Foreign ownership of U.S. farmland is growing. A Missouri lawmaker wants to ban it in the state.

“The new law was sponsored by a legislator who has received more than $30,000 in campaign contributions to date from Smithfield Foods,” wrote St. Louis Post-Dispatch reporter Kevin McDermott, in a 2015 investigation. “And it was advanced by a state Senate committee of which every single member had previously received money from the company.” 

The new rules—which were approved one week before WH Group’s acquisition of Smithfield—allowed up to 1 percent of the state’s farmland to be foreign-owned, though any transactions would have to be approved by the Missouri Department of Agriculture. But in 2015, legislators scrapped the approval requirement, making it easier for foreign companies to purchase land through shell companies, and harder for the state’s government to monitor purchasing. 

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“Part of the biggest problem we have with this is nobody knows exactly how many acres have been sold,” Beck told the committee. “If we’ve reached that one percent threshold in this state—there’s no knowledge if we’re there or not.” 

The U.S. Department of Agriculture (USDA) does keep tabs on foreign ownership of farmland, though those numbers are often published a year or more behind schedule. According to the latest data, which is current as of December 2019, Missouri has already hit up against the 1 percent cap, which could mean that foreign ownership has exceeded the limit in the intervening months. 

Nationwide, the numbers hint at growing global interest in U.S. farmland as an investment opportunity. By the end of 2019, foreign entities held an interest in nearly 35.2 million acres of U.S. agricultural land, representing 2.7 percent of all privately held farmland, according to USDA. That’s about a 60 percent increase from 2009, when foreign entities held an interest in only 22.2 million acres, or 1.7 percent of privately held farmland. 

But while that’s a significant jump, it’s not the only outside group after a slice of the agricultural pie. Non-farmer domestic entrepreneurs and investors are snapping up farmland at a rapid clip, also doing much to drive up the cost of agricultural production for those who don’t own their land. 

“Institutional investors—pension funds, university endowments, private foundations, and other organizations that manage huge pools of capital—are increasingly incorporating farmland into their investment portfolios,” wrote  University of California, Santa Cruz sociologist Madeleine Fairbairn, in her new book Field of Gold: Financing the Global Land Rush. “The same is true of those extremely wealthy people who in financial circles are euphemistically termed ‘high-net-worth individuals.’ This investor interest has spawned a host of new asset management companies eager to accommodate and encourage investors’ newfound passion for soil … managers [who] promise to shepherd investor capital safely, and often extremely profitably, into plots of farmland the world over.” 

That interest among deep-pocketed investors is on display in The Land Report, a glossy quarterly that styles itself as “the magazine of the American landowner.” In ads that run alongside profiles of farmland tycoons, rural-oriented real estate companies pitch thousand-acre farms as lucrative opportunities. In its listing for Double Nickle on the Niobrara, a 34,000-acre farm and ranch in Cherry County, Nebraska, that is going for north of $42 million, Hayden Outdoors Real Estate company—“The Brand that Sells the Land”—assures prospectors that the price tag is warranted. “One of the finest ranches in the Midwest,” the listing vows. “The cash flow and potential of this investment is unparalleled.” 

In acreage, that single Nebraska property is equivalent to 10 percent of all the foreign-held land in Missouri. Evidence suggests that the uptick in domestic sales are doing at least as much to raise land values and price out new and aspiring farmers. In Iowa, for instance, one of six states that has banned sales of farmland to foreign entities, the cost of farmland has increased more than sixfold since 1990, though it’s down about 15 percent from an all-time high in 2013. 

“Who will own America’s farmland when the crystal ball drops in Times Square on New Year’s Eve of 2099?” wrote Joe Hardy, resident of Fayette, Missouri, in a 2020 letter to the editor of the Columbia Daily Tribune. “Will the grandchildren of today’s farming families be independent operators farming their own land, or will they be employees of foreign or out-of-state corporations?”

He may be right to worry. But if State Senator Beck and his allies are serious about the issue, they may want to start looking a little closer to home.