Saturday, May 18, 2024

Zeroing in on foreign ownership of U.S. farmland


When it comes to foreign ownership of agricultural land in the United States, legislatures at both the state and federal levels are asking “how much is too much?”

According to the U.S. Department of Agriculture Farm Service Agency, foreign ownership and investments in U.S. agricultural land have increased to more than 40 million acres, an increase of almost 36 percent in foreign-owned farmland since 2011.

“Foreign ownership of agricultural land has emerged as arguably the single most active issue at the state and federal government levels, with more than half the states in the country proposing some kind of restriction on foreign ownership since Jan. 1,” Micah Brown, staff attorney at the National Agricultural Law Center, said. “This emerging interest in restricting foreign investments in U.S. land, especially agricultural land, is partly due to a Chinese-owned company purchasing more than 130,000 acres near a U.S. Air Force base in Texas. Another transaction that raised concerns among some lawmakers is the purchase of 300 acres near an Air Force base in North Dakota by the Chinese company Fefang Group.”

Brown, who specializes in agricultural finance and credit issues at the NALC, including foreign ownership of agricultural land, recently spoke at the U.S. Department of Agriculture’s 99th Annual Agricultural Outlook Forum. He presented the session “State Restrictions on Foreign Ownership of Agricultural Land and Recent State Proposals.” Information on the event, as well as presentation slides and recordings of the sessions, can be found online.

State Law

“Some state foreign ownership proposals seek to restrict certain countries, such as China, Iran, North Korea, and Russia,” Brown noted in his presentation. He also said that there are fourteen states that currently restrict foreign ownership of farmland within their state to some degree.

Micah Brown

In 2023, the Arkansas legislature has considered four proposals — HB 1255HB 1479SB 340SB 383 — that seek to restrict certain foreign investments in agricultural land. Specifically, HB 1478 would restrict acquisitions of agricultural land by governmental entities of China and companies headquartered in China, while SB 340 and SB 383 seek to restrict foreign investments of governments and entities from several different countries, such as China, Cuba, Iran, North Korea, and Syria.

Federal Law

There is no federal law restricting foreign individuals, business entities, or foreign governments from acquiring or holding U.S. agricultural land, but Congress is considering proposals that seek to restrict certain foreign investments in farmland, such as the Promoting Agriculture Safeguards and Security Act — the PASS Act of 2023. If enacted, the PASS Act would require the president to prohibit certain foreign investments in U.S. agriculture, including acquisitions of businesses engaged in agriculture and land used in agriculture.

“The NALC covers, on a daily basis, many issues important to the agricultural industry, but foreign ownership of agricultural land has definitely risen to the top in 2023,” NALC Director Harrison Pittman said. “Micah has emerged as a leading national expert on the topic, providing invaluable information to legislators, states’ farm bureaus, attorneys, and many others around the country.”

In January, Brown presented a National Agricultural Law Center webinar on foreign ownership. The recording of the webinar, “Foreign Ownership of Agricultural Land: Federal & State Legislative Update,” is available online on the NALC website. He has also developed the NALC’s Foreign Ownership of Agricultural Land: FAQs and Resource Library, highlighting state laws, AFIDA, federal proposals, and more.

For updates on foreign ownership of agricultural land and other agricultural law developments, subscribe free of charge to The Feed, the NALC’s newsletter highlighting recent legal developments facing agriculture, which publishes twice a month.

Drew Viguet is with the National Agricultural Law Center, U of A System Division of Agriculture.

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