Blocking Foreign Purchases of Ag Land

OMAHA (DTN) -- As Congress continues ramping up efforts to halt certain foreign investments in U.S. agriculture, the U.S. Senate late Tuesday added language to its Defense spending bill that would prevent people or businesses from China, Iran, North Korea and Russia from buying U.S. farmland and agricultural businesses.

The amendment, which has several provisions, passed the Senate on a 91-7 vote and will be added to the Senate version of the National Defense Authorization Act for fiscal year 2024.

The language is similar to provisions that have been added to multiple House bills this year, including the funding bill for USDA, which the House could vote on sometime later this week.

Foreign purchases of agricultural land have become a heightened issue in Congress, especially following the now-halted plans last year by Chinese-based company Fufeng to build a corn mill near the Grand Forks Air Force Base. The federal Committee on Foreign Investment in the United States (CFIUS) had reviewed the project but concluded it did not have jurisdiction. Grand Forks officials halted the project following a letter from Air Force officials that the project posed a "significant threat to national security."

Sen. Mike Rounds, R-S.D., introduced the amendment to the Defense bill along with Sen. Jon Tester, D-Mont., and others.

"China and Russia are our near-peer adversaries and North Korea and Iran are no friends of the United States," Rounds said. "These four adversaries view America as their top competitor and only wish to gain advantage and opportunities to surveil our nation's capabilities and resources. This commonsense provision will make our homeland more secure. I am pleased this amendment was included in this year's NDAA, and I look forward to working with my colleagues to move this legislation across the finish line."

Tester said on the Senate floor, "Allowing our foreign adversaries to invest in American farmland and agribusiness is a direct threat to our nation's food supply. Preventing our enemies from acquiring land near our sensitive military sites, like Malmstrom Air Force Base in my home state of Montana, is a no-brainer. And now we need to protect the rest of our food system."

Under the bill, China, Iran, North Korea and Russia would be prohibited from buying U.S. farmland and agricultural companies.

The bill comes after a decade of major Chinese purchases in U.S. agriculture. A private Chinese company, WH Group, is already the owner of the largest pork producer and processor in the U.S., Smithfield Foods, a purchase that was approved a decade ago. A state-owned Chinese enterprise, ChemChina, is the owner of one of the largest seed companies operating in the U.S., Syngenta and its subsidiaries, in a purchase approved in 2017.

Both the Smithfield and Syngenta purchases were approved by CFIUS. At the time, members of Congress attempted to add the U.S. Secretary of Agriculture as a member of CFIUS, but that did not happen. The Senate language would add the USDA Secretary as an ex-officio member of CFIUS specifically to consider agricultural purchases that could affect national security.

Under the amendment language, new scrutiny would be placed on any foreign investment in U.S. agriculture of more than 320 acres purchased or value of more than $5 million.

According to USDA, Chinese investors own roughly 384,000 acres of U.S. farmland, or less than 1% of all foreign-held farmland. Chinese land ownership rose by about 31,000 acres from the end of 2020 to the end of 2021, according to the latest report by USDA.

USDA's report also shows investors from Iran own 1,861 acres in the U.S., most of it listed as cropland. Russia is listed as owning 73 acres of land and North Korea is not listed as owning any U.S. agricultural land.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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