SIOUX FALLS, S.D. (KELO) — Gov. Kristi Noem is concerned, and at least several lawmakers are concerned, about foreign ownership of agricultural land.
The state already has a law that restricts foreign ownership of ag land by a person or government to 160 acres. But the proposal in 2023 appears to be more restrictive than state law 43-2A-2 passed in 1979.
The Senate Agriculture and Natural Resources Committee voted 7-0 on Feb. 14 to send SB-185 forward to the full Senate. The bill calls for creating a board to review purchases or leases of agricultural land by foreign persons or entities, with the governor deciding whether to allow a transaction to proceed.
Noem is focused on Chinese-ownership of agriculture land.
“We also have a duty to protect South Dakota ag land from national security threats. Possibly the greatest external threat facing our nation today is the Chinese Communist Party. Unfortunately, foreign countries now hold approximately 40 million acres of ag land in the United States – and that number will only increase as evil governments like China step up their game,” Noem wrote in an opinion piece published on Feb. 2 on news.sd.gov.
Multiple media have reported about the Chinese Community Party’s increased effort to influence over business. Other states are also considering legislation about Chinese and overall foreign ownership of agricultural land.
As of Dec. 31, 2021, foreigners owned 1% of all ag land in the state, according to the U.S. Department of Agriculture (USDA).
The 2021 data is the most recent available from the USDA. It was released in January 2023.
The USDA lists the top foreign owners of private ag land in the state.
Most of the 1% is owned by Canadians or Canadian interests. China is not listed as a top foreign owner while the United Kingdom (88,843), Germany (27,551), Netherlands (4,300) and Italy (2,116) are listed at the top.
China does not own enough ag land in South Dakota to warrant its own category. It would be listed in the USDA data under all others.
But China has a role in U.S. agriculture as a buyer of agriculture products such as pork and soybeans. Smithfield Foods is also owned by a Chinese corporation.
Seeds used by South Dakota may come from a Chinese company.
Sinochem merged with ChemChina. ChemChina took over Syngenta several years prior. Syngenta provides seeds to farmers.
The concerns of 2023 are in contrast to January 2020 when Noem was part of the delegation that celebrated the first phase of a trade deal with China.
Noem was in Washington, D.C. in 2020 as President Donald Trump and Chinese Vice Premier Liu He signed the first phase of a trade deal, between the two countries caught in a trade war.
Politico reported in January 2022 that China did not meet the standard for the amount of purchases from the U.S. and did not fulfill an agreement related to genetically modified ag products from the U.S.
Still, China remains a top export market for U.S. ag products, according to the USDA. U.S. ag exports to China in fiscal year (FY) 2022 reached $36.4 billion, according to the USDA. China was largest export market for the second consecutive year.
While concerns about Chinese and in general foreign ownership of agricultural land seem to be growing, foreigners don’t own that much land in South Dakota.
The 1% of ag land owned by foreigners is 382,475 acres. There are 37,939,910 acres of ag land that are privately owned. There is a total of 48,566,400 ag acres in the state.
The number of acres owned by foreign investors increased by 23,150 acres from 2020 to 2021.
Although Noem supports SB-185, not all entities associated with agriculture in the state are supportive.
Opponents of SB-185 include multiple agriculture trade groups. They said the federal government should set regulations on foreign investment in agricultural land. Supporters say states must act.
Although there is no federal law that restricts the amount of private U.S. agricultural land that can be foreign-owned, there are several proposals related to foreign ownership by lawmakers at the federal level. South Dakota Republican Rep. Dusty Johnson introduced a foreign-owned ag land bill in June.
The federal government does have the Agricultural Foreign Investment Disclosure Act (AFIDA) that requires “foreign investors who acquire, transfer, or hold an interest in U.S. agricultural land to report such holdings and transactions to the Secretary of Agriculture.”
Several states do have laws or restrictions on foreign ownership/investment in agricultural land but none of them, according to the National Ag Law review, absolutely prohibit ownership. Fourteen states have some sort of law or restriction.
Counties with the most and least foreign ownership of ag land
Custer County has 35 ag acres owned with foreign ownership. The ownership is classified as all others.
The USDA listed 87,623 acres as foreign-owned in McPherson County. Tatanka Wind Farm is located in the county. It is owned by ACCIONA based in Madrid, Spain. Spain is not its own ownership category but 36,044 acres are listed as all others.
Canadians or Canadian interests own 84,055 ag acres in Duel County. Another 236 acres has ownership based in the Netherlands. And 4,581 acres is owned by all others. The total acres owned by foreigners is 88,872.
One area of agriculture which has seen increased foreign investment is the dairy industry.
A June 21, 2022, KELOLAND News story highlighted the growth in the South Dakota dairy industry. The story also included comments from a northern Ireland couple who moved and started a dairy in Lake Norden.
“Really it was slow and steady growth through the 50s, 60s and 70s. In the late 80s and early 90s there was a real growth in the I-29 corridor. Dairy has been embraced, we’ve seen dairies from Europe, dairies from Canada, dairies from the west coast from the 90s on moving to the I-29 corridor,” Brian Sandvig, chief financial officer of Valley Queen said in the KELOLAND News story.