Federal Agencies in the Dark About China’s US Farmland Purchase, New Report Reveals

‘Growing foreign ownership of U.S. farmland, particularly by China, poses a direct threat to our food security and national security.’

Federal agencies don’t have reliable information on China’s purchases of U.S. farmland because of “flawed” data collection and reporting processes, a new government report has found.

The U.S. Department of Agriculture (USDA) needs to move away from its manual, paper-form-based foreign farmland purchase data collection process and share the information with other agencies more often than once a year, the U.S. Government Accountability Office (GAO) said in a report released on Jan. 18.

In addition, the USDA is required by law to create an online filing process and database of foreign agricultural land ownership by the end of 2025. However, according to the GAO’s findings, it has no plans nor timeline to do so.

The new report summarizes a 16-month review that the GAO conducted in response to requests from 130 Republican lawmakers, including leaders from committees of jurisdiction, according to Kimberly Gianopoulos, the GAO’s director of international affairs and trade.

Instead of holding the report for 30 days, the congressional requesters, organized by the House Committee on Agriculture, chose to release the findings to the public and members of Congress on the same day, she told The Epoch Times.

The requesters were interested in how “reliable, useful, and timely” the USDA’s foreign farmland ownership data were and the extent to which the information was available to the Committee on Foreign Investment in the United States (CFIUS), an interagency panel that coordinates national security reviews of foreign investments, Ms. Gianopoulos said.

Lawmakers React

“Growing foreign ownership of U.S. farmland, particularly by China, poses a direct threat to our food security and national security,” Reps. Glenn Thompson (R-Pa.) and James Comer (R-Ky.), the chairmen of the House committees on Agriculture and on Oversight and Accountability, respectively, said in their joint statement. The two were among the leaders who requested the GAO review.

“Safeguarding our farmland and food supply requires a whole of government approach and we will continue to work with the impacted agencies, related committees, and leadership to continue our robust oversight and to identify legislative vehicles to address the findings of the GAO report.”

Rep. Dan Newhouse (R-Wash.), another requester of the report, stated, “This report confirms one of our worst fears: that not only is the USDA unable to answer the question of who owns what land and where, but that there is no plan by the department to internally reverse this dangerous flaw that affects our supply chain and economy.”

Mr. Newhouse also offered to help as a member of the House Select Committee on the Chinese Communist Party (CCP) and the House Appropriations Committee.

Reduced Penalty

China held 346,915 acres of U.S. agricultural land as of the end of 2022, according to USDA data. Hong Kong’s holdings, which are reported separately, bring the total to about 500,000 acres. The USDA report emphasized that any numbers “should be interpreted as a minimum” because of data collection limitations.

The USDA relies on foreign investors to self-report their farmland purchases, and when they don’t comply, they don’t face strict repercussions.

For example, the authors of the GAO report noted eight penalty assessments for noncompliance between 2012 and 2021. Their interviews with USDA officials indicated that “most penalties equal less than one percent of the value of the land because the main goals of its AFIDA efforts are to maximize compliance and not to discourage potential filers from filing due to fears of large penalties.”

The AFIDA is the Agricultural Foreign Investment Disclosure Act of 1978, which requires a foreign person to disclose any acquisition or disposal of an interest in U.S. agricultural land. The Epoch Times previously reported on an instance in which a Chinese entity’s late filing fine was lowered from $21 million, based on AFIDA calculations, to a final payment of $120,000.

A tractor carrying pallets of sod drives through a farm in Salem, Ore., on June 2, 2021. (Nathan Howard/Getty Images)
A tractor carrying pallets of sod drives through a farm in Salem, Ore., on June 2, 2021. (Nathan Howard/Getty Images)

Interagency Collaboration

“It was very interesting to me how the AFIDA process was taking place within USDA, and how it was still, to some degree, a manual process at the county and the local levels, and how the information was not proactively being shared with CFIUS and with relevant agencies on a timely basis, given the amount of focus these days on China and the economic competition we have with China,” Ms. Gianopoulos said.

The USDA isn’t a regular member of the CFIUS, which is chaired by the Department of the Treasury, and the CFIUS considers the purchase of farmland to be a real estate transaction over which it has limited jurisdiction. In May 2023, the Treasury added eight military bases to the CFIUS’s list to expand its location coverage of real estate transactions.

The GAO report finds that the USDA’s foreign farmland purchase data aren’t regularly shared with the CFIUS or regularly included in CFIUS reviews.

However, the USDA responds in a timely manner to requests, according to the report. For example, in March 2023, the USDA presented AFIDA-related information to Department of Defense (DOD) officials interested in Chinese farmland ownership in the United States and holdings at a specific location.

In the case of any agricultural land purchased by persons from China, Russia, Iran, and North Korea, the USDA shares complete filings of these transactions with the DOD and the FBI. However, the process would require scanning and emailing AFIDA forms, causing a delay in information sharing. These paper forms are collected via the USDA’s 3,000 Farm Service Agency county offices and self-reported by foreign investors.

Recommendations

The GAO made six recommendations, including the detailed and timely sharing of foreign farmland transactions between the USDA and the CFIUS, the creation of an online database, and the recording of more tiers of investors beyond the primary. According to the report, the USDA requested $10 million over five years to create the database and has $1 million for the purpose in the budget this fiscal year, which started on Oct. 1, 2023.

“It was nice to be able to make recommendations to basically connect the dots and connect the two agencies together and make recommendations where we could help bolster a rigorous process that was already in place with information that would be clearly relevant to that process,” Ms. Gianopoulos said, referring to the USDA and the CFIUS.

She said that she would welcome a hearing on the report or other steps toward implementing some of the GAO’s recommendations.

The agriculture committee’s letter in October 2022 drove the review. “The Committee will evaluate potential legislative vehicles, including the Farm Bill, to address the dangers of rising foreign ownership of American farmland,” a committee aide told The Epoch Times.

The Epoch Times has sought comment from the Farm Production and Conservation Business Center, the USDA branch responsible for managing agricultural foreign investment disclosure.

 

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