Growing Concerns: Foreign Ownership of Agricultural Land Takes Center Stage in 2023

State legislatures across the country have been grappling with the issue of foreign ownership of agricultural land. This issue, which gained attention at both the federal and state levels in 2023, is the second most significant development in ag law and tax for that year. While it is not a new issue, foreign ownership of agricultural land has long been a concern due to its implications for national security and the food supply.

Under English common law, aliens were restricted from acquiring land without the approval of the King. This restriction was based on the understanding that control and ownership of land are vital for national security. In the United States, the restriction on foreign ownership of agricultural land has been embedded in jurisprudence.

In the 1970s, the issue gained additional attention due to large purchases of agricultural land by foreigners. This, coupled with concerns about the influx of liquidity in oil-exporting countries, led to the enactment of the Agricultural Foreign Investment Disclosure Act (AFIDA). Under AFIDA, the USDA collects information on agricultural land holdings by foreign individuals and businesses. While AFIDA is a reporting statute, it provides valuable information for potential future regulations on foreign investment in agricultural land.

In 2023, there was a push for increased oversight and restrictions on foreign investments in land at the federal level. States also took action to address this issue. For example, Arkansas became the first state to enforce a law restricting foreign ownership when it ordered a Chinese-owned company to divest its ownership interest in farmland. Florida enacted a law limiting landownership rights of certain noncitizens domiciled in certain countries of concern.

Several other states, including North Dakota, Oklahoma, and Virginia, have enacted laws restricting foreign ownership or investment in agricultural land. Some states, like Mississippi, have created committees to study the issue. The renewed interest in this issue stems from high-profile events such as Chinese-owned companies acquiring land near Air Force bases and concerns about national security.

Looking ahead to 2024, the issue of foreign ownership of agricultural land is expected to remain a contentious topic. Several states have already filed bills addressing this issue, indicating that it will continue to be a subject of debate and legislation.

These developments highlight the ongoing concern about foreign ownership of agricultural land and its potential implications for national security and the food supply. State legislatures and the federal government are actively working to address this issue through reporting requirements and restrictions on foreign ownership. The issue of foreign ownership of agricultural land will continue to be closely monitored in the years to come.