From 2009 to 2019, foreign ownership of US land doubled, according to USDA records. State and federal lawmakers in the United States are actively pushing to regulate foreign ownership of U.S. real estate due to national security concerns.
What threats do foreign acquisitions of U.S. land pose?
The most significant concerns involve potential threats to U.S. defense and food security. This is primarily because Chinese entities have been purchasing large tracts of farmland, some of it near sensitive sites. For example, in 2021, a Chinese company (Fufeng Group) bought land just 1.2 miles from an Air Force base in Grand Forks, ND, sparking panic among lawmakers across the country.
Another concern is that foreign land-grabbing can affect local land rights and agricultural production, which could put local food security at risk. This has spurred more concern among policymakers regarding foreign control of the U.S. food supply. Thankfully, these acquisitions do not yet represent a substantial enough portion of food production in the U.S. to threaten national food security.
What solutions are being discussed?
The only federal law currently governing these purchases is the Agricultural Foreign Investment Disclosure Act of 1978, which requires that any foreign entity that holds an interest in U.S agricultural land must disclose any transactions and holdings to the Secretary of Agriculture within 90 days. Failure to report results in steep penalties (up to 25% of the fair market value for their land), but this is rarely enforced due to ‘staffing shortages.’ There are also regulations on the state level, but these vary.
Following the supply chain disruptions from the COVID-19 pandemic and escalating tensions with China, U.S. lawmakers have increased scrutiny of purchases by Chinese investors. In a recent spending bill (H.R.4356), the House Appropriations Committee included an amendment that prohibits the purchase of U.S. land by Chinese-owned companies. However, land purchasing falls under state’s rights, so the USDA does have the constitutional authority to interfere in private land deals.
Where are Chinese Entities purchasing land?
In addition to the Fufeng Group’s purchase of land in North Dakota, other Chineses entities have purchased U.S. farmland across the country. More than 80% of the Chinese-owned land in the US is held by Smithfield Foods, and a billionaire named Sun Guangxin.
Smithfield Foods has recently purchased land in Virginia, Missouri, and North Carolina. Smithfield Foods currently owns approximately 128,000 acres of U.S. farmland. Since 2016, a company owned by Sun Guangzin has spent an estimated $110 million on land located in Val Verde county, Texas. Val Verde is home to the Laughlin AIr Force Base. Guangzin’s ties to the Chinese Communist party drew the attention of local and national politicians.
Using LandGate’s LandApp tool, you can search for land by owner or organization name. A search for the Fufeng Group provided the exact location of their parcels:
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