The Agriculture Department is working to update its system for tracking agricultural land leases and purchases to appease lawmaker demands, but staffing and funding limitations have limited the agency to "low-cost" options, a department official told the Senate Agriculture Committee on Wednesday.
Gloria Montaño Greene, the deputy undersecretary for USDA's Farm Production and Conservation (FPAC) program area, told lawmakers during a hearing that the agency relies on a self-reporting, "paper-based" system in its tracking of foreign land purchases.
Agency staff, who she said have "limited authorities that are less expansive in scope than those outside of USDA may recognize," must also navigate a complex patchwork of county and state-level processes when searching for land deeds and other transaction records.
Still, she said, the agency has worked to comply with language from the FY2023 appropriations bill calling for it create a searchable online database of foreign investment information. FPAC has published Excel spreadsheets on its website to fulfill Congress's request, but Montaño Greene said the agency is limited from doing more without lawmakers appropriating funds specifically for the task.
"This was what could be done with the funding we received," Montaño Greene said.
Sen. John Hoeven, R-N.D., pushed back, saying Congress did provide the USDA with money in the appropriations bill to use for the project.
"We've provided substantial funding," Hoeven, who sits on the Senate Appropriations Committee, said. "Whether you use it on that system or not, I get it. ... That's a decision you have in your discretion."
Hoeven said he will continue to look for ways to address funding for the online database through this year's agricultural appropriations bill.
Montaño Greene said the agency has also hired additional staff to carry out its duties under the foreign reporting law, called the Agricultural Foreign Investment Disclosure Act, and is revising the questions on its FSA-153 form, which foreign entities are required to file when they buy or sell land.
AFIDA requires foreign investors to file FSA-153s with the Farm Service Agency in the county where land is purchased, detailing the number of acres acquired, the buyers' country of origin, the purchase price, and the intended use of the land. They must also fill out the form when selling land.
But Michigan State University economics professor David Ortega told lawmakers he was concerned by the agency's enforcement of the law, which he called "inconsistent and, at times, lax."
The department assessed no penalties for late-filed, missing or incomplete reports between 2015 and 2018 due to "limited staff," according to a memo prepared by Montaño Greene that Agri-Pulse obtained earlier this year.
Agriculture Secretary Tom Vilsack later called the absence of penalties "unacceptable" in letters to several House members, noting that the agency had only "two to three" AFIDA specialists from 2016 to 2020. He said at a House hearing in March that the agency had upped the number of AFIDA specialists at its USDA headquarters to six and was considering retroactively enforcing penalties that may have occurred during the lapse
Ortega said some of the data published includes missing values, which makes it hard for economists like himself to "draw meaningful conclusions from any economic analysis on the impacts of these purchases." The country-by-country breakdown of the number of acres owned by foreign investors in its database, for instance, includes categories for "No Foreign Investor Listed" or "No Predominant Country Code Listed."
"That makes it very difficult to really understand what is happening," Ortega said.
Around 40 million acres, or about 3.1% of the nation's total farm, ranch and forest land, were owned or leased by foreign investors in 2021, according to the USDA's latest report on foreign land ownership.
While AFIDA relies on self reported information, Montaño Greene said other structures for tracking land ownership would be challenging to implement. State and local land records systems, for example, are inconsistent, which would make it difficult to create an automated system to aggregate land deeds and other ownership documents.
She added that there are more than 3,000 county clerks and recorders' offices, 50 states and 500 sovereign tribal nations that hold these records.
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"Any system for tracking land purchases and owners would be complicated, expensive, and create a potential risk to producer privacy, the price of agricultural land and individual American seller interests," Montaño Greene said.
Harrison Pittman, the director of the National Agricultural Law Center, said lawmakers should look at not only the text of AFIDA when considering changes to the law, but also the USDA's regulations, the Farm Service Agency handbook and the FSA-153 form. Changes to one of these things would likely require changes to the others.
He added that AFIDA is a complex statute.
"If you think AFIDA's easy, you probably haven't spent enough time with it," Pittman said. "If you think it's hard, it's probably harder than you think. The devil's in the details."
Canadian investors represent around 31% of foreign land holdings, while investors from the Netherlands and Italy make up 12% and 7%, respectively, according to the USDA foreign land holdings report.
Lawmakers at the hearing repeatedly expressed concern about investments by Chinese entities. Ortega, however, pointed out that Chinese investors hold only 383,935 acres of U.S. land, which represents less than 1% of foreign-held agricultural land and 0.03% of all U.S. agricultural land. Much of this land, he said, belongs to pork giant Smithfield Foods or companies associated with Sun Guangxin, a billionaire investor who has ties to the Chinese Communist Party.
Several of the bills that have been proposed by lawmakers seek to ban the Chinese government from owning land. Ortega, however, said the Chinese government doesn't directly own any land in the U.S.
Ortega also pushed back on concerns about the impact of foreign land ownership on food security in the U.S., saying the U.S. "is not only self-sufficient in basic food production," but also provides "food for many across the globe." Food insecurity arises in the U.S., he said, "not because of production deficits, but because of issues of affordability and accessibility."
"While, in my view, the foreign acquisition of U.S. agricultural land by foreign entities doesn't threaten our ability to produce food, it does raise specific and sometimes local concerns," he said.
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