New Regulations on the Horizon for Foreign-Owned U.S. Farmland

More than 46 million acres of U.S. agricultural land are under foreign ownership, representing roughly 3% of all privately held farmland. USDA has proposed sweeping changes to how that land is tracked and reported.

Reporting and restrictions for foreign-owned ag land have come a long way in the last five years.

Just 12 states had proposed legislation on foreign ag land ownership in 2021, but that number has jumped to 25 by this year. If passed, these laws will build on the Agricultural Foreign Investment Disclosure Act (AFIDA), which set the original framework for foreign ag land ownership back in 1978.

In early July, Harrison Pittman, National Agricultural Law Center Director, broke down where strides have been made in foreign-owned ag land legislation, as well as coming changes announced June 25 this year.

Foreign-owned land today

New Mexico, Texas and Oklahoma showed the largest increases of about 200,000 to 250,000 acres from the previous year. The largest decreases came in states like North Carolina, Arkansas, Colorado and Utah. Overall, Chinese land holdings have decreased by nearly 30,000 acres.

Types of ag land under foreign ownership or long-term lease agreements are broken down into four categories under AFIDA reporting: forestry, pasture, cropland and non-agricultural land. Forestry typically makes up about 50% of those acres, with cropland and pasture usually hovering around 25% each.

Proposed changes

In late June, USDA announced proposed updates to AFIDA, with a period for public comment extending through August 10, 2026. Pittman said the changes proposed would be a landmark move for foreign ag land reporting.

Today, AFIDA reporting happens at a local level through county Farm Service Agency offices. The local, analog-style reporting means national reports are often behind one to two years on data, an issue the proposed changes address.

“AFIDA is a reporting. It’s not a prohibition, it’s not a restriction; it’s a reporting law,” Pittman said. “It’s been historically up to the states to decide whether they want to prohibit or not, and it’s up to the federal government historically to require this uniform reporting.”

Key regulatory changes in the proposed rule include:

• the delegation of authority to Department of Homeland Security
• the modification of definitions of “agricultural land,” “any interest” and other terms
• the creation of new definitions for “foreign adversary” terminology
• new reporting requirements
• increased penalties
• new penalty review and appeals process
• online reporting

Many more changes accompany these additions to the rule, signaling a complete overhaul of the 1978 framework.

“Importantly, it’s going to create new definitions — a new definition for foreign adversary, new definition for foreign adversary-controlled entity and the creation of a definition for beneficial owner,” Pittman said. “That becomes important because beneficial owner is going to feed right into what is significant interest in substantial control test.”

He highlighted these specific changes but said the ruling proposed many major changes and the few highlighted only skim the surface of the potential rule.

EDITOR’S TAKE:

Many have called for outright bans on foreign ownership of agricultural land, with some restricting their focus to our nation’s adversaries. The proposed regulations discussed in this article are clearly just reporting foreign ownership. Yes, it does shine a brighter light on the issue, but any sort of restriction or ban is being left in the hands of the states. That means it will remain a patchwork of legislation across the nation. The reporting regulation is the only federal nationwide blanket that covers this issue, which is one that could not only impact farmers/ranchers, but rural communities as well.

If you are concerned about this topic, visit with farmers/ranchers in your area. Talk to local leaders about it and gather their opinions. Take action if you believe it will impact your customers by contacting your state elected officials and help support them to take action that will positively address your concerns.