State and federal lawmakers have been increasingly concerned about foreign ownership of U.S. real estate, particularly when it comes to Chinese entities amassing significant amounts of U.S. farmland. Their concerns revolve around the potential national security risks such acquisitions pose, especially those near sensitive sites. However, reviewing thousands of documents filed with the USDA (United States Department of Agriculture ) reveals a complex and nuanced picture.
According to a review, the actual extent of Chinese ownership of U.S. agricultural land is relatively small, accounting for fewer than 1,400 acres in a country with 1.3 billion acres of agricultural land. Chinese interests hold less than three-hundredths of 1% of all U.S. agricultural land. Despite this, the review also highlights significant shortcomings in the federal oversight system concerning the reporting and enforcement of foreign land ownership.
Federal law mandates that any foreign entity or individual purchasing or leasing U.S. agricultural land must report the transaction to the USDA within 90 days. However, some of these transactions have not been reported for years, with one case spanning more than two decades without disclosure. Furthermore, the penalties for failing to report such acquisitions have been relatively modest, with no fines exceeding $121,000 during the same time.
The review of USDA filings also sheds light on the nature of foreign land acquisitions in the U.S. While Chinese entities have made some purchases, most transactions involved European wind power companies leasing land from U.S. farmers to develop wind turbines. These transactions were mostly concentrated in states like Illinois.
Chinese entities accounted for only 11 of the disclosed purchases of agricultural land from January of 2022 to June of 2023 in the 35 states reviewed. Furthermore, many of these purchases were not recent sales, and some were reiterations of prior disclosures. For instance, Smithfield Foods, a Chinese-owned company since 2013, reported acquiring 186 acres in 2022 and 2023 in Missouri and North Carolina.
The concern over Chinese ownership of U.S. farmland is not solely about the quantity of land but also its potential risks. Critics argue that the U.S. needs tighter regulations, citing the growth in foreign ownership of agricultural land. While historically, foreign interests held about 3.1% of U.S. agricultural land, but foreign acquisitions have been accelerating. From 2011 to 2015, it increased by an average of 800,000 acres yearly, but from 2015 to 2021, it surged to 2.2 million acres annually.
Members of Congress have pushed for tougher regulations on foreign land purchases, emphasizing the need to safeguard national security interests. Legislation has been proposed to restrict ownership of U.S. land by countries like China, Russia, North Korea, and Iran, with additional oversight mechanisms to ensure timely and accurate reporting of land transactions.
Image is licensed under the Creative Commons Attribution-Share Alike 4.0 International license and was created by Sixflashphoto.
