Rhetoric vs. reality: How big of a threat is China-owned farmland in US?
al.com March 6, 2023
(Tribune News Service) — The rhetoric of China’s ownership of American farmland does not reflect reality.
China owns less than 1 percent of all foreign-owned land in the United States and, according to an Auburn University associate professor studying the issue, does not own any land in Alabama. And in 2021, 17 countries owned more land in the U.S. than China, according to the U.S. Department of Agriculture.
However, Alabama Sens. Tommy Tuberville and Katie Britt recently have amplified their concerns over China owning American land. Tuberville last year co-sponsored a bill prohibiting China from purchasing U.S. land.
“I believe that one acre of American farmland owned by the Chinese Communist Party is one acre too many,” Britt said at a Senate committee hearing last month.
Experts say, though, that China’s influence in land ownership is nominal while acknowledging it has increased over the past decade.
“That whole thing frightens people, so I don’t want to diminish people’s concerns,” said Rick Pate, Alabama commissioner of agriculture and industries. “Like I told you, I don’t think it’s much of a problem — especially not in Alabama but even nationwide as far as China’s investment. But we need to probably have a national policy before it is a problem.”
Tuberville’s office, citing USDA data, said China’s increase in agricultural land holdings has grown from almost 14,000 acres in 2010 to more than 352,000 acres in 2020. Despite that increase, it’s still only 0.88 percent of the 40 million acres owned by foreign countries at the end of 2021.
Canada accounts for the most foreign-owned land in the U.S. at 31 percent, followed by the Netherlands at 12 percent. In both Alabama and Florida, 6.3 percent of its agricultural land is held by foreign interests — only Maine, Hawaii and Washington have higher percentages. The Netherlands far outdistances other countries in owning 836,642 acres in Alabama, followed by Canada, United Kingdom and Germany.
Of that foreign owned agricultural land in Alabama, 97 percent of the land is forest, according to the USDA. In forestry acres, it’s more than 1.78 million. For perspective, Alabama has about 23 million acres of forest, according to the state forestry commission. Only 1.1 percent of foreign owned land in Alabama is categorized as crop land.
Nationally, the USDA said 47 percent of foreign-owned land is forests and cropland is next at 29 percent.
Tuberville continues to support blocking any members of the Chinese communist party from owning land in the U.S. And in January, Tuberville introduced the Foreign Adversary Risk Management Act that would assign the U.S. Secretary of Agriculture to the Committee on Foreign Investment in the United States — a move seen as a measure of protecting America’s farmland from being overtaken by foreign countries. But the target, Tuberville made clear, is China.
“Over the past few years, we’ve seen an alarming increase in foreign purchases of farmland and food companies, particularly by China,” Tuberville said in a statement accompanying the announcement of the bill. Britt is one of 10 Republican co-sponsors in the Senate. The proposed legislation has co-sponsors in the House of Representatives from both Democrats and Republicans, including Alabama Congressmen Jerry Carl and Barry Moore.
Both Tuberville and Britt have said they consider China to be the nation’s most significant foreign adversary. But any imminent threat by China in American agriculture is not born out by the data, said Mykel Taylor, associate professor and ALFA eminent scholar in the College of Agriculture at Auburn University.
Taylor said she and a colleague from Cornell University have been researching and studying foreign ownership of land and land markets in the United States. They had the 2021 USDA report on foreign land holdings but as detailed as that information is, there were questions it didn’t answer. For example, the report breaks down land ownership by the countries who own the most land across the country by state. Those countries are Canada, the Netherlands, Italy, United Kingdom and Germany.
All other countries who own land in a state are categorized as “all others.” In Alabama, that accounts for about one-third of all land owned by foreign countries.
Through a Freedom of Information Act request, Taylor said the researchers obtained a breakdown of land ownership in the “all others” category. In Alabama, China was not listed as a landowner, she said.
In a worldwide economy, however, foreign land ownership should perhaps not necessarily be a red flag transaction. The impact of foreign companies owning land and operating in Alabama cannot be overstated given that “transportation equipment” was the state’s top export in 2022. That includes motor vehicles and parts, aerospace products and parts and ships, among other things, according to a January announcement by Gov. Kay Ivey.
Alabama could have its own chapter of the United Nations with automakers Mercedes (German-owned), Honda ( Japan-owned), Hyundai ( South Korea-owned) and Mazda Toyota ( Japan-owned). The Toyota motor plant in Huntsville — separate from Mazda Toyota — has the capacity to produce 900,000 engines per year. And Airbus in Mobile is co-owned by German-French-Spanish European Aeronautic Defence and Space Company with Great Britain’s BAE Systems holding a minority ownership share.
“We can’t diminish the investments that Mercedes and Hyundai and those companies have made not just in autos but in shipbuilding and, in Mobile, airplanes,” said Pate, the Alabama agriculture commissioner. “So, where’s that right balance? I think we can certainly draw up a list of countries we need to be concerned about and some others maybe not as much. And that would be reasonable.
“We don’t want to suspend foreign investment in Alabama.”
Taylor pointed to China’s purchase of Smithfield Foods in North Carolina in 2013, a $7 billion deal that received approval from the same committee (CFIUS) to which Tuberville is seeking to have the U.S. agriculture secretary appointed.
“The purchase was approved and it went through and it hasn’t necessarily caused any harm that we know of,” Taylor said.
More recently, though, a Chinese company last year purchased about 300 acres in North Dakota to start a corn milling plant that will create about 200 jobs. That land, though, is about 20 miles from Grand Forks Air Force Base — creating the obvious concern of having a company from the country both Tuberville and Britt say is the America’s most formidable foreign enemy on the doorstep of a military base.
“That might be a different situation,” Taylor said. “That might be one that requires a little bit different look.
The specific concern most often raised by both Tuberville and Britt is the effect China could have on America’s ability to feed itself. Britt last month was raising money off the issue, sending a fundraising email to supporters that states, “The Chinese Communist Party is buying up American farmland and trying to control our food supply.”
At the Senate committee hearing last month, Britt said, “Food security is national security.”
Pate, though, had a different perspective on the country’s food security.
“Honestly, I thought one of the good things that came out COVID was it actually showed how well our food supply system worked,” he said. “Everything else — whether it was Q-tips or computer chips — we had problems getting out of China because of supply-side issues or production issues. But I was pretty proud. I thought in Alabama and across the nation, we did a dang good job of feeding ourselves through it.”
Taylor also said she had little concern about America’s food security while acknowledging the future is an unknown.
“I am not as concerned about it because of the percentage of land owned by foreign entities is so small,” she said.
And while noting that China is seen as a present-day security threat, Taylor said foreign enemies are often “cyclical,” she said. She told of presenting some of her research data to agricultural economists and one remarked that he was old enough to remember when Japan was the enemy.
“I think sometimes we don’t fully appreciate that these things have come and gone before,” Taylor said. “And I don’t want to be dismissive of what’s going on right now because I think that there’s enough going on on the national stage that it’s getting people’s attention. I just want to see them be as informed as possible. So that people don’t think that China’s buying all of our farmland because that’s not been the case up until this point.”
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