Why So Many States Want to Ban China From Owning Farmland

National Security

Why So Many States Want to Ban China From Owning Farmland

By Monica Potts

Feb. 16, 2023, at 6:00 AM

Fourteen states prohibit or restrict foreign ownership of private agricultural land, but that number may soon grow.

ROBYN BECK / AFP via Getty Images

The spy balloon spotted over Montana wasn’t the first recent incident to spark fears about national security and espionage in the U.S. Only a few years ago, a Chinese billionaire named Sun Guangxin planned to build a wind farm on part of 140,000 acres his company had amassed in southwest Texas, near Laughlin Air Force Base. But after the proposed project sparked national attention, Gov. Greg Abbott signed a law to stop the wind farm from being built. 

And just last year, a Chinese company bought 300 acres in North Dakota near the Grand Forks Air Force Base, planning to build a corn milling plant. The Grand Forks City Council voted to stop that project earlier this month.  

These two incidents, along with others, have focused the attention of state legislators on foreign land ownership, especially large tracts of farmland. Currently, 14 states prohibit or restrict foreign ownership of private agricultural land,1 but that number could grow this term. According to data from the National Agricultural Law Center at the University of Arkansas, nine of those states2 have new bills on the docket aimed at expanding the existing laws to limit or prohibit foreign ownership of agricultural land, a designation that can include cropland, livestock pastures and timberland. And an additional 15 states3 with minimal regulations or none at all are considering new bills on the matter. Many of these bills are designed to prevent foreign governments, companies and, in some cases, nonresident citizens of other countries from owning agricultural land.

It’s the latest political flashpoint in a long history of concerns over foreign ownership of United States farmland, said Micah Brown, the staff attorney for the National Agricultural Law Center. The fears go as far back as the Revolutionary War, and although the reasons have changed throughout history, national security is the primary concern today, Brown said. Legislators promoting such bills have framed them as necessary to protect the safety of the U.S. food supply, prevent shortages and keep land available and affordable for young American farmers. But it’s not clear that laws banning foreign land ownership would solve those problems. 

In 1978, Congress passed the Agriculture Foreign Investment Disclosure Act, driven by concerns over American families leaving farms and the security of the U.S. food supply, according to The New York Times. The law required that foreign ownership of farmland be reported to the United States Department of Agriculture, and the first report, in 1980, found that less than half of 1 percent of farmland was owned by foreign investors or entities.

Now, foreign investors hold just 3.1 percent of all privately owned agricultural land in the United States, according to the most recent USDA report, which covers through the end of 2021. The numbers vary by state, but overall, investors from Canada own the most, and foreign-owned land was most often timber or forest. 

While many of the states considering a ban on foreign ownership do not mention specific countries in their bills, it’s clear that some are targeting China. “Here in New Jersey, we should learn from what’s happening in other states and stop the Chinese Communist Party (CCP) from establishing strategic control over sprawling tracts of our farmland,” state Sen. Doug Steinhardt, who introduced a bill there this year, wrote in an editorial at NJ.com. These types of bills began surfacing in the past two years, on the heels of anti-China rhetoric during President Donald Trump’s administration, and anxiety about the relationship between the U.S. and China more broadly. Indeed, Trump has said that if he becomes president again, he will ban Chinese citizens from owning farmland outright, according to reporting from The New York Post. 

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However, some have argued that the focus on China is more about anti-Asian sentiment than genuine concerns, and could lead to legal immigrants being prevented from buying farmland. “Texas prides itself on sacrifice, hard work, opportunity and economic growth,” Jon Taylor, a political scientist at the University of Texas at San Antonio, wrote in the San Antonio Express-News. “How are these values served by denying land or property ownership to immigrants and their families from China, Iran, North Korea or Russia?”

And despite concerns about Chinese citizens buying land near military bases, Chinese investors own less than 1 percent of foreign-owned acreage nationwide. The total share of acreage owned by foreign investors and entities has been growing rapidly over the past few decades, but the overall numbers remain small. 

Even some lawmakers’ concerns about the effect of foreign land ownership on the food supply would not likely be addressed by the sort of bills currently being introduced, said Tomotaroh Granzier-Nakajima, an energy and environment policy fellow at MOST Policy Initiative, in Missouri. That’s because supply is less an issue of who grows food than one of who consumes it. “There are no restrictions in this bill that best stipulate where agricultural products can be sold,” he said of a bill advancing through the Missouri House. “So a domestically owned business that is producing food could sell anywhere.”

Other issues have focused attention on ownership of farmland, though. Under current law, the USDA requires reporting of foreign ownership, with a civil penalty for a failure to disclose. But a 2017 review by Investigate Midwest found holes in the data and lax enforcement. Last year, 130 lawmakers asked the Government Accountability Office for a review. Additionally, Sens. Chuck Grassley and Tammy Baldwin have recently cosponsored legislation to require more information to be collected. And Grassley elaborated on his worries about farmland ownership in a statement posted to his website in January. “Young and beginning farmers here at home should not be squeezed out or compete with foreign investors subsidized by the American taxpayer, especially those backed by unfriendly regimes, such as the Communist Party of China,” he wrote. (In some cases, foreign owners may be eligible for USDA subsidies or programs.) 

A 2022 report by the National Young Farmers Coalition found a majority of surveyed farmers ages 40 and under struggled to find affordable land. But the USDA has found foreign investment has no consistent, significant effect on the prices of farmland, although they say more research is needed.

Family farms in the U.S. have been dwindling for decades, struggling to keep up as agriculture became a global industry. Rural Americans today are much more likely to be employed in education, health care or the service and retail sector than in agriculture, forestry, fishing, hunting and mining, which, together, employ only about 1 in 10 workers in rural counties. A strong majority of Americans holds farmers in high regard, but despite some younger Americans entering the profession in recent years, a need for young farmers remains.

Whether these new laws about foreign land ownership would be constitutional is unsettled, said Brown. But even if they are, it’s not clear they would prevent security threats or help farmers in the ways lawmakers are promising.