Bill would require companies to disclose ag land and foreign owners

In a unanimous vote Thursday, the South Dakota House Agriculture and Natural Resources Committee passed a bill requiring companies to disclose whether they own agricultural land and have any foreign owners.

The bill will now move to the full House for consideration.

The bill is a response to a loophole in a law passed in 1979 that was designed to prevent some foreign individuals and governments from owning more than 160 acres of farmland. Despite that law, records in 2016 published by the Midwest Center for Investigative Reporting showed multiple examples of foreigners owning more than 160 acres in South Dakota.

Jon Van Patten is an assistant attorney general for the state and previously served 38 years as a law professor at the University of South Dakota. He told South Dakota Public Broadcasting the 1979 law has a loophole, because it only addresses foreign residents and governments.

“Who else besides an alien and a foreign government could own property? And the answer would be a corporation,” Van Patten said.

Under the new legislation, when corporations file already mandated annual reports with the state, they would have to disclose whether they own any agricultural land and whether they have any foreign owners. The bill would not require those owners to say what country they’re from.

The bill’s sponsor, Rep. Will Mortenson, R-Pierre, stated during testimony at the Capitol in Pierre that while the bill does not stop foreign corporations from buying agricultural land, it at least identifies them.

“We’re just requiring disclosure,” Mortenson said. “And then if we want to start closing that loophole, we’ll have an enforcement mechanism that the attorney general can start pursuing, and we can build out what that looks like.”

The bill received support from members of South Dakota’s agricultural community, who view it as a step toward greater accountability and transparency in ownership of the state’s agricultural land.

According to data from the U.S. Department of Agriculture, foreign residents or entities now own over 350,000 acres of ag land in South Dakota. That’s about 1% of all South Dakota agricultural land, but a greater than 3,000% increase from 1979. The largest foreign owners of South Dakota farmland are from Europe and Canada.

Land ownership by China, specifically, has become a top concern of Gov. Kristi Noem and other politicians. She supports a bill to establish a vetting process for foreign purchases of agricultural land in South Dakota. That bill, which has not yet had a hearing, includes creating a board to investigate proposed purchases of ag land by foreign interests, and to make recommendations of approval or denial.

“With this new process, we will be able to prevent nations who hate us – like Communist China – from buying up our state’s agriculture land,” Noem said in a news release.

There is currently no Chinese ownership of ag land in South Dakota, according to the USDA data. The Chinese-owned Sioux Falls Smithfield packing plant does not appear in the data, apparently because it’s within Sioux Falls city limits and is classified as industrial land – something Mortenson’s bill, which only targets ag land, does not address.