Chinese spies came to South Dakota, state official tells legislators

Committee endorses bill to ban ag land ownership by foreigners from six countries

By: - February 8, 2024 4:30 pm
A combine moves through a field on Oct. 2, 2023 in Douglas County, SD. (John Hult/South Dakota Searchlight)

A combine moves through a field on Oct. 2, 2023, in Douglas County. (John Hult/South Dakota Searchlight)

During testimony Thursday on a bill to ban ownership of agricultural land by foreigners from six countries, a state official told lawmakers that Chinese spies visited South Dakota two years ago.

Hunter Roberts is the head of the state’s Department of Agriculture and Natural Resources. He testified to the state House Agriculture and Natural Resources Committee at the Capitol in Pierre.

Roberts said the department received an inquiry in 2022 from a Chinese delegation requesting to meet with him and the Governor’s Office of Economic Development, and requesting tours and infrastructure meetings with grain elevator operators, processing facilities and ag producers. 

Roberts said the department declined, but the Chinese delegation came anyway, and the federal Department of Homeland Security called state officials before the delegation’s arrival to ask about it. Roberts said the federal officials were “very concerned” about the Chinese delegation and “very pleased” that state officials were not meeting with them.

“Homeland Security told the Governor’s Office and the Department of Public Safety that these were Chinese spies,” Roberts said.

Bill would amend 1979 law

Roberts’ testimony was in favor of a bill that would ban ownership of agricultural land in South Dakota by people, companies and governments from six countries, including China. The committee voted 12-0 to recommend passage of the bill by the House of Representatives, which will consider it next. 

Department of Agriculture and Natural Resources Secretary Hunter Roberts. (Courtesy of state of South Dakota)
Department of Agriculture and Natural Resources Secretary Hunter Roberts. (Courtesy of state of South Dakota)

“Our current law needs some updating,” said Rep. James Wangness, R-Miller, the bill’s prime sponsor. “It’s hard to enforce.”

An existing state law, which dates to 1979, prohibits foreign people and governments from owning more than 160 acres of agricultural land in South Dakota. There are exceptions for land that’s inherited or held as security for debt, for foreign people and governments whose right to hold land is secured by treaties, and for foreigners who’ve established residency in the United States. 

The law requires the state Department of Agriculture and Natural Resources to monitor annual federal government reports on foreign ownership of ag land. The department is required to scrutinize the reports for any indications of illegal ownership and to refer findings to the state attorney general. The attorney general is supposed to investigate the findings and take appropriate legal action, potentially including the forfeiture of illegally owned land.

Last year, South Dakota Searchlight found the state had one record of ever acting on the existing law, which did not lead to legal action.

New bill’s provisions

The new bill goes a step further, explicitly barring any agricultural land ownership in South Dakota by entities from countries designated as prohibited entities: China, Russia, Iran, North Korea, Cuba and Venezuela. The bill includes exceptions for leases or easements dedicated to agricultural research on land up to 320 acres, or contract livestock feeding “at an animal feeding operation, by a family farm unit, a family farm corporation, or an authorized farm corporation.”

The bill keeps the cap on the amount of agricultural land that any other foreign entity can own at 160 acres.

“The problem is the existing law has some loopholes,” Roberts said, specifically mentioning a loophole for foreign corporations. The new bill closes that loophole, defining a “foreign entity” as a company with 10% or more foreign ownership. 

The new bill would leverage a bill that passed last year to improve reporting to the state. That bill requires corporations formed in South Dakota to disclose whether they own agricultural land and have any foreign owners. 

State has one record of acting on 44-year-old foreign ag land law

During Thursday’s hearing, there was no update on how many corporations have made such a disclosure since the law took effect.

Luke Lindberg with South Dakota Trade, an organization party funded by the Governor’s Office of Economic Development, testified in favor of the bill Thursday. He said that while 60% of the state’s soybeans and one-third of its pork is exported to foreign countries (largely China), “The current system is not fair and balanced.” He said China bars Americans from owning land there.

“People respond to strength and not weakness,” Lindberg said. 

Proponents pointed out that no agricultural groups testified against the bill. 

Rep. Karla Lems, R-Canton, who made the motion to pass the bill, asked if it would impact Summit Carbon Solutions’ proposed carbon dioxide pipeline project, which she said has Chinese investors. The pipeline would collect carbon emitted by ethanol plants in multiple states, including South Dakota, and transport it for underground storage in North Dakota.

Roberts said the state would have to see the company’s ownership structure, adding, “It could have an impact.”

Summit secured a $300 million investment from TPG Rise Climate in 2022, and TPG Rise Climate has mentioned the Chinese Silk Road Fund as one of its investors. 

Afterward, Sabrina Zenor, spokesperson for Summit, responded to South Dakota Searchlight with a statement: “Summit has never received any direct investment from China. US-based TPG Rise Climate, who has a non-controlling stake in Summit, has accepted non-controlling investments from institutions across the US, Canada, Europe, and Asia. These investors are TPG Rise Climate’s Limited Partners, and by definition have no control over TPG Rise Climate’s investments.”

Foreign-controlled land in South Dakota

According to the most recent federal data, South Dakota has had 307 instances of foreign people or entities acquiring more than 160 acres of ag land since the passage of the existing federal and state laws in the late 1970s. The latest U.S. Department of Agriculture report says the total area of South Dakota agricultural land held by foreigners stands at about 380,000 acres, or about 595 square miles — representing a 3,000% increase from when the existing laws were enacted over four decades ago, but comprising less than 1% of all the land in the state.

Most of those acquisitions happened after 2015. Primarily, they involved European and Canadian wind energy companies. 

However, a closer look at the latest federal report shows that among the 307 ag-land acquisitions over 160 acres in South Dakota by foreigners, only 24 involve an ownership stake greater than zero, with the rest presumably being easements. An easement is an agreement that grants a right to use somebody else’s land for a single purpose, like erecting a wind turbine.

About one-third of the foreign-controlled ag land in South Dakota was acquired by Canadians, with the majority of the remainder being from European countries including the United Kingdom, France, Spain and Germany. The rest totals less than 4,000 acres held by people or entities scattered across locations including the Bahamas, Mexico and Saudi Arabia.

Federal reports do not list any Chinese-owned ag land in South Dakota, although a Chinese company does own the Smithfield meatpacking plant in Sioux Falls, which is zoned as industrial land.

 

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Joshua Haiar
Joshua Haiar

Joshua Haiar is a reporter based in Sioux Falls. Born and raised in Mitchell, he joined the Navy as a public affairs specialist after high school and then earned a degree from the University of South Dakota. Prior to joining South Dakota Searchlight, Joshua worked for five years as a multimedia specialist and journalist with South Dakota Public Broadcasting.

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