Agricultural technology theft, acquisition of land near military sites and illegal access to precision agriculture data are a few of the potential risks presented by the Chinese Communist Party that the House Agriculture Committee weighed Wednesday in an hours-long hearing.
The hearing, which stretched on more than four hours, focused on "the danger China poses to American Agriculture" and featured testimony from the leaders of the House Select Committee on the Chinese Communist Party, South Dakota Governor Kristi Noem, former Ambassador to the United Nationals Agencies for Food and Agriculture Kip Tom, former Treasury Department official Nova Daly, and American Soybean Association President Josh Gackle.
House CCP Committee Chair Mike Gallagher, R-Wisc., called for the Committee on Foreign Investment in the U.S.'s authorities to be expanded when it comes to reviewing land, citing the agency's limited jurisdiction over the Chinese-owned Fufeng Group's 2021 purchase of North Dakota land. Nova Daly, the former deputy assistant secretary for investment security at the Treasury Department, echoed this call.
Daly suggested lawmakers modify regulations to allow CFIUS to review currently-exempted land purchases in urbanized areas if they "make a finding of significant national security concerns."
Gallagher advocated for giving CFIUS jurisdiction over all agricultural land purchases by foreign investors. He also cited a recent Government Accountability Office report that found the Agriculture Department is slow to share information it collects on landholdings with CFIUS.
"This strikes me as something that Democrats and Republicans can come together right now in this Congress and solve," Gallagher said.
Rep. Raja Krishnamoorthi, an Illinois Democrat and the House CCP Committee's ranking member, agreed with Gallagher's concern about land purchases near military bases, but stressed to the committee that Congress should "make sure the cure is not worse than the disease." He warned lawmakers against crafting bills that resemble the "alien land laws" that prevented Chinese and Japanese immigrants from purchasing land in more than a dozen states in the early 20th century.
"These racist policies severely restricted economic opportunities and exacerbated discrimination against Asian communities in the United States, before eventually being overturned one by one," Krishnamoorthi said. "We must be clear that we do not stand for laws that discriminate based on ethnicity and nationality."
Foreign investors owned or leased 43.4 million acres, or about 3.4% of the nation’s total farm, ranch and forest land, in 2022, according to the Agriculture Department’s most recent data on foreign land purchases.
Chinese landholdings represent less than 1% of foreign-held agricultural acres, according to the USDA data. Chinese investors and U.S. corporations with Chinese shareholders held 346,915 acres in total, and no land was held directly by the Chinese government.
Approximately 87% of the reported Chinese holdings belong to five companies: Brazos Highland properties (102,345 acres), Murphy Brown LLC (102,345 acres) Murphy Brown of Missouri (42,716), Harvest Texas LLC (29,705 acres) and Walton International Group (29,437).
Brazos Highland Properties and Harvest Texas are Texas-based wind energy companies associated with Chinese Communist Party member Sun Guangxin, while Murphy Brown and Murphy Brown of Missouri are subsidiaries of pork giant Smithfield Foods. Walton International Group is a real estate investment and development firm with investors from around the world.
Gallagher called into question the accuracy of the data, however, due to an enforcement system he described as "alarmingly lax." He pointed to the GAO report, which mentioned information missing from some disclosure forms and duplicate information in the agency's spreadsheets.
"These are only the acquisitions that we know about," Gallagher said. "There could be much more."
While Michigan State University economist David Ortega — who did not appear at the hearing, but submitted written remarks to the committee — also questioned the completeness of current data, he said lawmakers should be more worried more about affordability and access issues impacting food security, rather than foreign land ownership.
"The discourse surrounding foreign—and notably Chinese—ownership of U.S agricultural land has been, at times, clouded by misconception, diverting attention from the true nature and risks of Chinese investments in foreign agriculture," Ortega said in his remarks, which he emailed to Agri-Pulse. "The data and evidence available suggest that Chinese ownership represents a miniscule fraction of our agricultural lands and does not compromise our ability to produce food or manage our agricultural resources effectively."
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Despite efforts by the Chinese government to expand production on domestic farmland, the country has struggled to cultivate enough food within its borders to meet its self-sufficiency goals. As a result, it has looked to farmland, equipment and intellectual property in other countries to fill those needs, according to a 2022 report by the U.S.-China Economic and Security Review Commission, an independent agency that advises Congress.
China, which consumes almost 60% of global soybean exports, has attempted to reduce its reliance on imports from other countries, the report said. Additionally, President Xi Jinping has encouraged citizens to “develop China’s seed industry, pay close attention to cultivating excellent varieties with independent intellectual property rights, and ensure food security from the source."
Both Gallagher and Krishnamoorthi also brought up risks associated with intellectual property theft, pointing to one example of a PRC scientist that was sentenced to more than 10 years in prison for conspiring to steal rice seed samples from a Kansas facility. They also urged lawmakers to create additional protections on agricultural data to prevent it from being acquired by U.S. adversaries.
Kip Tom, the former Ambassador to the UN Food and Agriculture Organizations, said U.S. farmers are at "extreme risk" of having their data stolen or attacked by CCP-linked entities, which could lead to "incorrect farming decisions and likely harm yields." Ransomeware too is a threat, he said.
South Dakota Governor Kristi Noem told lawmakers her state's agriculture department was contacted by Chinese Nationals looking to tour U.S. farms. She said the department declined the meetings and was later contacted by the State Department, who warned it that those individuals were actually Chinese spies.
"They were there to steal our intellectual property, to steal our genetics and [the State Department] wanted to debrief us if we had met with them," Noem said. "Thank God we did not."
American Soybean Association President Josh Gackle urged lawmakers not to approve any bill to repeal or modify China's Permanent Normal Trade Relations Status, which he warned could "immediately raise tariffs on imports from China." He also said lawmakers should boost funding for the Market Access and Foreign Market Development programs, which he said could help diversify export opportunities to other countries.
Gackle also said the Trump Administration's 2018 trade war with China "cost U.S. agriculture over $27 billion," with soybeans accounting for 71% of those losses. He warned lawmakers that "there is substantial risk that more unanticipated tariff action will undermine investments, export prices, and farm income."
"As the United States considers actions to protect our national security interests, we must also maintain and protect our economic and trade interests as well," he said. "Soybean growers need predictability and certainty that we will retain market access in China."
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