A flurry of proposals banning Chinese ownership of domestic farmland is being discussed in the US, at both the national and state level, as lawmakers have grown fearful of adverse foreign powers potentially posing a threat to national food security.

“We must act to mitigate this threat now, before it becomes too late to act,” contends Republican congressman Dan Newhouse.  

Mr Newhouse introduced the Prohibition of Agricultural Land for the People’s Republic of China Act on February 2. Just a few days earlier, on January 25, another bill — the bipartisan Foreign Adversary Risk Management Act — was proposed to increase the powers of the Committee on Foreign Investment in the US to scrutinise foreign investment deals through the lens of food security. 

“This drastic increase in investment by the Chinese Communist Party (CCP) in foreign agriculture in [regions] like Africa and South America has prompted its own response from US lawmakers like myself,” argues Republican congressman Dusty Johnson, who cosponsored both pieces of legislation. 

Chinese foreign investment into US farmland has increased tenfold in the past decade, according to the US Department of Agriculture (USDA). Chinese entities owned more than 380,000 acres of farmland in the US worth around $2bn as of end of 2021. The USDA reports that foreign land holdings have increased by an average of 2.2 million acres per year since 2015.

Overall, Chinese companies own less than 1% of the total private American agriculture land, with the majority of foreign holders being close US allies. Data from the USDA show that the top foreign holders of US agriculture land at the end of 2021 include Canada, the Netherlands, Germany, Italy and the UK. Those five countries hold roughly 62% of all foreign-owned US agricultural lands. 

While they are not one of the top-ten holders of US private farmland, the rising interest of Chinese companies in domestic farmland has spooked lawmakers at a state level, too. 

On February 17, Arizona became the first state to pass legislation that specifically inhibits the CCP from purchasing private or public land in the state.

In 2023 alone, 58 similar bills have been proposed at state level that would restrict foreign ownership of agricultural land in the US, according to figures by the Council of State Governments (CSG), a region-based forum that connects states’ policymakers. However, Arizona remains the only place where such legislation has been enacted into law. 

Red herring

Not all US lawmakers share the rising concerns of Chinese investments, especially those in states where local legislation has historically made it very difficult for foreign investors to purchase farmland. As of March 2023, 14 states have laws to restrict foreign agricultural land ownership and investments including Minnesota, according to CSG. 

“I think there’s a lot of concern about the Chinese buying up all our farmland but in Minnesota I just don’t see that happening,” says Thom Petersen, commissioner of the Minnesota Department of Agriculture. “At the moment I see it as a red herring, but it’s something we will keep an eye on.”

However, new limitations to the foreign ownership of US farmland may be reflected in the 2023 Farm Bill, the most comprehensive US legislation that funds the nation’s food and agricultural system, which is redrafted every five years. 

“There is speculation that this issue of foreign ownership of US agricultural land might make its way into the 2023 Farm Bill, and additional federal restrictions might result,” says Tara Sad, agriculture and rural affairs advisor for the CSG East.