Lately, there has been much coverage by the media regarding the purchase of U.S. agricultural land by foreign entities, especially those purchased by Chinese companies and individuals. Foreign entities’ purchasing of U.S. cropland, pasture, and forestland is monitored by the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978. This federal law does not prevent the purchase of land by foreign entities but rather requires that they inform the U.S. government of the amount, location, and value of the land purchased.

Data reported under AFIDA in 2020 indicated that the overall trend in agricultural land purchased by foreign investors has been increasing over the past several years. The leading country purchasing U.S. agricultural land is Canada, with 32%, followed by the Netherlands (13%), Italy (7%), and United Kingdom (6%). Total amount of farm, ranch, and forest land reported was 37.6 million acres, which represents about 2.9% of all agricultural land in the U.S.

Determining how much land foreign entities can own is a state-level issue, and there is variability by state in what is allowed. Fourteen (14) states forbid or limit foreign ownership of farmland. However, some states have relatively high percentages of purchases by foreign entities. As of the 2020 AFIDA report, Maine is the leading state for foreign ownership with 19.5%, followed by Hawaii (9.2%), Washington (7.1%),Alabama (6.2%), Florida (5.8%), Louisiana (5.8%), and Michigan (5.7%). Note: The percentage of foreign owned land to privately held land in Mississippi is 2.8%.

In Alabama, 1.8 million acres, 6.2 percent of all privately held agricultural land in the state, is owned by foreign entities. However, 96.8% of this acreage owned by foreign investors is forest land and only 1.2% is cropland. The 2020 AFIDA report indicated that the Netherlands held 51% of the foreign investment in Alabama Forest land, followed by Canada at 16%, and Ireland at 12%. The report further indicated that foreign ownership of privately held agricultural land inLouisiana is 66.3% forest land and 7.6% cropland; Mississippi’s foreign ownership is 29.3% forest land and 9.7% cropland.

While Chinese purchases are of great interest to policymakers and the media, the data provided by the 2020 AFIDA report reveal that Chinese investors make up a small percentage of the foreign-owned agricultural land in the United States. AFIDA reported that Chinese Holdings in the United States is 352,140 total Agricultural Acres, (slightly less than 1 percent of all foreign-held acres) with a large portion of the Chinese investment in U.S. agricultural land coming with the purchase of Smithfield Foods in 2013 by WH Group, a publicly traded Chinese company. However, it is worth noting that many investigative sources are concerned that the AFIDA report does not accurately reflect all foreign investments, due to many foreign investments being registered under U.S. company names/addresses and not identified in the data collection.

Many U.S. farmers and elected officials are concerned about the increasing trend of foreign investment in U.S. agricultural lands and as a result, there are some Federal legislative proposals restricting foreign investments. Some proposed bills focus solely on China, (In August 2022, Senators Tom Cotton (R- Arkansas) and Tommy Tuberville (R-Alabama) introduced the Securing American Lands from Foreign Interference Act to prohibit members of the Chinese Communist Party from purchasing any land in the United States), while others include Russia, North Korea, and Iran. And… several measures also seek to restrict foreign persons from participating in certain farm programs. This is a very politically charged topic in many states and we will likely see an interesting legislative landscape in the years ahead as the subject of foreign investments in U.S. agricultural land continues to be addressed.

Note: the above numerical data and much of this writing is being shared from a portion of Dr. Mykel Taylor’s presentation at the Alabama Agricultural Outlook conference held December 15, 2022. Dr. Taylor is the ALFA Eminent Scholar, at Auburn University and has approved this writing.