Foreign investors own, or partly own, about a third of the land in central Illinois’ McLean County. In neighboring DeWitt County, foreign investors hold about 20% of the county’s land, as well as about 10% in Logan and Ford counties.
A recent wave of foreign investment in Midwestern farmland has kicked off a flurry of legislation in Springfield and Washington. In Illinois, there are multiple bills in both the state House and Senate that would restrict some foreign entities from purchasing agricultural land – some of which specifically bar the Chinese Communist Party or Chinese businesses.
ChicagoGlobal’s analysis of foreign land acquisitions reported to the U.S. Department of Agriculture found that Chinese investors own less than one square mile of land in Illinois, while Portuguese, Italian, and Canadian interests own over 760 square miles combined. Most of these foreign investments were made by individuals or businesses, as it’s very rare for foreign governments to buy U.S. land outright.
The influx of foreign investment into some counties hasn’t had a significant impact on land prices or rents, according to the USDA. The agency found that pricing trends were essentially the same in counties that had foreign investment in agricultural land and those that did not, as well as those that gained, lost, or saw no change in foreign-owned acreage.
Still, our understanding of foreign-owned land on prices might be incomplete because the USDA relies on investors self-reporting purchases to the agency. Ortega told the Senate that enforcement had been “inconsistent and even lax.”
“How many foreign agricultural land acquisitions have gone unreported, and by whom?” Ortega asked in his testimony. “Failure to address these questions limits our ability to draw meaningful conclusions from any economic analysis on the impacts of these purchases,” he said.
China concerns
Chinese entities hold almost no land in Illinois, and only about 600 square miles nationwide. In his testimony to the Senate Committee on Agriculture, Nutrition, and Forestry, Ortega pointed out that’s less than 1% of all foreign-held land nationwide and just 0.03% of all privately held agricultural land.
“China’s investments in foreign agriculture are largely driven by its desire to build food self-sufficiency and feed a growing population with limited arable land,” Ortega told ChicagoGlobal.
“Their recent investment strategy in the West has focused on acquiring established agribusiness,” he added, pointing to the Chinese purchases of the chemical and seed company Syngenta and of Smithfield Foods, the world’s largest pork producer. “Their desire to strengthen control on their import supply chains and gain more influence in global commodity markets may spur additional investments in these areas,” he said.
Some Chinese investments have drawn intense scrutiny. For example, after lobbying from the Air Force, the city of Grand Forks, North Dakota, last year canceled a land sale to Chinese investors who planned to build a corn mill – and create 200 permanent jobs – near an Air Force base.
Ortega told the Senate that, in his view, foreign investment in U.S. agricultural land did not threaten the country’s food security, though it can “raise specific and sometimes local concerns.”
“The available data suggests that while foreign holdings have been rising, they still represent a small fraction of privately held agricultural land, with a majority of that ownership rooted in entities from friendly nations,” he said.
