Land tenancy issues are common in Mexico. This is especially true in rural areas, where most mining operations are located. The legal framework of land, its occupation, and exploitation is a complex and often misunderstood topic. In this post, we will address the history and regulation of land in rural parts of Mexico in the past one hundred years. We will address the issue of community-owned land, the legal changes that allowed private investment in these lands and the current state of land tenancy in Mexico.
The post is divided into the following sections:
One of the main causes of the Mexican revolution was the perceived unfairness in the distribution of land. Porfirio Diaz, Mexico’s president at the time, put forward a plan to colonize the mostly uninhabited northern territories of Mexico and gave a select few authority to review land titles and demarcate the land. With this power, a large part of Mexico’s territory was put in hands of a few wealthy individuals.
By 1910, it is estimated that about 97 percent of the national territory was in the hands of a few large estates. With Franciso I. Madero heading an opposition movement against Diaz’s 30-year regime and general discontent in rural Mexico, the 20th of November of 1910 marked the beginning of a revolutionary war whose effects would be felt for the next several decades and which gave birth to prominent figures like Emiliano Zapata and Pancho Villa.
The enactment of the 1917 Constitution, to many historians, marks the end of the war. With Porfirio Diaz exiled to France and Franciso I. Madero elected president, the new constitution was passed, embracing the revolutionary principles encapsulated in Zapata’s declaration that “the land belongs to those who work it” while reconciling the liberal views of the other revolutionary factions. Amongst its most important developments was Article 27, which laid the foundation for the regulatory framework of land tenancy, and brought the following developments:
- It called for the endowment of land to farmers, ranchers, and communities that lacked them.
- It ordered the restitution of lands to indigenous communities;
- It introduced the concept of the ejido, and recognized these and indigenous communities as legal entities;
- It called for the division of large estates and protected small-scale private property;
- It gave states the authority to limit the amount of land held by a single person or entity.
The years following the Revolution are referred to as the Reparto Agrario or agrarian distribution. Following the dictates of the newly enacted 27th Constitutional Article, the Reparto Agrario provided land to farmers and recognized the rights of indigenous communities to the land.
During its existence, the program distributed approximately 50% of Mexico’s territory. Twenty-six thousand ejidos were created and two thousand indigenous communities were recognized from 1915 to 1992. In total, about three million people were benefitted with over 96.5 million hectares of land. More important than the number of lands distributed, is the fact that these lands were not considered private property, but belonged to the community and only its officially recognized members could hold and exploit them. In addition, these lands were not to be entailed, conveyed or attached.
The program officially concluded in 1992 with the enactment of a Constitutional Amendment and a new Agrarian Law. At its conclusion, an unknown number of cases were turned over to the newly created Agrarian Tribunals. Some historians believe that approximately 50 thousand cases were pending at the program’s conclusion.
During the Agrarian Distribution, an estimated 26 thousand ejidos were created and about 2 thousand communities recognized. A total of 96 million 608 thousand 475 hectares, about half of the territory of Mexico, was distributed to around 3 million farmers.
The most important evolution in the legal framework came about in 1992 when a Constitutional Amendment to Article 27 and new Agrarian and Forestry Laws were introduced and passed by Congress. Among the chief changes, were:
• The State’s obligation to distribute land to farmers in need subsided;
• It allowed farmers, with restrictions, to transfer their rights over the lands;
• It opened the door to private investment and to transfer common lands to corporations, with certain restrictions.
Since 1992, farmers can sell their parcel of land to other members of the same community, can guarantee certain credits, and can transfer their rights to use and exploit the land in 30-year renewable contracts. Additionally, farmers can convert their parcels into private property with the approval of the Ejidatarios’ Assembly, its governing body. In which case, the property would no longer be subject to agrarian laws and would be regulated by commercial and civil laws.
The Assembly may also authorize the use and exploitation of common lands with a two-thirds vote. And even though these lands are usually non-transferable and not subject to adverse possession laws, the Assembly may transfer the lands to civil or commercial companies with two conditions: a) the ejidatarios must be members of the company; b) its productive purpose must focus on a common benefit.
Lands belonging to indigenous communities receive a similar treatment to ejido community property. Regarding individual rights, indigenous community lands have two significant differences: a) rights can only be transferred to other members of the community, and b) communities may only convert their lands to private property if they convert to an ejido beforehand.
Besides communal lands, Mexico regulates National Territories, small ranch properties, and farmland colonies. It also imposes restrictions on private property. The northern states of Baja California, Baja California Sur and Sonora are prime examples where legal disputes over National Territories are common. It is not uncommon to see legal claims being made over the same territory by different groups or individuals. In many instances, due to inaccuracies in the demarcation. These lands have also been subject to illegal settlements. As an example, in the state of Sonora, approximately 70,000 deeds will be granted on these lands in the following years.
Even though 25 years have passed since the constitutional amendments and legal reforms of 1992, 51% of the national territory is still held under common ownership. Since 1992, only five percent of ejidos have been converted to private property. The following chart shows a steady decrease in common ownership land.
The surface area of common ownership land is slowly being disincorporated, but our experience has been that lands adopting common ownership are usually those in close proximity to urban areas or those that have tourism potential. However, the current law still allows the creation of new ejidos; and, since 2010, there has been a steady increase in the creation of new ejidos, with an average of 43 ejidos registered yearly.
As the data shows, communal land is not disappearing any time soon. Even if government programs encourage disincorporation, at the current rate, it would take decades. And even if such disincorporation occurred, it is unlikely that all communal land would convert to private property.
Since the 1970s, the government created the Commission for the Regulation of Land Tenure (CORETT) whose main objective was to legalize or regularize land tenure on irregular human settlements on Federal or communal land. It operated by expropriating the land, compensating the community and selling it back to the settlers. The program ended in 2016 when it was replaced by the National Institute of Sustainable Land (INSUS).
CORETT sparked the illegal trade of land and increased the problem of illegal settlements in rural areas. Communities would sell off lots of land with no water, sewage or electricity to individuals looking for cheap land to build a home, usually an impoverished individual who could not afford land in urban areas. Communities would, in most cases, recognize the settler’s rights, and once enough parcels were sold off, would advise the buyers to pressure the government to regularize their situation. If certain conditions were met, the Federal Government would then proceed to expropriate the land, compensate the community and sell the land back to the settlers. This process would convert the communal land to private property and provide the settlers with a deed.
After 43 years of operation, CORETT was replaced by the National Institute of Sustainable Land (INSUS) on December 16, 2016, which operates in a similar fashion to CORETT. INSUS regulates settlements with at least 2,500 inhabitants. Additionally, INSUS can create territorial reserves to help eliminate illegal settlements. Even though these programs have managed to regulate a large number of illegal settlements, with Durango, Michoacan, Veracruz, and Sonora leading the way, it has not stopped the illegal trade of lands.
The history of Mexico cannot be understood without reference to the issue of land. And the legal framework of land tenancy and private property in Mexico cannot be understood without reference to the country’s history. A century of social conflict, the move from rural to urban life and irregular human settlements has generated a complex framework which businesses must navigate.
Businesses must be diligent when securing land. With hopes of opening employment sources, governments will offer businesses —especially foreign businesses— certain prerogatives without proper knowledge of the current state of land tenancy and without accounting for imminent or pending legal disputes. Businesses should not rely exclusively on government input when procuring land. A legal advisor that understands land disputes in Mexico and carries out comprehensive due diligence is the best bet in avoiding conflicts.