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Restricting Foreign Ownership of Agricultural Land in the US, Analysis of Efforts and Impact Considerations

Blake Bennett and Jason Johnson

Summary

Farmland plays an important and unique role in the asset base for U.S. agriculture. Agricultural real estate has historically accounted for over 80 percent of farm-sector assets. With the average age of the American farmer at over 57 years, it is anticipated that succession plans that entail land and agricultural assets changing hands will be implemented in the near future. To date, almost half of the states in the U.S. have some type of restriction to foreign ownership of agricultural land. As of 2023, 36 states saw proposals to place some type of restriction on foreign ownership. At the federal level, laws have been in place since 1978 requiring notice of purchase by foreign entities. However, much of the reporting requirements put in place by this legislation have been largely ignored. Most recently, bipartisan legislation has been introduced in both the U.S. House of Representatives and Senate to ban Chinese ownership of U.S. farmland. Such legislation has typically been justified on the premise of protecting the agricultural production sector in the U.S. and food security demands for U.S. consumers. However, such legislation could produce negative consequences to the industry if equity positions of U.S. farmers/ranchers are adversely impacted. This study provides a demographic overview of the laws in place restricting or limiting foreign ownership of U.S. farmland. This study also postulates potential consequences of such legislation on the production agricultural sector from the perspective of beginning, mid-life and retiring agricultural producers.

Details

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