New laws restrict foreign ownership of U.S. soil

Gov. Sarah Huckabee Sanders, R - Arkansas: “I’m announcing that Syngenta, a Chinese state owned agri-chemical company, must give up its land holdings in Arkansas.

In April of 2023, Governor Sarah Huckabee Sanders signed a high profile law that banned, among others, companies in China from owning land in  Arkansas.  In October of the same year, the Attorney General of Arkansas ordered Northrup King Seeds to divest itself of 160 acres of agricultural land. Northrup King is a subsidiary of Syngenta which is owned by the Chinese firm Chem China. 

This was one of the first actions taken under a wave of new laws sweeping across the country that added restrictions to foreigners ability to buy or lease farmland. 

The Arkansas law prohibits certain foreign parties from owning public or private land where more than 50 percent of the ownership is controlled by a “prohibited foreign entity”. Violations of the law can result in foreclosure on the property if the land isn’t sold to a qualified buyer. There is also no grandfather clause in the law allowing for purchases already made in the state.

Nat Sound: Senate Bill 383 passes.”

Concern has been growing in many states about foreign ownership of farmland. Prior to 2023, 14 states had laws prohibiting or restricting foreign ownership or investment in private farmland. Officials with the National Agricultural Law Center at the University of 

Arkansas say the number of states with some kind of limit on foreign ownership is now 24.

Dr. Wendong Zhang is an economist and assistant professor at Cornell University.

Wendong Zhang, Assistant Professor - Cornell University: (00;35;50;25 - 00;36;23;16) I think that, you know, the political, the political attention definitely is part of the reason why we are seeing a lot more, reaction, especially in the state legislatures. …many of the key sponsors, key legislators in their home states that the Chinese investments actually are quite low.

There are an estimated 1.3 billion acres of privately held agricultural land in the United States. Of that, foreign entities fully or partially own about 43 million acres according to USDA data. This is 3.4 percent of all privately held agricultural land and about 2 percent of all land in the United States. 

As of 2022, federal records show the largest foreign holder of U.S. property is Canada at 12.8 million acres, which is about 41 percent of all foreign owned U.S. land. Next in line is the Netherlands with 4.9 million acres, about 12 percent of the total. Chinese investors own less than one percent of all foreign-held acreage in the United States which is a little more than 349,000 acres.

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The USDA’s Farm Service Agency tracks foreign land ownership under The Agricultural Foreign Investment Disclosure Act or AFIDA. Foreign owners of U.S. land, be it agricultural or otherwise, must declare their purchase within 90-days of signing on the dotted line. Failure to do so could result in a federal fine of up to 25 percent of the value of the land. However, the applications are reviewed annually and some critics say it could be up to two years before an application is reviewed.

North Dakota enacted new legislation on foreign land ownership in 2023. The measure may have been motivated by a 2021 purchase of land near Grand Forks by the China-based Fufeng Group. The company wanted to build a corn milling plant on the property. The problem was that construction of the $700 million plant would be taking place within 12 miles of the Grand Forks Air Force base. The purchase was appealed to AFIDA and subsequently reviewed by the Committee on Foreign Investment in the United States. While federal officials concluded they didn’t have the authority to rule on the land purchase, in a statement, the Committee did say that any construction was a significant threat to national security. The building permit was denied but the land remains in Fufeng’s hands. 

North Dakota’s new law adds to restrictions already in place since 1979 and gives powers to counties and municipalities to prohibit local development by a foreign adversary. The new measure specifically prohibits farmland ownership by China, Russia, Iran, North Korea and Cuba. Ownership of land by Canadians is clearly stated as being allowed.

Missouri limits all foreign land ownership to a total of one percent of all arable land in the Show Me State. Of the 27 million acres available, Chinese companies control almost 43,000 acres, about one and a half percent of the total. 

Iowa, which already had limits on the books since 1980, added tougher restrictions in April of 2024. Governor Kim Reynolds stated at the bill signing, “American soil belongs in American hands.”

Florida also has a ban on foreign land ownership by countries like China but there is a grandfather clause for land already purchased.

Zhang believes that there are potential consequences to these new laws on the U.S. economy. His concern is over foreign investment in renewable energy like wind and solar. 

Wendong Zhang, Assistant Professor - Cornell University: Foreign ownership interest is one coming from the renewable energy companies investing in US agricultural development. And so they're often driven by federal and state level tax, incentives. And so whether, whether the restriction on foreign investments could potentially slow down, achieving renewable energy targets, so that’s one of the things that the state government is also debating.

For Market to Market, I’m David Miller.

contact: miller@iowapbs.org