The government is "trying to put in order property rights and figure out and resolve land conflicts, and behind the scenes, what these companies are doing is the opposite," said Absalón Machado, an economist and land reform consultant in Bogotá. "This, in some sense, generates a lack of trust in the state's ability to make progress in terms of this reform."

Among the buyers of the land are U.S. food giant Cargill Inc., Riopaila Castilla SA, Colombia's largest sugar producer, and Grupo Aval SA, GRUPOAVAL.BO +0.37% a financial firm owned by a Colombian billionaire who also owns El Tiempo, the country's largest newspaper, according to public documents and people close to the matter.

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The uproar deepened earlier this week when Mr. Arias posted documents on his website alleging that Cargill has acquired thousands of acres from small farmers in the same area through 19 different legal entities controlled by four Cargill subsidiaries.

Francisco Uribe, a Georgetown University-educated Colombian lawyer who advised on the Riopaila and Cargill deals, has staunchly defended their legality. Local magazine Semana quoted him as saying that the 1994 law doesn't apply to the lands in question and the purchases were made using overseas entities in order to attract European investment and offer an international jurisdiction in case the government tried to take back the land at some point in the future.