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Federal audit: More information on foreign-owned agriculture land needed

Foreign owners of agricultural land are required to fill out the FSA 153 form with the USDA. photo by Darrell Hoemann, Investigate Midwest

The U.S. Government Accountability Office recently made six recommendations on how USDA can improve its reporting on foreign-owned land across the country.

by Ben Felder, Investigate Midwest
January 22, 2024

Federal records on foreign-owned agricultural land include errors, lack details on subsidiaries and secondary owners, and are not provided to other government agencies in a timely manner, the U.S. Government Accountability Office reported in a recent audit. 

Foreign companies are required to disclose land purchases or leases to the United States Department of Agriculture as part of the Agriculture Foreign Investments Disclosure Act (AFIDA) of 1978. Agencies like the Department of Defense and the Department of the Treasury use the information to evaluate potential safety concerns, such as a foreign entity purchasing land near a military base. 

“However, according to DOD officials, they need to receive AFIDA information more than once a year, and they need information that is more up-to-date and more specific to help them identify relevant non-notified transactions and consider potential national security risks,” stated the GAO report, which was released on Jan. 18. 

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Foreign-owned land — which has increased by 40% since 2016 — has received increasing attention from government officials and politicians recently, including specific cases of Chinese companies buying land near Air Force bases in Texas and North Dakota.

Several states have imposed new laws banning foreign ownership of land and some members of Congress have proposed specific bans on companies with ties to China, North Korea, Russia and Iran. 

The USDA has said it needs more funding to accurately inspect land ownership records and to meet a 2025 deadline of creating an online submission process. Foreign-owned companies currently submit records via mail or directly to local county offices. 

As part of its 62-page report, the GAO audit agreed that more funding may be needed. It also offered six recommendations:

  • The Secretary of Agriculture should establish a process to provide detailed and timely AFIDA transaction data relevant to foreign investments in agricultural land to the Committee on Foreign Investment in the United States (CFIUS), an interagency committee that reviews certain foreign business transactions. 
  • Clearer and specific instructions should be given to USDA staff and county employees for completing AFIDA responsibilities, including reviewing the accuracy of forms and identifying missing information.
  • The Secretary of Agriculture should oversee an analysis of whether the USDA can satisfy the requirements of developing an online submission system and public database within its expected budget. If the analysis shows that the agency would be unable to meet the requirements, USDA should report the results to Congress and recommend appropriate legislative changes. 
  • USDA should improve its verification and monitoring of collected AFIDA data, such as reviewing and validating information throughout the data collection process.
  • USDA should continue data mining activities that compare AFIDA information with other records to identify suspected non-filers.
  • The Secretary of Agriculture should direct the chief operating officer of the Farm Production and Conservation Business Center to ensure its AFIDA reporting is complete, such as incorporating country information from additional foreign persons beyond the primary investor. 

USDA officials said they agreed with most of the recommendations but had concerns about the sixth “without additional financial resources and personnel,” according to a letter from Gloria Montaño Greene, a deputy under secretary at USDA.

This graphic, from the GAO report, shows how data on foreign-held agriculture land is collected.

The USDA said it already planned to start providing data this year on companies with secondary ownership and other associations with China, Russia, Iran and North Korea.

The GAO praised that step but said it was important to start reporting beyond the first tier of ownership, such as subsidiaries. 

“This information is key to a comprehensive picture of foreign investments in agricultural land,” the GAO report stated.  

Foreign-owned land growth has been most significant in Midwestern states like Oklahoma and Nebraska. Despite attention on Chinese-owned companies, most are European or Canadian companies buying or leasing land for wind and solar energy. 

Several states have enacted laws in recent years to limit foreign ownership and the GAO report acknowledged better AFIDA records would help local enforcement. 

“Some state laws incorporate AFIDA data into measures to monitor and enforce restrictions on foreign investment in U.S. agricultural land,” the GAO report stated. “However, during a March 2023 congressional hearing, the Secretary of Agriculture explained that USDA is reliant on foreign persons to self-report AFIDA information. The Secretary noted self-reporting is challenging to enforce because deeds are filed in over 3,000 county recorder offices. In September 2023, another USDA official noted that USDA cannot locate AFIDA filings beyond the county level, such as specific localities, and there is currently no system which tracks deeds or leases of agricultural land.”

This graphic from the GAO report shows the amount of penalties assessed for violating disclosure laws related to foreign-held agriculture land.

In Oklahoma, a law approved last year seeks to stop Chinese-backed companies from buying agricultural land for marijuana production. 

Arkansas officials recently told a subsidiary of Chinese-owned Syngenta Seeds, LLC, that it must sell 160 acres of land after that state passed its own law banning ownership by companies from China. 

The company in Arkansas is not listed in AFIDA records, an example of how records often lack information beyond the primary investor, an Investigate Midwest analysis recently found

In some cases, land holdings are counted multiple times in AFIDA records, the GAO report stated.

As part of its research for the report, the GAO interviewed two members of Investigate Midwest’s newsroom about their reporting on and analysis of foreign-held agricultural land.

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.

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