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Who Owns the Farm in the U.K.?

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Who Owns the Farm in the U.K.?

March 6, 2023

As U.S.-China competition heats up, lawmakers are realizing the extent to which Chinese companies and investments threaten U.S. national security. But this isn’t just an American issue; British policymakers should be aware of similar risks to their own country. In particular, the U.K. has a chance to learn from the latest U.S. area of focus: Chinese purchases of farmland.

To summarize the American situation: a number of embarrassing incidents have revealed lapses in judgment or attention. In 2017, for example, a Chinese billionaire connected to the Chinese Communist Party bought hundreds of thousands of acres on the Texan-Mexican border next to Laughlin Air Force Base. And in 2021, a Chinese agricultural company bought property right next to a North Dakota Air Force base. Fortunately, the U.S. government at least has the data on foreign farmland investment to discover what’s going on. While there are flaws with how data is collected, for the most part the U.S. has a sense of how much farmland is owned by foreigners.

Of course, now we need to do something about the problem, but the U.K. can’t even take the first step. It has no idea of how much of its agricultural land is owned by foreigners. In theory, the U.K. should be in a good position to track this information, thanks to the HM Land Registry and a public dataset for foreigners who own property in England and Wales. But in practice, there are no statistics available for what percentage of agricultural land is owned by foreigners, unlike in the United States, Australia, and New Zealand.

Coverage from the South China Morning Post illustrates the problem: when the outlet reported on Chinese investors buying farmland in England, it cited property agents and not the English government for data—because there was nothing to cite. At the moment, any discussion of foreign agricultural purchases in the U.K. cannot go much beyond hearsay because there is no data to point to.

Why does tracking foreign investment in agricultural land matter? It allows a country to track potential malign foreign influences and prevent foreign investors from having too great a stake in property that belongs in domestic control. The Sunday Times has already noted that Chinese investors have invested billions of pounds in the British economy, even in critical infrastructure such as nuclear reactors or wind turbines. Why hasn’t the same type of analysis been applied to land?

The failure to track foreign land investments has already caused geopolitical embarrassments. Last year, The Guardian discovered that the British government did not properly track £700 million in luxury homes owned by sanctioned oligarchs. If the British government can’t even properly track property in London, what other dangerous property purchases could be going unnoticed?

The good news is that some reforms are underway. The Russian-Ukrainian war has spurred reforms to improve transparency regarding assets owned by overseas entities. Last year, the U.K. required foreign companies to show their true owner in a property register, preventing anyone from hiding land ownership behind shell companies.

More should be done, however. The HM Land Registry should review the properties it already has and require additional details on agricultural holdings, such as what the land is being used for and whether it is owned by foreigners.

These steps should be simple but effective, given that the U.K. government already collects data in foreign landing holdings. In fact, the government likely already has some of the relevant information—although unlike in the U.S., the data is collected through multiple sources, rather than through a single form. The government could follow the example of investigators who have begun to look into the issue. Finally, having investment decisions made public as in New Zealand, or developing a detailed database as in the U.S., would go a long way toward providing transparency regarding how many foreigners own agricultural land in the U.K.

The U.K. already has the infrastructure in place to track foreign land holdings and has reformed how overseas entities report the land they own. Properly tracking foreign holdings in agricultural land would be a reasonable next step to protect British land and prevent the surprises now facing the United States.

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