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China is buying billions in US farmland and lawmakers are scrambling to try to stop them

Soybean harvest. (Pixabay/Released)
July 20, 2021

U.S. lawmakers are acting with increased concern as Chinese purchasers are buying tens of thousands of acres of U.S. farmland.

As of the start of 2020, Chinese investors owned about 192,000 acres of U.S. agricultural land valued at about $1.9 billion, according to Politico. While Chinese land ownership in the U.S. is less than that of other foreign nations, the growth in Chinese land ownership is part of an overall trend in China rapidly buying up other country’s farmland over more than a decade.

In 2018, the U.S. Department of Agriculture (USDA) reported that China’s agricultural investments in other nations had grown more than tenfold what they had

The extensive Chinese land holdings in the U.S. have stirred calls to cut China off and stem the potential U.S. reliance on those Chinese landowners from both sides of the political aisle.

In a speech last week for the conservative Heritage Foundation, Republican former Vice President Mike Pence said, “America cannot allow China to control our food supply.” During his speech, Pence called on President Joe Biden to “end all farm subsidies for land owned by foreign nationals.”

Both Iowa and Minnesota have already passed state laws, imposing restrictions on foreign ownership of farmland in their states. In 2019, ahead of the Democrat presidential primaries, then-candidate Warren said she would support a national version of Iowa’s law and further safeguards against foreign investors buying farmland through “fake American buyers” to circumvent land purchase rules.

“The current trend in the U.S. is leading us toward the creation of a Chinese-owned agricultural land monopoly,” Rep. Dan Newhouse (R-WA) warned in a recent House Appropriations hearing.

Newhouse raised his concerns about Chinese land ownership as he proposed an amendment in a new agricultural appropriations bill, H.R. 4356, that would block any new agricultural purchases by companies that are wholly or partly controlled by the Chinese government and would ban existing Chinese-owned farms in the U.S. from drawing from federal agricultural support programs.

One lawmaker, Rep. Grace Meng (D-NY), offered pushback to Newhouse’s amendment, raising concerns the measure could stoke anti-Asian sentiments in the U.S.

Meng said the amendment would “perpetuate already rising anti-Asian hate.” She said if lawmakers are concerned about the national security implications of Chinese investors buying up U.S., then lawmakers should similarly restrict other foreign buyers.

Efforts to stop foreign land purchases could come with several challenges.

Joe Maxwell, president of the progressive advocacy group Family Farm Action, told Politico that foreign investors could likely still set up limited liability companies (LLCs) in the U.S. and designate an American owner to circumvent reporting requirements while still owning the U.S. agricultural land through their corporate structure. Sifting through layered corporate structures could prove time-consuming and labor-intensive for regulatory agencies.

“It’s a massive undertaking to verify who really owns [the land],” Maxwell told Politico. “These foreign interests are pretty smart. They use different business structures to further conceal it.”

Maxwell also warned foreign investors could start bidding much higher prices for U.S. farmland up for auction, pricing out prospective new U.S. farmers.

“When this land changes hands, they’re going to gobble it up,” Maxwell said of Chinese and other foreign buyers. “These investments artificially increase the value of that land, which then denies young and beginning farmers opportunities to farm.”