Today, I submitted written testimony to the U.S. Senate Committee on Appropriations, Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. Click here to download a pdf of the testimony.
Chairman Heinrich, Ranking Member Hoeven, and members of the Subcommittee:
My name is Dan Lips. I am Head of Policy at the Foundation for American Innovation, a think tank focused on promoting innovation, strengthening governance, and advancing national security. I write to respectfully request that the Committee provide adequate funding to the Farm Service Agency to oversee disclosures of foreign investments in American land. Moreover, I respectfully request that the Committee include report language requiring the U.S. Department of Agriculture (USDA) to submit to Congress and publish a report answering the U.S. Government Accountability Office’s (GAO) recent recommendations.
Since 1978, the Agricultural Foreign Investment Disclosure Act (AFIDA) has required USDA to collect data on foreign investor ownership of agricultural land in the United States. However, a 2022 review found that “data collection has been long crippled by poor management and compliance,” and that “decades of neglect of the AFIDA program have prevented Congress and the general public from understanding the increase in foreign ownership of U.S. agricultural land over the past four decades.” The percentage of American agricultural land owned by foreigners has more than doubled since 2004. Chinese investment in American farmland grew from approximately $100 million in 2010 to $1.8 billion in 2020.
In its most recent annual report, USDA reports that “[f]oreign investors held an interest in over 43.4 million acres of U.S. agricultural land” in 2022, which represents “an increase of over 3.4 million acres from the December 31, 2021 report and represents 3.4 percent of all privately held agricultural land in the United States.”
The rising foreign ownership of American land has coincided with increasing concern from members of Congress about potential national security risks and USDA’s ability to oversee foreign purchases. For example, in 2022, 51 members of Congress sent a letter to the heads of the Agriculture, Defense, and Treasury departments expressing concerns about a Chinese business’s purchase of a property in North Dakota near an Air Force base. During the 117th and 118th Congresses, lawmakers have introduced legislation that would reform and strengthen AFIDA, deny USDA support funding to foreigners owning American land, prohibit certain agricultural purchases, and expand foreign investment reviews (including by adding the Agriculture Secretary to the Committee on Foreign Investment in the United States). In the FY2022 and FY2023 Consolidated Appropriations Acts, Congress required USDA to take steps to improve its oversight of AFIDA, including by reporting on trends of foreign ownership by certain foreign governments and by modernizing AFIDA data collection, management, and public disclosure. In its bipartisan December 2023 report, the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party recommended that Congress “[c]odify the Secretary of Agriculture as a voting member of CFIUS for cases that involve farmland or agriculture technology and allow the Secretary of Agriculture to flag potentially problematic land purchases for CFIUS review.”
In January 2024, GAO issued a report that detailed significant challenges to USDA’s ability to manage and enforce AFIDA disclosures and to share necessary information with other federal agencies. The GAO report included the following information that raises concern about USDA’s oversight of AFIDA and its ability to effectively share information with other agencies involved with the Committee on Foreign Investment in the United States:
- “[A]lthough Congress required USDA to create an online submission process and public database for AFIDA data by the end of 2025, USDA does not have plans and timelines to do so, in part because USDA has not received funding. USDA also does not sufficiently verify and conduct quality reviews to track the accuracy and completeness of its collected AFIDA data. GAO’s review of AFIDA data current through calendar year 2021 found errors, such as the largest land holding associated with the People’s Republic of China being counted twice.”
- “USDA does not regularly share AFIDA data with CFIUS agencies on a timely basis to be useful for CFIUS reviews. USDA releases its annual report online. However, according to DOD officials, they need to receive AFIDA information more than once a year, and they need information that is more up-to-date and more specific to help them identify relevant non-notified transactions and consider potential national security risks.”
To improve USDA’s ability to enforce AFIDA and to address potential security risks of foreign purchases of American farmland, the Committee should do the following:
First, the Committee should provide dedicated funding to the Farm Service Agency within USDA to establish the capacity to effectively manage AFIDA, including to address the FY2023 appropriations requirement to modernize data collection and management systems. In its January report, GAO recommended that USDA “complete an analysis to determine the extent to which the agency can satisfy the requirements of the Consolidated Appropriations Act, 2023 to create an AFIDA online submission system and public database within its expected budget,” and to provide recommendations to Congress to address potential resources needs. The Committee should work with USDA to expedite this review and to provide dedicated funding for AFIDA enforcement and information sharing through FY2025 appropriations.
Second, the Committee should include report language requiring the USDA Secretary to submit to Congress and publish a report describing the Department’s plan to answer GAO’s recommendations issued in its January 2024 report. GAO issued six recommendations, “including that USDA share detailed and timely AFIDA data with CFIUS agencies, improve the reliability of AFIDA data, and assess its ability to adopt an online submission system and public database,” and reported that USDA agreed with the recommendations. However, GAO also reports that USDA has 90 open recommendations as of May 7. Ten of these open recommendations were made before 2020, and the oldest open recommendation was made in 2004. To ensure that USDA answers GAO’s recent recommendations to improve its oversight of foreign investment in U.S. agricultural land, the Committee should require the Agriculture Secretary to provide to Congress and publish a report describing how USDA will answer GAO’s recommendations in a timely manner.
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Providing adequate resources to USDA and requiring the Department to answer nonpartisan watchdog recommendations to improve its oversight of AFIDA would strengthen national security.
