Everhart: Foreign Investment in American Farmland
In The Dark Side of the Balloon: Restrictions on Foreign Investment in US Farmland, Sarah Everhart (Delaware Law) argues that legislators should shift their focus from preventing foreign ownership of US farmland to supporting domestic farmers’ access to farmland.
Before analyzing recent trends in foreign landownership, Everhart discusses the history of US restrictions on foreign landownership dating back to early colonial governments. By the late 1800s, 11 western states had statutes aimed at preventing alien landownership. In the 1923 case, Terrace v. Thompson, the Supreme Court held that “the power to deny aliens the right to own land within its borders” falls within state police powers. Terrace has never been overturned, but the Supreme Court and state courts have since issued opinions that call into question its precedential value in supporting legislation restricting foreign land ownership.
According to Everhart, recent sensitive foreign land purchases and events such as the Chinese spy balloon episode have raised concern about non-citizen investors, prompting some states to enact legislation aimed at restricting foreign landownership. Proponents of these laws generally cite national security concerns based on the need to safeguard the national food supply and protect land near sensitive military facilities.
Everhart contends, however, that the available data does not indicate a threat to the US food system. Today, only 3.4% of privately held farmland is controlled by foreign investors. Countries considered adversaries by the State Department own only 0.007%, and as of the end of 2022, Chinese investors held less than 1%. Most of this land is not used for food production, as cropland represents only 28.3% of the total foreign-invested farmland.
Everhart argues that to protect American agriculture and food production, we must assist US farmers, rather than focus on preventing foreign ownership of farmland. Forty percent of farmland is projected to change ownership by 2035, and new farmers will need to step in to take over America’s food production. Young farmers cite the lack of affordable land as their key challenge to building successful farms. To most effectively secure our future food supply, Everhart urges legislatures to “take action that ensures farmers have access to farmland.”
This digest was written by Ben King, a 3L at the University of Nebraska College of Law, for Professor Jessica Shoemaker’s Rural Lands Seminar. Learn more about this course and other curricular offerings related to Law and Rurality in the Project’s new and growing collection of undergraduate, graduate, and law school syllabi.
