Foreign farmland ownership remains hot political topic

I woke up this morning to hear one of our local radio commentators talking about foreign farmland ownership, and he declared that “not one foreign owner should be allowed to buy any farmland in the U.S.”

He didn’t say exactly why or exactly which “foreigners” should be banned, but suggested even a smidgen of foreign ownership would be really bad for our country.

It’s a sentiment that I’ve heard more frequently as we near the November elections, with the angst primarily directed at Chinese-owned properties. It seems like both Democrats and Republicans on the state and federal levels want to do something to demonstrate that they are strongly defending Americans against foreign agricultural land ownership.

22 states on list

In fact, between January 2023 and July 2024, at least 22 states enacted legislation regulating foreign ownership of real property, according to the Congressional Research Service. Those laws vary significantly. To view states’ laws restricting foreign ownership of private agricultural land, see the National Agricultural Law Center’s “Statutes Regulating Ownership of Agricultural Land” at https://nationalaglawcenter.org/state-compilations/aglandownership/.

If you dig into more of the research and the numbers, you have to wonder how big of a threat foreign ownership really is to private landowners. And, if you put it into perspective, is urban sprawl—where we are losing prime farmland to development—a bigger threat? Here’s a look at some of the facts so you can form your own perspective.

As Agri-Pulse reported earlier this year, just over 3% of America’s farm, ranch and forestland is now owned by foreign buyers after overseas interests purchased another 3.4 million acres in 2022, according to a new U.S. Department of Agriculture report.

Colorado, Alabama and Michigan lead the way

Foreign investors owned or leased 43.4 million acres, or about 3.4% of the nation’s total farm, ranch and forestland, in 2022, according to the USDA’s most recent data on foreign land purchases. About 45% of the growth occurred in three states: Colorado, Alabama and Michigan. Forestland accounted for more than 48% of all reported foreign-held acreage, cropland for more than 28%, pasture and other agricultural land for more than 21% and non- agricultural land for slightly more than 2%.

Keep in mind that just because 3.4 million additional acres were added in the 2022 report doesn’t mean that land was purchased that year, according to Michigan State University Economist David Ortega. 

“This is self-reported,” he said. “We don’t know if this increase that’s being reported is because of an actual increase in purchases or if it’s just a reconciliation of past transactions.”

Under the Agricultural Foreign Investment Disclosure Act of 1978, foreign investors must file documentation with USDA detailing land acquisitions and dispositions or incur a late fee worth 0.1% of the land’s value for each week purchases go unreported, with the penalty capped at 25% of the land’s value.

Not every foreign entity that holds land files reports on time, however, and the USDA in recent years has struggled with the task of penalizing those that don’t. Talking points prepared for Ag Secretary Tom Vilsack in 2023, obtained by Agri-Pulse through a Freedom of Information Act request, say “poor record keeping” at the agency “resulted in inconsistent reports that could not be used as the basis to assess penalties” between 2016 and 2020. The document also pointed to “very limited staffing” that also posed a challenge from 2015 to 2018. 

Foreign investors reported 557,000 additional acres in Colorado in 2022, much of which was cropland and rangeland, according to the report. Some of this land was reported late. For example, Canadian-owned High Lonesome Ranch was assessed a $7,579 penalty last year for not filing forms with USDA, while Roan Creek Ranch, also under Canadian ownership, had to pay $855 for the same reason.

Foreign holdings in Alabama and Michigan, meanwhile, grew by 514,000 and 461,000 acres, respectively. The report said these increases mostly stem from large forestland purchases.

The state of Texas has the largest amount of foreign-held U.S. agricultural land, with more than 5.4 million acres. Maine has the second largest amount of foreign-held agricultural acres, with just under 3.5 million. Colorado has the third largest amount of foreign-held agricultural land with just under 2.5 million acres.

Canada is top foreign investor

The largest foreign investors in the United States are not from China.

Canadian investors own the largest amount of reported foreign-held agricultural and non-agricultural land, with 32%, or 14.2 million acres. Foreign investors from an additional four countries, the Netherlands with 12%, Italy with 6%, the United Kingdom with 6% and Germany with 5%, collectively held 13 million acres or 29% of the foreign-held acres in the U.S. The remaining 17.1 million acres, or 38 percent of all reported foreign-held agricultural and non-agricultural land, are held by various other countries.

China held 346,915 acres, which is slightly less than 1% of foreign-held acres.

Editor’s note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.com.