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Foreign ownership of U.S. farmland.

Contrary to popular perceptions, foreigners are not buying up all of America's farmland, according to attorney Peter DeBraal of USDA's Economic Research Service. The amount of cropland, pasture, and rangeland owned exclusively by foreigners is about 3 to 4 million acres.

DeBraal analyzes reports submitted by foreigners to USDA under the Agricultural Foreign Investment Disclosure Act of 1978 and reports those finding each year to the President and Congress. The data gained from these disclosures have been used in reporting the effects of such holdings on family farms and rural communities.

Foreign interests owned 14.5 million acres, or slightly over 1 percent, of privately owned U.S. agricultural land (farm and forest land) on December 31, 1990. That's up 15 percent (1,875,806 acres) from the previous year, according to a recent issue of the Agriculture Department's FARMLINE magazine.

However, that rise is not too alarming, according to DeBraal, since foreign ownership has remained relatively steady from 1981 to 1990, at slightly above or below 1 percent of all the privately owned agricultural land in the United States. And the totals reported may be overstating the extent of foreign ownership. DeBraal points out that about 62 percent of the reported foreign holdings (about 9 million acres) is land actually owned by U.S. firms. But the law requires them to register their landholdings as foreign if as little as 10 percent of their stock is held by foreign investors.

Only the remaining 38 percent of the foreign-held agricultural land (about 5.5 million acres) is owned almost exclusively by investors not affiliated with U.S. firms.

DeBraal found that corporations, both U.S. and foreign, own most (83 percent) of the foreign-held agricultural land in the United States. Partnerships' own 9 percent and individuals own 6 percent. The remaining 2 percent is held by estates, trusts, associations, institutions, and others.

DeBraal stipulates that because of the corporate holdings, an increase in foreign ownership from one year to another does not necessarily represent land newly acquired by foreigners. "Nor do the numbers necessarily represent exclusive ownership by foreigners," he says. "A U.S. firm's land holdings can show up as |foreign owned' one year, but not in another, as the firm's stock passes in and out of foreign hands. The land, however, is still owned by the same entity as before."

DeBraal's analysis also reveals:

* Forest land accounts for half of all foreign-owned acreage; cropland, 17 percent; pasture and other agricultural land, 30 percent; and agricultural land not under cultivation, 3 percent.

* Investors from Japan (individuals, corporations, partnerships, and others) own 4 percent of all foreign-held acreage. Investors from Canada own the largest share of the foreign total (27 percent, or 3.9 million acres) followed by investors from the United Kingdom (19 percent, or 2.8 million acres), Germany (8 percent, or 1.2 million acres), France (8 percent, or 1.1 million acres), the Netherlands Antilles (4 percent, or almost 590,000 acres), and Switzerland.(4 percent, or about 586,000 acres).

* Maine has by far the largest share of foreign-owned acreage, mostly forest land. Maine's foreign holdings represent about 21 percent of all the reported foreign-owned land across the Nation and 17 percent of all privately owned agricultural land in the State. Four large timber companies own 98 percent of the foreign held acreage in the State. Two are Canadian, one is a U.S. company partially owned by Canadians, and one is a U.S. company partially owned by French investors.

* The rest of the foreign holdings are concentrated in the West (33 percent) and South (32 percent). Foreign holdings in these regions are mainly used for timber production, most notably in Oregon, Mississippi, Washington, Louisiana, and Alabama.

* Rhode Island is the only State with no reported foreign ownership of agricultural land. Except for Maine's 17 percent, most States reported only a small share of privately owned agricultural land held by foreign interests.

* Foreign owners do not appear to be taking agricultural land out of production. According to the owners' reports, 94 percent of the acreage will remain in agricultural use. They also reported no plans to change tenancy or rental arrangements on 48 percent of the acreage. Some change is planned on 25 percent of the acreage. No response was given to the question, about future plans for the remaining 27 percent of the acreage.
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Title Annotation:misconceptions clarified
Publication:Frozen Food Digest
Date:Feb 1, 1992
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