Who are the Foreign Owners of U.S. Agricultural Land?
Expert views from Dr. Wendong Zhang, Assistant Professor, Dyson School of Applied Economics & Management, Cornell University.
Foreign ownership of U.S. farmland has been a concern among rural communities for a long time (Deaton and Lawley, 2022), and legislation was introduced as early as in the 1970s to restrict foreign ownership of U.S. land. In a much more recent context, from 2021 through 2022, 12 states (Alabama, Arizona, Arkansas, California, Indiana, Iowa, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee and Texas) have proposed legislation to restrict certain foreign investments in real property and agricultural land located within the boundaries of their state. In 2023, the momentum has persisted, as the majority of states either already have or are planning to propose similar legislation (National Agricultural Law Center 2023a). Based on the recent flurry of activity, we can expect the federal and state governments to enact even more measures in the near future.
In addition, the recent strategic classification of “adversary countries” holds significant implications for foreign land ownership in the United States. As of June 2023, the U.S. Department of Commerce has officially designated China, Russia, Cuba, Venezuela, Iran and North Korea as “foreign adversaries” (National Agricultural Law Center 2023a). As of March 2023, 14 states have proactively enacted some kind of legislative measures aimed at barring entities specifically affiliated with these “adversary” countries from purchasing agricultural land in the United States (Tesfaye, 2023). For example, Iowa has banned the Chinese government as well as any persons or entities from China from acquiring any real properties located in the state, and Arkansas became the first in the nation to enforce a state law on a foreign owned entity (National Agricultural Law Center 2023d). Concurrently, several other states are proposing similar prohibitory measures. This trend appears to be driven by the escalating tension between Washington and Beijing, as well as confluence of other international events. The deteriorating U.S.-China relationship, in particular, has amplified debates surrounding Chinese holdings of U.S. agricultural land and the concerns on national security of the U.S. food supply chain.
Based on data from the Agricultural Foreign Investment Disclosure Act, over the past two decades, while foreign interests in U.S. agricultural land have steadily increased, a significant portion of recently acquired farmland by foreign entities is held under long-term leases rather than full ownership. Furthermore, the primary acquirers of agricultural land are energy development and natural resource entities, as opposed to entities primarily engaged in agricultural or food production, especially for long-term leases. Specifically, the emergence of wind and solar energy farms represents a notable trend of recent foreign investments in U.S. agricultural land, and their effect on the U.S. food supply chain is likely limited. Another crucial aspect that has often been overlooked is the distribution of foreign-held farmland among “adversary” countries as well as U.S. allies. Notably, Figure 1 shows that “adversary” countries hold a mere 1% of all foreign held farmland, with U.S. allies accounting for 87%. The historical presence of “adversary” countries in the U.S. agricultural land has been minor, and our analysis suggests this trend is likely to continue, as more states have recently enacted or are proposing to prohibit or limit these countries from obtaining U.S. farmland.
About Dr. Wendong Zhang
Dr. Wendong Zhang is an Assistant Professor and Extension Economist in the Dyson School of Applied Economics and Management, SC Johnson College of Business at Cornell University. He specializes in studying the intersection of agriculture, the environment and Chinese agriculture. He’s an Associate Editor for two journals, received awards for his research and holds a Ph.D. in Agricultural Economics from the Ohio State University.
- Agricultural Foreign Investment Disclosure Act (AFIDA). Farm Service Agency, U.S. Department of Agriculture (FSA-USDA), 2020. fsa.usda.gov/programs-and-services/economic-and-policy-analysis/afida
- Deaton, B. J., & Lawley, C. (2022). A survey of literature examining farmland prices: A Canadian focus. Canadian Journal of Agricultural Economics/Revue canadienne d’agroeconomie, 70(2), 95-121. agriculture.com/news/livestock/prop-12-ruling-whats-next-for-pig-farmers
- National Agricultural Law Center, University of Arkansas. 2023a. Foreign Ownership of Agricultural Land: FAQs & Resource Library. nationalaglawcenter.org/foreign-investments-in-ag
- Tesfaye, Eva. (2023, March 17). Worried about spying and tensions with China, Midwest states want to limit who can buy farmland. Iowa Public Radio. iowapublicradio.org/agriculture/2023-03-17/worried-about-spying-and-tensions-with-china-midwest-states-want-to-limit-who-can-buy-farmland
- National Agricultural Law Center, University of Arkansas. 2023d. Spotlighting State Restrictions on Foreign Land Investments: Arkansas – Part One. nationalaglawcenter.org/spotlighting-state-restrictions-on-foreign-land-investments-louisiana-part-one