More Midwest states are moving to block foreign ownership of farmland in 2024

More Midwest states are moving to block foreign ownership of farmland in 2024

Thursday, February 1, 2024
KCUR | By Kate Grumke
Published January 22, 2024 at 4:00 AM CST

At least 21 states are considering legislation to block foreign companies and individuals from purchasing farmland. The issue has gained momentum in recent years.

Worries over foreign ownership of U.S. farmland don’t appear to have ebbed in the new year.

Across the Midwest, state lawmakers are proposing ways to prevent foreign companies and individuals from buying agricultural land. New bills have been filed in several states, including Nebraska, Iowa, Illinois, Missouri and Michigan.

In recent years the issue grabbed headlines and politicians' attention, after Chinese companies bought farmland near military properties in North Dakota and Texas. Last year saw a big uptick in legislation, with proposals introduced in more than 35 states and 10 new states adding restrictions, according to Micah Brown, who tracks the issue as a staff attorney at the National Agricultural Law Center.

Laws barring foreign ownership of farmland have been on the books in some states since the 1700s, Brown said, and land ownership is even addressed in the Declaration of Independence.

“This issue has popped up at different political flashpoints throughout our nation's history,” he said.

This year, many proposed laws are specifically targeting “foreign adversaries,” including countries like China and Iran. There are also multiple policy proposals related to farmland near military installations.

While legislators have taken action across the country, Missouri Gov. Mike Parson made a surprise move earlier this month. The Republican signed an executive order barring entities connected to foreign adversaries from buying agricultural land within a 10 mile radius of military facilities. The state is relying on a federal definition of foreign adversaries, which includes China, Cuba, Russia, Iran, North Korea and Venezuela.

“While we have had no issues at this point, we want to be proactive against any potential threats,” Parson said during a press conference announcing the order.

Although China is often the focus of political rhetoric on the issue, entities associated with the country hold less than 1% of farmland held by foreign entities, according to the U.S. Department of Agriculture.

“When it comes to China, we're talking about a very, very small number,” said David Ortega, an associate professor and food economist at Michigan State University.

Canadian citizens and companies own the largest share of farmland, much of it in forests or timberland. Other countries in the top five of agricultural land ownership are the Netherlands, Italy, the United Kingdom and Germany.

Tracking and enforcement

The total amount of foreign-owned farmland has increased in recent years, according to the latest numbers from the USDA. As of 2022, foreign investors held an interest in over 43.4 million acres of farmland, which is larger than the area of Wisconsin. That represents 3.4% of all privately held agricultural land in the U.S.

But there are limitations to this data, which is collected through the Agricultural Foreign Investment Disclosure Act.

“The AFIDA reporting system relies on self reporting, which introduces a lot of opportunities for missing data,” Ortega said. “People may not be reporting these transactions. And over the past few years, USDA has acknowledged that because of low staffing numbers in the agency and lack of resources, they have not been able to really enforce these reporting requirements.”

new report from the Government Accountability Office found major errors in the USDA’s foreign ownership data and said the agency’s processes for collecting and reporting this information are “flawed.”

On top of potential gaps in data, policies against foreign ownership aren’t always enforced. That could be changing; Arkansas enforced its new foreign ownership law in 2023, fining a Chinese company $280,000 and ordering it to divest its land.

Iowa Gov. Kim Reynolds is also looking to increase enforcement. The state has some of the strongest foreign ownership laws in the country, but in her Condition of the State address early this month, Reynolds, a Republican, called for legislation to raise penalties and improve transparency around the issue.

“As China’s threat adapts, our laws should too,” Reynolds said. “Because we cannot let foreign governments undermine the agricultural dominance our farmers have worked so hard to build.”

While tightening restrictions on foreign ownership of land is a hot topic, others have seized the moment to bring a spotlight to corporate and investor ownership of farmland.

State Rep. J.D. Scholten, a Democrat from Sioux City, Iowa, is crafting a policy he hopes will increase transparency to address both foreign and corporate ownership. He said that’s especially important as a generation of older farmers retire and sell their farmland in the coming years.

“We're gonna see a lot of land being transferred here and I'm really worried that Wall Street is going to own the land and our farmers are just going to become serfs on the land,” Scholten said.

The legislator said he’s working to find Republican colleagues to partner on a proposal this session.

This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest. It reports on food systems, agriculture and rural issues.

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