by NALC staff
On June 23, 2025, the House passed the Agricultural Risk Review Act (H.R. 1713) which seeks to increase governmental oversight of certain foreign acquisitions in U.S. agriculture, particularly in farmland. Specifically, this measure seeks to amend certain portions of the Defense Protection Act (“DPA”) of 1950 (50 U.S.C. § 4501 et seq.) to require the Committee on Foreign Investment in the United States (“CFIUS”) to review transactions involving foreign investments in U.S. agriculture. According to the proponents of this measure, placing the U.S. Department of Agriculture (“USDA”) as a permanent member of CFIUS will provide leverage to protect the interests of the agricultural industry in foreign investments and acquisitions of U.S. agricultural businesses and land.
Recently, USDA released the National Farm Security Action Plan, outlining its intent to formalize a role in reviewing farmland-related transactions in coordination with CFIUS. While the plan anticipates a joint Memorandum of Agreement between USDA and CFIUS to authorize this role, the passage of H.R. 1713 would go further by codifying USDA as a CFIUS member with both review and decision-making authority.
Background
Currently, no federal law exists that restricts foreign persons from acquiring or holding U.S. agricultural land. While there are approximately twenty-eight states that specifically prohibit or limit foreign ownership of agricultural land within the boundaries of their state, the federal government only monitors certain foreign acquisitions and landholdings in agricultural land through the Agricultural Foreign Investment Disclosure Act (“AFIDA”) of 1978. Essentially, AFIDA requires certain foreign persons to disclose their interests in U.S. farmland to USDA.
Over the past few years, federal policymakers have become increasingly concerned about foreign investment in U.S. agriculture, particularly agricultural land. Because there is no federal law that imposes a restriction on the amount of farmland that can be foreign owned, Congress has proposed several measures that seek to increase oversight and restrict foreign investments and acquisitions of land located within the U.S. Other measures proposed by Congress, such as H.R. 1713, would place the Secretary of USDA as a permanent member of CFIUS.
In general, CFIUS is an interagency committee headed by the U.S. Department of the Treasury that is authorized by the DPA (50 U.S.C. § 4565) to serve the President in reviewing certain transactions involving foreign investments and acquisitions of American companies and real estate to determine whether a transaction presents a threat to U.S. national security. Investments and acquisitions that could give a foreign person—whether that be an individual, business, or government—control over a U.S. business or that may pose a threat to national security are known as “covered transactions,” and these are the types of transactions CFIUS has jurisdiction to investigate and review. Transactions that may pose a risk to the national security, for example, are investments and acquisitions of critical infrastructure, such as transportation, telecommunication, public health, and energy. CFIUS also closely reviews investments in critical technologies. These technologies are created or used by certain U.S. businesses and industries that are essential to the nation’s economic and national security.
Essentially, CFIUS has the power to renegotiate, enforce, and impose conditions to covered transactions (whether pending or already completed) that could potentially impair U.S. national security. In other words, the Committee uses these measures to mitigate any threat to national security that arises from a covered transaction. CFIUS also makes recommendations to the President on whether to suspend or prohibit a transaction. Ultimately, the President has the authority to suspend or prohibit a transaction that would threaten U.S. national security.
In March 2024, President Biden signed the Consolidated Appropriations Act (“CAA”) of 2024 (H.R. 4366), which included a provision authorizing USDA to participate in CFIUS reviews on a case-by-case basis for transactions involving foreign purchases of U.S. agricultural land. H.R. 1713 builds on this by proposing to make USDA a permanent member of CFIUS for all relevant agricultural transactions and to require CFIUS review of acquisitions involving countries the federal government deems a “foreign adversary”, to determine if they pose a threat to U.S. national security.
Agricultural Risk Review Act
Under H.R. 1713, USDA will be added as a member of CFIUS for transactions involving U.S. agriculture. USDA would join CFIUS reviews involving agricultural land, biotechnology companies (such as seed developers), or agricultural businesses involved in transportation, storage, or processing of agricultural products. Aside from being included as a member of CFIUS for transactions involving agriculture, the legislation specifically authorizes USDA to evaluate certain foreign investments in U.S. agricultural land to determine whether a CFIUS review of the transaction is necessary.
H.R. 1713 authorizes USDA to notify CFIUS of any “reportable agricultural land transaction.” A reportable agricultural land transaction is defined as a transaction that USDA “has reason to believe is a covered transaction” or a transaction that involves the investment or acquisition of U.S. agricultural land by a “foreign adversary” person, which includes foreign individuals, business entities, and governments of China, North Korea, Russia, or Iran. Thus, if USDA believes a transaction gives a foreign person control over agricultural land or if agricultural land is being acquired by a foreign person from the four listed countries, the agency is authorized to report the transaction to CFIUS.
However, USDA’s notice requirement terminates for transactions involving a foreign investor from China, North Korea, Russia, or Iran if the country is removed from the “foreign adversary” list established by the U.S. Secretary of Commerce under 15 C.F.R. § 791.4. For instance, if the U.S. Secretary of Commerce removed only Russia from the foreign adversaries list, USDA would not have to provide notice to CFIUS of a transaction involving a Russian buyer of U.S. agricultural land, but foreign acquisitions from investors of countries remaining on the list would trigger USDA’s notice authority.
The legislation also links its definition of reportable agricultural land transactions to those that require an AFIDA report. As previously mentioned, AFIDA requires certain foreign persons to report their agricultural land investments to USDA. Specifically, any foreign individual, entity, or government, including domestic entities in which a foreign person has “significant interest or substantial control” of a domestic entity, is required to disclose certain information concerning their investments and acquisitions in U.S. agricultural land. Therefore, H.R. 1713 will authorize USDA to notify CFIUS of any investment in U.S. agricultural land by a foreign person from any country if the transaction requires the filing of an AFIDA report.
Importantly, H.R. 1713 allows USDA to notify CFIUS of any transaction that requires an AFIDA filing, regardless of whether the filing was actually made. Thus, USDA’s authority is based on whether a disclosure should have been submitted—not whether it was submitted.
Essentially, any foreign acquisition or investment that satisfies the definition of reportable agricultural land transaction provides USDA the ability to notify CFIUS. Such notice directs CFIUS to determine whether the transaction could potentially impair U.S. national security.
Once CFIUS receives notice of a reportable agricultural land transaction, H.R. 1713 requires CFIUS to determine whether the transaction is a covered transaction. If CFIUS concludes the transaction is a covered transaction, CFIUS must then determine whether they should initiate a review or some other investigative measure to determine the threat the transaction poses to U.S. national security. Accordingly, as a member of CFIUS, USDA will be involved in the decision-making process to determine if a transaction involving U.S. agriculture is a covered transaction and whether CFIUS should initiate a review of the transaction.
Conclusion
H.R. 1713 seeks to extend CFIUS’s jurisdiction to include not just agricultural land owned or acquired by certain foreign investors, but a large portion of the U.S. agricultural industry. The legislation also seeks to provide USDA authority to investigate agricultural land investments by foreign persons, particularly of countries deemed a foreign adversary by the federal government. Although H.R. 1713 has passed the House, it must still pass the Senate and be signed by the President before becoming law.
To read H.R. 1713, click here.
For more NALC resources on foreign ownership of ag land, click here.
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