Indiana, other states increasingly restricting foreign land buys
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Indiana was the only state to enact a law restricting certain foreign investments in its agricultural land in 2022, but more are taking action by blocking specific governments or political parties.
Foreign entities own 40 million acres of American agricultural land, and states like Indiana are increasingly cracking down.
Canada, the Netherlands, Italy, the United Kingdom and Germany hold the vast majority of the acreage, according to U.S. Agricultural Foreign Investment Disclosure Act data.
But recent technology scares — a Chinese spy balloon that traveled across the U.S. in February, for example — have sparked fears about ownership by “foreign adversaries.”
“We are concerned (that) Chinese ownership may impact our food supply chains and our energy supply chains,” said Zoe Liu, a fellow at the Council on Foreign Relations. “And we are also concerned that the Chinese government may …. have direct influence, indirect influence or even control or access to not just our physical assets, but also sensitive information.”
She spoke Monday at a National Conference of State Legislatures panel.
Those fears have translated into legislation: several dozen bills from 2021 through the present day, according to the National Agricultural Law Center’s website.
Indiana was the only state to enact a law restricting certain foreign investments in its agricultural land in 2022, but more are taking action, said center attorney Micah Brown.
Older laws are typically broadly written, he said, including Indiana’s first stab at it.
The state in 2022 blocked “foreign business entities” from acquiring Hoosier agricultural land for crop farming or timber production. And the law blocks those foreigners grandfathered into their ownership from transferring the land to other foreigners.
Enforcement, according to Brown, has been relatively lax across states with such laws on the books. But 2023 brought with it more specific takes on the concept.
“This differs a ton from what these states then (enacted) restrictions in 2023,” Brown said. “A lot of these states have very specific restrictions on specific countries, primarily China, Iran, North Korea and Russia.”
Those countries together own under 400,000 acres of agricultural land as of 2021, U.S. Agriculture Secretary Tom Vilsack said in March.
Some states specifically blocked governments or political parties, used federal definitions and more to tailor their laws.
In Indiana’s most recent legislative session, lawmakers approved language blocking the state and local governments from contracting with “prohibited” entities — citizens and companies from those four countries, and any others the governor deems a threat — on “critical infrastructure” projects. Under existing law, that includes chemical, aluminum, paper, pharmaceutical and other manufacturing, plus utilities, hazardous waste storage and more. Senate Enrolled Act 477 also blocks those entities from buying or leasing land next to military facilities and Indiana National Guard assets.
“With this new group of laws — a lot of them came into effect on July 1 — we might start having enforcement because it’s such a hot topic and everyone’s eyes are on this issue.”
Even as more states jump on board with legislation — two dozen have, already — Brown said attention is turning to the federal government.
There are no such federal restrictions, but work on the next, massive five-year farm bill is beginning.
“That’s going to be a vehicle I think, to get a foreign ownership law,” Brown told the Capital Chronicle after the panel. “And I think the states are still going to have the pedal to the metal coming into 2024.”
Indiana Capital Chronicle is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity.
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