Selling Farmland

Lars Erik Schönander and Geoffrey Cain express their worries about Chinese state-owned enterprises purchasing farmland in the United States in this Wall Street Journal op-ed:

Alarms went off in Washington when the Fufeng Group, a Chinese agricultural company, bought 300 acres of land and set up a milling plant last spring in Grand Forks, N.D. The plant is a 20-minute drive from an Air Force base that, according to North Dakota Sen. John Hoeven, hosts a space mission that “will form the backbone of U.S. military communications across the globe.”

The deal shouldn’t have taken the federal government by surprise. U.S. Department of Agriculture data show that Chinese ownership of U.S. farmland leapt more than 20-fold in a decade, from $81 million in 2010 to $1.8 billion in 2020. Beijing hasn’t outlined a strategy, but large-scale state backing for these investments indicates there is one. In 2013 the government-owned Bank of China loaned $4 billion to Hong Kong-headquartered WH Group, the world’s largest pork producer, to buy Virginia’s Smithfield Foods. WH now controls much of the U.S. pork supply and revenue because of the deal.

concluding:

Congress should authorize the USDA to cut through byzantine ownership structures and find the true foreign owners of farmland. The recently introduced Farmland Security Act of 2022 would require the department to release all data on foreign investments in American agriculture. The agriculture secretary should be added to the Committee on Foreign Investment in the U.S., which reviews flows of foreign money into sensitive businesses such as surveillance-camera equipment and semiconductors.

Afida is also overdue for a basic government audit that might reveal new data and improve disclosure practices. The last audit was in 1989. Major Chinese companies such as the Fufeng Group, which happen to buy up large plots of land near sensitive American military installations, should have to make their case or be shown the door.

I don’t think that foreign governments or state-owned enterprises should be able to purchase American land at all and foreign nationals and foreign-owned companies should only be able to purchase land to the extent that Americans or American companies can buy land in their countries. I’m referring to fee simple ownership. If only fee tail ownership is open to Americans in those countries, nationals of those countries should only be eligible for fee tail ownership in the United States. I don’t care whether the country is the Netherlands or China. The Agriculture Foreign Investment Disclosure Act allows a lot more than that.