Land Economics Professor Dr. Bruce Sherrick: Here’s the Real Data on Foreign Land Ownership
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Foreign ownership of American farmland has become a political flashpoint. If you live in a competitive political district, you may have seen commercials about ownership by a foreign entity – most likely China – trying to buy a farm or ranch in your state.
Those types of campaign ads stoke concerns about overseas investors buying up U.S. agricultural land and threatening parts of the U.S. food system.
But a closer look at the numbers suggests the story is more complicated than the rhetoric.
That’s the message from Dr. Bruce Sherrick, director of the TIAA Center for Farmland Research and Fruin Professor in Land Economics at the University of Illinois at Urbana-Champaign.
Dr. Bruce Sherrick bio:
TIAA Center for Farmland Research – Director
Fruin Family Professor of Farmland Economics – University of Illinois at Urbana-Champaign
Leading Harvest – Board Member
Foreign ownership of American farmland
In a new farmdoc daily publication that he co-wrote with Juo-Han Tsay, TIAA Center for Farmland Research Assistant Director, Sherrick revealed a new interactive mapping utility that provides a county-level breakdown of the U.S. to show what foreign countries own, how much, and what the use of the land is.
How Long Have Foreign Ownership Disclosures Been Required?
“The requirement to report foreign owning of assets has been in place since 1978,” Sherrick told American Farmland Owner. “And ownership records are mostly public in the U.S. because of property tax reasons and all kinds of things. And so, this has gone on for a really long time.”
The research team has tracked foreign ownership for years, primarily to provide reliable information about farmland markets. Recently, however, the researchers saw a need to examine the numbers more carefully as concerns about foreign ownership gained political momentum.
“Over the last couple of years in particular, I think the political opportunism of using a data set that might be a little hard for somebody in the general public to go access” has contributed to claims that may not hold up under closer scrutiny, Sherrick said.
“We don't find the things that a lot of the headlines might suggest,” he added.
One of the biggest sources of confusion involves what actually qualifies as agricultural land.
What Counts as Agricultural Land?
When people hear that foreign interests own agricultural land in the United States, they may picture productive corn and soybean fields changing hands. But the federal reporting data also includes forestland, which accounts for a substantial share of reported foreign-held agricultural acreage.
That distinction matters, particularly along the Canadian border, where timber production regions naturally cross political boundaries.
“Weather doesn't know when it crosses a geopolitical boundary, soils don't know who owns them,” Sherrick said.
Timber companies have legitimate reasons to own forestland on both sides of the border. The trees, soils, and growing conditions don't suddenly change because a property lies in another country.
The problem comes when acreage reported as agricultural land is presented as though it were all cropland, potentially creating a misleading impression of how much foreign-owned land is devoted to growing food.
The distinction is especially important when percentages are calculated using different measures of total land area. Changing the denominator can make the same amount of foreign-held acreage appear much more significant.
Tracking foreign ownership
The reporting system also captures indirect ownership interests that may surprise the average landowner.
Sherrick offered a hypothetical example involving an American investor who owns shares in a mutual fund that holds shares in a Canadian timber company. If that company owns land in the United States, its foreign ownership interests must be reported under the Agricultural Foreign Investment Disclosure Act, commonly known as AFIDA.
Depending on the ownership structure, the reporting process can trace foreign interests through multiple layers of corporate ownership.
“It's just a complicated thing to actually understand if you don't spend some time looking at the data,” Sherrick said.
That complexity makes it difficult to interpret headline acreage figures without understanding how ownership is defined and measured.
AFIDA 2.0
Congress and policymakers have continued to debate how to improve foreign ownership reporting, including proposals sometimes described as “AFIDA 2.0.”
Sherrick questions whether proposed changes necessarily solve the underlying problems with the existing system.
He pointed to inconsistencies in reporting requirements and the difficulty of determining foreign ownership percentages for publicly traded companies, investment funds and other entities with constantly changing shareholders.
Long-term leases present another challenge.
Consider an 80-acre farm with a wind-energy project occupying a small portion of the property. If a foreign company holds a qualifying long-term lease associated with the project, the reporting system may capture the entire 80 acres rather than just the ground occupied by the wind turbine.
“And that gets reported as 80 acres of farmland,” Sherrick said.
Yet the lease may have little effect on the agricultural use of the remaining property.
AFIDA is fundamentally a disclosure system, not a prohibition on foreign ownership.
Sherrick cautions against conflating the collection of ownership information with the power to prevent particular buyers from acquiring property.
The distinction is important as lawmakers consider how to protect national security without misrepresenting the extent of foreign investment in American farmland.
