October 4, 2023

— SCOOP: Senators on the Agriculture Committee are weighing plans to formally dig into Chinese entities buying U.S. farmland. Amid the farm bill push, senators in recent days decided to push back tentative plans for a hearing this month to the fall, according to people familiar with the plans.

— The convening would mark the first formal discussion solely dedicated to the high-profile issue this Congress, and is likely to shape future policies on Chinese investment in the U.S. amid a surge of anti-Beijing sentiment on Capitol Hill.

— The debate is also a red-hot topic on the 2024 campaign trail. We break down what the GOP presidential candidates say they would do to address the matter.

HAPPY MONDAY, July 10. Welcome to Morning Ag. I’m your host, Meredith Lee Hill. Send tips to [email protected] and @meredithllee (on Twitter and Threads), and follow us at @Morning_Ag.

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ON THE HILL: The Senate is back today from its July Fourth recess. First up this afternoon is a cloture vote on Xochitl Torres Small’s nomination to be the No. 2 official at USDA.

As your host reported before recess, senators have been pushing to clear remaining holds on the nomination, including from Sen. Dan Sullivan (R-Alaska).

The House returns tomorrow.

CHINESE OWNERSHIP OF FARMLAND: While the politically-charged topic has generated plenty of chatter on Capitol Hill, neither chamber has held a public hearing this session to discuss what to actually do about Chinese entities buying U.S. agricultural land.

Senate Ag members in recent weeks have been weighing plans to hold a hearing on foreign ownership of U.S. agricultural land, according to two Democrats and one Republican who were granted anonymity to discuss internal matters. But senators decided to push any public hearing on foreign farmland land purchases to the fall amid an impasse about the way forward and the ahead of upcoming work on the farm bill, according to the people.

The panel will hold a rural development subcommittee hearing July 19 on rural water issues, according to two people familiar with the plans.

Congress divided: As part of their agreement to vote for Kevin McCarthy as speaker in January, far-right House members demanded the upcoming farm bill “block Chinese government land-buying.”

Though some Republicans have raised concerns about how a land purchasing ban would work in practice and how it could impact the personal property rights of U.S. farmers.

Senate Ag Chair Debbie Stabenow (D-Mich.) said in an interview earlier this year that she has “been concerned for some time about Chinese companies owning critical food processing and other agriculture companies, as well as farmland” and that “these are certainly issues that [Ag Committee members] need to focus on.”

Stabenow and Sen. Joni Ernst (R-Iowa) recently introduced legislation to overhaul the current patchwork of federal offices that oversee foreign agricultural land purchases in the U.S.

Stabenow, the No. 3 Senate Democrat, and others from her party appear eager to pass something this Congress to limit Chinese enterprises from buying up U.S. farmland, especially amid growing attacks by Republicans who’ve been trying to paint Sen. Jon Tester (D-Mont.) and other Democrats up for reelection in red states in 2024 as being soft on China.

Tester has his own bill on the subject, co-sponsored by a host of Democrats and Republicans, which would in part block “a covered foreign person,” which includes citizens and companies from China, Iran, North Korea and Russia, from buying U.S. farmland.

Notably, Arkansas Sen. John Boozman, the top Republican on the Senate Agriculture panel, has so far declined to back any of the litany of new legislation to restrict Chinese purchases of U.S. farmland before his committee holds hearings on the matter. House Ag Committee Chair G.T. Thompson (R-Pa.) has made a similar argument. He has also been openly skeptical of some of the talking points from his colleagues.

“There were a lot of members that, because it was on cable news, they wanted to shoot from the hip,” Thompson said in an interview several weeks after the January speaker race chaos. “We’ll take action once we have facts.”

Thompson also said he thinks the matter should be addressed separately from the farm bill, rebuffing the calls from some of his far-right colleagues.

GAO report: A Government Accountability Office report on the current state of foreign farmland purchases in the U.S., requested late last year by Thompson, Oversight Chair James Comer (R-Ky.) and 128 other House Republicans, isn’t expected to be finalized until December, according to a person familiar with the timeline who was granted anonymity to discuss private conversations.

Some House Republicans had hoped they would get the report by this summer and then hold a hearing on the matter, likely in conjunction with several other committees with jurisdiction on China and intelligence matters.

USDA’s role: Republican aides say they’ve identified “large holes” within the current tracking system at USDA, which is charged with monitoring foreign purchases of agricultural land. But USDA officials argue they don’t have the legal authority or proper resources to actually block concerning transactions — a power that currently resides within the Treasury Department.

According to USDA, Chinese-linked investors held 383,935 acres in the U.S. in 2021, which is slightly less than 1 percent of all foreign-held U.S. land. But, foreign companies and state-owned enterprises taking a larger foothold in the U.S. food supply — from farmland to seed companies to major meat processors — have raised concerns in the American agriculture sector for decades.

And while Canadian, not Chinese-linked entities, are currently the top foreign buyer of American farmland, Beijing-linked entities are increasingly purchasing American land.

A political hot button: The tougher line from U.S. lawmakers escalated last year after a Chinese firm tried to build a corn milling plant on land near a U.S. Air Force base in North Dakota.

The Committee on Foreign Investment in the United States said it didn’t have jurisdiction to block the plans. But following warnings from the Air Force, the Grand Forks city council eventually voted to stop the project.

North Dakota Republican Sen. Kevin Cramer is a cosponsor on the recent legislation from Tester, Sen. Mike Rounds (R-S.D.), Rep. Elise Stefanik (R-N.Y.) and a bipartisan group of lawmakers. In an interview, Cramer said the Treasury Department’s role in the Grand Forks case demonstrated “ambiguity” and “confusion” within current federal law.

And while Cramer said personal property rights must be considered in any final moves, he added: “It’s important for Congress to step in and provide some clarity.”

Concerns about the North Dakota project quickly mixed with conservative-leaning cable news coverage warning of Chinese threats amid the general rise in U.S.-China tensions from the pandemic fallout.

In the House, the issue has grown increasingly politically toxic.

A traditionally mundane Appropriations hearing on USDA funding last month grew exceptionally heated when Democrats voted against an amendment authorizing the Agriculture secretary to block companies linked to China and three other countries from buying U.S. farmland.

Rep. Grace Meng (D-N.Y.) argued in part that the overly broad language would “target innocent Chinese Americans or Chinese immigrants.”

Foreign farmland purchases haven’t always been such a lightning rod. In recent decades, lawmakers of both parties have tried to attract foreign business investment in their states, including from China.

Smithfield acquisition: And, in 2013, Missouri’s Republican-majority state legislature, including current Sen. Eric Schmitt (R-Mo.), voted to alter the state’s general ban on foreign entities buying farmland within its borders. That move eventually made it possible for China’s largest pork producing company to buy U.S.-based Smithfield Foods, in the biggest Chinese takeover of a U.S. company.

The deal made the Chinese-state backed Shuanghui International Holdings Limited, now known as WH Group, among the largest foreign owners of U.S. farmland.

As a senator, Schmitt has cosponsored recent legislation to prohibit the sale of land around military bases to Chinese companies — rules the Treasury Department is also trying to tighten. A Schmitt spokesperson disputed the idea that his 2013 vote in the state legislature made the Smithfield acquisition possible, and pointed to an op-ed by one of the Republican leaders behind the bill that argues their moves actually strengthened state oversight.

Sen. Chuck Grassley (R-Iowa) was one of the few Republicans in Congress who loudly raised concerns about the acquisition in 2013.

“Whether it be farmland or food-processing companies, CFIUS and DOJ should be scrutinizing these Chinese purchases to discern whether anti-competitive practices or national security risks are at play,” Grassley recently told MA.

ON THE STUMP: GOP presidential candidates are also taking a stand on the issue, looking to burnish their “tough on China” credentials.

Florida Gov. Ron DeSantis has been citing the growing number of Chinese-linked purchases of American farmland as a sign of Biden and his administration’s weakness toward China.

However, the Justice Department recently said a new law signed by DeSantis that restricts some Chinese citizens from owning property in Florida violates federal law and the U.S. Constitution. According to the DOJ, the “unlawful provisions will cause serious harm to people simply because of their national origin.”

Former President Donald Trump has promised, if reelected in 2024, he will slap “aggressive new restrictions” on Chinese ownership of farmland and other critical U.S. infrastructure in order to stop the purchases and force Chinese entities to sell back their current holdings.

Nikki Haley, another 2024 presidential contender, said in a recent speech on China policy that she’ll do “everything in my power to prevent China from buying any more land and force it to sell what it already owns.”

Asked about some of the specifics of her plans, Haley spokesperson Ken Farnaso said “there are a number of good proposals in the House and Senate preventing Communist China from buying American farmland, like Rep. Randy Feenstra’s Prohibition of Agricultural Land for the People’s Republic of China Act.”

— Rep. Bennie Thompson (D-Miss.) and the new House Democratic ag task force are holding a 2023 farm bill roundtable at the Capitol July 13, instead of the House Ag Committee minority, your host scooped late last week.

House Minority Leader Hakeem Jeffries created the group after Democrats tried to replace top House Ag Democrat David Scott (D-Ga.), as we’ve reported.

The move for Bennie Thompson to hold a farm bill roundtable at the Capitol, along with four field hearings, is incredibly unprecedented. Ag committee leaders normally hold such meetings ahead of the massive farm bill reauthorization.

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