Foreign Investments in U.S. Agricultural Land: Enhancing Efforts to Collect, Track, and Share Key Information Could Better Identify National Security Risks (2024)

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.

Foreign Investments in U.S. Agricultural Land: Enhancing Efforts to Collect, Track, and Share Key Information Could Better Identify National Security Risks (1)

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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

Foreign Investments in U.S. Agricultural Land: Enhancing Efforts to Collect, Track, and Share Key Information Could Better Identify National Security Risks (2)

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.

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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

Highlights Page (1 page)
Full Report (62 pages)

As a seasoned expert with a deep understanding of foreign investment in agricultural land, I can shed light on the intricate web of challenges and potential risks highlighted in the provided article. My expertise is built on a foundation of comprehensive knowledge about the intricacies of the United States Department of Agriculture (USDA), the Committee on Foreign Investment in the United States (CFIUS), and the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA).

Foreign Investment in U.S. Agricultural Land:

The article emphasizes the substantial growth of foreign investment in U.S. agricultural land, reaching an estimated 40 million acres in 2021 according to USDA estimates. This surge raises concerns about national security, particularly when foreign interests acquire land in close proximity to U.S. military installations.

USDA's Role and Flaws in Data Sharing:

The USDA is tasked with collecting and disseminating data on foreign investments through AFIDA. However, the article underscores a critical issue – the lack of timely and detailed data sharing with CFIUS agencies, including the Department of Defense (DOD) and the Department of the Treasury. This deficiency poses challenges for national security assessments, especially when DOD requires more specific and up-to-date information.

Deficiencies in USDA Processes:

The article delves into the flawed processes employed by the USDA in implementing AFIDA. The agency collects required data on paper forms, creating ambiguity and challenges in the collection and review of information. The AFIDA handbook, intended as a guide, lacks clear instructions, hindering the accurate collection of data. The absence of an online submission process and public database exacerbates the issue, and GAO's review found errors in the collected data, highlighting the need for improvement in verification and quality reviews.

Recommendations for Improvement:

To address these challenges, the Government Accountability Office (GAO) has made several recommendations, including the establishment of a process for timely data sharing with CFIUS agencies, clarification of instructions in the AFIDA handbook, analysis for the creation of an online submission system, improved verification and monitoring of collected data, continuation of data mining activities, and ensuring completeness in AFIDA reporting.

In conclusion, the issues raised in this article demand immediate attention and action to enhance the transparency and reliability of data related to foreign investments in U.S. agricultural land. The recommendations put forth by GAO provide a roadmap for the USDA to strengthen its processes and contribute to national security efforts. As an expert in this field, I emphasize the urgency of implementing these recommendations to safeguard the interests of the United States.

Foreign Investments in U.S. Agricultural Land: Enhancing Efforts to Collect, Track, and Share Key Information Could Better Identify National Security Risks (2024)
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