Western states gauge foreign ownership of agricultural land with eye toward national security

LAY OF THE LAND

I’m guessing you’ve seen the headlines about Western states crafting legislation aimed at limiting foreign ownership of agricultural land. And I’m betting, like me, you’ve wondered what’s behind this trend. So I’ve done a little digging.

Legislation and Foreign Ownership

First of all, foreign ownership is no secret. The Agricultural Foreign Investment Disclosure Act requires foreign investors in U.S. agricultural land to report their transactions to the Department of Agriculture (USDA), which publishes an annual report about the purchases.

Second, foreign ownership isn’t that significant: the 40 million acres of foreign-owned land accounts for just 2.5% of the 1.3 billion acres of private agricultural land in the U.S. As of 2021, the top foreign owners of land are from Canada (12.8 million), the Netherlands (4.8 million), Italy (2.7 million), the United Kingdom (2.5 million), and Germany (2.2 million).Add post content here…

So why the headlines? Think “national security.” Certainly, that was the case for the North Dakota Legislature, which in April passed a law banning foreign governments, and businesses they control, from buying ag land in that state. (Canada is not considered a “foreign government” in the bill.)

The genesis of that legislation was a land purchase by the Chinese-owned Fufeng Group. The self-described “internationalized bio-fermentation products manufacturer” paid $2.3 million to purchase 300 acres just 12 miles from Grand Forks Air Force Base, home to top-secret drone technology. After local and federal authorities expressed concerns about the firm’s connections to China’s ruling government, the project was halted by the state, owing to national security concerns, and the legislation followed.

What’s happening in other states?

Similar legislation is being considered in other states, but not all of it is meeting with approval. For example:

• A supermajority of senators in South Dakota rejected a panel, proposed by Gov. Kristi Noem, to oversee foreign purchases of agricultural land.
• Proposed bills in the Wyoming legislature that would have prevented any foreign government, business or person from buying state ag land died in committee.
• Legislators in Washington state have legislation in committee that would bar foreign companies, governments and foreign-controlled subsidiaries from purchasing land in the state used for farming, ranching or timber production.

Congress Ponders Federal Law

Federal legislation has been considered in recent years to limit purchases with origins in China, Russia, Iran, and North Korea. In April, Colorado U.S. Senator Michael Bennet and other senators introduced the bipartisan Security and Oversight of International Landholdings (SOIL) Act to “provide oversight and transparency over purchases of American agricultural land that threaten our national security.” To date, no bills have been approved.