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There is growing concern about foreign ownership of land in Oklahoma (and states nationwide), particularly ownership by Chinese entities. That trend is real, but not at a crisis level yet.
That means policymakers have time to act. The only question is whether they have the will to do so.
Nationwide, it is estimated about 40 million acres of U.S. agriculture land is now owned by foreign investors, which comprises 3.1% of agricultural land nationwide.
That’s not substantial enough to threaten national food security, but it is also a dramatic increase since 2000, when 1.2% of land was owned by foreign purchasers.
Furthermore, officials expect that a significant amount of agricultural land could be sold in the coming years. The average age of a U.S. farmer is now 57, and officials estimate up to two-thirds of all farmland will be sold in the next decade as farmers retire.
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Oklahoma has experienced significant growth in foreign-owned land. Between 2015 and 2021, the amount of foreign-owned land in Oklahoma increased by more than 300%. Foreigners/foreign businesses now own around 383,000 acres in Oklahoma.
In 2020, our state ranked first for land purchases by foreign entities.
Foreign land purchasing occurs for many reasons, including food production, wind farming, carbon offsets and speculative investments.
But in Oklahoma some purchases have been linked to the drug trade. The 2018 vote to legalize medical marijuana, with few regulations, caused thousands to purchase land to grow marijuana, often for illegal sale elsewhere. By 2022, officials with the Oklahoma Bureau of Narcotics said Oklahoma had become the top supplier of marijuana to states around the nation.
State lawmakers are trying to address this problem. This year they passed Senate Bill 212, which bans foreign investors from buying Oklahoma land for marijuana production.
But even without the link to the drug trade, there are other issues associated with foreign ownership.
For example, in water-scarce regions, outside use of freshwater resources can affect water availability for local farmers and communities. And there are reasons for long-term concern regarding food supply.
In 2013, Smithfield Foods (now called WH Group) was purchased by a Chinese entity. The company is the nation’s largest pork producer and vertically integrated, meaning the company owns all aspects of its supply chain, including over 146,000 acres of farmland.
When COVID-19 hit, Smithfield increased pork exports to China.
Security concerns have also been raised. In 2020, a Chinese entity purchased land in North Dakota, supposedly for a corn-milling plant. Notably, that property was next to a U.S. Air Force base.
Under the Agricultural Foreign Investment Disclosure Act of 1978, foreign entities must report transactions to the U.S. Department of Agriculture. But that regulation is seldom enforced, in part because the federal government uses a paper-based approach for data collection to enforce AFIDA.
The USDA currently has no way to electronically identify the geographic location of the AFIDA filings.
Six states forbid foreign farmland investors. Oklahoma has a state constitutional prohibition. But exceptions have been carved out.
In the 1970s, state lawmakers exempted swine and poultry producers, hoping to attract the industry to our state. In 1981, the Oklahoma Supreme Court ruled foreign firms could purchase land in the state so long as a company was otherwise qualified to do business in the state.
Put simply, there is much room for improvement. There is reason for concern today about foreign ownership of Oklahoma land.
However, unless policymakers act swiftly and prudently, current trend lines suggest we may soon reach the point that Oklahomans are justified in viewing the situation not just with concern, but alarm.
Thomas Rashid, M.D., is a urology specialist in Tulsa.
Thomas Rashid, M.D., is a urology specialist in Tulsa.
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