Foreign-owned acres of U.S. farmland may be underreported

Mary Hightower, University of Arkansas System Division of Agriculture

October 18, 2023

WASHINGTON, D.C. — Hampered by an antiquated paper-based and loophole-riddled reporting system, the number of foreign-owned acres of agricultural land in the United States may be undercounted, witnesses told the U.S. Senate Agriculture, Nutrition and Forestry Committee.

      While the issue of foreign ownership of farm- and forestland in the United States goes back to the nation’s earliest days, concerns were reignited in 2021 when Chinese buyers eyed farmland near U.S. military bases.

      Testifying before the committee on Wednesday were Harrison Pittman, director of the National Agricultural Law Center; Gloria Montaño Greene, deputy undersecretary for farm production and conservation for the U.S. Department of Agriculture and David Ortega, associate professor-agricultural, food and resource economics at Michigan State University.

Who owns U.S. ag land?

      According to NALC, investors from three countries — Canada, the Netherlands and Italy — comprise one-half of all foreign ownership of agricultural lands. The United Kingdom and Germany represent 6 percent of all foreign ownership. The remaining third is spread among 100 countries.

      Citing the 2013 purchase of Smithfield Foods by the Chinese and subsequent foreign purchases of U.S. agriculture and food organizations, Committee Chair Sen. Debbie Stabenow of Michigan said, “American farmers and families have raised many questions, from the economic impacts of foreign purchases in our food supply chain, to how we can protect agriculture innovation and research spurred by U.S. investment and more.”

      “We also know food security is national security,” she said.

      Arkansas Sen. John Boozman, ranking member of the committee, said he’s often been asked about the issue. 

      “We need to better understand the problem before we can supply a solution,” he said. 

Paper-based approach

      At the center of the discussion was the 1978 Agricultural Foreign Investment Disclosure Act or AFIDA. The law requires any foreign person who buys, sells, or holds a direct or indirect interest in U.S. agriculture land to disclose holdings and transactions.

      Greene outlined the challenges her department faces in collecting information about foreign ownership.

      “The process to report and track foreign-owned agricultural land is complex,” she told the committee.

      “AFIDA is self-reporting. Currently, the AFIDA reporting system uses a paper-based approach to data collection,” Greene said.  “We currently have no way to identify the geographic location of AFIDA filings more specifically than the country level.

      “There is not currently a system at the national, state or local level that tracks deeds or leases and there is no automated reporting mechanism to aggregate information,” she said.

‘Alarming gap’

      Two senators expressed concerns about the quality of data currently in the AFIDA reporting system.

      “We have a lease loophole that’s currently in the AFIDA process, that if you don’t own it and you lease it, you don’t have to go through that reporting process,” said Sen. James Lankford of Oklahoma, adding that a second loophole is that any holding smaller than 10 acres doesn’t have to be reported.

      Sen. Tammy Baldwin of Wisconsin said there was “an alarming gap” in reporting on foreign ownership and its effects on America’s food system.

      “We don’t know the full extent of the risk at hand. Outdated reporting systems and a lack of auditing at both the state and federal level leave us with incomplete information and many questions,” Baldwin said.  

      Baldwin cited last year’s Farmland Security Act to help improve the situation. The law requires the Agriculture Department to move to an online form and create a public database of filings. The law also requires USDA to report to Congress on the impact of foreign ownership.

‘Historical shift’

      Legislative activity at both the state and federal levels has greatly increased since 2021, Pittman told the committee.

      “In 2021 and 2022 at the state level, we saw a very significant increase in activity in the number of proposals” addressing foreign ownership, which he called a “historical shift.”

      “Transferring over into 2023, that level of intensity and activity basically increased threefold across the country,” he said. “In fact, there are not many states left that have not had at least one or more proposals.”

      As of July 2023, about half of U.S. states have enacted laws that bar or limit certain foreign ownership. A dozen states in 2023 alone — Alabama, Arkansas, Florida, Idaho, Louisiana, Montana, North Dakota, Ohio, Oklahoma, Tennessee, Utah and Virginia  have enacted laws restricting or limiting certain foreign ownership of land within that state.

      The NALC found a change in states’ focus on foreign ownership in general to something more specific — “what we often referred to as the ‘Big Four,’ China, North Korea, Russia and Iran,” Pittman said.

Domino effect

      Pittman said there has also been increased interest at the federal level, with nearly two dozen proposals addressing foreign ownership between the U.S. House and Senate, most of which fall into three categories.

      Since AFIDA was enacted Pittman noted the extraordinary changes in research and innovation, the complexity of international trade, and even the concept of a lease since the late 1970s.

      The changes were such that “there’s really no way Congress or USDA could have accounted for that at that time,” he said.

      AFIDA itself comes with several closely related components, encompassing four key aspects:

  • The statute
  • The regulations
  • The Farm Service Agency handbook and
  • FSA153, the form used to report foreign ownership.

      Amending the law could lead to a domino effect.

      “Any change to one of those is likely to require a change to any one of the others,” Pittman said. “Missing that point could very well lend itself to having trouble with implementation later.

      “With the exception of the recent Consolidated Appropriations Act, 2023, for all practical purposes, AFIDA has not been significantly amended since its enactment nearly one-half century ago,” Pittman said in written testimony submitted to the committee. “AFIDA remains essentially the only action Congress has taken in our nation’s approximate 250-year history specifically addressing foreign ownership of agricultural land.”

Southern Livestock

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