Sunday, July 21, 2024

States crack down on foreign-owned farm fields

by BIZ Magazine

By Kevin Hardy, Stateline

Andy Gipson gets concerned even when American allies such as the Netherlands and Germany invest in large swaths of Mississippi’s farmland.

“It just bothers me at a gut level,” he said.

For Gipson, Mississippi’s commissioner of agriculture and commerce, the growing trend of foreign ownership could threaten what he views as the state’s most valuable asset: the land that grows its forests, rice and cotton.

“It is our ability as a country, as a state to produce our own food, our own fiber and our own shelter,” he told Stateline. “And I think every acre that’s sold to anybody outside of this country is one less acre that we have to rely on for our own self-interest, our own national food security.”

Gipson has spent recent months studying the growing amount of his state’s farmland being bought up by foreign interests. He chaired a study committee that just issued a 363-page report on the issue requested by the legislature after a lawmaker had offered a bill to completely ban foreign purchases.

Since its constitution was approved in 1890, the state has had provisions restricting land ownership by “nonresident aliens,” the report noted. But the committee concluded current state law “lacks a clear, workable enforcement mechanism.” The U.S. Department of Agriculture reports that foreign interests held some 757,000 acres of Mississippi’s agricultural land, about 2.5% of the total. Gipson hopes the Republican-led legislature will stiffen the law in the upcoming session.

“I think the time is going to be right in 2024 for the legislature to tighten these laws up,” he said.

If the legislature acts, Mississippi will join a growing group of states seeking to ban or further restrict foreign ownership of farmland. Lawmakers are targeting nations considered hostile to U.S. interests, such as China and Russia, and looking for new enforcement measures. Many see Arkansas as leading the latter push; officials there invoked a new law in October that bans certain foreign owners and ordered a Chinese seed company to divest its land.

Nearly half the states have some restrictions on the books, some of them dating back to the 1700s.

While the debate is as old as the nation itself, the issue has been reinvigorated in recent years after Chinese firms purchased land near military installments in North Dakota and in Texas, said Micah Brown, an attorney at the National Agricultural Law Center at the University of Arkansas who tracks the issue.

Brown said lawmakers in 36 states proposed some sort of legislation on the issue this year, ranging from caps to bans to targets on certain countries, with measures passing in about a dozen of them. More bills are expected in upcoming sessions.

Some lawmakers and experts warn that such laws could go too far, making it difficult for some farmers to sell their land, discouraging economic development, or even leading to discrimination against certain groups of people such as Asian Americans.

Foreigners held an interest in about 40 million acres of U.S. agricultural land at the end of 2021, according to the U.S. Department of Agriculture. Canadian investors own the largest share of that acreage, followed by investors from the United Kingdom and Europe. Foreign ownership represents only about 3.1% of all privately held U.S. agricultural land. But the number is quickly rising: Foreign ownership has increased more than 50% in the past decade, Brown said.

But USDA data shows Chinese ownership is still relatively rare: Chinese interests own less than 1% of the nation’s foreign-held agricultural acreage.

Federal law currently does not regulate foreign ownership land beyond requiring foreign buyers to register with the USDA. But there is bipartisan interest in Congress in tighter restrictions and reporting on foreign ownership.

At the state level, much of the legislation has been proposed by Republicans, though Brown said it’s largely enjoyed bipartisan support — particularly when bills target ownership by nations considered hostile to American interests.

“It’d be pretty difficult for someone to step out and say, ‘Hey, I don’t think we should restrict North Korea.’ … That’s kind of where some of the politics comes into this. It looks like you’re achieving something. There’s been a lot of bipartisan support on these efforts.”

Arkansas leads on enforcement

In October, Arkansas Republican Gov. Sarah Huckabee Sanders invoked the war between Israel and Hamas as she announced her state was taking its first action against foreign ownership of agricultural land.

Sanders described America’s “enemies,” naming not just Hamas, but also China, Iran and Russia as “on the march.”

“Yet for too long in the name of tolerance we’ve let these dangerous governments infiltrate our country,” she said. “Arkansas will tolerate them no longer.”

The state ordered seed and pesticide maker Syngenta to sell 160 acres of land it owns in Northeast Arkansas and uses for research. Legislation passed during the 2023 session barred certain foreign countries from owning farmland and enabled the state to seek judicial foreclosure for those found in violation. The attorney general’s office said it was to date the only known property covered by the new law.

Syngenta, which was given two years to sell its property, did not respond to a Stateline request for comment. The company previously criticized the Arkansas action as “shortsighted.”

Last month, Arkansas Attorney General Tim Griffin, a Republican, announced that Syngenta had paid a $280,000 civil penalty for failing to register with the state as required under legislation passed in 2021. 

“This serves as a warning to all other Chinese state-owned companies operating in Arkansas — I am investigating these types of properties throughout the state and will exercise all powers afforded to my office under the law,” he said in a statement last month. 

Based in Switzerland, Syngenta was bought by ChemChina, a state-owned entity, in 2017.

Republican state Sen. Blake Johnson said he was unaware of Syngenta’s acquisition when he sponsored both pieces of legislation. He said the laws were broadly aimed at protecting national security.

“Our food safety is paramount to the national defense, in my opinion: feeding, clothing ourselves and our military if need be in the future,” he said. “That can be done by our own land. We don’t need to outsource that to our enemies.”

Johnson said he was careful to target the legislation at unfriendly nations. It applies to the same countries named in the International Traffic in Arms Regulations, federal rules that restrict weapons from certain adversarial nations. He noted that friendly nations are exempt: Canada, for instance, owns large swaths of timberland in southern Arkansas.

“That’s not a problem under this law,” he said.

The Arkansas action was closely watched by officials in neighboring Mississippi.

“To date, Arkansas is the only state that has actually enforced a law like this,” said Gipson, the Mississippi agriculture commissioner. “I like the way they did it.”

But he said there are plenty of complications.

Mississippi doesn’t want to hinder important agricultural research, Gipson said. Nor does it want to dissuade investments such as Japanese-based Nissan’s giant assembly plant in Canton.

“Some of the states have had unintended consequences and we don’t want to have those, obviously,” he said.

Republican state Rep. Bill Pigott, who also served on the study committee, said he’s working on legislation that he thinks will pass in 2024.

A farmer who raises peanuts, corn and cattle, Pigott said he has not heard from other farmers about the issue, though he said many constituents are concerned.

“People who listen to the news and watch TV — they seem to be more concerned about it than actually the farmers themselves,” he said. “I do get people ask if we are doing anything.”

Pigott said the legislation will aim to target hostile nations such as China and Russia. Currently, investors from the Netherlands are the largest foreign owners in Mississippi, followed by Germany.

“Almost nobody has any concern with that,” he said. “It is the hostile nations, and No. 1 on that list is China.”

Striking a balance

In opening a U.S. Senate hearing in September, Michigan Democratic Sen. Debbie Stabenow acknowledged that the nation’s food system is an integral component of national security.

With more foreign entities buying up land, she said, the issue deserves scrutiny. But she offered a warning:

“We must also be cautious of our history of barring immigrants from owning land in our country and ensure efforts to protect our national and economic security do not encourage discrimination,” she said.

During hearings on foreign-owned agricultural land in Topeka, Kansas, state Rep. Rui Xi, a Democrat and the only Chinese American in the state House, in September warned about rhetoric casting suspicion on Asian Americans such as grad students lawfully admitted to the United States.

“If we want to take a look at foreign investment in ag land and it’s narrow, that’s great,” Xi said. “If you try to cast a shadow and it continues to cast suspicion on people who are here innocently who are just trying to learn, who are trying to attend our universities, I think that’s where we really, really need to urge caution.”

While more American agricultural land is being bought up by foreign interests, it’s generally not governments that own it, said David Ortega, a food economist at Michigan State University. Syngenta garnered plenty of attention in Arkansas, but it’s more common for foreign individuals and firms to buy land as investments, he said.

So far, Ortega said, there’s no evidence that foreign purchases have raised ag prices or pose any threat to American food security.

Ortega said policymakers should consider carefully the potential effects of new laws on the broader agricultural economy. China, for instance, is often targeted by legislators. But it’s also the largest buyer of American agricultural exports and could retaliate against American farmers.

“It’s far easier for China to find a new source to buy [from] than it is for us to find new export markets,” he said in an interview.

Ortega said there are specific, local concerns about foreign ownership worth addressing. And while there are many good-faith debates occurring, he does worry that the conversation could lead to discrimination of groups such as Chinese Americans.

“I don’t think that the root cause of lawmakers’ concerns over this issue is rooted in xenophobia,” he said. “But I am worried that the way this issue is talked about can lead to xenophobia and those types of issues. And that’s why I and others are urging caution.”

Since Congress has not enacted any legislation, state lawmakers say they are willing to act.

“While I would prefer we send one message from our Congress to address this issue, that’s beyond the scope of what I can do,” said Georgia state Rep. Clay Pirkle, a Republican. “What I can do is formulate a state response to this issue.”

Pirkle grows cotton, peanuts, rice and butterbeans on about 1,000 acres in southern Georgia. Earlier this year, he introduced legislation in Atlanta that would prevent nonresident aliens from purchasing farmland near military bases if they were from nations deemed adversarial by the U.S. Department of Commerce — a list that currently includes China, Cuba, Iran, North Korea and Russia. The bill didn’t progress, but Pirkle plans to pursue it again next session.

He said crafting legislation on the matter is complicated because he does not want Georgia to dissuade purchases from people who have fled other countries for the United States.

“I really made every effort to avoid unintentional consequences of folks from these countries that have come to the United States because they really desire liberty and freedom,” he said. “And I wanted to make sure that I did not unduly burden them.”

But Pirkle believes something needs to be done. American agricultural land is not a renewable resource. And developers continue to encroach on farmland for the development of new housing and industry.

“The land that we have that we grow crops on to feed the world is the land that we have in ag production,” he said. “We’re not making any more, and it is a scarce resource.”

(Ed.’s Note: This report was first published by Stateline, part of the States Newsroom nonprofit news network with the Louisiana Illuminator.)

You may also like

-
00:00
00:00
Update Required Flash plugin
-
00:00
00:00