Law 26.505 on the Promotion of Investment in Economic Activities in the Lands of National Territory and of Peasant and Native Communities, or Land Law (1995), ruled out the limitations on the use and disposal of agricultural land, such as, for example, the principle that the land belongs to those who work it, the prohibition of latifundios, the need to eliminate minifundios, the concept of the social function of agrarian property, and the need to establish a size limit to large property. Thus, it allowed the free transfer and any modality of rights transfer over land; additionally, greater security was provided to large landowners.
An important policy of recent years has been to enable unproductive lands (tierras eriazas) on the Peruvian coast, previously confiscated by the state (and sometimes affecting the rights of producers and communities) by allocating large state investments in irrigation megaprojects. These lands are then auctioned to the highest bidder and, therefore, end up in the hands of large companies and economic groups, without benefiting the peasant sector. These lands are being used for the production of crops such as sugar cane and African palm for the production of agro-fuels.
In this context, where the concentration of land is no longer controlled—and in fact is promoted—the situation of relative equity in land tenure that had been achieved with the Agrarian Reform of 1969 has been reversed by land grabs. Currently, about 80% of agricultural units in Peru have less than 5 hectares and control 6% of the total national agricultural area. At the same time, agricultural units with more than 500 hectares are only 0.3 % of the total, but they amount to approximately 70% of the country's agricultural area.
On the other hand, there are several mechanisms of land concentration in Peru: free market, state intervention in projects favorable to agribusiness, irrigation projects, extractive industries, control of water for irrigation. Peru has made a major leap toward export agriculture, hand in hand with land grabbing by large economic groups, and the state has played a fundamental role in supporting these corporations and companies through making the land tenure system more flexible, creating subsidies, lowering taxes and investing in state capital.
In the last 25 years, the agricultural policies described above have led to the introduction and consolidation of an economic model linked to the primary export sector. This sector is associated with the export of non-traditional agricultural products such as asparagus, mangos, coffee, grapes, avocado, quinoa and a wide variety of additional crops, supported by processes of modern private investment and high innovation. The results are remarkable in terms of increasing the contribution of agriculture to GDP and national income; however, much of this economic growth is the result of increased land grabbing and marginalization of peasants and small producers.
On the other hand, in addition to the undeniable state support for large-scale agricultural investment, there are about 54,000 concessions in Peru affecting various natural resources, mainly mining and hydrocarbons. These concessions overlap with the land rights of peasants and native communities. State support for agroindustry has its counterpart in state backing for private investments in the exploitation of these resources, without considering the needs of local populations.