Efforts to block a land sale in North Dakota to a Chinese agribusiness subsidiary have failed. Fufeng USA is purchasing 370 acres in Grand Forks to build a $700 million corn milling project. A government review of the project did not raise enough red flags to block the proposal, which has refueled the debate about foreign land ownership.
The Committee on Foreign Investment in the United States is the interagency body charged with assessing national security risks involving foreign investments. After a 45-day review they ruled the Chinese agribusiness giant is a private citizen and not covered under its jurisdiction. The project has been highly controversial due to its proximity to the Air Force base as well as espionage fears.
However, foreign ownership of U.S. land has long been highly controversial. Although China has been in the spotlight, USDA data shows most of the foreign-owned land is held by other countries. Canada leads the pack at 32%, the Netherlands at 13% and China only accounts for 1%, or a little over 352,000 acres. Overall, foreign investors own 37.6 million acres of U.S. ag land, which is only about 3% of the total.
Dennis Reyman, chairman of the American Society of Farm Managers and Rural Appraisers, says that doesn’t curb the debate or transactions. “I don’t know anyone who can provide exact details of Chinese purchases, but just because I don’t know doesn’t mean it doesn’t exist. But who is buying the land is a big deal,” he says.
The project has also prompted federal legislation. In August, a bill was introduced in the U.S. Senate to “blacklist China” from investing in or acquiring any U.S. farmland or agricultural business. Reyman says he’s not sure it will have the desired effect.
“Whenever you make a law you can find a way around — somebody will find a way around it,” Reyman says. “It’s a hard thing to really keep under control. We’ve got foreign ownership of hogs, of really every ag produce, so how do you stop them from owning the land itself? I don’t know if it can be done ultimately.”
Until policy is confirmed, the U.S. farmland market remains open to foreign buyers. However, some states have legislation banning foreign ownership and more are in the works. In fact, South Dakota Governor Kristi Noem and state legislators just announced proposed legislation to restrict foreign purchases of agricultural land in the state. The plan creates a new board, the Committee on Foreign Investment in the United States – South Dakota, which will investigate these proposals and recommend either approval or denial to the Governor.
