Foreign investments

Minnesota farmers call foreign investment and land buyouts by billionaires a ‘sticky situation’

James Rainwater may not be a household name in Minnesota politics.

But on Tuesday morning, at a town hall meeting for congressional candidates in southern Minnesota, the attorney caught the attention of farmers at the Farmfest outdoor shed in Redwood County.

“I hear stories of Bill Gates buying up hundreds of thousands of acres for commercial farms,” Rainwater of Lake City said. “I think the little guy needs some help.”

It’s been a summer of unease in farmland, with a flurry of national reports of Chinese investors and environmentally conscious billionaires buying up US farmland and taking over agribusinesses.

Either way, the nation turned to North Dakota.

Earlier this year, a Grand Forks fracas erupted after a China-backed investment firm bought 300 acres of land less than 20 minutes from an Air Force base. The subsequent maize mill the group hopes to develop – still awaiting approval – has prompted scrutiny of national security concerns.

Also this summer, in an unrelated action, The North Dakota Attorney General has approved the sale of land parcels in Pembina and Walsh counties to Red River Trust, a Washington-based entity linked to tech billionaire Gates.

In Minnesota, only 1.6% of farmland in the state is owned by foreign entities, according to the latest report from the United States Department of Agriculture. State laws against foreign and corporate ownership of farms keep the state relatively safe from intruding buyers. Only citizens, permanent residents, or entities with less than 20% foreign investment may own Minnesota farmland.

“The vast majority — 70 to 80 percent — of farmland is sold to neighboring farmers,” said Glen Fladeboe of Fladeboe Land, a Minnesota farmland brokerage firm.

Doug Spanier, an attorney with the Minnesota Department of Agriculture, said that aside from exemptions for timber and wind energy easements on farmland, state law ensures that farmland remains controlled. mainly by farmers or their owners.

“States in the Midwest all have some sort of law preventing corporate farms,” ​​Spanier said. “And no foreign citizen can own farmland unless they have been lawfully admitted to the United States for permanent residence.”

Still, the two cases in North Dakota could plausibly happen in Minnesota. It is not against state law for a foreign investor to own a grinding plant. And Gates’ Red River Trust has announced plans to lease the purchased land to farmers, which could ease concerns about commercial farming, as it has from North Dakota AG’s perspective.

Officials at Campbell Farms, the Grafton, North Dakota-based potato farm sold to Red River Trust, did not respond to multiple maintenance requests. And Gates is not believed to own any land in Minnesota yet, although he does own plots in neighboring Wisconsin and Iowa.

But growing public concern has some farmers worried.

At the annual agriculture industry meeting in southwestern Minnesota last week, talk of farmers relying on new combines or lining up for pork chops centered on historic inflation, which has driven up the cost of fertilizer and diesel fuel.

But right behind the gripes about the cost of filling the tractor or supplying nitrogen, were rumors about who was buying up America’s farmland.

“I don’t think there’s a lot of out-of-state or out-of-country land buying in our area,” said Dawson farmer Dustin Johnson, who was inspecting heavy equipment Tuesday. “But it’s still bigger investors buying land, competing with farmers for it.”

“I’m a little worried about that. [Chinese land buyers]”said Adam Lund, who also farms near Dawson. “But on the other hand, [China is] a huge importer of soybeans and some degree of corn and many different agricultural products, so it’s a tricky situation.”

Over the past decade, China’s Belt and Road initiative to invest in global infrastructure has found its way to American farmland, with Chinese buyers owning nearly 200,000 acres by 2020. And the alarm about foreign or plutocratic ownership of US farmland comes at a time of increasing concentration. – and even suspicion – in the agricultural supply chain.

Last month, U.S. Representative Dusty Johnson, a Republican from South Dakota, calls on Gates to appear before the House Agriculture Committee to tell the country what Gates intends to do with his 270,000 acres of land, citing the billionaire’s past remarks urging developed countries to ditch animal protein. In late July, Minnesota GOP U.S. Rep. Tom Emmer and a Washington state congressman wrote a letter to the USDA, describing foreign ownership of farmland as an “insidious threat” to the ability of America to feed the country.

And in Grand Forks, the dispute over the corn mill — which city officials tout as an economic opportunity for farmers — has torn the community apart, with debates sometimes tinged with anti-Asian bias.

In Minnesota, the state enacted the Foreign Farm and Agricultural Business Acts in the 1970s, though Spanier insists some prohibition of the former has existed since before the state was established. A fight over foreign farm ownership last erupted in the early 2000s, when Dutch dairy farmers sought leniency from state law to stay on their farms. Under a recent exemption, an E-2 visa holder can be a dairy farmer — and only a dairy farmer — on up to 1,500 acres.

Although direct business ownership and foreign ownership are prohibited, some wiggle room exists. With its recent acquisition of a leading poultry integrator, for example, Minnetonka-based Cargill inherits contracts with farmers who distribute birds and seed to producers. And in northern Itasca County, 150,000 acres are owned by foreign-headquartered loggers.

The The recent campaign by the country’s wealthiest residents to buy land from individuals often, but not always, has environmental overtones. In Montana, a foundation has purchased nearly half a million acres of land and is converting it into a nature preserve. In South Dakota and Nebraska, media mogul Ted Turner owns a ranch home to bison and prairie dogs. And last year, the Land Report announced that Gates is now the largest farmland owner in the country.

Seattle Livestock Image tech billionaire driving a tractor drew laughter from two farmers watching congressional forums on Tuesday. But a trend evoking associations with the English landed gentry of old is not located in the heart of the country.

“The which is very important,” Minnesota Attorney General Keith Ellison said, speaking on the sidelines of Farmfest on Tuesday. “But I have a bigger concern with the outright purchase of farmland and its concentration in too few hands.”

On Tuesday, Ellison and Gary Wertish, president of the Minnesota Farmers Union, unveiled a “trust-buster” UTV (Utility Utility Vehicle), sporting a boxing glove on the door. The pugilists’ call for better prices for farmers is resonating with small producers who feel the farming system has become too cumbersome, corporate and international to navigate from their front porches.

But building an agricultural economy with only American producers and customers is an older notion than the old International Harvester tractor sitting in the ditch. US-based agribusiness companies charter ships in the Black Sea and ship grain around the world. Meanwhile, two of the country’s biggest meat producers – Smithfield and JBS – are owned by Chinese and Brazilian investors, respectively.

In other words, the American farm has long since gone global.

Acknowledging consolidation was inevitable, Wertish said he was nonetheless concerned when he heard reports of farmland being sold to outside entities, whether Gates or foreign investors.

“It’s about losing control,” Wertish said, likening the loss of the local farm to the displacement of moms and pops by big-box stores. “Because once you lose control, the benefits of that land don’t stay in the local community.”