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Without Mentioning China, California Close to Blocking Foreign Buyers From Its Farmland

Farmer Larry Cox watches a tractor at work on a field at his farm Aug. 15, 2022, near Brawley, Calif.
Farmer Larry Cox watches a tractor at work on a field at his farm Aug. 15, 2022, near Brawley, Calif.

California’s legislature has passed a bill banning foreign entities from buying its agricultural land, a move that is part of reignited discussions about whether the United States should block parties from unfriendly countries from buying farmland.

The California bill makes no mention of China, and Governor Gavin Newsom has until the end of the month to sign it into law. But on a national scale, some experts and politicians are concerned that China’s increasing investments in U.S. agriculture pose a threat to the country’s security. Other analysts told VOA Mandarin that those concerns are overblown, saying there is little evidence to suggest that China’s actions are harmful.

Senator Melissa Hurtado, the Democrat who introduced the California bill, represents a district in the Central Valley with some of the world’s richest and most fertile farmland. For her, security is the key issue behind regulating foreign ownership of farmland. “Food can, and is, being used as a weapon like we are seeing in Ukraine,” she said in a statement.

The Food and Farm Security Act, passed by the California Senate on Aug. 31 after passing the Assembly on Aug. 22, “would prohibit a foreign government from purchasing, acquiring, leasing or holding an interest, as defined, in agricultural land within the State of California.”

California grows two-thirds of all fruits and nuts in the United States and one-third of all vegetables. That production “would be jeopardized if foreign governments controlled our agricultural land,” Hurtado said in a statement to VOA Mandarin.

“My concerns are not with a particular foreign government, but rather with the well-being of Californians, Americans and the millions of people around the world who depend on us for food,” Hurtado said. “My bill will help maintain California’s strong agriculture industry and allow us to remain resilient, even during times of global unrest or international conflict.”

The United States does not have a national law regulating the amount of agricultural land that can be foreign-owned.

FILE - Farmer Larry Cox looks at soil on a field at his farm Aug. 15, 2022, near Brawley, Calif. The Cox family has been farming in California's Imperial Valley for generations.
FILE - Farmer Larry Cox looks at soil on a field at his farm Aug. 15, 2022, near Brawley, Calif. The Cox family has been farming in California's Imperial Valley for generations.

“It’s very surprising that there are currently no federal regulations governing ownership of agricultural land in the United States,” Caitlin Welsh, director of the Global Food Security Program at the Center for Strategic and International Studies (CSIS) think tank in Washington, told VOA Mandarin. “I do think that this is something that both the federal and state governments of the United States should look into.”

Just 2.9% of U.S. privately owned agricultural land is foreign-owned, according to a December 2020 report from the U.S. Department of Agriculture, which was the last time such data was released.

Canada accounts for the largest share of foreign-owned U.S. agricultural land at 32%, or 12.4 million acres, as of 2020, according to the report.

China holds 352,140 acres as of 2020, which is slightly less than 1% of foreign-held acreage in the United States.

Fred Gale, an agricultural economist at the U.S. Department of Agriculture, does not think China currently poses a threat to the United States through its agricultural land investments because the investments are so small.

“When we look at the composition of land purchased by Chinese owners, only about one-third is real crop land,” Gale told VOA Mandarin. “Most of the rest is what we call other kinds of farmland, which is just a miscellaneous category.”

Chinese investors’ holdings of U.S. agricultural land increased from 13,720 acres in 2010 to 352,140 acres in 2020, according to a May 2022 report by the U.S.-China Economic and Security Review Commission. This rise was mainly due to Shuanghui International buying Smithfield Foods in 2013.

As of 2019, the Chinese-owned Smithfield properties accounted for 76% of all the U.S. agricultural land owned by Chinese entities, according to the May report.

That rapid increase in China’s holdings from 2010 to 2020 prompted much of the concern over Chinese ownership of U.S. agricultural land, according to Cory Combs, an analyst at the China-focused policy research group Trivium.

“It’s poorly understood what’s driving this investment, and to my mind, the real issue is no one really has a clear idea of — Is this state-led investment? Is this opportunism? Is this food security diversification?” Combs told VOA Mandarin. “The unknown — the uncertainty — is what’s really the most threatening aspect of this.”

China’s Washington embassy did not reply to VOA’s email requesting comment.

There isn’t much concern that the top countries that own U.S. agricultural land — such as Canada and the Netherlands — have harmful motives, since their relationships with the United States have long been friendly, Combs said.

China is facing food security issues at home due to arable land lost to rapid urbanization and industrial growth, population decline and natural disasters, according to a report from the U.S.-China Economic and Security Review Commission. “Recognizing its challenges, China has also gone abroad to address its needs through investments and acquisitions of farmland,” among other means, the report said.

The question of Chinese ownership of U.S. farmland has been a periodic flashpoint — most recently in July, when a Chinese food manufacturer, the Fufeng Group, bought 300 acres of land near Grand Forks, North Dakota, to set up a corn milling plant. The sale raised national security concerns because the project is located about 20 minutes from the Grand Forks Air Force Base.

Following the controversial sale, Republican Senator Mike Rounds of South Dakota introduced a bill in August that would ban the governments of China, Russia, Iran and North Korea from buying or investing in U.S. agricultural land.