Foreign Ownership of U.S. Agriculture: Selected Policy Options

Foreign Ownership of U.S. Agriculture: Selected Policy Options

January 19, 2023
Foreign Ownership of U.S. Agriculture: Selected Policy Options
Congress continues to debate the role of foreign investment
not taken up in the Senate. The House-passed prohibitions
in the U.S. food and agriculture sector. Recently enacted
were not included in the enacted appropriations.
appropriations directed the U.S. Department of Agriculture
(USDA) to expand public access to available data related to
Other Legislative Proposals
foreign holdings of U.S. agricultural land—including crop,
The 117th Congress introduced various legislative proposals
grazing, and forest land (7 U.S.C. §3508). The 117th
to address concerns involving foreign investment in U.S.
Congress considered, but did not enact, other legislation
agricultural lands. Although the FY2023 appropriations
that would have further amended USDA and other federal
statute expands USDA data accessibility and transparency,
authorities. The 118th Congress may reintroduce or expand
the enacted provision did not amend AFIDA to authorize
these or other related proposals.
changes to existing federal disclosure requirements or to
restrict USDA benefits related to foreign investments in
Enacted Agriculture Appropriations
U.S. farmland, as proposed by some. The 118th Congress
Recently enacted appropriations included provisions and
might consider these types of proposals during the next
report language related to USDA reporting under the
farm bill debate. The 117th Congress considered, but did not
Agricultural Foreign Investment Disclosure Act of 1978
enact, other proposals that would have provided additional
(AFIDA; P.L. 95-460, 7 U.S.C. §§3501-3508). AFIDA
oversight actions or prohibitions related to national security
established a nationwide system for USDA to collect data
concerns. Some of these proposals may involve other
pertaining to foreign ownership of U.S. agricultural land.
federal authorities and fall outside the jurisdiction of the
USDA regulations require foreign investors who acquire,
House and Senate Agriculture Committees.
transfer, or hold an interest in U.S. agricultural land to
disclose such holdings and transactions to USDA (7 C.F.R.
Tightening AFIDA Disclosure Requirements
Part 781). Foreign investors held a reported interest in 40
Users of USDA’s AFIDA data have noted inaccuracies and
million acres of U.S. agricultural land as of year-end 2021.
underreporting under current disclosure requirements. The
For more background, see CRS In Focus IF11977, Foreign
Midwest Center for Investigative Reporting asserts that data
Farmland Ownership in the United States.
collected under AFIDA are not complete, contain errors and
omissions, do not track sales of foreign-held U.S. farmland,
The FY2023 Consolidated Appropriations Act (P.L. 117-
and may not accurately reflect changes over time. As
328, §773) directs USDA to report on the impact of foreign
reported by the center, USDA has acknowledged errors and
investments in U.S. agricultural land on “family farms,
omissions in the AFIDA data. Some Members raised
rural communities, and the domestic food supply.” It directs
similar concerns in an October 2022 request that the
USDA to establish a “streamlined process for electronic
Government Accountability Office (GAO) review foreign
submission and retention of disclosures” under AFIDA and
investment in U.S. farmland and “its impact on national
to provide an “internet database” with “disaggregated data
security, trade, and food security as well as U.S.
from each disclosure submitted.” USDA has three years to
government efforts to monitor these acquisitions.”
implement some of these directives. The FY2022
Accordingly, GAO is examining which data USDA collects
appropriations (P.L. 117-103) directed USDA to report on
under AFIDA, how collection methods have changed over
“data on foreign-owned agricultural land trends including
time, how USDA ensures accurate disclosure, and how
land owned, or partially owned, by the governments of
reporting requirements under AFIDA might be improved.
China, Russia, Iran, or North Korea” and “the potential
impacts on the American agricultural sector, food security,
One set of policy recommendations by the Lincoln Policy
and rural economies.” Appropriators also expressed
Group, a bipartisan consultancy, recommends that Congress
concerns about “agricultural land purchased by non-farming
“use its legislative, oversight, and appropriations powers to
entities, including private equity firms and foreign-owned
strengthen AFIDA and improve transparency” by requiring
corporations” (H.Comm. Print 47-047).
additional USDA data collection, oversight, restrictions,
and penalties, as well as authorizing funding for USDA to
Although not part of the enacted appropriations, the House-
manage and enforce AFIDA disclosure requirements and to
passed versions of the FY2023 and FY2022 appropriations
improve data access. The group recommends that USDA
bills included provisions that would have prohibited the
improve AFIDA data accessibility by providing public
purchase of U.S. agricultural land by companies owned, in
access to disclosure forms, building a data dashboard, and
full or in part, by China, Russia, North Korea, or Iran (H.R.
providing data in a user-friendly format. The FY2023
8294, §769; H.R. 4502, §777, respectively). The FY2022
enacted appropriations provision has instituted some of
House-passed bill also would have prohibited participation
these types of data access and transparency
in USDA-administered programs. Similar provisions were
recommendations. The group also suggests that USDA
https://crsreports.congress.gov

Foreign Ownership of U.S. Agriculture: Selected Policy Options
conduct investigations of AFIDA data disclosures under its
which serves the President in overseeing the potential
current authority (7 U.S.C. §3503).
national security risks of foreign investment that could
result in control of U.S. businesses; certain noncontrolling
In the 117th Congress, H.R. 9483 would have expanded
investments, including those involving critical technologies
AFIDA reporting to include security interests and land
or critical infrastructure; and certain real estate transactions
leases, as well as idle land acquisitions and companies that
that meet specific criteria. If an investment transaction falls
issue equity securities primarily traded on a foreign
within CFIUS’s jurisdiction and were found to threaten
securities exchange, among other USDA reporting
U.S. national security, the President has the authority to
requirements intended to improve transparency. House-
block or unwind the transaction (see CRS Report RL33388,
passed provisions in H.R. 4521 (Division P) would have
The Committee on Foreign Investment in the United States
amended USDA annual reporting requirements under
(CFIUS)). In addition to expanding CFIUS’s membership,
AFIDA to establish a nationwide data reporting system,
some 117th Congress proposals would have added
require USDA to certify current foreign agricultural
agricultural systems and supply chains in the definitions of
landholders, amend civil penalties for failure to report or
critical infrastructure and critical technologies, required
misreporting, and require reports from USDA. Other bills
review of any investment that could result in foreign control
(H.R. 9395/S. 4667) proposed that USDA establish a public
of any U.S. agricultural business, and required USDA and
database and submit an annual report to Congress on the
GAO to report on foreign influence in U.S. agriculture
impacts of foreign investments in U.S. farmland. Some of
(H.R. 5490/S. 2931). S. 3089 also would have required
these recommendations are consistent with provisions
CFIUS to consider the potential effects of a transaction on
enacted in the FY2023 appropriations.
the security of the U.S. food and agriculture systems, and
H.R. 8274/S. 4786 would have required review of
Restricting USDA Program Eligibility
transactions related to biotechnology and established new
Some proposals in the 117th Congress sought to prohibit
reporting requirements.
certain foreign investors from participating in USDA-
administered farm programs (H.R. 4502, H.R. 7892). Other
Although USDA and HHS are not current CFIUS members,
bills would have prohibited access to other governmental
CFIUS may consider foreign investment transactions in the
services (S. 4954, H.R. 9194). Currently, foreign persons or
food and agriculture sector, and the U.S. Treasury may
entities may be eligible for USDA farm programs provided
designate USDA and HHS as co-leads in a CFIUS
they meet certain requirements, including being “actively
investigation on a case-by-case basis. In September 2022,
engaged” in farming (7 U.S.C. §1308–1). Eligibility,
President Biden instructed CFIUS to consider “elements of
however, varies by USDA program, and some programs
the agricultural industrial base that have implications for
already exclude foreign persons and entities. For more
food security” among other factors to consider with respect
background, see CRS Report R46248, U.S. Farm
to a transaction’s effect on U.S. technological leadership in
Programs: Eligibility and Payment Limits, and USDA fact
areas affecting U.S. national security (E.O. 14083). The
sheet, “Payment Eligibility and Payment Limitations.”
Cybersecurity and Infrastructure Security Agency at the
Department of Homeland Security (DHS) has designated
Expanding Federal Oversight/Prohibitions
USDA and HHS as the co-Sector Risk Management
Some proposals in the 117th Congress reflected national
Agencies for the U.S. food and agriculture sector. DHS has
security concerns related to foreign investment in the U.S.
designated the U.S. food and agriculture sector as one of 16
food and agriculture sector and would have amended
critical infrastructure sectors. See CRS Report R45809,
federal authorities outside USDA. Some proposals would
Critical Infrastructure: Emerging Trends and Policy
have expanded federal review of foreign investment
Considerations for Congress.
transactions in the U.S. food and agriculture sectors, and
other proposals would have prohibited certain foreign
Other 117th Congress proposals would have prohibited the
adversaries from such investment transactions. The October
purchase of U.S. agricultural companies and real estate by
2022 GAO request also asked whether there are assurances
persons or companies owned, in full or in part, by certain
that foreign-owned U.S. agricultural land is being used for
countries (H.R. 8274/S. 4786, H.R. 8294, H.R. 4502, H.R.
its “intended purpose and does not pose a threat to national
2728/S. 1278, H.R. 7892, H.R. 3847/S. 4703). Some of
security.” Federal law provides for various frameworks that
these proposals would have placed general restrictions on
allow for the review of national security risks posed by
land ownership, including farmland. Other bills would have
private commercial transactions (see CRS Legal Sidebar
authorized the President to prohibit certain investment and
LSB10848, National Security Review Bodies: Legal
real estate transactions (H.R. 6329/S. 1854, H.R. 8603,
Context and Comparison).
H.R. 6383, H.R. 8652). Some of these proposals, if enacted,
could have caused unintended market and trade disruptions
Some proposals in the 117th Congress would have amended
in the U.S. food and agriculture sector.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. §4565) governing the activities of the Committee on
Current federal law imposes no restrictions on the amount
Foreign Investment in the United States (CFIUS). These
of private U.S. agricultural land that can be foreign-owned.
bills would have added the Secretary of Agriculture and, in
However, several states have imposed certain prohibitions
some cases, the Secretary of Health and Human Services
or restrictions on foreign ownership, according to a review
(HHS) as members of CFIUS (H.R. 3413/S. 1755, H.R.
of state laws by the University of Arkansas National
5490/S. 2931, and H.R. 8274/S. 4786, S. 3089). CFIUS is
Agricultural Law Center. To date, no state has instituted an
an interagency committee (chaired by the U.S. Treasury),
https://crsreports.congress.gov

Foreign Ownership of U.S. Agriculture: Selected Policy Options
absolute prohibition on foreign ownership, and most states
Renée Johnson, Specialist in Agricultural Policy
expressly allow foreign ownership.
IF12312

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF12312 · VERSION 1 · NEW