Land in any country is a major non-renewable resource. It is a source of food production, recreation, and housing and is intricately linked to the very cultural fabric of a civilization or a country. Foreign ownership of land, therefore, brings about visions of losing access to that security blanket. It is therefore a cause of real human fear. This article examines the issue in the US from the lens of drivers of that fear, actual facts that face us today, and regulations that exist to protect the land.

Why is there a concern?

The first question to understand is why a concern exists. In our opinion, this concern is driven by 4 considerations. These are 1) Farmland transition 2) Farmland access to new farmers 3) Hysteria over the acquisition of Smithfield Pork 4) Food security considerations in the US. Each of these is detailed below.

1. Farmland transition: In the US around 371 million acres of farmland is expected to be in transition over the next 20 years according to the American Farmland Trust. This transition opens up avenues for the next generation to sell farmland to cash in on returns or to repurpose the land to other uses (like development/ renewable energy) which in turn allows investors with deeper pockets to come in and acquire new farmland. 

2. Farmland access for new farmers: Across the US, a survey by Youngfarmers.org found that 36% of new farmers list access to land as the one of largest barriers to entering farming. 17% list it as their single biggest challenge.  Both first-generation and multigenerational farmers in the US cited land access as their top challenge. With this kind of lack of access to precious land to start farming operations, there is increasing scrutiny and skepticism whenever there is large land ownership by foreign entities.

3. Acquisition of Smithfield Pork: WH Group's 2013 purchase of Smithfield Foods, the largest pork producer in the U.S., raised concerns about Chinese intervention in American food systems. WH Group owns over 42,000 acres of farmland in Missouri (of the 146,000 acres of farmland in the US) and controls a significant part of U.S. pork production and revenue. Critics argue that a rule change allowing foreign entities to own up to 1% of Missouri's farmland contributed to the deal's success. This acquisition resulted in increasing scrutiny of any ownership by foreign entities of the food production system in America and as a result a focus on the topic of foreign ownership of land.

Is the concern real?

Foreign investors own about 3.1% of U.S. agricultural land, which is approximately 40 million acres. There has been a modest increase in foreign holdings since 2009, with an average of 2.2 million acres annually. Forest land accounts for the highest proportion of foreign-held agricultural acreage at 47%, followed by cropland at 29%, and pasture and other agricultural land at 22%. Non-agricultural land makes up the remaining 2%.

Foreign individuals possess agricultural land in all 50 US states and Puerto Rico. With the exception of Maine, privately owned foreign agricultural land is only a small part of all privately owned agricultural land in the states. Texas has the highest amount of foreign-owned agricultural land in the US, with approximately 5.3 million acres. Maine has the second largest amount of foreign-owned agricultural land, with just over 3.6 million. Colorado has the third largest amount of foreign-owned agricultural land with approximately 1.9 million acres. 

Use the map below to explore foreign ownership of land in your state.

What regulatory protections are available by state and at a federal level?

According to researchers at the University of Arkansas’s National Agricultural Law Center, no U.S. state has a complete ban on foreign ownership of farmland. However, some states limit or propose to prohibit certain foreign entities from owning agricultural land, and several states have disclosure requirements. There is no uniform approach under state laws in addressing foreign ownership, with general categories including restrictions on land ownership amount or duration, residency status, inheritance considerations, and ownership by foreign corporations.

You can find out more about foreign ownership legal protections by state here. 

What is Oaken doing?

If you are a new farmer, Oaken’s platform helps you connect with landowners, get access to new land and even finance land from within the platform. We are on a mission to connect farmers to the best farmland. Get in touch with us now.