NC lawmakers vote to ban China, Russia from buying up farmland

North Carolina House lawmakers passed a bill Wednesday banning hostile foreign countries from buying local farmland — or any land within 25 miles of one of the state's many military bases.

The definition of a hostile foreign country is up to the federal government. Right now the list includes China, Russia, Iran and North Korea. None of those own very much land in the U.S. But of them, China owns the most.

The bill bans land ownership by any individual or entity that’s owned or controlled at least 50% by one of those foreign governments — or which takes direction from one of those countries even if the ownership is under that 50% threshold.

"As someone who grew up on a family farm, preserving North Carolina’s farmland is a top priority," Rep. Jennifer Balkcom, R-Hendersonville, said in a press release after the bill passed the House Wednesday. "Our state’s agricultural land is one of our most important assets and it is common sense that we protect it from foreign governments that do not have America’s best interests in mind."

North Carolina is the nation's biggest exporter of tobacco, and one of the biggest pork exporters — and China is one of the top importers of both. State House Majority Leader John Bell, (R-Goldsboro,) said in an earlier interview that he's not aware of China buying up any farmland specifically in North Carolina. He considers that good news and hopes this bill becomes law to make sure it stays that way.

"I don't know of any of those situations happening in North Carolina so far," Bell said. "But I'd rather deal with it before it happens."

A spokesperson for the Chinese embassy in the U.S. didn't immediately respond to a request for comment.

The bill passed the chamber unanimously Wednesday, 114-0, following a last-minute amendment. That change made it clear that if someone does sell land to a person or company who should've been banned from buying the land, the seller wouldn't face any civil or criminal penalties.

The bill next goes to the state Senate.

Many other states are considering similar proposals, ranging across the political spectrum from New York and California to North Dakota and Utah. The bipartisan support extends to North Carolina, too. A number of Democrats co-sponsored the bill including Rep. Robert Reives of Chatham County, the Democratic leader in the House.

These types of bills, which are in state legislatures across the country, aren't targeting anything that's already happening. Companies with ties to China are responsible for just a tiny fraction of foreign-owned land inside the United States, which is itself a tiny fraction of the total amount of U.S. land.

At the end of 2021, companies with Chinese interests owned about 383,000 acres in the U.S., according to the U.S. Department of Agriculture. The total — roughly the size of Harnett County — is less than 1% of foreign-held acres, the department reported. Much of that land transferred to Chinese ownership in 2013 when a Chinese company bought Smithfield Foods, according to Stateline, an initiative of The Pew Charitable Trusts.

Smithfield Foods, which owns processing plants and a number of farms in North Carolina, said the bill before the state legislature wouldn’t apply to it because the company doesn’t fit the criteria outlined in the bill.

The company today owns about 128,000 acres of agricultural land in the U.S, which is less than one-one hundredth of a percent. “There are many important issues between the United States and China,” Smithfield Foods spokesman Jim Monroe said. “This is not one of them.”

He added in a statement: “Smithfield buys and sells farmland in the U.S. in support of the same principles that guide all of our business strategies — to promote efficiencies and improve results. Since 2013 we have sold more farmland than we have purchased.”

Foreign ownership of U.S. farmland, long a national security focus of lawmakers, has gained increased interest in the past year on the federal level as well.

In October dozens of lawmakers, including the Republican leader of the U.S. House Committee on Agriculture, asked the U.S. Government Accountability Office to study the impact of foreign investment in U.S. farmland on national security, trade and food security.

An increase in foreign ownership and investment in U.S. agricultural land over the past decade elevated their concerns, U.S. Rep. Glenn Thompson, a Pennsylvania Republican, said in a letter to the GAO that was signed by more than 100 members of Congress, including six from North Carolina.

The Smithfield deal in 2013 drew particular scrutiny from lawmakers at the time. Hong Kong-based Shuanghui Group paid about $4.72 billion for Smithfield, a deal that was approved by the Committee on Foreign Investment in the United States, which vets such transactions.

During a 2013 U.S. Senate committee hearing on foreign purchases of food companies, Daniel Slane, a member of the U.S.-China Economic and Security Review Commission at the time, suggested that Smithfield was controlled by the Chinese government because its purchase was funded in part by the state-owned Bank of China.

The company, now called WH Group, is a publicly traded company. The company said it isn’t owned or controlled by the Chinese government and that it doesn’t undertake commercial activities on behalf of the Chinese government.

“Smithfield Foods makes enormous economic contributions to the state of North Carolina,” Monroe said.

Correction: A previous version of this article incorrectly described the ownership of Smithfield Foods. The company is owned by WH Group, a public company based in Hong Kong.