Although two senators identified the farm bill as a potential way to restrict foreign ownership of U.S. farmland, Senate Agriculture Committee chair Debbie Stabenow said on Wednesday that the annual defense authorization act seemed a better bet. Senators added language to the defense bill in July to prohibit China, Russia, Iran, and North Korea from purchasing U.S. farmland and agricultural companies.
“The NDAA [National Defense Authorization Act] is the vehicle that is moving and will have an opportunity to get signed into law first,” said Stabenow at the end of a two-hour hearing on foreign ownership of farmland. The NDAA sets defense policy and funding levels.
Concerns about foreign ownership of U.S. agricultural land and companies have grown in tandem with Sino-U.S. and Russian-U.S. tensions. Some lawmakers have proposed restrictions or outright bans on ownership by specific governments and their citizens. Others call for a better system of monitoring the purchases. Congress has given the USDA until 2026 to create a digital filing system and a searchable database of foreign holdings, although it has provided no additional funding for the work.
A 1978 law requires foreign investors to report purchases of agricultural land. About 40 million acres, or 3 percent, of the 1.3 billion acres of private agricultural land in the country are owned by foreigners. One-third of that land is owned by Canadians, followed by Europeans. Chinese entities own roughly 384,000 acres, most of it in the hands of Smithfield Foods and billionaire Sun Guangxin.
“There is no clear evidence that foreign ownership is causing U.S. farmland prices to rise,” said David Ortega, an associate professor at Michigan State University. “Publicly available analysis of USDA data finds no statistically significant difference in agricultural land values (cropland, pastureland, or total ag land) or rental rates for counties with foreign investment in such land and those without.”
A more serious concern for U.S. food security, said Ortega, was China’s global leadership in the public funding of agricultural research. “We are falling behind,” he said. The European Union was the second-largest spender on ag research and India was closing in on No. 3 United States a few years ago, according to the USDA.
New Jersey Sen. Cory Booker, a Democrat, said corporate ownership of farmland also deserved scrutiny. He said he supported legislation to prevent corporations such as Smithfield Foods from buying additional land.
“The process to report and track foreign-owned agricultural land is complex,” said USDA deputy undersecretary Gloria Montaño Greene. The agency gathers information from more than 3,000 counties, 50 states, and 500 tribes. “There is not currently a system at the national, state, or local level that tracks deeds and leases, and no automated reporting mechanism to aggregate information and contribute to the disclosure report,” she said. “Any system for tracking land purchases and owners would be complicated, expensive, and create a potential risk to producer privacy, the price of agricultural land, and individual American seller interests.”
Republican Sens. James Lankford of Oklahoma and Mike Braun of Indiana suggested the farm bill should include language on prohibiting or monitoring foreign ownership of farmland. “We have a lease loophole,” which means long-term leases are not reported, said Lankford. Sen. Tammy Baldwin, a Wisconsin Democrat and advocate of more data gathering, said, “Right now, we don’t know the full extent of the risk at hand.”
Sen. Mike Rounds, a sponsor of the ban on ownership by China, Russia, Iran, and North Korea, said the farm bill should include additional provisions on foreign ownership. “There’s more work to be done,” said the South Dakota Republican. Montana Sen. Jon Tester, cosponsor with Rounds of the ownership limits, said, “We should not allow these bad actors to be on our soil.”
In the hearing’s opening remarks, Stabenow said, “We have heard some real concerns that foreign ownership may be undercounted and that the American government lacks proper oversight tools to see the whole picture.”
John Boozman of Arkansas, the senior Republican on the Agriculture Committee, said after the hearing that “where I hear agreement is the CFIUS issue,” meaning suggestions to add the Agriculture Department to the Treasury-led Committee on Foreign Investment in the United States. The committee reviews the national security implications of major purchases of U.S. assets and has the power to demand changes in the transactions or to deny the sales.
On Monday, Agriculture Secretary Tom Vilsack said that “being part of CFIUS, I think, is part of” improving the U.S. system of appraising purchases.
To watch a video of the hearing or read written testimony by witnesses, click here.