PD Guides

Foreign Ownership of Farmland

ISSUE

As globalization continues to increase, many are questioning how long it will be before other countries purchase enough ground in the United States to influence our way of life. This is seen much more frequently in undeveloped countries but is an issue of concern in developed ones as well. Other countries have recently been leasing land on U.S. soil for a variety of reasons, and it is being reported as those countries, foreign entities, or foreign people owning it. Nebraska Farm Bureau is asking our members for guidance on how they would like to approach this issue.


BACKGROUND

There is little federal regulation on this issue. Under the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA), all foreign people who acquire an interest in agricultural land are required to report it within 90 days. If land owned by a foreign person becomes agricultural land or ceases to be agricultural land, or if an individual becomes or ceases to be a foreign person, they must report that information within 90 days of the change. If they fail to report, they can be fined up to 25% of the value of the land.

While state laws vary, the four differing factors are whether the states (1) explicitly allow foreign ownership, (2) explicitly prohibit foreign ownership, (3) require reporting of foreign ownership, and (4) regulate corporate farming. Nebraska prohibits foreign corporations or individuals from buying land or holding a lease of more than five years in the state and has a law requiring reports to the secretary of state if there is corporate interest in farmland.

There are some state Farm Bureaus that have policies on this issue. Iowa supports  prohibition of foreign ownership and encourages improved enforcement and transparency. Kansas only holds that foreign owners should not get preferential tax treatment. Missouri supports prohibition of foreign ownership of ag land and is against preferential tax treatment for foreign parties. South Dakota opposes ownership of any agricultural ground by a majority of foreign stockholders.

Regardless of current laws, concerns about foreign ownership of agricultural land have been growing alongside the tensions between the United States and countries that are not our allies. Concerns are amplified by information not being easily interpreted, leading to people believing land is foreign owned when it is foreign leased. Just recently the Senate voted to prohibit the purchase of U.S. farmland by China, Iran, North Korea, and Russia as part of its annual defense policy bill.

In 2022, American Farm Bureau Federation received 11 different policy proposals from nine states on the subject with the delegate body ultimately deciding to stand on current policy. Over the past several months, members of the American Farm Bureau’s Market Structures and Budget/Economy Issue Advisory Committees (IAC) met several times and decided to propose new language for members to consider. The proposed language is as follows:

420/Foreign Investment
3. We support additional funding to improve data collection, auditing techniques, and enforcement of reporting under the Agricultural Foreign Investment Disclosure Act (AFIDA). Current data collection and reporting on foreign ownership of U.S. agricultural land is incomplete, flawed, and unclear. Farmers need an accurate image of current ownership dynamics to inform policy development.


FARM BUREAU POLICY

STATE POLICY: FOREIGN OWNERSHIP (2023). Farm Bureau is opposed to the sale and/or holding as collateral of any agricultural real estate in Nebraska to any foreign governments, foreign entities, or foreign individuals.

FEDERAL POLICY: AFBF policy states all foreign investment in U.S. assets should be monitored. It also says foreign ownership in ag land should be limited to less than a controlling interest and subject to standard tax laws.


QUESTIONS
  • Should NEFB take a stronger stance on foreign ownership of real property within the state?
  • Is the current Nebraska state statute prohibiting foreign ownership of ag land and extended leases sufficient in upholding NEFB policy?
  • Should reporting of foreign interest in agricultural land be done in a clearer and more uniform manner?
  • Do you support the proposed AFBF IAC language listed above?

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