Please! don’t ban Chinese investment in US farmland

What happens to America’s food supply if foreigners, and not American farmers, own the amber waves of grain? It’s an old fear that’s generating new tensions, thanks to a Chinese company’s acquisition of 300 acres of North Dakota farmland .
The company plans to build a corn milling operation. Opponents fear that it will also build the capacity to surveil the nearby Grand Forks Air Force Base. As debate over the investment flares, at least two pieces of legislation have been introduced in Congress that would prohibit Chinese nationals or entities from owning or leasing US agricultural assets, including farmland.
The national security concerns are legitimate. Fears that China or another nation might take control of America’s food supply chain are not. After all, foreigners owned a little less than 3% of US agricultural land in 2020.
But there is a larger issue the US is facing. Over the next two decades, roughly 40% of US domestic farmland will be transferred to new ownership in a wave of farmer retirements, providing a huge opportunity for investors at home and abroad.
Ensuring that those acres are transferred in a way that protects national and food security should be a priority. Fortunately, it can be done without barring investors on the basis of their nationality.
Efforts to curb foreign ownership of American real estate aren’t new. In the 19th and early 20th centuries, several states, concerned about waves of new immigrants, passed racially based alien land ownership laws. On the West Coast, they targeted Japanese immigrants, especially farmers. Courts eventually ruled the laws unconstitutional, but fears of foreign land ownership never went away entirely.
In the 1970s, Cold War-era concerns that foreign landholders would drive up land prices, erode local control and impede US farm and food policies led to more widespread ownership restrictions. These laws were not racially based, varied in impact — and remain in force. As of 2021, 12 states — mostly in the Midwest — restrict foreign ownership, while 29 expressly allow for it.
Are the strictures necessary? As of December 2020 , only 2.9% of US agricultural land was foreign-owned, and most of it was acquired by investors from countries friendly to the US. Not surprisingly, Canadians were the leading non-US landowners, with 32% of all foreign holdings, or 12.4 million acres. Investors from the Netherlands, Italy, Germany and the UK were next on the list, accounting, collectively, for 31% of all holdings.
Owners from countries that are US adversaries were harder to find. Russia and Iran owned 834 and 2,463 acres of US farmland, respectively. Chinese investors, the target of recent proposed legislation, owned a still-minuscule 352,140 acres, or a mere 0.04% of total US farmland. That’s hardly enough to put the US soybean crop at risk, much less justify overheated headlines claiming “ China is Buying Up American Farms .” In fact, US Agriculture Department data shows that most of the agricultural land owned by Chinese investors isn’t intended for growing crops or livestock grazing at all.
—Bloomberg