Despite concerns that China is buying or leasing all the farmland in the United States, new Cornell-led research shows that this is not the case.

Using a federal dataset of more than 40,000 foreign investments in U.S. agricultural land as of 2020, Wendong Zhang, assistant professor and extension economist at the Charles H. Dyson School of Applied Economics and Management, and collaborators show that countries classified by the federal government as “adversary,” such as China, held only 1% of the roughly 40 million acres of foreign-owned farmland. The top foreign country in terms of ownership of U.S. agricultural land? Canada, which owned about a third, much of it Maine and Michigan forestland.

And while foreign ownership has increased steadily over the past two decades, long-term leasing is the main driver of the increasing foreign interests, and many foreign transactions are related to renewable-energy development.

“I became interested in this, especially Chinese ownership of U.S. farmland, because of the political attention it was getting,” Zhang said. “And there’s an increase in state-level legislation, in Texas, Florida, Indiana and other places. We wanted to look at the facts, given the spread of rumors.”

Zhang is a co-author of “Mapping and Contextualizing Foreign Ownership and Leasing of U.S. Farmland,” which appears in the 2024 Journal of the American Society of Farm Managers and Rural Appraisers. Other co-authors are Fangyao Wang, M.S. ’23, a research assistant in Zhang’s group; and Mykel Taylor, associate professor of agricultural economics and rural sociology at Auburn University.

“Most people are surprised to find that China actually ranked so low in terms of total holdings, and most people wouldn’t necessarily think that Canada captures the lion’s share,” Zhang said. “Of course, Canada and China pose different national security risks, so the reaction is very different.”

Currently, 24 states have some kind of restrictions on foreign ownership of land, but each state’s restrictions vary. In April 2023, Arkansas implemented legislation that bars a “prohibited foreign party” (PFP) from acquiring agricultural land, and prohibits acquisition by any PFP-controlled business.

The Chinese spy balloon episode of 2023 – along with the thought that Chinese ownership of land near sensitive U.S. military or intelligence installations could compromise national security – have made foreign ownership of U.S. agricultural acreage a hot-button issue.

While there isn’t an outright ban on foreign land ownership at the federal level, the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978 requires that foreign investors who acquire, transfer or hold an interest in U.S. agricultural land – including leases of 10 years or more – report such holdings and transactions to the secretary of agriculture.

Through a Freedom of Information Act request, Zhang and his collaborators obtained information from the AFIDA database, which contains information about the foreign entities that hold U.S. agricultural land, including the name of the entity, nationality, location, date of acquisition, acquisition methods, land use (crop, pasture, forest and other agriculture) and other specifics.

The researchers reported three main findings:

• Long-term leasing of at least 10 years or more is the main driving force of the increasing foreign interests in U.S. farmland in the past 20 years, yet its important role remains largely ignored in current policy debate. As of 2020, a total of 38.3 million acres (2.9%) of U.S. farmland had foreign interests, up from 12.2 million acres in 2000;
• A considerable number of foreign entities, especially companies, invest in renewable energy such as wind and solar energy development instead of agricultural production; and
• Companies and individuals from “adversary” countries (China, Venezuela, Iran, Cuba and Russia) account for only 1% of all the foreign-owned agricultural land in the United States.

Zhang said the group was motivated to do this research by the rumors regarding China’s desire to buy up U.S. agricultural land.

“There’s been talk, especially now during election season, that China is trying to potentially control millions of acres of U.S. farmland,” he said. “The percentage of land that is under foreign control, either through purchases or long-term leases, is very low overall.

“There is definitely grounds for more scrutiny and more concern,” he said. “The share of foreign-owned land has increased significantly over the last 20 years, but still the overall share is fairly low.”

More information on foreign land holdings of New York state’s agricultural land is available in the authors’ Dyson Extension Bulletin.

As noted in a recent report by U.S. Government Accountability Office, better data tracking and more timely sharing of data within government agencies is needed to ensure the reliability of the information reported to Congress or the public about where and how much U.S. agricultural land is held by foreign companies or individuals.

This research was supported in part by the U.S. Department of Agriculture’s National Institute of Food and Agriculture.