Attempts to block foreign ag-land ownership continue, despite existing laws that address it

PIERRE — Efforts to prevent and root out existing foreign ownership of agricultural land in South Dakota are still in progress, despite the Legislature’s rejection of a proposal from Gov. Kristi Noem, and despite a set of 44-year-old state laws that already facilitate some of what lawmakers are trying to accomplish. 

The governor’s bill would have created a committee to consider foreign purchases of ag land and make recommendations of approval or denial to the governor. The bill was intended to prevent ownership of ag land by countries viewed as hostile to the United States, such as China. But the governor’s bill was defeated.

Meanwhile, a bill from House Majority Leader Will Mortenson, R-Pierre, would require companies to disclose whether they own any agricultural land, and whether they have any foreign owners. The disclosures would be made in annual corporate reports that companies are already required to file. The bill has passed the House and awaits a vote in the Senate.

New bill’s intent

Part of Mortenson’s aim is closing a perceived loophole in existing state laws. Those laws, which date to 1979, prohibit foreign people and governments from owning more than 160 acres of agricultural land, with exceptions including land that’s inherited, land covered by treaties, and land held by foreigners who have residency in the United States.  

The laws do not specifically mention companies or corporations. Records from the U.S. Department of Agriculture show there are some foreigners and foreign-held corporations who own more than 160 acres of ag land in South Dakota, while the total amount of ag land in the state held by foreigners is more than 380,000 acres.

Closing the perceived loophole for companies, Mortenson said Thursday, “is my intention, and that is what I would like to continue working toward.”

But the 1979 laws appear to account for much of what Mortenson is trying to achieve.

Existing laws

Those laws say the state Department of Agriculture and Natural Resources must monitor the reports of foreign ownership of ag land in South Dakota that are produced by the U.S. Department of Agriculture. The reports are required by the federal Agricultural Foreign Investment Disclosure Act of 1978. 

The state laws further require the Department of Agriculture and Natural Resources to gather any indications of illegality revealed by the reports, and then to refer that information to the state attorney general for an investigation and potential legal action to force the forfeiture of any illegally owned land.

South Dakota Searchlight has asked whether DANR monitors the reports from the USDA, whether DANR refers any instances of non-compliance with the 160-acre rule to the attorney general, and whether the attorney general investigates and takes action against illegal land holdings. Representatives of DANR and the Attorney General’s Office have acknowledged the questions and said they’re seeking answers.

Attorney General Marty Jackley also said his office is watching Mortenson’s bill.

“We’re monitoring it, but we’re not taking a position on it,” Jackley said. 

Mortenson said he remains committed to doing something more than existing state law requires.

“We need to ensure our laws are followed,” Mortenson said in a written statement. “The state has a role in monitoring foreign ownership of agricultural land.”

Sponsor of ’79 laws obtains data

Former legislator Kent Frerichs, of Wilmot, sponsored the 1979 legislation in South Dakota. He recently obtained the 2021 report of foreign ag ownership in South Dakota from the USDA and shared it with South Dakota Searchlight. 

The report lists 700 parcels of land in the state owned by foreign people or entities, including companies. Of those, about 50% are individuals and entities that own under 160 acres of land. The majority of the other 50% are European- and Canadian-owned wind farms and dairies. None of the land is held by Chinese owners, although a Chinese company owns the Smithfield packing plant in Sioux Falls, which is technically not classified as agricultural land. 

What the USDA database does not disclose is whether those foreign owners who hold more than 160 acres are covered by the exceptions in South Dakota’s 1979 laws, or whether they’re holding land in South Dakota illegally. That’s something the state laws require DANR and the Attorney General’s Office to determine.

Frerichs has been frustrated by what he views as the failures of state government, the governor and the Legislature to utilize those existing laws before trying to enact new legislation. He believes the current laws could be effective if they’re enforced.

“I seriously wonder if the governor and Legislature have looked at the current statute,” Frerichs said.