Policy Development -- Issue Surfacing: Foreign Ownership of Agricultural Land

Background

According to a USDA Farm Service Agency report “Foreign Holdings of U.S. Agricultural Land,” foreign investors held interest in roughly 40 million acres of U.S. agricultural land, including both forest land and farm ground, as of Dec. 31, 2021. This equates to 3.1 percent of all privately held agricultural land in the U.S. and 1.8 percent of all land in the U.S.

When you look more closely at the data you find that forest land accounts for 47 percent of all reported foreign-held acreage, cropland for 29 percent, pasture and other agricultural land for 22 percent, and non-agricultural land for 2 percent. The non-agricultural land category includes homesteads and roads.

Canada owns the largest amount of foreign-held agricultural and non-agricultural land, with 12.8 million acres. Foreign investors from the Netherlands, Italy, the United Kingdom, and Germany own a combined 12.4 million acres with the remaining 15.6 million acres being owned by investors from various other countries.

What is the issue? 

Currently, federal law has no restrictions on the amount of private U.S. agricultural land that can be foreign owned. However, foreign persons and entities are required to disclose to USDA information related to foreign investment and ownership of U.S. agricultural land.

Some states have restrictions on foreign ownership of farmland, but there is not a uniform approach among states to address foreign ownership. The laws fall under a few categories:

• prohibitions or limits based on which country the prospective owner is from;
• additional disclosure requirements;
• restrictions on the amount of land that can be owned or for how long;
• distinctions in how agricultural land is defined;
• differences between resident/nonresident aliens;
• restrictions on ownership by foreign corporations; and
• exemptions for specific types of agriculture.

AFBF Activity

During the 2022 resolutions process, AFBF received 11 policy proposals from nine different states concerning foreign ownership of U.S. agricultural land. During December 2022 resolutions meeting, the subcommittee responsible for this issue reviewed these policy proposals relevant to (then) section 419 of the 2022 policy book (now section 420): Foreign Investment.

Many of the proposals differed and even contradicted each other in ultimate intent, making it difficult for the subcommittee to take any clear stance. The subcommittee recommended that these proposals be reviewed more thoroughly, a task ultimately assigned to members of the Market Structures and Budget and Economy Issue Advisory Committees.

Three meetings were held during 2023 concerning foreign ownership of U.S. agricultural land. The Market Structures and Budget and Economy Committees met individually, in person, on February 17th. Speakers on the topic were from the International Food Policy Research Institute and the Congressional Research Service.

The second meeting was held jointly and virtually on April 20, 2023 with the Market Structures and Budget and Economy Issue Advisory Committees (IAC) to discuss next steps on policy regarding foreign ownership of U.S. agricultural land. This meeting included an open discussion of possible policy options for the committee to recommend to the AFBF board of directors.

Finally, on June 20, 2023, the IAC’s met jointly again to refine recommendations further. The final recommendation unanimously supported by the Market Structures and Budget and Economy IAC would add a new number 3 under section 420 Foreign Investment of the AFBF 2023 policy book listed as:

420 / Foreign Investment

1. Foreign investment in U.S. assets is a concern. The impact of foreign investment in agriculture, banking, insurance and other business institutions in the United States should be monitored.

2. Foreign ownership of utility companies and natural resource businesses, including agricultural land, should be limited to less than a controlling interest. We oppose preferential treatment of foreign investments in agriculture and insist that foreign investors be required to conform to the same tax laws, import and export regulations as American producers.

3. We support additional funding to improve data collection, auditing techniques and enforcement of reporting under the Agricultural Foreign Investment Disclosure Act (AFIDA). Current data collection and reporting on foreign ownership of U.S. agricultural land is incomplete, flawed, and unclear. Farmers need an accurate image of current ownership dynamics to inform policy development.

At the December 2023 Resolutions Meeting, this paragraph will be submitted as a policy recommendation for consideration.

Congressional Activity

In the 118^th Congress, there have been a number of bills introduced to address the issue of foreign ownership of agricultural land.

• S. 68, the Foreign Adversary Risk Management Act or the FARM Act, introduced by Senator Tommy Tuberville (R-AL), places the Secretary of Agriculture on the Committee on Foreign Investment in the United States. It also requires the committee to review any investment that could result in foreign control of any U.S. agricultural business. Further, the bill includes agricultural systems and supply chains in the definitions of critical infrastructure and critical technologies for the purposes of reviewing such investments. Finally, the Department of Agriculture and the Government Accountability Office must each analyze and report on foreign influence in the U.S. agricultural industry.
• S. 168 – Promoting Agriculture Safeguards and Security Act, introduced by Sens. John Tester (D-MT) and Mike Rounds (R-SD) and companion bill H.R. 683 – Promoting Agriculture Safeguards and Security Act, introduced by Reps. Elise Stefanik (D-NY-21) and Jim Costa (D-CA-16) would prohibit China, Russia, Iran and North Korea from purchasing U.S. agricultural land and agricultural companies.  It also adds the Secretary of Agriculture as a standing member of the Committee on Foreign Investment in the United States to consider agriculture needs when making determinations affecting our national security and requires reporting from the Secretary of Agriculture on the risk of foreign purchases of agriculture companies to the American agriculture sector.
  • NOTE: On July 25, 2023, the Senate adopted a slightly modified version of the Promoting Agriculture Safeguards and Security Act as an amendment to the National Defense Authorization Act on a bipartisan basis (91-7).  The amendment would include the Secretary of Agriculture on the Committee on Foreign Investment in the United States, require review of certain agricultural transactions in the U.S., and prevent China, Russia, North Korea, and Iran from purchasing farmland or agriculture businesses in the U.S.
• S. 2060, the Foreign Agricultural Restrictions to Maintain Local Agriculture and National Defense (FARMLAND) Act, introduced by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and Sen. Joni Ernst (R-IA), would add USDA to the Committee on Foreign Investment in the U.S. and require the panel to review foreign entities’ land purchases or leases that exceed $5 million or 320 acres of land.
• S.2312, a bill to make the Agriculture and Health and Human Services secretaries permanent members of the Committee on Foreign Investment in the U.S., was introduced by Sens. Chuck Grassley, R-Iowa, and cosponsored by Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., Jon Tester, D-Mont. and Joni Ernst, R-Iowa.  The bill also would add additional agriculture and food security considerations to CFIUS’s review criteria.
  
  

Resources

• Link to AFBF IAC Report
• AFBF Market Intel (Nov. 2, 2023): Foreign Investment in U.S. Ag Land – The Latest Numbers: https://www.fb.org/market-inte...
• Congressional Research Service
  • Foreign Ownership of U.S. Agriculture: Selected Policy Options: https://crsreports.congress.gov/product/pdf/IF/IF12312
  • Foreign Ownership and Holdings of U.S. Agricultural Land: https://crsreports.congress.gov/product/pdf/IF/IF11977
• National Ag Law Center
  • State Statutes Regulating Ownership of Ag Land: https://nationalaglawcenter.org/state-compilations/aglandownership/