More than half of U.S. states now have some type of restriction on foreign ownership of agricultural land. Harrison Pittman, director of the National Agricultural Law Center, says many of those laws are aimed at foreign adversaries rather than all foreign investors.
“Most of your foreign ownership is Canada, the Netherlands, the UK, Italy, Germany. And I’m probably leaving one out there. But that’s almost 70 percent, 66 to 70 percent of foreign ownership for those entities. When the real target was certain categories of foreign adversaries. And so they had trouble even sort of gaining traction in the democratic process from one state to the other. But I think that’s really one of the trickier parts of this whole issue. And most of the laws and probably just about all the laws, if not all, that have been enacted really beginning in 2023, they’re really tailored towards these foreign adversaries. So think China, North Korea, Iran, Russia.”
Pittman says that focus has helped reshape the policy debate at the state level.
“At one bookend, at the end of calendar year 2022, a super majority of states in the United States affirmatively allowed for foreign ownership of all regardless of country of origin. And now we’ve crossed over by a handful of states, more than half, 30 or so states now have some type of restriction on foreign ownership. And so that part’s been a very significant change in terms just in terms of the number of states that have weighed in.”
While states have moved quickly, Pittman says attention is also growing in Washington.
“So, there’s a number, when I say a number, over the last two years or so, we’re talking dozens, maybe three, different proposals. Some of them are between the House and the Senate are really similar to each other. Their companion bills, others are pretty unique. The current Farm Bill that’s working its way, it’s come out of the House. They had another just came out of committee in the Senate. It has some provisions related to foreign ownership. The most tangible action that’s happened recently and at the federal level is USDA issued a proposed rule to put new rules out to implement a AFIDA (Agricultural Foreign Investment Disclosure Act). It would really, really broaden the scope of what is to be reported.”
As he mentioned, one area to watch is a USDA proposal that would expand reporting requirements under the Agricultural Foreign Investment Disclosure Act.
“If it was enacted and implemented as proposed, it would be really the most significant changes to AFIDA in well over half a century. So, there is more and more traction at the federal level. One of the issues there is it’s really quite practical. Congress is having trouble creating legislative vehicles for which anything to be attached to. We’ve had some changes in appropriations bills affecting foreign ownership. They’re important in and of themselves, but they’re not major. They’re not like when the authorizing committees change direction of the issue. There’s a lot of interest at the federal level.”
Pittman says both USDA’s rulemaking process and the next Farm Bill could shape the future of foreign ownership policy.
“I would watch, frankly, the two things at the federal level: if and when USDA releases a final rule on the AFIDA reporting. There’s certainly, there’s no legal timeline for them. But at some point, I mean, they could always just say we’re not releasing a final rule, I suppose. That’s not likely. But it’s not guaranteed that those items that are in the proposed rule will make it to the final rule. So I’d keep an eye on that. The comment period closed August the 10th. We now have a, at least in the Senate side, the committee passed a Farm Bill narrowly. Virtually impossible for there to be any movement before the midterms. Possible movement between the midterms and the end of the calendar year. So I would watch that. And frankly, particularly on the Senate side, provisions regarding foreign ownership and AFIDA specifically are in contradiction with what USDA proposed.”
Harrison Pittman, along with us, he’s the director of the National Agricultural Law Center.
And here are some fast facts, courtesy of the Department of Agricultural and Consumer Economics at the University of Illinois. AFIDA data shows foreign interests hold just over 46 million acres of agricultural land. That includes certain long-term leases, such as wind and solar development. Nearly half of that reported acreage is forestland. When measured against all U.S. land in farms, foreign ownership accounts for 0.67 percent. And who is the largest foreign holder of that land? Canada.