Citing a growing concern about Chinese investment in U.S. agriculture, Iowa Republican U.S. Sen. Joni Ernst on Tuesday announced a new bipartisan proposal to overhaul monitoring of foreign ownership of farmland across the country.
Ernst and Michigan Democrat Debbie Stabenow, chair of the Senate Committee of Agriculture, Nutrition and Forestry, hope to limit China’s ability to purchase U.S. farmland and require the federal government to consider stripping some Chinese and foreign landowners of their real estate.
Foreign ownership and investment in U.S. agricultural land nearly doubled over the last decade, according to the U.S. Department of Agriculture.
Chinese ownership of U.S. farmland increased from $81 million in 2010 to $1.87 billion in 2021, the USDA reported. And reports have shown that Chinese investors are buying farmland near military bases and other critical U.S. infrastructure.
Allowing Chinese investors to strengthen their presence and control over U.S. food production poses a national security risk, Ernst said.
“Food security is national security,” Ernst, who serves on the Senate Armed Services Committee and the Agriculture Committee, told reporters Tuesday.
She called China the country’s “No. 1 pacing threat,” and referenced a Chinese company’s plan to build a corn mill 12 miles from Grand Forks Air Force Base in North Dakota, casting it as a geopolitical risk.
Air Force Assistant Secretary Andrew P. Hunter, in a letter to Republican North Dakota U.S. Sen. John Hoeven from January, warned the “project presents a significant threat to national security with both near- and long-term risks of significant impacts to our operations in the area.”
Ernst said China has been allowed to “use loopholes to attempt to exploit any potential vulnerability and assert control over our agriculture industry.”
She said current federal law does not provide enough oversight of which foreign entities are buying farmland and where they are purchasing large swaths of real estate.
The USDA is charged with monitoring foreign investment in farmland under the 1978 Agricultural Foreign Investment Disclosure Act. The law requires all foreign holders of agricultural land to report those holdings to the USDA.
The USDA’s Farm Service Agency releases that information in an annual report. However, the agency largely relies on voluntary reporting, according to a report by Investigate Midwest.
Ernst and Stabenow proposed legislation they hope to become part of next Farm Bill that would give Congress and federal agencies greater oversight and involvement in reviewing the acquisition of U.S. cropland, pasture, forest and other agricultural land.
The bill would give the Committee on Foreign Investment in the United States authority to consider agricultural and food security concerns in determining whether a land purchase is a national security threat. The bill would also:
— Require federal review of all purchases or leases of land over the last three years by a foreign entity in excess of $5 million or 320 acres
— Allow for greater USDA involvement in reviewing acquisition of land by foreign adversaries
— Bolster USDA oversight and investigations by adding staff
— Develop a public database of agricultural land owned by foreign investors and create an audit of ownership
— Prohibit land owned or operated by foreign investors from participating in Farm Service Agency programs
— Require the Committee on Foreign Investment in the United States to consider retroactive divestment of real estate owned by foreign entities
As of December 2021, Chinese investors owned more than 380,000 acres, just less than 1 percent of all foreign-held farmland in the nation, according to the USDA. That’s up from 13,720 acres owned by Chinese investors in 2010.
In all, foreign investors owned about 40 million acres of U.S. farmland worth about $74 billion and equal to 3.1 percent of all U.S. farmland, USDA data shows. That is an area larger than the size of the state of Iowa.
Foreign investors held more than 507,000 acres, or roughly 1.5 percent, of all Iowa farmland as of Dec. 31, 2021, the USDA reported. That’s down from nearly 550,000 acres held by foreign investors as of the end of 2020.
The decline reflects long-term leaseholds that were terminated and the sale of various types of agricultural land, according to the USDA. Some of the changes also reflect reconciliation of past transactions and recording of late filings.
Ernst said she could not say how much Iowa farmland is owned by Chinese investors, and the most recent USDA report of foreign holdings of U.S. agricultural land does not specify what’s held in the state.
Iowa is among at least a dozen states that have limits on foreign ownership. State law restricts foreign farmland purchases to 320 acres.
While Iowa already has a state law that limits foreign ownership of ag land, Iowa Secretary of Agriculture Mike Naig, in a statement, said he’s hopeful the bipartisan bill can become the basis for a much tougher federal law.
The debate over farm ownership has intensified as Chinese firms over the past decade have purchased major agribusinesses, like pork processing giant Smithfield Foods. It also comes amid broader efforts by Congress and the Biden administration to curb the United States’ reliance on China in key industries critical to the nation’s supply chain.
China is one of Iowa’s largest trading partners.
Ernst stressed the proposed legislation does not prohibit Chinese and other foreign ownership in the United States.
“But it is strengthening our oversight and making sure” the USDA and FDA “have a seat at the table as we are reviewing foreign investment in the United States,” she said. “We’re just protecting our national security interest here in the United States.”
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