Lawmakers worried that China could gain control of the U.S. food system by making land purchases to curb the country’s hold on U.S. farmland, despite there being no evidence of a spike in land sales to Chinese interests, according to a report. Agri-Pulse analysis of data from the agricultural department.
The latest data collected under the Agricultural Foreign Investment Disclosure Act (AFIDA) shows that in 2019, Chinese investors owned just over half of 1% of the total 35.8 million acres of US farmland and forest land under foreign ownership. about 2.7% of all U.S. farmland and forest land, which covers approximately 897 million acres, according to the Department of Agriculture.
Those data also show that the roughly 190,000 hectares of land owned by Chinese interests has remained virtually unchanged since 2013.
Still, the House was approved in August as part of the USDA’s 2022 Fiscal Financing Act. The measure does not appear in the Senate version of the spending memorandum.
The amendment would extend the same ban to the state-owned companies of three other US opponents. But the lead author, Rep. Dan Newhouse, R-Wash., designed it with China in mind. He told Agri-Pulse he intended to serve it as a preventative measure, a way for Congress to prevent the Chinese government from acquiring American land in the future.
“We know that the Chinese Communist government has set itself the goal of taking control of not just agricultural assets, but many different types of assets around the world,” Newhouse said. “This was a preemptive effort on our part to prevent important, critical parts of our supply chain from coming under the control of the Chinese.”
While Chinese officials have encouraged agricultural firms to invest abroad to expand the country’s global influence and achieve national food security, a 2018 USDA Economic Research Service report said these investments are focused less on land and more on acquiring existing businesses. Most of the farmland that Chinese investors acquire is in other parts of the world, including Southeast Asia, Russia and Africa.
“Most Chinese agricultural investment has passed through the United States,” the report’s authors wrote. North America has received the smallest share of China’s agricultural outward investment of any continent, despite being a top supplier [sic] of China’s agricultural imports and a top destination for China’s non-agricultural investments.”
In addition, investors from China — who owned a total of 191,652 acres of land in 2019 — appear to own far fewer acres of U.S. farmland than people from other countries. Investors from Canada and the Netherlands had 7.4 million acres and 4.5 million acres respectively, and investors from Italy, Portugal, Germany, the United Kingdom, France and eight other countries followed suit, with each group owning more land than their Chinese counterparts.
When Newhouse introduced his amendment during a House Appropriations Committee price hike on June 30, lawmakers from both sides expressed concern about the potential consequences of allowing or restricting Chinese ownership of American land.
The chairman of the House Ag Appropriations Subcommittee, Sanford Bishop, Jr., D-Ga., said he supported the “draft” of the amendment and called the current number of acres of land occupied by China a “national security issue.” Rep. Jeff Fortenberry, R-Neb., the subcommittee’s top Republican, saw the move as a matter of “fairness” because China probably won’t allow the US to buy farmland within its borders.
But Rep. Grace Meng, DN.Y., called the amendment a “slippery slope” that had the potential to fuel hatred toward Asian Americans, though she eventually voted to add it to the credit bill after Newhouse agreed to work with her. to allay her worries.
“It’s not about drawing attention to a group of people in our country in a negative way — that’s not the goal,” Newhouse told lawmakers after a brief pause allowed him to speak with Meng. “This is about the government of communist China. This is about the national security of our country. If we can agree on those two things, I think we can move forward.”
Since then, the amendment has been expanded to include three other well-known US rivals: Iran, Russia and North Korea. Meng said at the awards ceremony that she wanted to see a broader focus on multiple US adversaries. Iran owned 2,463 acres of US land in 2019, while Russia owned 834 acres and North Korea owned none.
James Talent, a former US Senator from Missouri and a current member of the US-China Economic and Security Review Commission, spoke to Agri-Pulse in his personal capacity and said Chinese ownership of farmland could be a cause for concern, especially as the Chinese government has “perfected its use of economic leverage” to achieve its own goals.
But Talent said at this point that the nation appears to be more focused on feeding its own people than on disrupting America’s food supply.
“I think in general it’s fair to say that their purchases so far have been designed to secure their own food supply chains, rather than affect ours,” he said. “That could change.”
According to AFIDA data, the amount of agricultural land owned by Chinese investors has remained relatively stable in recent years. The last significant increase in acres occurred between 2012 and 2013 after the privately held Chinese company Shanghui, now known as the WH Group, bought US pork giant Smithfield Foods.
According to AFIDA data obtained by: Agri-Pulse through a Freedom of Information Act request, 76% of the land wholly owned by Chinese entities — or 146,537 acres — was owned by Smithfield Foods in 2019.
The company manages more than 49,000 acres of land in North Carolina, more than 42,000 acres in Missouri, just over 33,500 acres in Utah, more than 13,000 acres in Virginia, more than 3,800 acres in Colorado, and about 2,500 acres in Oklahoma. It also owns some land in Texas, South Carolina, and Illinois, but far fewer acres than other states.
After purchasing Smithfield in 2013, Shanghui took control of several properties in Iowa, including processing plants, at least one livestock purchasing station, a feed mill, an office facility in Ames, a plot of land near Manning where the construction of a feed mill was carried out. according to a series of letters exchanged between representatives of Smithfield and the Iowa Attorney General’s office.
But because of state laws restricting farmland owned or leased from abroad, the company told the attorney general’s office it would relinquish 40% of its rented barns to US-based Christensen Farms and the rest. converting to traditional contract finishing and custom feeding arrangements. by late 2015. According to the letters, Smithfield’s other properties were not on farmland.
Other states with Smithfield operations, such as Oklahoma and Missouri, have some restrictions on owning foreign farmland, but none prevent the company from operating there.
The Oklahoma statute allows foreign companies to own farmland for hog, poultry, or animal feed activities. Missouri previously had a ban on foreign ownership, but state lawmakers changed it in 2013 — 15 days before the Smithfield acquisition — to allow foreign investors to own up to 1% of the state’s farmland.
Smithfield Foods lobbied for Newhouse’s amendment as it spilled over into the final credit bill, data shows.
A source close to the case told Agri-Pulse Smithfield representatives urged Newhouse’s office to clarify in the amendment that the restrictions should only apply to companies owned by the Chinese government. Newhouse’s native language had also singled out “nationals of the People’s Republic of China,” but that portion had been crossed out before the vote on the amendment.
On its website, Smithfield claims that the Hong Kong-based WH Group is a publicly traded company and not a state-owned company, raising the possibility that the company will not be affected by the law. Smithfield representatives declined to comment on this story.
The impact the change has on Chinese companies will likely depend on how the USDA chooses to define ownership. Both Newhouse and Talent said the Chinese government has ways to influence the way companies operate within its borders, even if they are private.
“I think in theory you could have a company that had no ties to the government that wouldn’t influence it, but I don’t think that actually exists in China,” Newhouse said. Agri-Pulse. “There is always a relationship with the communist government. I can’t talk to Russia, Iran and North Korea because that wasn’t part of my native language.”
In an email to Agri-PulseUSDA press secretary Kate Waters said the agency has not yet decided what criteria it would use to determine whether or not a company is owned by one of the four states included in the amendment.
USDA data on foreign farmland ownership is two years old, so Chinese investors may own more or less land than the numbers reflect. In addition, complex corporate ownership structures and issues with USDA reporting law enforcement, as reported by the Midwest Center for Investigative Reporting in 2017, may mean these numbers are inaccurate.
“Part of the difficulty here is that we’re not sure how reliable our own numbers are, because foreign entities are required to report when they buy farmland, but there really aren’t any resources to enforce that,” Talent said. “And it’s not that the Chinese are very honest about other economic statistics, that’s another well-known fact.”
Some experts, including Francine Miller, a senior staff attorney and adjunct professor at the Vermont Law School Center for Agricultural Food Systems, question whether the USDA would have the legal authority to ban the governments of the countries named in the bill from using land. to buy.
“It’s really a constitutional issue,” Miller said. “There is, as far as I’ve been able to ascertain, no federal jurisdiction for the federal government to stop — especially a particular country — buying farmland in America.”
But Waters, the USDA spokeswoman, said Congress would give the USDA legal authority to ban the sale of farmland under the law to foreign countries if the bill were passed. However, she said some of the infrastructure needed to enforce the law does not currently exist and must be created by the USDA.
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