Fast Facts
Foreign investment in U.S. agricultural land grew to about 40 million acres in 2021, per USDA estimates. This can pose national security risks—such as when foreign interests buy land near U.S. military installations.
USDA annually publishes data on agricultural land investments, which DOD, Treasury, and other agencies may review for risks. DOD noted that it needs more specific and timely data.
USDA needs to collect, track, and share the data better, and developing a real-time data system would help. For example, USDA annually compiles its data from paper forms filed with headquarters or county offices. Our recommendations address this and more.
Highlights
What GAO Found
The United States Department of Agriculture (USDA) does not share timely data on foreign investments in agricultural land collected under the Agricultural Foreign Investment Disclosure Act of 1978, as amended (AFIDA). Committee on Foreign Investment in the United States (CFIUS) agencies, including the Department of Defense (DOD) and the Department of the Treasury, identify and review transactions that may pose national security risks, such as the proximity of agricultural land to a sensitive military base. USDA annually publishes selected AFIDA information online that CFIUS agencies may use when considering potential national security risks associated with agricultural land. In addition, USDA officials said they respond promptly when they receive requests for information. However, DOD officials noted they need AFIDA information that is more up-to-date and more specific, and they need to receive this information more than once a year. USDA has requested funding to develop a real-time data system that can be accessed by other U.S. government agencies and the public. Meanwhile, sharing current data could help increase visibility into potential national security risks related to foreign investments in U.S. agricultural land.
AFIDA Data Are Not Regularly Part of CFIUS Reviews
USDA implements AFIDA across field offices and headquarters, but its processes to collect, track, and report key information are flawed. USDA collects the required data on paper forms with county or federal offices and reviews them for accuracy, according to USDA officials. However, its processes to do so are unclear and challenging to implement. For example, USDA's AFIDA handbook provides limited instructions on how to collect reliable AFIDA information. In addition, although 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 has begun efforts to identify AFIDA non-compliance through data mining, according to officials, and has opportunities to expand this practice. But without improving its internal processes, USDA cannot report reliable information to Congress or the public about where and how much U.S. agricultural land is held by foreign persons.
Why GAO Did This Study
USDA estimated that foreign investment in U.S. agricultural land grew to approximately 40 million acres in 2021. These investments may have consequences for U.S. national security. For example, there may be foreign ownership of U.S. agricultural land close to sensitive military installations.
CFIUS is an interagency committee that reviews certain foreign transactions to determine potential effects on U.S. national security. These include foreign investments in U.S. agricultural land. In addition, USDA's AFIDA statute, enacted in 1978, requires foreign persons acquiring or transferring agricultural land to file a disclosure form with USDA.
GAO was asked to review foreign investments in U.S. agricultural land. This report examines the extent to which (1) USDA shares information related to foreign investments in U.S. agricultural land with CFIUS for its national security reviews, and (2) USDA's processes enable it to collect, track, and report reliable data on foreign investments in U.S. agricultural land. GAO reviewed laws, regulations, and agency guidance; analyzed USDA data; and interviewed agency officials.
Recommendations
GAO is making six recommendations, including that USDA share detailed and timely AFIDA data with CFIUS agencies, improve the reliability of AFIDA data, and assess its ability to adopt an online submission system and public database. USDA generally agreed with our recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | The Secretary of Agriculture should ensure that the Chief Operating Officer of FPAC-BC, in coordination with relevant CFIUS member agencies, establish a process to provide detailed and timely AFIDA transaction data relevant to foreign investments in agricultural land to CFIUS member agencies, including DOD and Treasury. Such information could include whether a party has filed a disclosure, who filed it, and when it was filed. (Recommendation 1) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of FSA, as FPAC-BC updates the AFIDA handbook, to clarify and provide specific instructions to headquarters and county employees for completing AFIDA responsibilities, including reviewing the accuracy of forms and identifying missing information. (Recommendation 2) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Department of Agriculture | The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC and the Administrator of FSA to jointly complete an analysis to determine the extent to which the agency can satisfy the requirements of the Consolidated Appropriations Act, 2023 to create an AFIDA online submission system and public database within its expected budget. If the analysis shows that the agency would be unable to meet the requirements of the Consolidated Appropriations Act, 2023, USDA should report the results to Congress and recommend appropriate legislative changes. (Recommendation 3) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Department of Agriculture | The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC to improve its verification and monitoring of collected AFIDA data, such as reviewing and validating information throughout the AFIDA data collection process. (Recommendation 4) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Department of Agriculture | The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC, in coordination with the Administrator of FSA, to continue data mining activities that compare AFIDA data to FSA program data to identify suspected non-filers. (Recommendation 5) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Department of Agriculture | The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC to ensure its AFIDA reporting is complete, such as incorporating country information from additional foreign persons beyond the primary investor when available. (Recommendation 6) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
See All 6 Recommendations
Full Report
As a seasoned expert in the field of foreign investments and national security, I bring a wealth of knowledge and experience to shed light on the intricacies of the article about foreign investment in U.S. agricultural land. My understanding of the topic is not only theoretical but grounded in practical insights, making me well-equipped to delve into the key concepts discussed in the article.
The article highlights the substantial growth of foreign investment in U.S. agricultural land, reaching approximately 40 million acres in 2021, according to USDA estimates. The core concern revolves around the potential national security risks associated with these investments, especially when foreign entities acquire land in proximity to sensitive military installations.
The Committee on Foreign Investment in the United States (CFIUS), comprising agencies such as the Department of Defense (DOD) and the Department of the Treasury, plays a pivotal role in identifying and reviewing transactions that may pose national security risks. However, the article reveals a crucial gap in the information-sharing process, with the United States Department of Agriculture (USDA) failing to provide timely data on foreign investments in agricultural land as required by the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA).
The lack of real-time and specific data poses a challenge for agencies like DOD, which emphasizes the need for more up-to-date information to assess potential risks. The article suggests that USDA has recognized this issue and is seeking funding to develop a real-time data system accessible to other government agencies and the public.
The AFIDA data collection processes employed by USDA, however, come under scrutiny in the article. The methodology, relying on paper forms filed with county or federal offices, is criticized for its lack of clarity and challenges in implementation. The article points out that the AFIDA handbook provides limited instructions on collecting reliable information, and despite a congressional mandate to establish an online submission process and public database by the end of 2025, USDA lacks plans and timelines due to insufficient funding.
Furthermore, the reliability of the collected AFIDA data is questioned, with errors identified in the GAO's review, such as the double counting of the largest land holding associated with the People's Republic of China. The article underscores the importance of improving internal processes to ensure accurate and complete reporting, as without these improvements, USDA cannot provide reliable information to Congress or the public regarding the extent of foreign ownership of U.S. agricultural land.
In response to these challenges, the Government Accountability Office (GAO) presents six recommendations to USDA, including sharing detailed and timely AFIDA data with CFIUS agencies, improving the reliability of AFIDA data, and assessing the feasibility of an online submission system and public database. The recommendations aim to address the gaps in information-sharing, data collection processes, and reporting accuracy identified in the article.
In conclusion, my extensive expertise in foreign investments and national security allows me to analyze the nuances of the article comprehensively. The issues raised regarding the lack of timely data, flawed data collection processes, and the need for improved information-sharing mechanisms highlight critical areas that require attention to safeguard U.S. national security interests in the realm of agricultural land investments.
