Foreign entities own some 330,000 acres of Arkansas cropland and pastureland but would be prohibited from most such purchases in the future under a bill approved in the Senate.
The ban applies only to 5 or more acres involved in the "the clothing and feeding" parts of agriculture, not to forest land, said Sen. Blake Johnson, R-Corning, sponsor of Senate Bill 312.
No particular incident or nation sparked introduction of the bill, Johnson said. "It's more of a general concern for the future because we need to be able to feed and clothe ourselves as a nation, as a state. We're blessed that we export more than we consume. We don't want that to change to where we're controlled by an outside interest. It's more of a national security issue."
Almost all the foreign-owned agricultural land in Arkansas and the nation is held by entities based in nations that are allies of the U.S.
The Senate approved the bill last week without debate and with few questions. SB312 is now in the House Committee on Agriculture, Forestry and Economic Development.
"It's all just good policy for the future," Johnson said. "We're the world's leading economy, but there's always a possibility that changes."
Of the state's 28.1 million acres defined as agricultural land, foreign interests owned 1.1 million acres, or 3.9%, as of December 2019, the most recent figures available from the U.S. Department of Agriculture. But some 775,000 acres are forest land and aren't affected by SB312, Johnson said, even though there's no explicit exemption.
Questions from the Arkansas Forestry Association led him to seek the counsel of the state attorney general's office on that issue, he said. He said his bill is identical to legislation approved in Missouri in 2013.
"It's our understanding forestry isn't part of this bill," said Max Braswell, executive director of the Forestry Association. "We're still looking it this. It's sort of a complicated issue, with different definitions and language such as how ag land is defined."
The lack of a specific exemption, Braswell said, "is why we keep looking at it, to see if there's an implication beyond what we think there is."
Foreign entities own 291,432 acres of Arkansas cropland and some 22,000 acres of pasture, according to the USDA. Acreage involved in the production of fruit, chicken, cattle, hogs and dairy also would be affected by his bill, Johnson said.
The bill limits foreign-owned agricultural land in Arkansas to 1%, a threshold long passed.
"I didn't want to add a lot of my stuff to the bill," Johnson said, in reference to the lack of a specific exemption for timberland and to the apparent mootness of a 1% threshold. "The Missouri bill has already gone through [in 2013] and is [legally] defensible."
The 1% limit in Missouri replaced a ban on foreign ownership of farmland.
Arkansas and many other states have long allowed foreign ownership of farmland but with certain reporting requirements, such as to a secretary of state or an agriculture department. Eight states ban it entirely. Like Arkansas, some other states are considering tighter restrictions. Little if any opposition has been mounted.
The Arkansas Farm Bureau said it is monitoring Johnson's bill but doesn't oppose it. "We don't have state policy dealing with foreign investment, but we do have national policy," a spokesman said. "It states, 'Foreign investment in U.S. assets is a concern. The impact of foreign investment in agriculture, banking, insurance and other business institutions in the United States should be monitored.'"
Federal law generally doesn't prohibit foreign ownership of U.S. soil, farmland or other property, but does require foreign interests to file farm-ownership reports with the U.S. secretary of agriculture.
Johnson said his bill affects only future purchases by foreign entities and non-Americans, not land currently owned. The bill won't affect investments in farmland such as those held by state retirement systems or farmland owned by Arkansas residents but leased to foreign interests, he said.
Johnson said the bill also exempts agricultural land purchased by foreign entities for nonfarming purposes, such as for development into an industrial or manufacturing site. But such land must actually be converted to the nonfarm use within 10 years, Johnson said.
The 10 years should provide enough time to acquire permits and complete other parts of the redevelopment plan, he said. "The plans can't just be unending," Johnson said.
Entities from the Netherlands own the most agricultural land in Arkansas, at some 416,000 acres, apparently because of prospective interests in wind farms, according to USDA figures. Canada is next at 237,584 acres, with its ownership of sawmills and timber interests. Almost all the acreage owned by entities in those two countries is in heavily wooded Clark and Dallas counties.
The other top three are businesses from Italy (27,458 acres), Germany (97,062 acres) and the United Kingdom (2,749 acres).
Nationally, according to the USDA's 2019 figures, foreign investors held an interest in nearly 35.2 million acres, or 2.7%, of U.S. agricultural land, up from 14.6 million acres in 2004. Since 2015, foreign holdings have increased by a yearly average of about 2.3 million acres, the USDA said.
Foreign ownership of U.S. land used to be murkier.
The USDA started compiling such reports in 1978, after Congress found itself flummoxed on the issue.
"In the aggregate, state laws do not have a major impact on foreign ownership of land," the Government Accountability Office, an independent nonpartisan branch of Congress, said that year in a report to Congress.
"The laws range from general prohibitions on such ownership to a total absence of provisions dealing with this subject," the GAO said. "There are so many different provisions, exceptions, and stipulations that even classifying the laws into general categories is difficult. These differences seem to mirror the diversity of state perceptions as to whether foreign ownership of land constitutes a present or potential problem in the state.
"Few states have reporting requirements that provide any data on foreign ownership of land, and even in those cases there is little or no assurance that the data is complete and reliable."
The Midwest Center for Investigative Reporting, in a national study of foreign-held farmland released in 2019, found 610 tracts of land in 56 Arkansas counties owned by entities from 34 nations. Ownership of about 150 tracts, however, was marked as "unknown."