The United States Department of Agriculture (USDA) has just released its report into foreign ownership of agricultural and forestry land for 2010. (Actually for the 10 months from February – December, on account of a switchover to calendar years for 2011 onwards.)
The report indicates continuation of a trend observed throughout the first decade of the 2000s, of increasing foreign interest in US agricultural land, with the 2010 holdings being up over 1.5 million acres on 2009, to a total of 24.2 million acres (roughly 9.8 million hectares). The USDA treats foreign holdings as including both outright ownership and leases of more than 10 years. ‘Agricultural’ land is defined as a tract of more than 10 acres used for farming or forestry. (Holdings of less than 10 acres are included if agri-income from the tract exceeds $1,000.)
!m(/uploads/story/199/thumbs/pic1_inline.png)According to the USDA, that 24.2 million acres accounts for just 1.9 percent of all agricultural land in the US, a relatively low level by international standards. (In Australia, for example, 11 percent of farmland is foreign-owned.) Of course, the extent of foreign ownership varies from state to state, from a negligible 0.1 percent in Massachusetts, which is hardly a rural state, and only 0.2 percent in North Dakota, which is, up to a high of 16 percent in Maine. In the latter case, almost all that foreign interest relates to timberland.
As for which foreigners are buying US agricultural land, the report identifies – as might be expected – that neighbouring Canada provides the largest proportion. Canadian interests account for around 29 percent of foreign landholdings, the bulk of which – also predictably – is in the northern states. But the countries which come next are not quite so obvious. Given its small size, it is striking that The Netherlands provides over 19 percent of the ownership of US agri-land – some 4.8 million acres in total – followed by Germany with 6.6 percent, the United Kingdom with 5.9 percent and Denmark with a shade over four percent. The balance of 8.6 million acres – some 35 percent of total foreign ownership of US agri-land – is spread across a range of other countries.
What is notable here is the extent to which foreign ownership lies in what might be described as ‘western’ hands. Whether this represents a conscious policy bias within the United States is hard to say. Foreign land acquisition is regulated at state rather than federal level and, according to information from the National Conference of State Legislatures, only 10 states – mostly in the mid-west – impose restrictions on foreign purchases of farmland. So it stands to reason that the primary constraints on the foreign ownership mix are economic rather than political.
In particular, the USDA report debunks claims which regularly get an airing in xenophobic blogs that the big bogey – China – is buying up huge chunks of American farmland, to feed its own hundreds of millions at the expense of US food security. Whereas Canadian interests, as noted earlier, account for over 4.2 million acres, Chinese ownership of US agri-land is recorded as just 13,720 acres – 0.05 percent of foreign ownership and an almost undetectable 0.0008 percent of of the nearly 1.7 billion acres of agricultural land in the United States.
Frank is a native New Zealander with a wealth of experience. A lawyer by background Frank was commercial law partner in an established New Zealand law-firm for 10 years. He has practised commercial law and legal/business consultancy services in both his homeland and in Europe where he is currently based. Now an integral part of iNVEZZ's journalist team Frank has a particular interest in agricultural law and business as well as real estate and mergers-aquisitions, stemming from his legal consultancy background.