Restrictions on foreign ownership of farmland get renewed push

Bills have been introduced in more than a dozen states.
FILE – Walter Fernandez moves irrigation pipes on an alfalfa field in Rio Vista, Calif., July 25, 2022. (AP Photo/Rich Pedroncelli, File)

A multi-year effort to restrict foreign ownership of property, including farmlands and critical infrastructure, is getting a second wind this year.

That is especially the case in Republican-led states, as the GOP steps up its rhetorical war against China.

Momentum appears especially strong in Texas, where this month Gov. Greg Abbott (R) announced he would sign a bill that would ban Chinese, Iranian, North Korean or Russian citizens or entities from buying real property in the state. He said it would build upon a 2021 Texas law that prohibits contracts with companies from that same list of countries to work on critical state infrastructure.

“We have a goal here and that is to prevent countries that are hostile to the interests of the United States from being able to buy up our farmland and our other land that’s so important to us,” Abbott said.

Foreign ownership bills have been introduced in more than a dozen states, according to tracking by the National Conference of State Legislatures and reporting by Pluribus News. The list includes Republican strongholds Mississippi, Missouri, Montana, North Dakota, Oklahoma, South Carolina, Tennessee, Texas, Utah and Wyoming.

Legislation has also been filed in deep blue California and Hawaii, plus Virginia, one of only two states with split control of the legislature.

Elsewhere, Florida Gov. Ron DeSantis (R), a potential presidential contender next year, indicated he will ask state lawmakers to pursue a ban this year on Chinese investments in residential and agricultural real estate. And members of Congress from both parties are teeing up oversight legislation in response to Chinese purchases of farmlands, according to the Wall Street Journal.

The Texas proposal has drawn fierce opposition from Democrats in the state and recently sparked a protest at Houston City Hall. At a news conference at the Capitol, state Rep. Gene Wu (D), who was born in China, likened the proposed law to anti-Asian immigrant policies of more than a century ago.

“It’s now 2023 and not 1883 and here we are today still rehashing the same old laws, the same old ideas over and over again,” Wu said. “It is extremely disappointing and extremely painful for … the Asian community to see this continued attack.”

Wu took particular exception with the portion of the Texas bill that would prohibit individuals who are citizens of the banned countries from buying property, which he said could affect immigrants awaiting U.S. citizenship. The sponsor of the bill, state Sen. Lois Kolkhorst (R), has said the bill is not intended to apply to lawful permanent residents of the U.S.

The issue also appears to be gaining traction in Missouri where foreign ownership of land has been a topic of controversy since 2013 when the legislature voted to allow foreign companies to own up to 1% of state farmlands. Previously, foreign ownership of Missouri ag lands was barred. That vote paved the way for a Chinese conglomerate to acquire pork processing giant Smithfield Foods.

Missouri Democrats have used the 2013 vote as a cudgel against majority Republicans. This year, state Sen. Doug Beck (D) has reintroduced, for the fifth year in a row, a bill to prohibit any “alien or foreign business” from acquiring farmlands in Missouri.

“It’s a potent issue, it’s a populist issue, but I think it’s a good issue,” Beck told Pluribus News in October. “You could have a hostile country that controls part of your food source — that’s a national security issue.”

But the issue is now also getting a fresh look from Missouri Republicans. A Senate committee recently took testimony on a trio of GOP-sponsored bills related to foreign ownership of land, including a proposal to reduce the cap on foreign land ownership to 0.5% and block the foreign purchase of lands near military bases.

“Missouri ought to be owned by Missourians, or at least Americans,” said state Sen. Bill Eigel (R), sponsor of one of the measures and a possible 2024 candidate for governor, according to the St. Louis Post-Dispatch.

The state’s Farm Bureau backs the effort to restrict foreign ownership, but Missouri Realtors and the Chamber of Commerce have voiced opposition to the proposals.

“We don’t think it’s the place of government to get involved with private business transactions,” Sam Licklider, a lobbyist for the Realtors, said in testimony.

In Montana, the Senate Agriculture Committee held a hearing on a proposal from Senate President Pro Tem Kenneth Bogner (R) that would prohibit interests from China, Iran, North Korea and Russia from renting, leasing or owning critical infrastructure, including ag lands.

Citing concerns about national security and food security, Bogner said he introduced the bill specifically with China in mind.

“China especially has shown a concerning interest in acquiring lands and resources in our country that could help them with spying efforts, economic competition, and gaining the upper hand in any conflict with the United States,” Bogner said in a statement.

The U.S. Department of Agriculture estimates that foreign owners held an interest in 40 million acres of agricultural land, mostly forestlands, as of the end of 2021 – amounting to 3% of all privately held ag lands and nearly 2% of all lands.

Canadian investors held nearly a third of the foreign-owned land and Chinese interests less than 1%, according to the report.

Foreign buyers are also purchasing residential property in the U.S. A recent report from the National Association of Realtors found that from April 2021 to March 2022 non-U.S. citizens — both residents and non-residents — purchased 98,600 U.S. homes, representing 1.6% of home sales.

The top foreign buyers were from Canada, Mexico and China, and the top destinations were Florida, California and Texas.

In housing-crunched Hawaii, where foreign buyers have snapped up investment properties, lawmakers are once again this year proposing to bar “nonresident aliens and businesses” from purchasing certain residential properties. A second measure would prohibit the purchase of real estate within two miles of federal land.

Foreign ownership of farmlands has also become an issue in California’s Central Valley. State Sen. Melissa Hurtado (D) recently reintroduced legislation to bar foreign governments from purchasing or leasing ag lands. A similar measure passed the California Assembly last year, but Gov. Gavin Newsom (D) vetoed it.

According to the NCSL, state laws surrounding foreign ownership of farmlands “vary significantly,” with some states expressly allowing ownership, others limiting it, and some fully prohibiting ownership.