House Bill to Strengthen Agricultural Security Against China Advances

https://www.theepochtimes.com/us/house-bill-to-strengthen-agricultural-security-against-china-advances-5498388 

A bill that strengthens U.S. national security through reviews on the risk of agricultural transactions passed the House Financial Services Committee on Sept. 20 with bipartisan support, ready for a floor vote in the House.

The bill, dubbed the “Agricultural Security Risk Review Act,” would give the U.S. secretary of agriculture a permanent seat on the federal national security review panel—the Committee on Foreign Investment in the United States (CFIUS)—for agricultural transactions, including purchases of farmland and agricultural biotechnology.

“Protecting America’s agriculture security is a critical part of our national security,” Rep. Frank Lucas (R-Okla.) said in a statement released on Sept. 21. “With an increasing amount of foreign investment in U.S. agriculture, including the Secretary of Agriculture as a member of CFIUS is long overdue.”

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“I know firsthand just how important the security of our agricultural industry is, which is why I applaud my colleagues on the House Financial Services Committee in taking a critical step to make my longstanding priority law,” he added.

At a White House press briefing on Monday, U.S. Agriculture Secretary Tom Vilsack echoed that his department’s representation on CFIUS would be helpful to have a “foolproof system so that nothing gets through the cracks.”

“I think there are legitimate concerns in that space,” Mr. Vilsack said, responding to the question of whether concerns about Chinese purchases of U.S. farmland were overblown.

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According to him, one of the reasons his team has “articulated the need as a department to be more engaged in the CFIUS process” was the case in North Dakota, where a Chinese firm bought farmland near a military installation.

In the fall of 2021, a Chinese company bought, through its subsidiary Fufeng USA, 370 acres of farmland to build a corn-milling plant in Grand Forks, North Dakota.

The land is within 15 miles of Grand Forks Air Force Base, which houses sensitive drone, satellite, and surveillance technology. In December 2022, CFIUS determined that the land sale for the Fufeng project was “not a ‘covered transaction’” under the committee’s jurisdiction.

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The project proceeded until, at the end of January, the Department of the Air Force stated (pdf) that the branch has an “unambiguous” view that “the proposed project presents a significant threat to national security with both near- and long-term risks of significant impacts to our operations in the area.”

Mr. Lucas's bill complements existing measures to curb the Chinese Communist Party's access to U.S. farmland and agricultural business.

On July 25, the U.S. Senate passed an amendment offered by Sen. Mike Rounds (R-S.D.) to ban China and other foreign adversaries from purchasing U.S. farmland and agricultural businesses. The amendment is included in the Senate version of the National Defense Authorization Act (NDAA) for fiscal 2024, passed at the end of July.

Mr. Rounds’s amendment, passed by a 91–7 vote, also adds the secretary of agriculture as a nonvoting member of CFIUS. Mr. Lucas’s bill takes the representation further to offer the secretary permanent membership. The 2024 NDAA is currently under review by the conference committee before it reaches the president’s desk for signature.

CFIUS is an interagency commission led by the Department of Treasury. Its current members include the secretaries of Homeland Security, Commerce, Defense, State, Energy, and Labor, and the attorney general and the director of national intelligence. Currently, the agriculture secretary may be involved on a case-by-case basis, as determined by the U.S. president.

Secretary of Agriculture Tom Vilsack speaks during the daily press briefing at the White House in Washington on Sept. 25, 2023. (Madalina Vasiliu/The Epoch Times)

Mr. Vilsack also mentioned the need to improve information collection on Chinese farmland purchasers.

“I would also say that I think there’s work to be done to give us the tools to be able to do an even better job of ensuring that we know when these transactions take place,” he added.

The Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978 requires a foreign person to disclose any acquisition or disposal of an interest in U.S. agricultural land. The foreign person must submit filings to the Farm Service Agency within 90 days of the date of the transaction. Failure to report is subject to a civil penalty of one-tenth of 1 percent, or 0.1 percent, of the land’s fair market value for each week the AFIDA report is filed late, up to 25 percent.

In reality, USDA often reduces the penalty amount significantly for fear of disincentivizing filing. For example, in April 2021, the department decreased the fine for a Chinese billionaire for failing to report a 140,000-acre agricultural land purchase in Texas in 2016 from $21 million to $120,000.

As of Dec. 31, 2021, China owned 383,935 acres of U.S. agricultural land, according to a USDA report (pdf). While the acreage under Chinese ownership is slightly less than 1 percent of all foreign-held agricultural land, it represents a nearly 30-fold leap from 13,720 acres in 2010.