Today, I submitted written testimony to the Senate Committee on Appropriations, Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. Click here to download a full PDF of the testimony.
Dear Chairman Hoeven, Ranking Member Shaheen, and members of the Subcommittee:
My name is Lars Erik Schönander. I am a Research Fellow at the Foundation for American Innovation, a think tank focused on promoting innovation, strengthening governance, and advancing national security. I write to respectfully request that the Committee provide adequate funding to the Farm Service Agency to oversee disclosures of foreign investments in American land. Moreover, I respectfully request that the Committee include report language requiring the U.S. Department of Agriculture (USDA) to submit to Congress information on how the agency will address the U.S. Government Accountability Office’s (GAO) recent recommendations on reforming the Agricultural Foreign Investment Disclosure Act (AFIDA).
Since 1978, AFIDA has required USDA to collect data on foreign investor ownership of agricultural land in the United States. However, a 2022 review found that “data collection has been long crippled by poor management and compliance,” and that “decades of neglect of the AFIDA program have prevented Congress and the general public from understanding the increase in foreign ownership of U.S. agricultural land over the past four decades.” The percentage of American agricultural land owned by foreigners has more than doubled since 2004. Chinese investment in American farmland grew from approximately $100 million in 2010 to $1.8 billion in 2020. In its most recent annual report, USDA reports, “Foreign investors held an interest in nearly 45 million acres of U.S. agricultural land (forest land and farmland) as of December 31, 2023. This is an increase of over 1.5 million acres from the December 31, 2022 report.”
In January 2024, GAO issued a report that detailed significant challenges to USDA’s ability to manage and enforce AFIDA disclosures and to share necessary information with other federal agencies. The GAO report included information that calls into question USDA’s oversight of AFIDA and its ability to effectively share information with other agencies involved with the Committee on Foreign Investment in the United States.
- “[A]lthough Congress required USDA to create an online submission process and public database for AFIDA data by the end of 2025, USDA does not have plans and timelines to do so, in part because USDA has not received funding. USDA also does not sufficiently verify and conduct quality reviews to track the accuracy and completeness of its collected AFIDA data. GAO’s review of AFIDA data current through calendar year 2021 found errors, such as the largest land holding associated with the People’s Republic of China being counted twice.”
- “USDA does not regularly share AFIDA data with CFIUS agencies on a timely basis to be useful for CFIUS reviews. USDA releases its annual report online. However, according to DOD officials, they need to receive AFIDA information more than once a year, and they need information that is more up-to-date and more specific to help them identify relevant non-notified transactions and consider potential national security risks.”
In response to these recommendations, Congress passed legislation to address AFIDA’s problems. The FY2024 Consolidated Appropriations Act required USDA, within two years of the Act's passing, to establish a digital process for submitting forms on foreign investment to USDA. USDA was added to the Committee on Foreign Investment in the United States for covered transactions involving agriculture. The FY2025 continuing resolution did not contain any language about funding the Farm Service Agency’s AFIDA modernization program.
First, the Committee should provide dedicated funding to the Farm Service Agency within USDA to establish the capacity to effectively manage AFIDA, including to address the FY2024 appropriations requirement to build an online submission system. In response to an open GAO recommendation, USDA stated, “USDA officials told us that it will be difficult to provide real-time filings except through the manual process without a funding appropriation sufficient for development and maintenance of an online filing portal.” The Committee should work with USDA to expedite the development of an online submission and to provide dedicated funding for AFIDA modernization through FY2026 appropriations.
Second, the Committee should include report language requiring the USDA Secretary to submit to Congress a report describing the Department’s plan to answer GAO’s recommendations issued in its January 2024 report. As of today, four of the six GAO recommendations made to USDA are still open. USDA concurred with all the recommendations GAO made in its 2024 report on AFIDA. The Committee should require the Agriculture Secretary to provide to Congress an update on USDA’s progress on fulfilling the recommendations GAO gave to USDA.
