The Threat of Foreign Ownership to US Agriculture: An Investigation by the US Government Accountability Office

The agricultural sector is a significant contributor to the United States economy, providing employment opportunities and ensuring food security for its population. However, the increasing trend of foreign ownership of US agricultural land has raised concerns about potential national security risks and the impact on food security. In response to these concerns, the US Government Accountability Office (GAO) conducted an investigation into the Department of Agriculture’s (USDA) implementation of the Agricultural Foreign Investment Disclosure Act (AFIDA) and its efforts to track foreign investments in US agricultural land.

According to the GAO report, the USDA has failed to consistently share timely data on foreign investments in US agricultural land as required under AFIDA. The Department collects AFIDA data on paper forms filed with county or federal offices, but its process is unclear and challenging to implement. Furthermore, USDA has no plans and timelines to create an online AFIDA database, despite Congress mandating the agency create one by 2025.

The GAO investigation also found that USDA’s AFIDA data contains errors, such as reporting the largest land holding associated with China twice. Sharing current data could help increase visibility into potential national security risks related to foreign investments in US agricultural land. However, USDA’s internal reporting and data management need to be addressed to identify foreign actors investing in the over 40 million acres of US farmland reported to have ties to foreign entities.

The USDA’s inability to answer the question of who owns what land and where, and the lack of a plan to internally reverse this flaw, has sparked concern among lawmakers. In October 2022, House Agriculture Committee Chairman Glenn Thompson and House Oversight Committee Chairman James Comer led a letter to GAO Comptroller General Gene Dodaro, signed by nearly 130 fellow House Republicans, requesting a probe into foreign investment in US farmland and its impact on national security, trade, and food security.

The trend of foreign ownership of US agricultural land, particularly by China, poses a direct threat to food security and national security. In recent months, Republican lawmakers and local leaders have increased scrutiny on land purchases by foreign investors, sparking concerns that foreign companies and investors may be establishing a stranglehold of key US food and energy supplies.

In February 2023, officials in Grand Forks, North Dakota, rejected a Chinese company’s proposed corn mill due to concerns about its proximity to a US Air Force base in the area. While the company, Chinese-owned Fufeng Group, was able to purchase 300 acres of land in the area, the local government rejected its building permits, effectively killing the project.

Despite CFIUS ruling that the project was not a covered transaction, Air Force Assistant Secretary Andrew Hunter stated that the project posed a significant threat to national security. The process to report and track foreign-owned agricultural land is complex and governed by a 46-year-old law that depends on self-reporting by foreign buyers and sellers of US agricultural land.

To fulfill its obligations under the law, USDA gathers information from the more than 3,000 counties and county equivalents in the United States, each with their own county clerk and recorder’s office, feeding information into more than 50 different state systems. The GAO’s recommendations would require changes by Congress, starting with the funding needed to increase staff and modernize processes, in addition to a change in data collection mandates down to the county level.

Any system for tracking land purchases and owners would be complicated, expensive, and create a potential risk to producer privacy, the price of agricultural land, and individual American seller interests. However, the potential risks of foreign ownership of US agricultural land, particularly by China, cannot be ignored. The USDA must take action to address the findings of the GAO report and safeguard US farmland and food supply.

In conclusion, the USDA’s failure to properly track foreign ownership of US agricultural land and its lack of a plan to begin tracking that data poses potential national security risks and impacts food security. The GAO’s investigation highlights the need for the USDA to modernize its processes and create an online AFIDA database to increase visibility into potential national security risks related to foreign investments in US agricultural land. The USDA must take action to address these findings and safeguard US farmland and food supply.

The US agricultural sector is a significant contributor to the US economy, and its food security is essential to the well-being and prosperity of the nation. The increasing trend of foreign ownership of US agricultural land, particularly by China, poses a direct threat to food security and national security. The USDA must take action to address these concerns and ensure that US farmland remains in the hands of American farmers and ranchers.