Alex Miller

Associate Editor

Loyola University Chicago School of Law, JD 2026

Recently, there has been an increased concern regarding foreign ownership of agricultural land in rural America. This growing concern among lawmakers has led to the introduction of several bipartisan bills this year that restrict foreign investments in United States agricultural land. In part, these bills have been introduced as a response to a study published earlier this year by the United States Government Accountability Office (GAO), which identified potential national security risks in foreign investments in United States Agriculture. Currently, the only federal law regulating foreign investments in agricultural land is the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA). AFIDA established a nationwide system to collect and record data regarding foreign ownership of U.S. agricultural land. The law requires foreign investors in U.S. agricultural land to report holdings and transactions to the United States Department of Agriculture (USDA). Furthermore, twenty-four states already have legislation in place restricting foreign individuals, entities, or both from owning land, with four states refining their laws to improve enforcement this year. Although the issue of foreign investment is complex, it is necessary that the USDA and other agencies adequately protect against the national security risks posed by foreign investment while also recognizing that not all foreign ownership in U.S. agricultural land is a threat to national security.

GAO study on foreign investments in agricultural land

In January of this year, GAO published a study with six new recommendations, concluding that enhancing efforts to collect, track, and share key information is necessary to identify national security risks better. GAO conducted the study after the USDA found that foreign investment in U.S. agricultural land grew to approximately 40 million acres in 2021. With this growth, there are national security concerns as foreign entities may purchase land near sensitive military bases and other locations that threaten national safety. Specifically, the Department of Defense (DOD) has issued statements that the USDA is not sharing timely or specific data necessary to protect against potential security risks. GAO found that the USDA has flawed methods in collecting and tracking key information, with unclear and challenging implementation. The USDA does not verify the accuracy of AFIDA data, and in its review, GAO found several errors.

In concluding its study, GAO recommends that the USDA establish a process to provide detailed and timely AFIDA transaction data relevant to foreign investments in agricultural land to Committee on Foreign Investment in the United States (CFIUS) member agencies, update the AFIDA handbook for specific instructions, assess whether the agency can create an online database, improve its verification and monitoring of AFIDA data, continue data mining operations, and ensure that AFIDA reporting includes country information from additional foreign persons or entities other than the primary investor. The last recommendation is vital because there are concerns that foreign persons and entities from adversarial countries, such as China, Iran, and Russia, are acting in bad faith as they invest in agricultural lands for espionage and other nefarious purposes that threaten national security.

Proposed federal legislation

Proposed legislation addressing the concerns outlined in the GAO study has had little traction. However, several bipartisan bills have been introduced this year, and next year, with a newly elected Congress, similar legislation may be passed. Earlier this year, a bipartisan group of senators introduced the AFIDA Improvements Act of 2024 to directly address the concerns in the GAO study and codify the recommendations into law. More recently, with bipartisan support, the Protecting American Agriculture from Foreign Adversaries Act of 2024 passed in the House in September and waits for Senate approval. The bill amends the CFIUS by requiring it to determine whether a national security review is necessary for reportable agricultural land transactions that the USDA refers. Proponents of the various proposed legislation argue that if enacted, the legislation will provide improved AFIDA tracking to block adversaries from acquiring U.S. land.

State laws restricting foreign ownership of agricultural lands

With the federal government failing to quickly address the growing national security concerns of land acquisitions by foreign entities, the states have taken various legislative actions. First, it is important to note the reasoning behind the increased legislative activity, even though foreign ownership of United States land is comparatively minimal to domestic ownership. Factors leading to increased actions include insecurities in the food supply chain from the COVID-19 pandemic, reports of Chinese groups buying land near military installations across the country, and the increased demand for agricultural land for renewable projects. Twenty-four states have a law prohibiting or restricting foreign investments in private agricultural land. This year, four midwestern states enacted further legislation to address these concerns. Indiana eliminated all exceptions of the state ban prohibiting the purchase or leasing of land by persons or entities of federally designated adversaries and established investigatory and enforcement procedures. Iowa established a state registry requiring foreign landowners disclose their identity and specify the intended use of the land to the Secretary of State. Nebraska modernized its existing law, adding limitations to prevent purchases from “restricted entities.” Lastly, South Dakota explicitly banned foreign ownership from China, Cuba, Iran, North Korea, Russia, and Venezuela and restricted the amount of land “non-resident aliens” from non-adversarial countries may own or lease.

These state actions can signal what will come over the next few years. As federal and state lawmakers and administrators address the national security and economic risks of adversarial foreign entities purchasing agricultural lands across the country, it is essential that new laws and regulations do not violate equal protection rights through possible undue prejudice against foreign nationals. Further, government officials should seek to limit adverse effects in the economic market that may result from regulating “the free market.”