Advertisement

Secret Acres: Foreign-owned agricultural land inaccurately tracked by government

Federal law requires disclosure, but those records are incomplete
Published: Jan. 24, 2022 at 5:02 PM EST
Email This Link
Share on Pinterest
Share on LinkedIn

Gray’s National Investigative Team is covering issues surrounding transparency in agriculture. Click here to watch and read Secret Subsidies, which covers the secrecy surrounding farm subsidies in the United States. If you have story ideas or tips regarding transparency and agriculture policy, contact the team here.

(InvestigateTV) – American soil is becoming less and less American when it comes to ownership. Foreign companies are snapping up land across the country, including millions of acres of farmland.

But the conversation about foreign agricultural policy is difficult to have, according to some farmers, lawmakers and researchers, because the true level of overseas ownership is largely unknown.

“We should know, based upon whether it’s a national security issue, a food security issue… who’s going to be the next generation of farmers and feed our neighbors,” said farmer and former Missouri Democratic lieutenant governor Joe Maxwell. “We should know who’s buying up America’s farmland and for what purpose they’re doing it.”

Despite a federal law requiring foreign transactions of agricultural land be reported to and recorded by the federal government, the U.S. Department of Agriculture’s database appears to be missing significant acres of land.

Records of who owns what don’t match. Reconciling federal, state and county records on land ownership is all but impossible. It is unclear whether the discrepancies originate from the companies’ reporting, the forms or the USDA’s recording of the land.

“If we don’t have accurate information on who holds the title or who holds the deed, then we’re no longer even upholding the basic system of property rights in the United States,” said Loka Ashwood, a professor at the University of Kentucky who studies agricultural policy and rural trends.

In dozens of counties in Missouri, for example, InvestigateTV found no matches when comparing federal and county records. None of the farms registered with the federal government as foreign-owned appeared in county-level records with foreign addresses.

There were apparent omissions and discrepancies in the federal level data as well, with publicly-reported foreign-owned or controlled property not showing up or appearing under different names.

“There’s no doubt in my mind, it’s incomplete,” Ashwood said.

State and federal lawmakers from both sides of the aisle have pushed for changes – from locking down the sale of agricultural land to foreign entities to forcing increased transparency and mandating more accurate record-keeping.

“They exploit the labor that we have here, exploit the communities that we have here as best they can to ensure that they have profits and security in another place in the world… There’s something wrong with this,” said Wes Shoemyer, a lifelong Missouri farmer who would like to see reform in transparency and corporate farming.

In recent decades, no federal legislation to drastically change the tracking or sale of farmland has passed.

But many say it needs to.

Joe Maxwell, the former lieutenant governor of the state of Missouri, believes the United...
Joe Maxwell, the former lieutenant governor of the state of Missouri, believes the United States should accurately monitor and report the purchase of American land and enforce laws requiring the disclosure of foreign interests.(Jamie Grey, InvestigateTV)

Ag accounting

A 1978 law was supposed to ensure that foreign-owned farmland is tracked through the USDA, but the data collection associated with that law appears to be incomplete.

The Agriculture Foreign Investment Disclosure Act “requires that a foreign person who acquires, disposes of, or holds an interest in United States agricultural land must disclose such transactions and holdings to the Secretary of Agriculture.”

Through a form, companies or individuals are supposed to report things such as the geographic location of the land, type of owner (such as corporation or individual), total acreage, and the value of the land.

Using that data collection mandated under AFIDA, InvestigateTV compared the reported foreign-owned agricultural land with USDA’s log of all farm and forest land in the United States.

Between 2009 and 2019, the AFIDA data shows 48 states had increased foreign-ownership.

In total, InvestigateTV’s analysis found an increase of more than 13 million acres of foreign-owned land in the United States over those ten years.

Maine, Oklahoma, Michigan, New York and Illinois saw some of the largest percentages of land shifting to overseas ownership and interest.

But that AFIDA data, according to experts and analysis, is likely giving an incomplete picture.

InvestigateTV attempted to match the federal government’s data with county assessor records and found discrepancies.

A few examples:

● GH America Energy, LLC, a company owned by billionaire and former Chinese military officer Sun Guangxin, planned to develop a wind farm on Texas land it owns through its subsidiary Brazos Highland Properties LP, according to 2020 Foreign Policy and 2021 Forbes reporting. Members of Congress specifically expressed concern about the proposed development in Val Verde County. AFIDA data lists Brazos Highland Properties LP owning land in Borden and Scurry counties in Texas, but not in Val Verde County. The Val Verde County Assessor’s Office lists property owned by Harvest Texas, LLC using a Houston address shared by GH America Energy on filings with the Texas secretary of state. That land does not appear in AFIDA data obtained by InvestigateTV.

● The Escalante Ranch in Uintah County, Utah started receiving hate mail after Chinese investor Green Pasture International LLC bought the ranch in 2011, according to an October 2021 report by Deseret News. Uintah County assessor records confirm Green Pasture’s ownership since 2011. But in AFIDA data, no Chinese company is listed as owning land in Uintah County between 2011 and 2019.

● Acciona Energy USA Global LLC, a Spanish renewable energy company, lists 10 solar and wind farm developments it owns on its website. AFIDA data shows three totally different properties owned by Acciona in Adams County, Illinois, and Calhoun and Taylor counties, Texas. Online county assessor records show property owned or leased by Acciona in Cameron County, Texas, Cedar County, Iowa, and Clark County, Nevada. None of those are recorded in AFIDA data.

InvestigateTV reached out to these companies but did not receive a response.

“We’re not even accurately tracking who owns, and then we’re not aggregating it in any sense at the federal level, so I see this is really problematic. It’s not necessarily more regulations, just let’s just be accurate in the first place,” said Ashwood, the professor in Kentucky.

Ashwood’s team ran into the same issues as InvestigateTV when trying to research corporate land ownership.

“We have a database that’s supposed to be tracking that. There’s supposed to be disclosures of foreign investments in agricultural land. But what’s available is thin, and then when you do look at data entries, a lot of the data entries are missing the actual country and location, for example,” Ashwood said.

Her research team specifically looked into a foreign-owned LLC that came up during the teams research into corporate structures in agriculture, and in the AFIDA records, they found all useful geographic information, including the county names, was missing.

“There’s no doubt in my mind, it’s incomplete. I think that there’s a capacity for the government to know what owns the land and who’s investing, but they’re going to have to require public disclosures. And if you do that, then you’re going to have to have investors come out publicly,” Ashwood said.

Dr. Loka Ashwood, an assistant professor at the University of Kentucky, has faced issues...
Dr. Loka Ashwood, an assistant professor at the University of Kentucky, has faced issues attempting to use federal records to research corporate farm ownership. She agrees the records appear to be inaccurate and incomplete.(Jamie Grey, InvestigateTV)

The data is also very difficult to reconcile because the USDA uses its own definitions for data fields, and some of those data fields were incorrectly identified or cataloged in the spreadsheets. The parcel numbers are also different between federal and county records.

When InvestigateTV asked the USDA to provide data definitions to help clarify the discrepancies, an agency spokesperson provided two, un-dated data fields keys, which in some cases either contain fields not included in the data sets, or are missing fields.

When asked which data fields correspond to Farm Services Administration Form-153, the document farms use to report foreign ownership and is the source for the AFIDA database, the spokesperson provided a “rough” breakdown, but said: “We don’t have anything specific to identify which sections of the form correspond to the data fields in the database.”

The USDA did not respond to InvestigateTV’s requests for an interview.

The LLC shield

Gone are the days of widespread family farming, and experts say the system of having farms with foreign companies documented in AFIDA doesn’t work with the new ag business models.

The industry is now often consolidated in investment funds and convoluted leasing agreements, making it difficult to figure out what’s happening on farmland – and who owners are leasing land to.

The average person can’t see who’s invested because that information is private, and the leases are also private.

“We’ll find tax parcel data that has a subsidiary, and it’ll say, oh we’re sending the mail to this P.O. box that’s local in the county. So it looks like it’s locally-owned. Right. But actually, when we find business reports related to that subsidiary, the parent company is out of state,” Ashwood said. “So even when we think that land is locally-owned, like it’s a small mom and pop operation…actually it’s a multi-layered subsidiary corporation.”

Research by Ashwood and her colleagues found that when agriculture businesses are set up using a multilayered subsidiary model, land was owned by someone outside of the county where the land is located 96% of the time.

“The problem for us is we can’t figure it out because we don’t have access to corporate documents on an international scale. How deep the rabbit hole of foreign investment could go, that’s one of our challenges methodologically right now,” Ashwood said.

InvestigateTV’s analysis also found AFIDA data does not fully account for business models that rely on land leasing agreements and investment funds where the land user is a different party than the actual owner.

Asset managers like International Farming Corporation may not be fully accounted for by AFIDA...
Asset managers like International Farming Corporation may not be fully accounted for by AFIDA data when owning and leasing land to third parties.(Illustration: Cory Johnson, InvestigateTV)

For example, United Arab Emirates-based Al Dahra grows 30,000 acres of alfalfa, garlic, and onion in Arizona and California, according to the company’s website. Reporting by The Arizona Republic identifies one of those farms in La Paz County, Arizona where, as of 2019, Al Dahra leased 3,000 acres from the International Farming Corporation (IFC).

But La Paz County assessor records list only two acres of land owned by IFC Investment Management. Another 238 acres are registered to Arizona Valley Farm LLC with the same North Carolina mailing address as IFC.

InvestigateTV found nine other limited liability companies (LLCs) in Mississippi, Missouri, Oklahoma, and Texas with the same mailing address as IFC filed with those respective secretaries of state. County assessor records available online showed parcels owned by five of the LLCs.

But AFIDA data shows no record of Al Dahra, IFC, or any of the known LLC affiliates from 2011 to 2019.

IFC declined InvestigateTV’s request for comment.

Multiple names, one company

Even farmers are at a loss at who’s operating right next to them. Susan Williams, a cattle farmer in Missouri, said she can’t figure out what’s going on down the road.

“It’s hidden. We’ve asked. We know a company that’s kind of managing this transaction, but they will not tell us who their investors are. They say that’s private. You can look at all Missouri records, and it just lists the LLC and it will list an attorney who filed the LLC document. And that’s all you know,” Williams said.

InvestigateTV examined 46 counties in Missouri with online assessor records and found no large parcels — those 500 acres or larger — of land with foreign mailing addresses.

In those same counties, 2019 federal AFIDA data shows at least 162 foreign deed holders that account for 140,394 acres.

In some cases, multiple subsidiary businesses of one parent company are named deed holders to the same parcel of land, creating a discrepancy between local and federal landowner records.

For example, in Daviess County, Missouri, AFIDA data names China’s Smithfield Foods’ hog production subsidiary, Murphy-Brown, LLC, as a registered land owner. Its property shows up many times in the federal database.

But county data doesn’t necessarily use that name. Murphy-Brown doesn’t show up in those records.

Instead, Daviess County assessor records list parcels owned by Premium Standard Farms, the hog production subsidiary’s name until 2013, and KC2 Real Estate, LLC- another Smithfield Foods subsidiary recognized by the Securities and Exchange Commission.

A Smithfield spokesperson said in an email that the Hong Kong-based company has investors worldwide — including from the U.S. ― and that the company doesn’t create LLCs to be obscure or secretive.

“Over the years, acquisitions of businesses that own farmland have played a role in Smithfield’s growth. In other cases, we have created subsidiaries which own agricultural land,” the spokesperson said. “Many of these transactions occurred before 2013, when we first became subject to AFIDA filing requirements. We have never created a subsidiary or engaged in a real estate transaction through a subsidiary in order to obscure compliance with AFIDA.”

Smithfield also noted it’s not an uncommon practice in the industry to have a “collection of entities.”

The reason for LLCs, according to Ashwood, makes sense for large farming corporations. The LLCs help protect a company’s assets if something happens. Rather than an entire corporation going bankrupt, for example, only a portion of the company would be pulled into financial risk.

“The whole company wouldn’t default. Smithfield wouldn’t necessarily be accountable, and it would protect their investments elsewhere in their corporate hierarchy,” Ashwood said.

But when it comes to transparency issues, the corporate structure may appear fractured or unrelated in documentation, especially without digging deep into multiple government records.

Ashwood agrees the paper trails are confusing with the many farming corporations that operate this way: “Just like how many different names they go under, how they file using different LLCs in different paperwork and just how convoluted Smithfield ends up looking on paper versus what it really is, which is a Chinese company.”

While there is criticism for companies based overseas to collect American land, proponents of these arrangements say there is a contribution to the economy in the U.S. Smithfield, for example, said its presence in the country is helpful – not harmful – to the economy.

“Indeed, Smithfield owns farmland in the United States. Raising hogs is a core part of our business and enables the contributions we make to the U.S. economy, the communities where we operate and to the nation’s food security,” the spokesperson said.

Land opportunity lost?

Web Davis is a farmer in Missouri who owns Triple D Produce. He is a veteran and serves in...
Web Davis is a farmer in Missouri who owns Triple D Produce. He is a veteran and serves in roles with the Missouri NAACP.(Jamie Grey, InvestigateTV)

Some Missouri farmers worry that increasing corporate ownership of farmland drives out competition and stifles opportunity for independent, local producers and their communities.

As a Black farmer, Web Davis’ father integrated the hog market in Mexico, Missouri to receive the same price white producers were offered in the 1960s. By the 1980s, Davis knew of five Black farmers in his rural neighborhood. Today, he’s the only one.

Davis said the only way for young people to enter farming today is by inheriting a family farm or having other wealth. Buying isn’t an option for many because of the competition over land.

“Almost impossible. I mean, unless you have an outside source of income, that disposable income or something,” Davis said.

On the flip side of competition for land, is the lack of competition for market prices that comes with consolidation, argue some farmers.

Wes Shoemyer has farmed in Missouri for 45 years, since he was a teenager. He said a lot has changed over the years: government programming, the weather, competitive market forces – and now simply understanding who owns what.

“They don’t track, and they don’t track the right way to understand exactly who owns what parcels. And so I believe, no, we do not know exactly how much foreign ownership [there is],” he said.

Companies may control multiple parts of the supply chain from growing crops to livestock raising to animal processing, allowing them to make even larger profits and use the capital to buy more land, deepening their market share.

“Let’s get back to promoting what helps our local communities what helps what will help the next generation come back, let’s talk about these values of competition in our in our food system,” Shoemyer said.

Farmers like Shoemyer are also concerned with land stewardship and protection.

“We need to make sure that the farmers and the communities in this country and this state, that the people who are operating here, have a real stake in what they leave behind,” Shoemyer said.

Fewer companies controlling the market can also lead to higher prices for consumers at the grocery store or create shortages, according to people advocating for more accounting and domestic control.

“This is a problem where as we see further corporate consolidation, it not only drives farmers out of the business and off their land... what it does is it brings in foreign imports, which undercut what our local and national growers, our producers are making,” said Brian Smith, the policy and legislative coordinator for the Missouri Rural Crisis Center.

Joe Maxwell, the former Missouri lieutenant governor, said he wants to see companies penalized for not disclosing their affiliations, and he would like to see a cap on foreign ownership.

A large part of his argument, and the argument of others, is more about keeping U.S. land, rather than taking the opportunity to own the land away from other people.

“We shouldn’t hate other people, nor necessarily hate other countries. But we need to do is respect what China, Saudi Arabia and other countries are doing. They have their national interest, their people’s interest at heart, I can’t fault them for that. They’re going to take care of their people. What I can do is fault my government for failing to have the same level of interest in and taking care of U.S. citizens,” Maxwell said.

Smith also said the idea isn’t to regulate smaller, individual purchases but to stop large-scale takeovers of large swaths of land.

“We want to stress we’re talking about foreign corporations, not foreign, individual families and that type of thing,” Smith said.

A federal call for change: ‘God only made so much land’

Multiple lawmakers on both sides of the aisle have proposed reform in agricultural policy when it comes to tracking and allowing foreign sales.

But even after multiple proposals over the years, AFIDA has remained largely unchanged. Other efforts have stalled or failed.

Senator Chuck Grassley (R-Iowa) was one of the sponsors of AFIDA. He said prior to its passage in 1978, there was zero tracking of foreign ownership.

When asked about AFIDA’s accuracy today, he told InvestigateTV he questions the accuracy of the USDA’s records. The issue, he says, is one worth bringing to the Senate’s agricultural committee.

“We have a figure of the most recent [report], about 2.7% of land in the United States being owned by foreigners. Now, is that 2.7% accurate? Or is it a little bit more? A little bit less? I think you raise a legitimate question, are we getting accurate information from it? And that’s something for congressional oversight to get into,” Grassley said.

In 2017, Grassley proposed legislation with Senator Debbie Stabenow (D-Michigan) to give agriculture officials a permanent spot on the Committee on Foreign Investment in the U.S.

It stalled.

For Grassley, his main concerns are national security and food security.

“Think around the world where there’s been a shortage of food, you have revolution. So the social cohesion of the United States is very important that we maintain a supply of food, to have peace and certainty,” Grassley said.

Grassley’s home state is one of several states that has laws on the books to limit the foreign purchase of land in most circumstances.

There have been multiple state-level proposals across the country in the last couple of years to stop the sale of farmland to foreign entities. In 2021, both Texas and Tennessee saw bills introduced that would limit foreign ownership of agricultural land. In Tennessee, the bill made it as far as the calendar of the state senate, but was referred back to committee and never received a vote. The Texas bill didn’t make it out of the committee stage.

Sen. Chuck Grassley (R-Iowa) was first elected to the U.S. Senate in 1980. He co-sponsored the...
Sen. Chuck Grassley (R-Iowa) was first elected to the U.S. Senate in 1980. He co-sponsored the original AFIDA legislation while in the House in 1978.(Jamie Grey, InvestigateTV)

Grassley said he would support limits at the federal level as well.

Representative Dan Newhouse (R-Washington) is one lawmaker who sponsored such legislation. His amendment to the 2022 USDA appropriations bill specifically would limit the sale of American farmland to China, and after some debate — some of which included concern from members of Congress about anti-Asian sentiments in the past two years — it was later expanded with Democratic input to include Russia, Iran and North Korea.

“Certainly my interest was preventing a country who is obviously not an ally from beginning the process of a agricultural monopoly, so to speak in our country. I’m fully aware that the amount of acres that are currently owned by China is compared to all the available farmland in the country is not great. But the trend we’ve seen over the last decade or more is growing,” Newhouse said.

In addition to the ownership issues, the transparency and lack of punishment for failing to report holdings also bothers Newhouse.

While there is a penalty for failing to report, fines are rarely used.

InvestigateTV requested fines from 2018 through 2021 and found only three penalties have been assessed, with fines totaling less than $200,000.

“There’s not a great requirement or any good system to make sure that this reporting is transparent,” Newhouse said. “I think we need to put more teeth in the legislation to make sure that the entities that we have that have authority on the reporting requirements actually can get the job done.”

Newhouse’s amendment was accepted by the House appropriations committee, but the overall funding bill remains in limbo.

State-level legislation: ‘We need to find out who owns our food’

While federal lawmakers consider options, some say the records issues should be dealt with at the state level to get a handle on what’s happening.

“It would be extremely easy right now, which is why it is so urgent that this problem get dealt with in our state legislature,” said Smith, from the Missouri Rural Crisis Center.

From 1978 until 2013, Missouri effectively banned the foreign buying of state land. But the law changed with an omnibus bill, and right away, according to lawmakers, Smithfield moved in — and things changed dramatically.

A few years after that change, Missouri state Senator Doug Beck (D-St. Louis County), watched family farmers pack a hearing room in the statehouse. The issue: Foreign-owned farmland.

Earlier attempts to pass legislation to cap foreign ownership had stalled in committee, but he said the issue is important to continue pushing.

“I think when you have a foreign company, and in some cases, a foreign company backed by a foreign government, buying your farmland, which is one of our finite resources, one of our most precious resources, it creates a national security issue. It also creates a food security issue,” he said.

In 2021, Beck proposed a state bill that would have stopped all future foreign agricultural land transactions in the state.

The idea: Pause sales until proper accounting of land is done.

“Because we don’t know what’s going on. We don’t know how many acres are actually owned. You know, there’s numbers of 49,000 [foreign-owned acres], I’ve heard upwards of 100,000,” Beck said. “The bottom line is there’s no transparency there, so we don’t know how many acres are quite our own.”

Once the land is logged, he said, the state should revisit the situation.

“I would like to at least get an account, an honest account, of actually how many acres are owned here? How many families are affected by this?”

Beck said he wasn’t surprised to find InvestigateTV had trouble matching federal and county records, and he said that mismatch is his main concern.

“You look at the county clerks and assessors, nobody knows exactly because nobody’s keeping track. The Department of Agriculture no longer keeps track. So we know that for a fact. And then we have these LLCs,” Beck said.

Companies such as Smithfield say their business structures are common even amongst domestic companies in agriculture. Lobbyists for the company have testified in state legislative hearings that limiting foreign ownership would disincentivize investment that can help small, rural communities.

For example, the company said it employs 40,000 people in the United States and makes donations and other financial contributions in areas where it operates.

For those seeking more regulation or simply more transparency, it’s not enough.

Beck said lawmakers will express concern with the current system in private, but when measures go to a vote, things change.

“There’s a lot of other entities with money that are involved, that are supporting a lot of these candidates. And let’s just be honest about it. That’s what politics a lot of times comes down to,” Beck said.

Beck filed a bill this session that would stop the sale of Missouri land to foreign owners and require the state to approve any future transactions of foreign-held land. That bill was referred to the Missouri Senate Agriculture, Food Production and Outdoor Resources Committee.

While the conversation of whether foreign ownership is contentious and has many considerations, the issue of transparency is one piece many stakeholders are getting behind.

“There’s no transparency and there is not any enforcement mechanism, that the enforcement doesn’t deter the failure to report or the failure to be honest within the existing system,” said Maxwell, the former lieutenant governor.

Until there’s better information, making other decisions will be difficult, said Ashwood.

“Accurate information can be transformative. I really do because I think when people know what’s going on, they then are more empowered,” Ashwood said.