States Mull Limits on Foreign Ownership of Farmland
This story was initially revealed in Examine Midwest.
Amid rising concern about Chinese language funding in U.S. agriculture, there was a renewed push to restrict and extra intently monitor overseas possession of farmland throughout the nation.
A minimum of eight states thought of implementing a brand new restrict on overseas management of agricultural land, and one, Indiana, handed a brand new legislation limiting new funding by overseas corporations—particularly citing China as a motive for passing the legislation.
As well as, due to considerations about knowledge, greater than 125 Home Republicans despatched a letter pushing the Authorities Accountability Workplace, a high watchdog of the U.S. authorities, to analyze overseas possession of farmland.
In the meantime, Sen. Mike Rounds, R-South Dakota, proposed a legislation that will ban corporations from China, Iran, North Korea and Russia from buying U.S. farmland. The legislation is one in all a number of proposed legal guidelines that will strengthen federal authorities monitoring of overseas possession.
At the moment, the U.S. Division of Agriculture is meant to observe overseas funding in farmland beneath the Agricultural International Funding Disclosure Act. That act, handed in 1978, requires all overseas holders of agricultural land—whether or not that’s house owners or long-term renters—to report these holdings to the USDA.
Nevertheless, the USDA largely depends on volunteer reporting, by way of an FSA-153 report. Annually, the USDA’s Farm Service Company releases that info in an annual report.
Examine Midwest obtained a database by way of the Freedom of Data Act detailing all of the land within the annual report. The database has vital gaps. There are greater than 3.1 million acres with out an proprietor listed. Spot checks present that many parcels listed are now not managed by the proprietor within the database. It’s unclear if land is faraway from the database after it’s bought or a lease is terminated.
Whereas the database has vital errors and sometimes has incomplete info, it’s the solely complete indicator of the amount of land being bought or leased to overseas pursuits.
As well as, 14 states have limits on overseas possession.
Micah Brown, a workers legal professional with the Nationwide Agricultural Legislation Middle, who researches state and federal legal guidelines about overseas possession of farmland, says AFIDA is well-known to be unreliable and that, regardless of the state-level legal guidelines, it’s nonetheless actually troublesome to trace possession in these states.
“Nearly each state has an enforcement provision within the legislation, but it surely doesn’t appear to be there’s a lot enforcement, simply it,” says Brown.
Brown says he views the present considerations as a “political flashpoint” much like when present legal guidelines had been handed prior to now. He mentioned these handed throughout 4 distinct flashpoints: the Declaration of Independence period; the late 1800s (throughout westward growth); the early to mid 20th century; and the Nineteen Seventies.
There are a number of causes for the elevated scrutiny, in accordance with specialists, and China is on the coronary heart of lots of them: rising overseas funding in agriculture; rising land costs; rising funding in farmland; a commerce battle with China; a pandemic, the place meals shortages hit residence for a lot of Individuals, and spurred considerations about meals safety.
Joe Maxwell, president and cofounder of Farm Motion, an advocacy group on behalf of household farmers, has lobbied for stricter laws on overseas funding from each states and the federal authorities for years. Maxwell says it’s clear there was extra give attention to overseas possession of farmland in recent times.
“Extra folks on Capitol Hill are specializing in what China is as much as,” says Maxwell, a Democrat who previously served as lieutenant governor of Missouri.
The difficulty has been bipartisan, with advocates for stricter monitoring within the Senate starting from Sens. Debbie Stabenow, D-Mich., Jon Tester, D-Montana, Elizabeth Warren, D-Mass. and Bernie Sanders, I-Vermont to Chuck Grassley, R-Iowa.
The eight states that thought of implementing a brand new restrict on overseas management of agricultural land included Alabama, Arkansas, California, Indiana, Missouri, Oklahoma, Tennessee and Texas. California’s was handed, however the measure was vetoed.
China cited as motive for legislation, however knowledge missing
Of their letter to the GAO, Home Republicans expressed considerations about what impact overseas funding in farmland has on nationwide safety. The group additionally expressed doubts about how AFIDA is working.
“Issues have additionally been expressed that overseas funding in U.S. farmland might end in overseas management of obtainable U.S. farmland, particularly prime agricultural lands, and probably result in overseas management over meals manufacturing and meals costs,” the letter from the Home Republicans said.
A lot of those self same representatives despatched a letter in July to Secretary of Agriculture Tom Vilsack, elevating considerations concerning the impact of overseas possession on meals costs. The group expressed particular concern about China’s degree of funding.
Republicans have repeatedly cited China as a necessity for the legislation.
This summer season, Indiana grew to become the fifteenth state to go a legislation limiting overseas possession after the state legislature handed a legislation earlier this yr banning foreign-owned corporations from buying farmland. In Indiana, 401,747 acres are foreign-owned.
In doing so, the invoice’s sponsor particularly cited China as a priority.
“It’s vital that crop floor be used to provide meals, meals safety to our nation first,” Sen. Mark Messmer, R-Jasper, advised the Indiana Home Committee on Agriculture and Rural Growth, in accordance with The Indiana Lawyer. “With an adversary of our nation shopping for and controlling extra agricultural land yearly, it would finally change into a nationwide safety difficulty.”
What isn’t clear, nonetheless, is how a lot of the give attention to China is warranted.
Chinese language corporations personal 352,140 acres, simply lower than 1% of all foreign-held farmland. This pales compared to nations comparable to Canada (which owns 12.4 million acres) and the Netherlands (which owns 4.9 million acres).
Nevertheless, the depth of funding by Chinese language corporations—comparable to a Chinese language firm’s buy of Smithfield Meals (the biggest pork producer on the planet) and ChemChina’s buy of Syngenta (a high seed and chemical firm)—has raised considerations.
Brown says the dearth of dependable knowledge beneath AFIDA and state disclosure legal guidelines might imply that the extent of funding by China is underreported. Brown additionally says the USDA’s present reporting pointers make it unclear—relying on what number of layers of possession there are and the proportion of possession—who needs to be reporting.
A 2017 investigation by Examine Midwest discovered that the USDA does little or no to analyze whether or not overseas house owners of farmland are correctly reporting beneath AFIDA and that the one largest fantastic was on account of a company self-reporting a missed transaction. This raises questions on whether or not the USDA is investigating possession beneath restricted legal responsibility firms. The USDA did fantastic two Chinese language companies in 2021 for failing to report their transactions, in accordance with Agri-Pulse.
The most important proprietor of farmland on behalf of China is WH Group, which bought Smithfield Meals in 2013, gaining 146,000 acres of farmland. Smithfield is the biggest pork firm within the U.S.
Smithfield confronted criticism within the early levels of the coronavirus pandemic, when the corporate was exporting file ranges of pork to China, regardless of claiming a meat scarcity within the U.S. On the time, Smithfield mentioned that the meat was ordered and processed earlier within the yr and that a lot of the meals that was despatched to China was meals that isn’t desired within the U.S.
A report issued earlier this yr by the United Staes-China Financial and Safety Evaluation Fee raised considerations about Chinese language funding in U.S. agriculture, together with overseas funding in farmland. The writer of the report didn’t return messages looking for an interview.
Who does personal it? What the information says
An evaluation of disclosures beneath the Agricultural International Funding Disclosure Act reveals that China owns 1% of all land held by overseas entities.
These disclosures embody land that’s owned, in entire or partly, or in a long-term lease by overseas corporations.
Total, overseas entities personal or lease almost 37.6 million acres of agricultural land, together with forests and pastures. That’s an space barely bigger than the state of Illinois and makes up 2.9 p.c of all privately held agricultural land within the U.S. That is up from a complete of 24.2 million acres in 2010, in accordance with the USDA.
The most important house owners are timber corporations, largely owned by Canadian and Dutch funding companies. Moreover, many European renewable vitality corporations maintain long-term leases for wind generators.
An evaluation by Examine Midwest evaluating the quantity of agricultural land in every county to the quantity of foreign-owned agricultural land reveals that greater than 190 counties are 10% or extra owned or managed by overseas entities. These usually have giant timber holdings or giant renewable vitality developments. That determine excludes Hawaii.
The county that’s the most owned is Keweenaw County, Michigan, which incorporates Isle Royale (a distant nationwide park in Lake Superior) and a few land on Michigan’s Higher Peninsula. Total, the county, which has a inhabitants simply greater than 2,000 folks, has 345,600 acres of land.
Greater than 262,000 acres—75.8% of the land within the county—are owned by three overseas entities within the county. Two are timber restricted legal responsibility firms that checklist house owners from the Netherlands and one is known as Lake Superior Land Firm that lists house owners from the U.S. Virgin Islands.
Whereas that is an especially excessive proportion, 18 of Florida’s 67 counties are greater than 10% managed. 4 of Maine’s 16 counties are greater than 10% managed, whereas 15 of Alabama’s 65 counties are greater than 10% managed. Arkansas and Texas, which have heavy timberland funding, even have greater than 10 counties which have at the least 10% managed by overseas pursuits.
“We’ve got to watch out that we don’t give the farms away,” says Bruce Shultz, vp of the Nationwide Farmers Group, a co-op of household farmers. Shultz is a cattle rancher in rural Montana, and he says that the NFO isn’t a “tremendous political group” however this is a matter that impacts farmers in every single place.
“We’re involved about farmland leaving household farms,” he says. “We’re involved about the place the following technology of farmers are gonna stay, and the place that meals goes to return from.”
Scott Chadde of Examine Midwest contributed knowledge evaluation. Examine Midwest is an unbiased, nonprofit newsroom. Their mission is to serve the general public curiosity by exposing harmful and expensive practices of influential agricultural firms and establishments by in-depth and data-driven investigative journalism. Go to them at www.investigatemidwest.org