States eye restrictions on foreign ownership of farmland

Legislators in several states are pushing for new limits on foreign ownership of agricultural lands, with lingering concerns about China’s growing global dominance and the United States’ long-term food security.

California lawmakers unanimously approved a bill in August that would have prohibited a foreign government from purchasing or leasing agricultural land in the state — although it was vetoed by Gov. Gavin Newsom (D). Similar legislation was also introduced this year in Alabama, Missouri and South Dakota, according to tracking by the National Conference of State Legislatures.

Such restrictions are already in place in more than a dozen states, and the list is poised to grow as the push appears likely to continue into 2023.

“It’s a potent issue, it’s a populist issue, but I think it’s a good issue,” said Missouri state Sen. Doug Beck (D), who has introduced legislation to restrict foreign ownership of farmlands for four years in a row.

As of 2020, foreign investors held 37.6 million acres of agricultural land — nearly half of it forestland — up from 24.2 million acres a decade earlier, according to the U.S. Department of Agriculture. That is equal to nearly 3% of all privately held agricultural land in the U.S.

China’s growing investments in the global food and agriculture sector have raised particular concern. In Missouri, Beck pointed to the 2013 multi-billion-dollar sale of pork processor Smithfield Foods to a Chinese meat processing company. That sale went through shortly after Missouri lawmakers voted to allow foreign companies to own up to 1% of state agricultural lands.

The issue has also caught the attention of members of Congress. Earlier this year, U.S. Rep. Dan Newhouse (R), a former director of the Washington State Department of Agriculture, introduced a bill to bar Chinese nationals from buying public or private farmlands. U.S. Sens. Tom Cotton (R-Ark.) and Tommy Tuberville (R-Ala.) have introduced similar legislation.

But China is not the leading foreign landholder in the U.S. That distinction falls to Canada, which accounts for 32% of foreign-held agricultural and non-agricultural land, the USDA report said. As of 2020, Chinese investors accounted for less than 1% of the foreign-held land. The singling out of China has provoked concerns among some elected officials about xenophobia.

Tim Gibbons of the Missouri Rural Crisis Center, a nonprofit that advocates for family farmers and independent livestock producers, said he views the push at the state level to limit foreign ownership of farmlands as a response to corporate influence.

“This is about foreign multinational corporations that are often connected to foreign governments owning land, this is not about foreign people owning land in Missouri; I think that’s an important distinction to make,” Gibbons said.

Restrictions on foreign ownership of land have their roots in English common law and carried over to colonial America, according to research by the National Agricultural Law Center in Arkansas.

NALC has noted that state-level restrictions have often been adopted during “political flashpoints”: after the Civil War, during the early 1900s, following World War II and in the 1970s.

“A fifth flashpoint may be on the rise as the issue of restricting foreign investments and ownership of agricultural land has emerged in a number of states and U.S. Congress over the past two years,” NALC director Harrison Pittman said in an emailed statement.

The decision nearly a decade ago to weaken Missouri’s law on foreign land ownership has become an issue in this year’s U.S. Senate race. Earlier this month, Trudy Busch Valentine (D) released a TV ad highlighting Eric Schmitt’s support for the 2013 change.

Between 2019 and 2020, foreign ownership of Missouri ag lands grew by almost 50,000 acres, and now the state’s 1% cap has been exceeded, according to a state analysis this year.

Beck, the Missouri state senator, said he thinks the issue will get a closer look from majority Republicans in the 2023 legislative session.

“You could have a hostile country that controls part of your food source — that’s a national security issue,” Beck said.

In California, Newsom vetoed the ban on foreign governments buying farmland on the grounds that it would “create new and arduous responsibilities” for the California Department of Food and Agriculture.

The sponsor of the bill, state Sen. Melissa Hurtado (D), called the veto disappointing and said she plans to reintroduce a revised measure later this year. If foreign actors control our food and water sources, “then do we have control of anything really?” she said.

Hurtado said her interest in the issue began when farmers in her ag-rich Central Valley district told her about land purchases in which it was not entirely clear who the buyers were.

As of 2020, 2.7% of California’s nearly 42 million acres of privately held agricultural land was held by international owners. Federal tracking shows Texas, Maine and Alabama have the largest number of acres in foreign hands.

Since 1978, the U.S. has required disclosure of foreign ownership in agricultural lands under the Agricultural Foreign Investment Disclosure Act. Several states have similar disclosure requirements, including Arkansas which passed its law last year. Separately, more than half of states expressly allow foreign ownership of lands.