by NALC Staff

Over the past few years, federal and state lawmakers have become increasingly concerned about foreign investments in U.S. agricultural land. While there is no federal law that restricts foreign investments of agricultural land, the federal government does monitor certain foreign acquisitions and landholdings in agricultural land through a federal reporting law known as the Agricultural Foreign Investment Disclosure Act (“AFIDA”) of 1978. Essentially, AFIDA requires certain foreign persons to disclose their interests in U.S. farmland to the U.S. Department of Agriculture (“USDA”). Recently, the Farmland Security Act of 2025 was introduced in Congress, which seeks to amend certain provisions of AFIDA.

Background

Enacted by Congress in 1978, AFIDA established a nationwide system for collecting certain information about foreign investments and ownership of U.S. agricultural land. According to a U.S. House Report from the Committee on Agriculture (H.R. Rep. No. 95-1570, 2d Sess. 1978) discussing AFIDA prior to its enactment, Congress was concerned with the growing number of foreign investments because these investments likely increase farmland prices, which was considered as a factor that was adding to the economic pressures affecting family-farm operations. However, the House Report asserts that determining the impact of foreign ownership of U.S. agricultural land “is difficult to gauge…because of the lack of data on the nature, magnitude, and scope of foreign investment activity.” In order to measure the impact of foreign investments in agricultural land, Congress enacted AFIDA to collect the data necessary to assess foreign investment activity within the U.S.

Under AFIDA, “foreign person who acquires or transfers any interest…in agricultural land” is required to disclose their interest in the land to USDA. 7 U.S.C. § 3501(a). Thus, a foreign person who acquires, holds, transfers, or disposes an interest in agricultural land within the U.S. is required to disclose certain information concerning such transactions and investments by filing an FSA-153 reporting form at the appropriate Farm Service Agency (“FSA”) county office. FSA will soon accept electronic FSA-153 filings from foreign persons. This data is compiled into an annual publication that reports the amount of cropland, pastureland, forestland, and other types of agricultural land that is foreign owned. To learn more about AFIDA, read NALC’s article titled Answering to AFIDA: Reporting Requirements of Foreign Agricultural Land Investments here.

Farmland Security Act of 2025

Over the past decade, foreign investments in agricultural land have grown. According to the most recent AFIDA report, which includes data through December 31, 2023, foreign persons held an interest in nearly 45 million acres of U.S. agricultural land. In response to these types of investments, there have been multiple bills introduced in the 119^th Congress (2025-2026) that seek to increase oversight and restrict foreign investments and acquisitions of land located within the U.S. Some of these proposed measures seek to amend certain provisions of AFIDA.

Senators Tammy Baldwin (D-WI) and Chuck Grassley (R-IA) have introduced the Farmland Security Act of 2025 (“S. 845”) which seeks to amend AFIDA. According to the sponsors of this bill, foreign investments of U.S. agricultural land “have the potential to impact our food security and national security.” During the 117^th Congress, the pair of senators introduced a measure—Farmland Security Act of 2022—that was signed into law as part of the Fiscal Year 2023 Omnibus Appropriations Bill, directed USDA to accept AFIDA disclosures electronically and establish a database of certain disaggregated foreign ownership data that is accessible to the public. S. 845 seeks to take additional steps to increase monitoring foreign investments in U.S. farmland and support transparency of these investments.

One way S. 845 seeks to increase monitoring of foreign investments in U.S. farmland and forestland is by penalizing shell corporations 100% of the fair market value of the entity’s interest in agricultural land not reported to USDA. Under the bill, a “shell corporation” is a business entity, including partnerships, joint stock companies, trusts, estates, or any other legal entity “that has no or nominal operations.” In other words, a business entity that has no significant business operations or assets. Currently, it is unclear whether a shell corporation that is part of a larger business structure, and contains some level of foreign interest, is required to disclose its agricultural landholdings under AFIDA. Accordingly, S. 845 seeks to require all foreign-owned shell corporation to disclose its agricultural landholdings or risk a penalty equal to the foreign person’s interest in the agricultural land.

While S. 845 seeks to establish a civil penalty against shell corporations that fail to file or submit a defective AFIDA disclosure, the legislation does provide shell corporations the ability to correct its filing or submit a disclosure without incurring a penalty. If USDA provides notice to a shell corporation’s failure to properly file an AFIDA disclosure, the entity has 60 days to remedy its failure to file or a defective filing. If the entity correctly files a disclosure within this 60-day period, it will not incur a penalty.

Further, S. 845 will require USDA to conduct annual audits of at least 10% of the AFIDA disclosures the agency received during the year. In conducting these audits, USDA will be required to ensure the completeness and accuracy of the AFIDA disclosures submitted during the year. This piece of legislation also seeks to require USDA to provide training to state and county-level employees to identify agricultural and forestland that should be reported as having some level of foreign ownership and farmland that has not yet been reported by the applicable foreign person.

S. 845 will require USDA to conduct research on leases of agricultural land by foreign persons and the impact these leases have on family farms, rural communities, and the U.S. food supply. This legislation directs USDA to examine trends of foreign investments in U.S. agricultural land by shell corporations, and the agricultural production capacity of foreign-owned agricultural land (i.e., the amount of agricultural or forestry products that can be produced on foreign-owned land) and the overall foreign participation in the U.S. agricultural economy. USDA will be required to submit its research and findings to Congress on an annual basis.

Last, S. 845 will appropriate $2,000,000 to USDA each year from 2025 through 2030 to carry out the task of auditing AFIDA disclosures and conducting the research required under the legislation.

Conclusion

S. 845 was introduced and referred to the Senate Committee on Agriculture, Nutrition, and Forestry on March 6, 2025. A companion bill, H.R. 1629, which contains identical language to S. 845 has been introduced in the House and is currently being considered by the House Committee on Agriculture. At this stage, the committee can review the bill, hear testimony in support and opposition of the bill, amend the bill, pass the bill for consideration by its respective chamber, or vote to fail passage of the bill out of committee.

NALC will provide an update to this article as S. 845 and H.R. 1629 advance through the legislative process.

To read NALC articles discussing foreign investments in U.S. agriculture, click here.
To learn more about foreign ownership of U.S. land, click here.

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