Foreign ownership of land in the United States is growing, with lawmakers and national security experts particularly worried about China’s increased role, but the U.S. government’s ability to track the challenge is marred by serious blind spots.
The February shootdown of a Chinese spy balloon off the East Coast after it traversed the continental U.S., combined with a local city council finally rejecting the Chinese government-linked Fufeng Group’s plans for a site very close to Grand Forks Air Force Base in North Dakota, helped crystallize the challenge but also highlighted U.S. weaknesses in addressing it.
NORTH DAKOTA TOWN REJECTS CHINESE PROJECT NEAR MILITARY BASE
Foreign Ownership
The U.S. Department of Agriculture’s annual report, for which 2021 is the most recent year, concluded there are 40.84 million acres of land considered foreign-owned. The USDA said this was an increase of over 2.4 million acres from 2020 and makes up 3.1% of all privately held U.S. land. The Congressional Research Service noted this year that Canada owned 31% of foreign-controlled land, the Netherlands owned 12%, Italy owned 7%, and the United Kingdom and Germany both owned 6%. Foreign investment in agricultural land is also “concentrated in the South and West.”
Those foreign investors often buy up farmland for different reasons. For example, Canada, which owns more than 12.8 million acres, is heavily invested in forestland and timber.
And while China is known to own just a fraction of U.S. agricultural land, a little less than 1% of all foreign-held land, its investment in agricultural holdings has increased dramatically in recent years.
Chinese investors owned just 69,295 acres of American land at the end of 2011, according to the USDA, but by the end of 2021, Chinese investors controlled 383,935 acres. Iran is listed as owning 4,324 acres, Russia as 73 acres, and North Korea as none.
Sen. Mike Braun (R-IN) asked Agriculture Secretary Tom Vilsack, during an exchange in a mid-March Senate hearing, whether the USDA believed China, Russia, Iran, and North Korea should own American farmland.
“First of all, how much farmland do you think they own?” Vilsack said in reply.
“I’m worried about them owning more in the future,” Braun said, repeating his question.
Vilsack answered with an inaccurate estimate of how much land the four adversaries owned, underestimating their land holdings by tens of thousands of acres.
“Shortcomings”
The Agricultural Foreign Investment Disclosure Act established a nationwide system for collecting information on foreign ownership of U.S. agricultural land. But there are flaws in how AFIDA is implemented, lawmakers and experts say, leading to blind spots on how much land foreign nations actually own.
The federal government essentially relies on an honor system for landowners to self-report information about their properties and the corporate structures of companies that may have equity in the land.
And the USDA’s rules about what information landowners are required to report are open to interpretation, leaving open the possibility that different companies may come away with different ideas about how much they need to disclose.
Rep. Dan Newhouse (R-WA) told the Washington Examiner that “we have numbers for what we know” about Chinese ownership, but he cautioned that “we don’t know what we don’t know.”
“There are certainly a lot of shortcomings in the way we collect the data,” Newhouse said.
That means foreign purchases “may be happening that we just don’t know about,” he added.
The acreage that the USDA does register as foreign-owned likely doesn’t include all the land held by other countries.
The Congressional Research Service said earlier this year that “users of USDA’s AFIDA data have noted inaccuracies and underreporting.” The Midwest Center for Investigative Reporting “asserts that data collected under AFIDA are not complete.”
The congressional research arm pointed out that 7.5% of the AFIDA-reported foreign-owned acres in the U.S. fell under a category called “Country Not Listed.” The data are also “limited” related to tax-haven countries, such as the Cayman and British Virgin Islands.
Renee Johnson, a CRS agriculture specialist, presented at a USDA forum in February, and she laid out “shortcomings,” including “unreported” purchases, “limits on policing disclosure” due to massive transaction volume, and the “incentive for non‐reporting/anonymity to hide the extent of their investment to avoid possible federal or state action.”
Micah Brown, a staff attorney at the National Agricultural Law Center, told the Washington Examiner that deficiencies in the foreign land ownership data “definitely is an area of concern.”
“The self-reporting component of this is likely the biggest concern,” Brown said.
Earlier this year, it was revealed through the Freedom of Information Act that the USDA did not penalize a single entity between 2015 and 2018 over inaccurate foreign ownership filings. The details, revealed in a memo penned by USDA deputy undersecretary Gloria Montano Greene and obtained by Agri-Pulse, showed this was “due to limited staff (and a new program manager).”
The memo added that in 2012, the USDA received just 911 filings, while it received 6,363 filings in 2021 — and the agency has struggled to keep up.
“As the foreign acquisition of farmland increases, it is evident that more oversight is needed to protect local farmers, rural communities, and our national security,” Newhouse and 27 of his House colleaguestold Vilsack in a February letter. “We cannot allow failures to report foreign acquisition of U.S. agricultural land to go unpunished.”
Vilsack has since acknowledged that the USDA “has a very limited investigatory or legal enforcement power.” He lamented there are “more than 3,000 counties in this country,” each with a different recorder’s office, calling it “a system where there is a gap in terms of our ability to know what transactions are taking place.”
The agriculture secretarysaid that between 2016 and 2020, there were only two or three USDA headquarters employees “responsible for all data entry” related to the foreign ownership filings. Vilsack said there are now six AFIDA specialists at the headquarters, with “one person focused on penalty assessments.”
Private Ownership
Some wealthy Americans privately own significant swaths of U.S. land, according to “The Land Report 100”put out by the Magazine of the American Landowner at the end of 2022.
Joseph Glauber, a senior research fellow at the International Food Policy Research Institute and a former chief economist for the USDA, told the Washington Examiner the value of agricultural land has either remained “fairly flat” or climbed over the past 40 years.
“It’s a huge asset, and you buy it for investment purposes,” Glauber said.
The Emmerson family, which owns the Sierra Pacific Industries lumber production company, became the largest private owner of land in 2021. The family currently owns 2.4 million acres.
John Malone and the Malone Family Land Preservation Foundation are the second-largest private landowner, with 2.2 million acres. CNN founder Ted Turner ranks third, with roughly 2 million acres.
The Reed family, which owns the Green Diamond Resource forestry company, ranks fourth and owns 1.7 million acres. And billionaire Stan Kroenke also owns 1.627 million acres of U.S. land and rounds out the top five.
Other high-profile billionaires have invested heavily in agricultural land in recent years as well.
Amazon founder Jeff Bezos is the 24th largest private land owner, with 420,000 acres (still more than China is known to own), while billionaire Microsoft co-founder Bill Gates is the 41st largest private landowner with the 275,000 acres he owns.
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Federal Government Ownership
The U.S. government itself owns a massive, and often controversial, percentage of all U.S. land. The Congressional Research Service noted the federal government controls “roughly 640 million acres, about 28% of the 2.27 billion acres of land in the United States.”
The Bureau of Land Management, Fish and Wildlife Service, National Park Service, and Forest Service combined manage 606.5 million acres, while the Pentagon administers another 8.8 million acres.
The U.S. government owns just 0.3% of land in states such as Connecticut and Iowa but controls 80.1% of the land in Nevada. The federal government owns 60.9% of Alaskan land and 45.9% in 11 Western states that border each other, controlling just 4.1% of the land in all other states.
