ZIDRES - Incentives for Investments in Agricultural Projects in Colombia05/09/2017
The Zones of Rural, Economic and Social Development Interest (ZIDRES for its Spanish acronym) are legal systems created by the government with the initiative to connect local farmers, medium producers and entrepreneurs to exploit lands that were not previously accessible and where the costs of production are high.
Law 1776 of 2016 known as ZIDRES was enacted in February 2017 but it has not been implemented yet; the government is in the process of structuring the law so that investors are able to participate with their projects.
ZIDRES areas are isolated from urban centers and demand high costs of productive adaptation. They have low population density and high poverty rates because they lack infrastructure for transportation and marketing of the products.
According to the minister of agriculture: “the law seeks to promote the social inclusion of Colombian farm workers to increase sustainable land productivity, promote social and economic development of the area, improve soil agricultural conditions, encourage environmental conservation, promote access and regularization of land ownership for agricultural workers, and promote rural employment and food security.”
The government has committed to grant special incentives to the companies that are planning investments in these rural areas, but they have not declared the specific type of yet. Some possible incentives for investors might include: public goods, roads, irrigation systems, research, access to credit, among other benefits.
Even though economic benefits have not been mentioned, there is a very attractive aspect for investors with this new law which is the access to “baldíos”, which are brownfield sites without any property dominium and are under the control of the government. They are rich lands suitable for agricultural production and have not been harvested before due to restrictions for investors before ZIDRES.
It is very important to mention that companies interested in ZIDRES would not become owners of these lands, instead, they would be rented to them during the period of production. In other words, Colombian politicians have established that property will not be delivered to investors because this law is thought only in the means of productivity, not ownership.
Investors who are planning on occupying “baldíos” would have an obligation to make a payment to the rural development fund to provide the necessary infrastructure for the expansion of ZIDRES.
Only lawful lands can be used with the benefits of this law and can be accessed via leasing, purchase, contribution to society or concession. The areas that cannot be included in ZIDRES are:
- Indigenous reserves or zones of ethnic communities.
- Collective territories or in the process of titling.
- Natural parks
- Territories that have been affected by measures taken by the government to protect against forced displacement.
The ultimate purpose is to be able to exploit more than seven million hectares in the country, a size of land like Ireland. The hectares are distributed in different parts of the country as Altillanura, Guajira, Uraba Chocoano and La Mojana.
To conclude, ZIDRES will be a safe legal system for investors because private capital associations can have presence and form alliances to exploit these areas with landless farmers who wish to settle in there. It is a perfect economical combination between the money from investors and the knowledge of the farmers.
Jose A. Abusaid.