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Praveen Srivastava Group

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Askold Horns
Askold Horns

Buying Farmland

"This is no small amount of food we're talking about," Johnson says. "In recent years the Chinese Communist Party has increased their holdings of foreign farmland ... by 1000%. They own 1,300 agricultural processing facilities outside of China, and that number is growing rapidly."

buying farmland

Rep. Johnson is among the bipartisan group of lawmakers who support the PASS Act, which would create a federal ban on China, Iran, North Korea or Russia buying U.S. agricultural land or processing facilities.

Johnson, a co-sponsor of the bill, says Chinese holdings are a very small portion of total farmland in the U.S. right now, but the issue may become a larger focus for the new House committee. The panel is planning future field hearings, which could include traveling to a state to highlight the issue of China's investment in land or agricultural businesses.

Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations. With a maximum loan amount of $600,000 ($300,150 for Beginning Farmer Down Payment), all FSA Direct Farm Ownership Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers. The funding comes from Congressional appropriations as part of the USDA budget.

1. WHY do you want to buy a farm? Are you interested in farming as your livelihood or just as a lifestyle? Might it be better for your farm enterprise to lease farmland instead of purchasing farmland? Though it might be a bit dated, this easy to read resource from ATTRA entitled Finding Land to Farm: Six Ways to Secure Farmland offers a quick overview.

4. WHAT ARE YOUR FINANCIAL RESOURCES? What you could pay for a mortgage payment for the next 15 to 30 years! Remember that buying the land is only part of your farming dream and farm improvements such as a farmhouse, barns, and other infrastructure must also be considered as you budget your farming operation.

FSA makes and guarantees loans to farmers who are unable to obtain financing from commercial lenders. You can use FSA loans to pay normal operating or family living expenses, purchase and develop farmland, implement approved conservation plans, and buy farm structures, seeds, livestock and equipment.

On the state level, regulations vary. Most states, like Texas and Maine, have no restrictions on foreign ownership of land, contributing to the large amount of farmland that is under foreign control in these states. Six states forbid any foreign landholdings, and some, like Missouri, put caps on how much land can be held by foreign entities.

A4: Since the 2013 purchase of Smithfield Foods, multiple bills have been proposed to provide more oversight of foreign investments in U.S. agricultural companies (including in 2017 and 2020), but until recently they each died in committee. Even if these bills had passed, they would have strengthened oversight on purchases of U.S. companies, not agricultural land specifically, leaving most land acquisitions unregulated. Furthermore, policymakers have signaled no efforts to improve state- or national-level information on foreign purchases of U.S. farmland, leaving the true picture obscured.

A5: Land grabbing is more of an immediate threat to food security in other parts of the world than it is in the United States, but it could become a greater threat in the future if more farmland is sold and if foreign investors continue to buy available farmland. The U.S. farmer population is aging, with an average age of 57.5 in 2017, up from 55 in 2012. The National Young Farmers Coalition (NYFC) anticipates that two-thirds of farmland will change hands over the next decade as farmers retire, meaning that more land could become available for foreign purchase.

It is important to note that foreign entities are not the only ones aggressively buying up U.S. farmland. Many large corporations, pension funds, and wealthy individuals are investing in agricultural land in the United States and abroad. Advocacy groups like the National Family Farm Coalition argue that the larger threat to national security is corporate capture of U.S. land resources, whether those corporations are U.S.- or foreign-owned. The NYFC also points to both urban and rural development as a threat to the future of U.S. farms, since converting farmland to other uses drives up prices and makes the land unaffordable for beginning farmers. Along similar lines, climate-related efforts to increase biofuel production and expand afforestation and reforestation could reduce the amount of land available for food production in the future.

For long-term U.S. food security, perhaps the larger concern is why up-and-coming U.S. farmers are unable to buy the land they need. According to the NYFC, young and aspiring farmers say access to land is their largest barrier to starting a successful farm business. With an aging U.S. farmer population and not enough new farmers able to enter the industry, more land will inevitably be converted to other uses or sold to foreign and domestic investors unless policies are put in place to support the next generation of farmers. Focusing narrowly on land purchases by Chinese companies or other foreign entities will not address the full scope of this problem. Policymakers should, instead, consider the many threats facing the future of the U.S. food system and ensure that current and aspiring farmers have the resources they need to secure long-term U.S. food production, starting with access to affordable farmland. In addition to federal action, some states, like Arizona, could do more to protect their local resources and communities from exploitation by domestic and foreign entities.

A previous version of this Critical Questions incorrectly stated that upon acquiring Smithfield Foods, WH Group (formerly Shuanghui) owned 146,000 acres of Missouri farmland. This piece has been corrected to state that upon acquiring Smithfield Foods, WH Group was reported to own 146,000 acres of farmland across the United States, including approximately 42,000 acres of farmland in Missouri as of 2015.

As the only working farmer in the U.S. Senate, Tester has long been an advocate for increased market transparency and a stronger food supply system. During a Senate Banking Committee hearing this past year, Tester pushed for answers about how the federal government tracks foreign investment in American farmland and agribusiness.

That could change soon. An investment company has purchased nearly 500 acres of farmland and wants to strip it of its water and send it 200 miles across the desert to a Phoenix suburb, where developers plan to build thousands of new houses.

Similar deals could follow as the demand for water in the growing Southwest outpaces the dwindling supply. Investors have begun buying thousands of acres of farmland to acquire the water, which they view as an increasingly valuable asset.

Here along the western edge of Arizona, the investment company Greenstone bought 485 acres of farmland and now awaits federal approval to sell most of its water entitlement from the land to the town of Queen Creek, one of the fastest-growing suburbs in Arizona.

The fields that would be left dry represent a small portion of the vast stretches of farmland this company and other water-focused investors have been buying, properties where the water could be taken, partially or entirely, to quench the thirst of growing cities and suburbs.

These large-scale purchases of farmlands have occurred as years of severe drought and the effects of climate change have contributed to dramatic declines in reservoirs along the Colorado River and throughout the West. As water has grown scarcer, investors have stepped in to try to profit by offering water to the highest bidders.

An examination of property records by The Arizona Republic found that Greenstone and related companies have bought at least 8,863 acres of farmland in three Arizona counties in recent years. They have amassed enough land in Yuma County to trigger alarms among longtime residents, whose water rights are among the most valuable on the lower river.

Unlike the water entitlements tied to the land in Cibola, which are held by a Greenstone LLC, the water that flows to farmland in Yuma County is based on higher-priority rights and is administered by irrigation districts like the Yuma Mesa Irrigation and Drainage District and the Wellton-Mohawk Irrigation and Drainage District. This means that, under the current rules, a single landowner cannot independently strike a deal to move water to another community like the agreement between Greenstone and Queen Creek.

Decisions about water in the irrigation districts are made by the district boards. Some people critical of water transfer deals, like Noble, say that buying up irrigable land is one way to gain influence on these boards, ultimately paving the way for more transfers.

Mullion is one of a handful of growers who work in Cibola, and he lives across the river in California. To get to his fields from Blythe, he passes through farmland in the Palo Verde Valley and then crosses a narrow bridge into Arizona.

Deals that move water away from farmland have bred distrust in some communities. Several years ago, the agency that manages the Central Arizona Project considered buying farmland in Mohave County and leaving some land fallow to put the water into the CAP Canal and send it to cities. Water Asset Management owns land where the water would have been transferred away. After an outpouring of opposition, the agency's directors dropped the proposal in 2018.

Property records show that Water Asset Management and Vidler both own farmland in the Harquahala Valley, one of the groundwater basins where state law allows groundwater to be pumped and transferred to other areas. Emails released by state agencies show these companies and Greenstone have regularly talked with officials about planned water deals. 041b061a72


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