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Balancing Foreign Ownership and Agricultural Access: Fostering Economic Development in the US

June 9, 2023

Foreign ownership of land in the United States has been a topic of debate, raising questions about the impact on domestic agriculture and the nation’s economic development. As a nation built on the principles of innovation and progress, it is crucial to strike a balance that allows for economic growth while safeguarding the accessibility and sustainability of our agricultural resources.

Why is Foreign Investment Important?

Foreign investment has always played a pivotal role in driving economic growth and development in the United States. Investments from abroad inject capital into various sectors, creating job opportunities, stimulating local economies, and fostering innovation. These investments can lead to infrastructure improvements, technological advancements, and increased competitiveness, benefiting not only the investors but also the American workforce and communities.

While encouraging economic development, it is equally vital to protect our agricultural resources and maintain access to farmland. Agriculture is the backbone of our nation, providing food security, contributing to rural economies, and preserving our cultural heritage. It is crucial to strike a balance that allows for responsible foreign investment without compromising domestic agricultural access. US Senators have called protecting the national food supply a matter of national security and have begun looking at ways to monitor and protect the sale of agricultural land. Senator Jon Tester (D-Montana) joined by Senator Chuck Grassley (R-Iowa) in a bipartisan coalition has worked on the PASS Act, an attempt to develop new measures to protect the American food supply chain.

Legislation such as this recognizes the issue is complex, and while the concerns of many US landowners and valid and well-founded, it’s important to recognize the potential for mutually beneficial partnerships to blossom from foreign investment. Collaboration between domestic farmers and foreign investors can lead to knowledge sharing, technological advancements, and increased market access. 

Evidence of this is apparent when we look at a state like Maine, which has the highest percentage of foreign farmland ownership with 20.1% of the state’s privately owned agricultural land held by private investors. This foreign investment has bolstered Maine’s capacity for international trade, as roughly 176,000 Maine jobs were supported by international trade in 2018, accounting for more than one in five jobs in Maine that year. Similarly, families are reaping the benefits of lower prices for imported goods and increased diversity in product choice. Free trade agreements, or FTAs, resulting from foreign investment have also helped reduce the cost of products in Maine and afford consumers more purchasing power. Foreign investment in Maine has created many jobs, increased the state’s profits from exported goods and services, and reduced financial burdens for families and consumers. 

The largest investors in US farmland are friendly countries, with the USDA listing Canada as the largest investor at 9.7M acres, with other European nations such as the Netherlands, the U.K., Italy, and Germany being in the top 10 foreign landowners. This contrasts with the narrative of China becoming a major landowner in the U.S., as their land holdings in the United States total roughly 192,000 acres, making China 18th place among foreign landowners.

Although China only ranks 18th on the list of foreign landowners in the U.S., it’s important to consider where the lands they hold are located and what they may contain. Much of the land that China has purchased is rich in precious minerals such as Molybdenum which is used in the production of many alloys and lubricants. So although China may not be the largest foreign landowner in the United States, it’s still imperative that we monitor foreign investment and strive for transparency to encourage joint ventures and cooperative agreements that promote economic growth while preserving our natural resources and agricultural access.

How Should We Handle Foreign Land Ownership in the United States?

Maintaining transparency throughout the process of foreign investment in agriculture is key to success, and it can also help diminish fears. We’ve already seen some state governments prohibiting countries like China from purchasing more land within their borders, which communicated a clear message to their residents that the state was intent on protecting their agricultural interests. Clear communication and involvement of all stakeholders, including farmers, local communities, and policymakers, are essential to address concerns, mitigate risks, and ensure accountability. Public engagement provides an opportunity to establish guidelines that promote responsible investment, protect agricultural interests, and support sustainable economic development.

Fortunately, the Agricultural Foreign Investment Disclosure Act (AFIDA) is proof that our government is committed to transparency as it relates to foreign investment. Under the AFIDA, foreign entities are required to report their acquisition of agricultural land to the USDA along with the location, size, and intended use. This allows the USDA to monitor foreign investment into United States’ agricultural land and protect our nation’s food supply. Legislation such as this strikes a middle ground between attracting foreign investment and ensuring our nation’s food security, and we should be looking for more legislation along these lines in the future.

As we move forward, it’s important to recognize the significance of responsible land management as well as the role that foreign investment can play in American agriculture. With thoughtful planning, we can work towards sustainable economic development that benefits stakeholders and landowners alike, all the while preserving our agricultural legacy.

About the Author
Being a Transitional Commercial Land Professional, a registered lobbyist, and a former elected official, I develop land, write policy, and create new opportunities by writing legislation and protecting landowners. In my home life, I tend to horses and cattle beef ranching. Selling land is more than just a listing. The due diligence, different contracts, and disclosures required to prepare the land for its showcase take a skilled land expert to make sure everything is being transferred with the sale and you are getting the highest and best value the land can produce. If you are in the Kansas City area and want to make this your next place to buy land, I would love to show you the best BBQ places the locals know and help you find the right piece of land.