The Capitolist | 12 March 2023
Food security concerns put Florida at the forefront of foreign farmland ownership fight
by Brian Burgess
Florida is on the front lines of a growing fight against foreign ownership of farmland – centered around concerns over food security – with state lawmakers and Governor Ron DeSantis pushing for new restrictions on foreign investors. Among their concerns are recent Florida farmland purchases, one by a Chinese government-linked pharmaceutical research company and several in Florida by a Middle Eastern nation, both of which took tens of thousands of acres of viable food production lands and put them squarely under the control of their new owner-nations.
Research shows that owner-nations can, and do, prioritize food exports shipped to their own countries over domestic consumption in America, leading to potential shortages and higher food prices for U.S. consumers.
But there are other concerns, too, including questions about spying, allegations of theft of American agricultural intellectual property (IP), and the simple fact that many foreign investors are willing and able to pay significantly higher prices for farmland than many Americans. And last fall, long before the temporary national hysteria caused by Chinese spy balloons, the outcry from local Florida residents put a stop to a Beijing-linked plan to install a monkey research facility on 1,400 acres of farmland in Levy County.
DeSantis and Florida lawmakers have seen the reports and expressed their concerns. DeSantis even highlighted his plans to deal with the matter in his 2023 State of the State speech delivered last week:
“The Chinese Communist Party represents the greatest economic, strategic and security threat that our country faces,” DeSantis said. “We in Florida long recognized this and have taken action such as banning the CCPs Confucius Institutes at our state colleges and universities. Now we see the CCP trying to make strategic land purchases across the US and our message in Florida is very simple. We will not allow land grabs by CCP-backed businesses in our state.”
And lawmakers appear to share DeSantis’s concerns. This year, four bills have been introduced in the Florida legislature. HB 835 and its identical Senate companion, SB 924, aim to prohibit Chinese government-owned or controlled entities or entities whose primary place of business is in China from acquiring an interest in over 50 acres of agricultural land within Florida. The bills also aim to prohibit Chinese entities from acquiring or holding real property within 50 miles of a strategic asset or a military base. Strategic assets include emergency operation centers, power plants, telecommunication towers, and other similar structures that the state deems strategic. If passed, these bills would restrict certain Chinese entities from owning or investing in specific types of real estate or agricultural land within Florida from June 30, 2023.
But China isn’t the only target. SB 264 and its companion in the House, HB 1355, aim to limit the acquisition or ownership of agricultural land within the state by foreign principals, business entities, governments, government officials, or political parties associated with “foreign countries of concern,” specifically named in the bill as North Korea, Russia, China, Iran, Syria, Cuba, and Venezuela’s Maduro regime.
Not on the list? Dubai. Recently, that Middle Eastern nation’s sovereign wealth fund purchased thousands of acres of farmland stretching from Georgia and across the border into the Florida panhandle from billionaire Bill Gates, who began his farmland buying spree in December 2012 and is still the largest landowner in the country.
Gates’ holding company purchased Georgia-based Coggins Farm and Stanley Farms in 2013 and 2014, respectively, but sold off the Generation Farms label and a massive chunk of the land to Dubai’s sovereign wealth fund, making the Arab country the owner of the “largest grower, processor, packer, and shipper of carrots and sweet onions on the East Coast. The farm also grows sweet potatoes, green beans, bell peppers, berries, and watermelons.”
Then, in March 2021, the foreign-owned farm announced that it would start exporting its American produce to “serve the Middle East market.”
The transaction between Gates and the Dubai Sovereign Wealth Fund raised eyebrows, believed to be valued at over $100 million. Information about the deal between Gates and the buyers remains hard to find on the internet. Meanwhile, only scant details about the purchase of another “38,453-acre asset” in Florida by the Dubai Sovereign Wealth Fund can be found.
While foreign investment in U.S. farmland is not a new phenomenon, the extent of foreign ownership has grown to become a national security concern. As of 2020, foreign investors owned nearly 37.6 million acres of U.S. agricultural land, which now accounts for 2.9% of all privately held U.S. agricultural land, encompassing nearly 900 million total acres. In 2020, Chinese investors owned 192,000 acres of U.S. agricultural land, which is less than 1% of all foreign-held acres and is worth about $1.9 billion.
According to a 2021 report from Florida Realtors, foreign real estate investment in the Sunshine State, which includes residential, commercial and agricultural land, accounted for $12.3 billion in real estate transactions in 2021. The report notes that foreign ownership of agricultural land in the United States continues to rise, particularly in states like Florida with large agricultural sectors.
And the real concern behind foreign land ownership – food security – has only become bigger since Russia invaded Ukraine. Russia and China export a significant portion of the world’s phosphate fertilizers, while at the same time, Florida is home to the biggest phosphate reserves in the United States, putting the Sunshine State squarely in the middle of escalating geopolitical tensions with far-reaching consequences. Trade restrictions with Russia have only exacerbated the risks of Florida, and other states, losing control over phosphate mining and food production.
Fortunately, Florida isn’t alone in taking action to address the matter. Other states are getting in on the act, too. Georgia, Idaho, and Iowa are considering legislation to restrict foreign investments and acquisitions. Georgia aims to restrict individuals, business entities, and governmental entities of China, Iran, North Korea, and Russia from owning or holding real property, specifically farms and property where food is produced. Idaho aims to restrict foreign governments and government-owned enterprises from acquiring or holding an interest in agricultural land, water rights, mining claims, or mineral rights, while Iowa seeks to restrict Chinese entities from purchasing, acquiring, or transferring any real property and also restricts U.S. business entities in which a majority interest is owned by nonresident aliens from China.
On the national level, Senator Chuck Grassley has been vocal about the growing trend of foreign ownership of US farmland, noting that it could have negative impacts on rural communities and national security, including the displacement of American farmers and the loss of control over domestic agricultural production.
The issue of foreign ownership of farmland has been debated for decades in the United States, and remains complex, combining far-reaching implications for food security and national security with legitimate questions about xenophobia. But recent geopolitical developments centered around the growing Chinese threat and Russia’s aggression in Ukraine have pushed the issue into the forefront of political debate. Florida is taking the lead in pushing for new restrictions on foreign investors, but is by no means alone. The concern is nationwide, a matter of great importance that requires careful consideration and balancing of the desire to be welcoming and fair with the need to protect American agriculture and national security.