New Laws Threaten To Limit Foreign Ownership Of Land Across The Nation

The United States and Foreign Ownership of Farmland

Introduction

The United States has long seen itself as an open-for-investment free-market bastion. However, concerns about national security and political grandstanding have raised questions about foreign ownership, particularly when it comes to farmland.

State Actions Against Foreign Ownership

Last week, Arkansas Attorney General Tim Griffin ordered Northrup King Seed Co. to divest itself of 160 acres of agricultural land in Craighead County within two years. The company, a subsidiary of Syngenta Seeds, LLC, is ultimately owned by China National Chemical Co., a state-owned enterprise. This action was taken in response to allegations that the foreign ownership violated Act 636, which prohibits foreign-party-controlled businesses from acquiring or holding land in Arkansas. Similar laws exist in two dozen other states.

Growing Foreign Ownership of U.S. Farmland

Foreign ownership of U.S. agricultural land has been increasing at an accelerated pace. As of December 31, 2021, foreign persons reported holding an interest in over 40 million acres, or 3.1% of all privately held U.S. agricultural land. This is up from 37.6 million acres and 2.9% in 2020. China owns just 383,935 acres, representing less than 1% of foreign-held acres. The largest foreign holders are from Canada, the Netherlands, Italy, the United Kingdom, and Germany.

Legislative Measures and Federal Oversight

While there is currently no federal law restricting foreign ownership of farmland, some members of Congress are taking up the issue. The Foreign Adversary Risk Management Act (FARM Act) and the Security and Oversight of International Landholdings (SOIL) Act are two bipartisan measures aimed at subjecting certain land purchases by foreign entities to additional review. Additionally, the Committee on Foreign Investment in the United States (CFIUS) has proposed rules to limit foreign land ownership near military bases for national security reasons.

Historical Context and Tax Regulations

Concerns about foreign ownership of land, especially farmland, have existed for decades. The Foreign Investment in Real Property Tax Act (FIRPTA) was enacted in 1980 to address these concerns. FIRPTA imposes taxes on the disposition of U.S. real property by non-U.S. persons. Additional reporting requirements were introduced in 2018 with the Foreign Investment Risk Review Modernization Act (FIRRMA), which expanded the authority of CFIUS to review certain real estate transactions.

State Laws Restricting Foreign Ownership

Currently, two dozen states have laws that restrict foreign ownership of farmland. These laws vary in scope and restrictions but generally aim to limit or prohibit foreign ownership of agricultural land. Some states, like Florida, have recently enacted laws specifically targeting countries like China, Cuba, Venezuela, Syria, Iran, Russia, and North Korea.

Legal Challenges and Future Outlook

There is currently one pending legal challenge to a foreign ownership law in Florida, and Arkansas is the only state with a pending enforcement action against a prohibited foreign investor. However, with the recent surge in new foreign ownership laws, more legal challenges and enforcement actions are expected in the future.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 2: Zero Hunger – The article discusses concerns about foreign ownership of farmland and its potential impact on American farmers.
• SDG 15: Life on Land – The article highlights the issue of foreign ownership of agricultural land and its implications for land use and conservation.
• SDG 16: Peace, Justice, and Strong Institutions – The article mentions laws and regulations implemented by states to restrict or prohibit foreign ownership of land, indicating efforts to ensure fair and just governance.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 2.4: By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding, and other disasters, and that progressively improve land and soil quality.
• SDG 15.2: By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests, and substantially increase afforestation and reforestation globally.
• SDG 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for SDG 2.4: Proportion of agricultural area under productive and sustainable agriculture.
• Indicator for SDG 15.2: Forest area as a proportion of total land area.
• Indicator for SDG 16.3: Proportion of population who have experienced a dispute in the past two years and who accessed a formal or informal dispute resolution mechanism, by type of mechanism.

Table: SDGs, Targets, and Indicators

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Source: forbes.com

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