Whether it’s for farming, ranching, or just as a real estate investment, American land is appealing to foreign entities. Since 2009, the amount of agricultural land purchased by foreign investors has doubled, according to USDA records. This increase has drawn the attention of lawmakers and the public, who worry that these purchases could compromise We buy U.S. land food security. In an effort to address these concerns, the House Appropriations Committee included a provision in its most recent Department of Agriculture-Food and Drug Administration spending bill that bans Chinese-owned companies from purchasing farmland. However, these types of bills cannot be enforced because farmland purchases fall under state and local jurisdictions.
Many factors drive foreign investments in American land. Some investors seek the income potential of residential and commercial property, which often yield high rental returns and appreciate in value over time. Others are attracted to the country’s abundant wildlife and natural beauty. The diverse geography of the United States allows investors to select areas that align with their lifestyle preferences, from bustling urban centers to rural retreats.
The quality of life offered in the United States is another major draw for many foreign investors, who may purchase land near renowned educational institutions to provide their children with access to world-class education. Additionally, the American legal system is known for its transparency and protection of property rights, which reduces the risks associated with land ownership compared to many other countries.
In addition to these benefits, many foreign investors are attracted by the fact that the United States is a highly developed economic power. The country’s economy offers a wide variety of job opportunities, and its capital markets are highly rated internationally. These factors make the U.S. a safe haven for investors seeking to diversify their portfolios and hedge against inflation and currency fluctuations.
Foreign entities purchase land for a number of reasons, including food production, wind farms, and carbon offsets. The USDA maintains a database that tracks foreign land ownership, but the information is self-reported and not verified, and penalties are rarely enforced. This data does not capture all farmland purchases, and it is difficult to determine the extent of foreign ownership in the United States. Although the rise in global concerns over “land grabbing” is valid, the reality is that these purchases do not threaten national food security and can be mitigated by improving federal and state oversight of this activity. The aging farmer population will also contribute to the loss of agricultural land, but policies need to be in place to ensure that up-and-coming farmers have the opportunity to acquire it.