A Missouri state legislator has renewed a push to ban foreign companies from buying farmland in the state. If successful, the effort could have major ramifications for global food companies like Smithfield Foods that operate in the Show Me State, as well as those foreign investors who see American farmland as a safe bet in uncertain times.
“Our farmland is a finite and precious resource that should not be controlled by foreign interests as this jeopardizes both our food security and our national security,” said Democratic Sen. Doug Beck, who unveiled his bill during a committee meeting this week. The proposed ban would not impact current land holdings, only new purchases, and would go into effect in August of this year.
Beck introduced the same legislative language last year in the state House, where he served four years before winning a Senate seat this past fall. That bill, however, never made it out of the House Agriculture Finance and Policy Committee. Similar proposals from other lawmakers likewise failed to gain the needed momentum in 2018.
The reactions to Beck’s latest effort have broken down along the expected lines. Environmental and local ag groups are in favor, while groups such as the Missouri Pork Association and the Missouri Realtors association are opposed, reports the St. Louis Post-Dispatch.
The Missouri law governing the matter dates back to at least 1978, when the state barred foreign entities from buying agricultural land. In 2013, however, lawmakers softened that ban to allow foreign entities to own up to 1 percent of the state’s farmland. That controversial change conveniently cleared the way for a Chinese company—then known as the Shuanghui Group, now known as the WH Group—to purchase Smithfield soon after for more than $7 billion.
The relaxed law was then further weakened two years later by lawmakers who removed a provision that had required foreign buyers to apply directly to the state as part of any purchase. According to a Post-Dispatch investigation, the 2015 change was—shocker—pushed through at the last second by a group of lawmakers that had received thousands of dollars in campaign cash from Smithfield, which now owns an estimated 40,000 acres in Missouri and another 90,000 acres elsewhere in the United States. In effect, the change made it much easier for foreign companies to hide behind subsidiaries and much harder for Missouri officials to keep tabs on who owns what in the state.
The accounting is better at the national level, but only relatively so. The US Department of Agriculture has a nationwide tracking system, although reporting tends to lag. According to its most recent report from the very end of 2019, foreign entities owned about 350,000 acres of farmland in Missouri—right at the existing 1-percent limit and raising the very real possibility that more recent and yet-to-be-reported purchases have breached that threshold.
Nationally, Missouri is in the middle of the pack in terms of its percentage of foreign farmland ownership and nowhere near the top three of Maine (18.9 percent), Hawaii (9.2 percent) and Washington (6.9 percent). Meanwhile, according to the USDA’s 2019 figures, foreign investors own 2.7 percent of the nation’s nearly 35.2 million acres of farmland.
Giant food companies aren’t the only ones who have shown an interest in American farmland. Increasingly, so, too, have domestic and international investors, who can turn a profit by renting out the land, capitalizing on farm subsidies and even by sitting back and waiting for the property to appreciate in value. They can, in short, make money without getting their hands dirty—literally, at least.