Foreign investment subject to Senate bill
OKLAHOMA CITY — Lawmakers seeking to limit foreign ownership of Oklahoma’s farmland could face a complicated battle this session, as their sense of patriotism may present a challenge to key aspects of the state’s economy. .
State Sen. Warren Hamilton, R-McCurtain, introduced Senate Bill 1469, intended to clarify existing state law that prohibits foreign entities from purchasing land in Oklahoma.
“While Oklahoma law already prevents foreign land ownership, it does not prevent these people from setting up businesses to buy property,” Hamilton said in a statement announcing the bill. “Senate Bill 1469 will end this workaround to current state law.”
Foreign investment in farmland has been trending up across the country for several years, but Oklahoma is one of the few states where the growth has been most pronounced.
According to federal data, Oklahoma saw one of the largest increases in agricultural acres owned by foreigners in 2020, adding nearly 383,600 acres, for a total of 1.5 million acres owned by entities. foreign.
In 2008, only 0.3% of Oklahoma’s farmland was owned by foreigners; in 2019, an estimated 2.94% of the state’s farmland was foreign-owned, according to federal data compiled by InvestigateTV — which acknowledged that much federal data on foreign ownership is incomplete, making means that the total percentage could be higher.
According to reports from the United States Department of Agriculture, Oklahoma is one of 14 states in the country with more than one million acres of foreign-owned land. Oklahoma is also one of 14 states that currently restrict or prohibit foreign ownership of US private farmland.
The Oklahoma Constitution states that non-US citizens cannot acquire or own land in Oklahoma. Land acquired by inheritance or for the purpose of collecting a debt must be disposed of within five to seven years.
However, an exception is made for immovable property necessary for the exercise of the activities of a company legally incorporated in the State. In the law, the word “foreign” also applies to US corporations formed in other states, as well as international entities.
SB 1469 would clarify that “no alien or any person who is not a citizen of the United States shall acquire any title or own land in this State, directly or indirectly through any business entity or a trust, except as provided below”.
The measure would make an exception for an “alien who is or will become a bona fide resident of the State of Oklahoma, or any legally recognized business entity, whose majority voting stock or equivalent controlling interest is owned by one or more resident aliens.
“This is America,” Hamilton said. “To own a piece of it, you have to be American. Allowing a foreign entity to own a piece of America is treason – such madness may be allowed in places like California, but it should never happen here in Oklahoma. I am confident that my colleagues will understand the urgent need to close the loophole in current state law and end foreign land ownership in our state.
In his statement announcing the bill, Hamilton pointed to the rise of the medical marijuana industry in the state as a vehicle used by foreign interests to buy land in Oklahoma.
“As the marijuana industry in Oklahoma continues to grow, we have seen an increasing number of foreign interests enter our state and buy up our farmland for astronomical sums to establish crops and other related businesses” , Hamilton said.
But the land purchase in Oklahoma long precedes the state’s vote to legalize medical marijuana in 2018. International and domestic investors have been grabbing farmland for more than a decade.
Farmland has historically proven to be a low-volatility asset that offers strong returns on investment, and investors have increasingly turned their attention to the sector since the 2008 recession. Between 1992 and 2020, the average annual return agricultural land was 10.9%, compared to 7.87% for the stock market and 6% for gold. Microsoft founder Bill Gates is currently estimated to own approximately 242,000 acres of farmland in 19 states.
Countries like China have invested in US farmland, often citing food security interests. By 2020, Chinese nationals had acquired nearly 192,000 acres of US farmland worth nearly $2 billion, nearly ten times more than in the previous decade.
Chinese-owned entities can also acquire farmland by buying agricultural businesses in the United States, such as when Hong Kong-based Shuanghui acquired Smithfield Foods – then the world’s largest pork producer and processor with facilities in Guymon, Oklahoma as well as several other states – back in 2013. The Hong Kong company made the acquisition amid a series of food safety incidents in China.
According to USDA data, Oklahoma saw one of the largest increases in farm acres owned by foreigners in 2020, adding nearly 383,600 acres, for a total of 1.5 million acres owned. to foreign entities.
In 2019, more than 40% of the 3.4 million acres acquired by foreign investors in the United States were located in Texas, Oklahoma and Colorado. Canadian investors bought the most land, 29%, although the Netherlands, Italy, Germany and the United Kingdom also bought land in the United States.
Nationally, the report estimates that 37.6 million acres, or about 2.9% of the country’s total farmland, ranches and forests, were under foreign ownership in 2020, the last year for which data was available.
According to USDA data, Maine has the most land owned by foreign entities, with 3.1 million acres, followed by Texas, Alabama, Washington and Michigan. Canada is the largest foreign owner of US farmland and forestry, with 4.7 million acres in the United States.
Legislation has also been introduced in Congress that would prevent non-US citizens from investing in and owning US farmland.