A reality check on foreign-owned farmland
This summer, a sale of 300 acres of North Dakota farmland raised eyebrows and alarm. The $2.6 million price tag was noteworthy, but the bigger kicker was the buyer — Chinese company Fufeng Group.
Various government officials, including North Dakota’s Governor Doug Burgum, raised concerns over the sale, as the land is 12 miles from Grand Forks Air Force Base, which houses complex drone technology.
Fufeng Group says it plans to use the land to build a $700 million corn milling plant, which the company says, would create at least 200 jobs, as well as residual opportunities for logistics, trucking and other services.
ESPIONAGE POTENTIAL?
The purchase put several lawmakers and analysts on edge, cautioning about potential espionage.
“More needs to be done to ensure the U.S. food supply chain is secure and independent,” says Rep. Dan Newhouse, R-Wash. “If we do not prevent these land grabs, we are failing to protect our farmers, our families and our country.”
In September, Newhouse, along with 50 other members of Congress, asked USDA and other agencies to take effective action in addressing the potential national security risks that appear to arise from this transaction.
Although China has been in the spotlight, most foreign-owned land in the U.S. is held by other countries, according to USDA. Of the 37.6 million acres of American agricultural land that is foreign owned, these countries own the deeds:
- Canada — 32%
- Netherlands — 13%
- Italy — 7%
- United Kingdom — 6%
- Germany — 5%
- China — 1%
China’s 1% accounts for 352,140 acres. “At first, you look at China’s acreage and think it’s small, but that has almost all been acquired in the past decade,” Newhouse says.
TROUBLE IN TEXAS
Similar to North Dakota, a project had its plug pulled in Texas. A wind energy project in Del Rio, Texas, was canceled in April when state officials realized these two key issues:
- The land’s proximity to the Laughlin Air Force Base.
- The company hired for the job is owned by a former member of the Chinese military who has direct ties to China’s ruling communist party.
Rep. Tony Gonzales, R-Texas, co-sponsored the Protecting Military Installations and Ranges Act of 2021, which places restrictions on the purchase of certain property by a foreign person (or someone acting for someone) from Russia, China, Iran or North Korea. The bill was referred to the Senate Committee on Banking, Housing and Urban Affairs, where it awaits its review.
Similar legislation proposed in the past has been curbed on the grounds of discrimination, according to Chuck Devore, former California assembly member and retired lieutenant colonel in the U.S. Army Reserve. He says pushing pause on foreign land ownership will only put pressure on the “ticking timebomb” that is China.
Until federal policy is confirmed, the U.S. farmland market remains open to foreign buyers in some states.
Foreign investors own 37.6 million acres of U.S. agricultural land, which is 2.9% of all privately held agricultural land and 1.7% of all U.S. land.
International Investors
Around 1% of his company’s farmland-buying clients are from other countries, says Howard Halderman of Halderman Real Estate and Farm Management. They typically hail from the European Union, the U.K., Argen-tina, Brazil and Japan.
One of his Denmark clients provides an example of foreign interest in U.S. farmland.
“I showed him some land in the eastern Corn Belt, but those farms really didn’t fit his vision,” he says. “It wasn’t until he saw bigger tracts of land in the Great Plains, fields of crops and lower price points — that Nor-man Rockwell vision of what U.S. farmland would be like — that he made a purchase.”
Foreign investors, Halderman says, generally have no connection to agriculture, but see U.S. farmland as the best place to invest their money.
