As the encomienda system lost its effectiveness, it was gradually replaced by the hacienda and latifundio systems of landed estates. These are quite similar systems, but with some important differences. The hacienda, called estancia in Argentina and Uruguay and fazenda in Brazil ("Hacienda"), is a more neutral term that can mean the same as a ranch.
It was a labor-intensive enterprise cultivating only a portion of land under its control for a small-scale market; haciendas were usually self-sufficient. The hacienda provided the owner with economic return as well as social prestige and political influence. The labor force was usually Indians who were theoretically free-wage workers. However, in practice, their employers were able to bind them to the land by keeping
them in an indebted state by giving them loans or advances on wages (Delpar 271). In fact, by the 19th century, up to half of the rural population of Mexico was entangled in this peonage system ("Hacienda"), reflecting the influence of the encomienda system. Many of these estates were broken up as the result of the Mexican Revolution of 1911.