(The Center Square) – The U.S. Department of Agriculture’s latest report on foreign land ownership shows that 1.6% of Iowa’s 35.8 million acres are owned by entities outside the U.S., an increase of 6,463 acres from 2021 to 2022.
Canada owns the most significant chunk of Iowa land with 198,667 acres, followed by “all others” with 181,258, according to the USDA report that includes data through Dec. 31, 2022. The majority of foreign-owned land, 398,527 acres, is for cropland, according to the report.
Several states and Congress are considering legislation that would curb ownership of U.S. farmland, citing national security concerns mainly from China.
Iowa has strong laws on the books regulating the ownership of farmland by non-U.S. entities, said Micah Brown, a staff attorney at the National Agriculture Law Center.
“Structurally, it is a good law because it provides enforcement mechanisms and penalty mechanisms that are necessary to enforce,” Brown said. “Some states are silent on enforcement and penalty.”
People outside of the U.S. who own agricultural land in Iowa must register with the Secretary of State, according to Chapter 91 of the Iowa Code. The state can sue foreign landowners who do not follow the law and take their land, according to the code.
Iowa has several exceptions for research, development, and experimentation of agricultural products, which is seen in quite a few states, according to Brown.
U.S. Sen. Chuck Grassley, R-Iowa, a farmer, has championed bills that create more scrutiny of foreign-owned farmland. The Farmland Security Act of 2022 enacted stricter reporting requirements for foreign-owned land. He and Sen. Tammy Baldwin, D-Wis., proposed more legislation in July 2023 that would penalize foreign companies that did not report or misreported the acreage they own. The bill also asks for more research into how much land is owned by non-U.S.-based entities.
But the tighter regulations on foreign-owned farmland could have a downside for states, according to Brown, who said he is asked about the consequences when he testifies before legislatures. For example, a foreign-owned company operating grain elevators could just shut down if the law is violated.
“They can breach the contract they have with farmers to bring their grain to that elevator,” Brown said. “Some farmers might be in trouble.”
And there could be economic consequences. Foreign companies wanting to create other businesses like automobile manufacturing plants may not feel welcome in a state that has some kind of restriction on foreign land ownership, according to Brown.
“And, sometimes it might be agricultural land that they are purchasing or want to purchase for a facility,” Brown said. “That might be another little snag in actually purchasing land and converting to industrial. They would first have to purchase ag land in some instances.”
