On September 11, 2024, the U.S. House of Representatives passed the Protecting American Agriculture from Foreign Adversaries Act of 2024 (H.R. 9456), a significant legislative measure aimed at tightening government oversight of foreign investments in U.S. agriculture, particularly concerning farmland acquisitions. This act proposes amendments to the Defense Protection Act of 1950, mandating that the Committee on Foreign Investment in the United States (CFIUS) review transactions involving foreign investments in U.S. agriculture. Notably, a bipartisan group of Senators, led by Senator Mike Braun (R-IN), has introduced a companion bill, S. 5007, in the Senate, underscoring the growing concern over foreign ownership of critical agricultural assets.
Currently, there are no federal laws restricting foreign entities from acquiring U.S. agricultural land. While around twenty-five states impose limitations on foreign ownership, federal oversight has largely been limited to the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978, which requires certain foreign investors to disclose their interests in U.S. farmland. Recent years have seen heightened apprehension among federal policymakers regarding the implications of foreign investments in agriculture, particularly as no overarching federal restrictions exist. H.R. 9456 and S. 5007 aim to address these concerns by incorporating the U.S. Department of Agriculture (USDA) as a permanent member of CFIUS, thereby enhancing its role in safeguarding the agricultural sector against potentially harmful foreign investments.
The CFIUS is an interagency committee led by the Treasury Department, tasked with reviewing foreign investments to assess potential threats to national security. The committee’s jurisdiction traditionally covers transactions that might give foreign entities control over critical infrastructure or technologies essential to the nation’s security. By including the USDA in CFIUS, the proposed legislation seeks to ensure that agricultural interests are adequately represented in reviews of foreign transactions, particularly those involving land, agricultural biotechnology, and related industries.
Under the new provisions, the USDA would be authorized to evaluate foreign investments in U.S. agricultural land and report any transactions deemed necessary for CFIUS review. This includes acquisitions by foreign individuals or entities from countries identified as foreign adversaries, such as China, North Korea, Russia, and Iran. The legislation defines “reportable agricultural land transactions” as those necessitating an AFIDA report, thereby expanding the scope of transactions subject to federal scrutiny. If the USDA identifies a transaction that could potentially grant a foreign entity control over agricultural land, it is empowered to notify CFIUS, which must then determine whether to initiate a review.
The implications of H.R. 9456 and S. 5007 are profound, reflecting a broader trend of increasing vigilance regarding foreign investments in vital sectors of the U.S. economy. By placing the USDA at the center of this oversight mechanism, the legislation aims to bolster the protection of American agricultural interests amid rising global competition and geopolitical tensions. The move is particularly timely, given the growing concerns about food security and the strategic importance of domestic agricultural production.
As the Senate considers the companion bill, the agricultural community and foreign investors alike are closely monitoring developments. Proponents argue that enhanced oversight will safeguard national interests and ensure that U.S. agricultural resources remain under American control. Critics, however, may raise concerns about the potential for excessive regulation that could deter foreign investment, which has been a significant source of capital and innovation in the sector.
The passage of H.R. 9456 marks the beginning of a legislative journey that could reshape the landscape of foreign investment in U.S. agriculture. As discussions continue in Congress, the outcome will likely influence not only the agricultural sector but also the broader economic and geopolitical dynamics surrounding U.S. agriculture in an increasingly interconnected world.