Just this year, over half the states have introduced bills to restrict foreign ownership of agricultural land. These states are joining the approximately eighteen states that already have laws limiting foreign ownership in some way. It is true that between 2009 and 2019, foreign ownership of U.S. agricultural land doubled, and it has only continued to rise since then. This seeming surge creates political momentum because of concerns about national security and autonomy over our domestic food supply.
The only federal mechanism for controlling foreign ownership of agricultural land is 1978’s Agriculture Foreign Investment Disclosure Act (AFIDA), which requires foreign purchasers to report when they acquire U.S. agricultural land within 90 days of transfer. This is passive enforcement and is widely thought to underrepresent the reality of foreign ownership.
Nonetheless, this statute is the only means for us to have access to any data about foreign ownership in the U.S.. There are nearly 1.3 billion acres of privately owned agricultural land in the US. Roughly 3% of that is foreign-owned, according to the USDA’s database.
Most political concern over this relatively small 3% concentrates on certain countries. Canada is the top foreign owner of U.S. agricultural land in both acres and land value, but the political discussion revolves not around our neighbor to the north, but around China.
In 2013, a Chinese company purchased Smithfield, a previously U.S.-owned pork producer. The purchase included 146,000 acres of Smithfield’s farmland, immediately making the Chinese company one of the largest overseas owners of U.S. agricultural land. At the time, there was a lot of debate over national and food security in light of this purchase. Chinese investment in agricultural land in the U.S. has only grown since 2013, and recent events like the spy balloon incident has sparked another wave of anti-foreign ownership debate by politicians.
However, based on available data, Chinese companies and investors only own less than 1% of all foreign-owned agricultural land. While Congress is discussing stronger foreign ownership controls, some cite growing concerns that a federal program to restrict foreign ownership would catalyze racist and xenophobic sentiments. Others feel the complexities are best resolved by letting the states decide.
And the states have taken up that mantle, as over half of them have introduced some form of foreign ownership legislation this year. The National Agricultural Law Center has a great resource here for diving into the specific foreign ownership legislation in individual states.
While foreign ownership in general is getting a lot of attention, an underlying issue of corporate and investor farmland ownership, whether domestic or foreign, is largely being ignored by lawmakers.
There are a handful of states that have separate legislation called anti-corporate farming laws, which do restrict both domestic and foreign corporations from purchasing or controlling (potentially even leasing) farmland in their state. As Farm Commons’ resource linked above points out, these rules are intended to protect the security of our food supply and the viability of agricultural production on a family scale. But, because many modern farms operate as corporations or LLCs with unrelated co-owners and want to buy farmland, some small farms can run afoul of these laws as an unintended consequence. Furthermore, court decisions over the years have served to weaken these laws, so they can’t always properly serve their original purpose.
Oversight into when and how investors and corporations—no matter where they reside—purchase large swaths of farmland is not currently seeing a surge of legislation, unlike the issue of foreign ownership. Yet, the rise in domestic corporate and investor ownership is a huge factor in driving up the price of agricultural land and making it more difficult for farmers to access land in a sustainable way.
To learn more about this topic, we’d suggest reading Selling Out the Delta: Farmland Investment and Small Farmer Land Access in Mississippi by Madeleine Fairbairn, Elsa Calderon, and Jordan Treakle. This report provides a great overview of corporate/investor ownership of farmland and land access challenges specific to black farmers before looking closely at farmland ownership in Mississippi in light of corporate and investment purchases.
Who the law chooses to regulate and how the law regulates the ownership of farmland and the companies that process our food is a complex issue. But it’s one that matters to each farmer as we are all invested in creating a system that works for everyone.