Why Do Foreign Nations Own Agricultural Land in the United States?

Are you aware that foreign nations, including adversaries such as North Korea, Iran, or China, own “more than 43 million acres of agricultural land” in the United States? According to an article posted by Amy Joi O’Donoghue in The Deseret News, this is the assertion of Sen. Mike Crapo (R-Idaho) who is co-sponsoring the Protecting American Agriculture from Foreign Adversaries Act (CIFUS). The purpose of this bill is “to add the U.S. Secretary of Agriculture Thomas Vilsack to the Committee on Foreign Investment in the United States.” 

The U.S. Department of Agricultural says that 43.4 million acres of U.S. agricultural land is foreign owned, some near key military installations….

Sens. Mike Braun, R-Ind., Tommy Tuberville, R-Ala., Joe Manchin, I-W. Va., Tom Cotton, R-Ark., John Tester, D-Mont., Roger Marshall, R-Kansas, John Fetterman, D-Pa., Chuck Grassley, R-Iowa, Marsha Blackburn, R-Tenn., Pete Ricketts, R-Neb., John Barrasso, R-Wyo., Katie Britt, R-Ala., Tammy Baldwin, D-Wisc., Todd Young, R-Ind., Deb Fischer, R-Neb., Joni Ernst, R-Iowa, and Cynthia Lummis, R-Wyo., also co-sponsored the legislation.

The House passed companion legislation introduced by Rep. Dan Newhouse, R-Wash., last week, too.

Numerous states have grappled with the issue of foreign nations buying agricultural land. Kyla S. Kaplan authored an article outlining what happened in Arkansas less than a year ago. 

On October 17, 2023, Arkansas became the first state to enforce a state law banning certain foreign entities from owning agricultural land (doing so under Act 636, which blocks “prohibited foreign-party-controlled business” from owning public or private land directly or through affiliation).

Arkansas Attorney General, Tim Griffin ordered Syngenta Seeds LLC. To sell 160 acres (65 hectares) of farmland because the business is owned by Sinochem Holdings Corporation, a Chinese “state-owned enterprise.” Additionally, the company’s subsidiary was fined $280,000 in civil penalties because Syngenta failed to register as a foreign agricultural landowner under Arkansas Act 1046, Arkansas’ state analog to the federal Agricultural Foreign Investment Disclosure Act (AFIDA).

The enactment of state laws to restrict foreign ownership of agricultural land is on the rise – potentially due to concerns over national security. Currently, there are approximately twenty-five (25) states, like Arkansas, that, in at least some circumstances, forbid or limit nonresident aliens, foreign business entities, and/or foreign governments from acquiring or owning an interest in private agricultural land within their state. This year alone, twelve (12) states have either enacted or amended laws restricting foreign investments in state land.

Enforcement also varies between state laws. While some state laws contain provisions that assign enforcement authority to the state’s attorney general or “a district attorney of the county where the foreign-owned land is located,” other states provide private enforcement or prescribe civil (monetary) penalties for noncompliance with its foreign ownership law. Arkansas will likely not be the last state to enforce such regulations – Based on recent trends, political tensions, and what is happening in Arkansas, it appears most enforcement concerns may come with a connection to Chinese ownership.

O’Donoghue’s article described how Utah is affected by foreign ownership of agricultural land. Utah “is in the top five in the country for the amount of land acreage at risk, due to the number of key military installations it hosts, including Hill Air Force Base, the Utah Test and Training Range and Dugway.” O’Donoghue also described what North Dakota is doing about the issue.

In 2023, according to the Kiowa County Press, the North Dakota state Legislature passed a pair of bills aimed at stopping the threat.

The media outlet reported that one law prohibits land ownership by nations or businesses in those countries deemed foreign adversaries under certain federal rules. The other law deals specifically with farmland, blocking foreign governments from acquiring it.

China’s agricultural investment outside its borders has grown more than tenfold in less than a decade, according to the reporting by the North Dakota outlet. For the law dealing with agriculture, there are exceptions, including Canadians who want to buy North Dakota farmland. The state’s agriculture commissioner cited some concerns about these restrictions, including the potential impact on agribusiness opportunities.

According to O’Donoghue, Utah is implementing similar restrictions. HB516, sponsored by Rep. Candice Pierucci (R-Herriman) and passed earlier this year, “prevents countries – North Korea, China, Iran and Russia – from buying land in Utah.” The law goes even further. “If those countries, or foreign controlled companies with a 51% ownership in land holdings, already own parcels, that land has to be relinquished within a year.”

Pierucci gave two reasons for why these laws are important: (1) “this is a major national security concern and (2) “China is purchasing land and in proximity to military installations.” The new law “requires coordination with the Utah Department of Public Safety to document those land holdings. The agency is compiling a database on land holdings in Utah and sets in motion a way to reverse that course.”

O’Donoghue gave several interesting statistics – given by the American Farm Bureau Federation – in her article that emphasizes the need for states to take legislative action:

·         A little over 20% of Maine’s privately held agricultural land is held by foreign investors, which makes up 9% of total foreign-held land.

·         Hawaii has the second-largest percentage of foreign-held U.S. agricultural land, which is 9.2% of the privately held agricultural land in the state.

·         The number of U.S. farm acres owned by foreign entities grew more than 8% in 2022, although it represents just a little more than 3% of farmland.

·         In Utah, less than 40,000 acres are under foreign ownership, but lawmakers want to stop the trend.

·         According to Smithfield’s website, it says it has 75 company owned farms, 28 contract farms and one feed mill in Utah.

I am grateful that numerous states are taking legislative action to protect their farmlands and companies from foreign ownership. Americans do not want to eat foods that are grown and produced by adversary countries. However, there is another important reason to stop foreign adversaries from purchasing farmlands around military installations: national security.