Foreign Investments in U.S. Agricultural Land: Enhancing Efforts to Collect, Track, and Share Key Information Could Better Identify National Security Risks
Fast Facts
Foreign investment in U.S. agricultural land grew to about 40 million acres in 2021, per USDA estimates. This can pose national security risks—such as when foreign interests buy land near U.S. military installations.
USDA annually publishes data on agricultural land investments, which DOD, Treasury, and other agencies may review for risks. DOD noted that it needs more specific and timely data.
USDA needs to collect, track, and share the data better, and developing a real-time data system would help. For example, USDA annually compiles its data from paper forms filed with headquarters or county offices. Our recommendations address this and more.
Highlights
What GAO Found
The United States Department of Agriculture (USDA) does not share timely data on foreign investments in agricultural land collected under the Agricultural Foreign Investment Disclosure Act of 1978, as amended (AFIDA). Committee on Foreign Investment in the United States (CFIUS) agencies, including the Department of Defense (DOD) and the Department of the Treasury, identify and review transactions that may pose national security risks, such as the proximity of agricultural land to a sensitive military base. USDA annually publishes selected AFIDA information online that CFIUS agencies may use when considering potential national security risks associated with agricultural land. In addition, USDA officials said they respond promptly when they receive requests for information. However, DOD officials noted they need AFIDA information that is more up-to-date and more specific, and they need to receive this information more than once a year. USDA has requested funding to develop a real-time data system that can be accessed by other U.S. government agencies and the public. Meanwhile, sharing current data could help increase visibility into potential national security risks related to foreign investments in U.S. agricultural land.
AFIDA Data Are Not Regularly Part of CFIUS Reviews
USDA implements AFIDA across field offices and headquarters, but its processes to collect, track, and report key information are flawed. USDA collects the required data on paper forms with county or federal offices and reviews them for accuracy, according to USDA officials. However, its processes to do so are unclear and challenging to implement. For example, USDA's AFIDA handbook provides limited instructions on how to collect reliable AFIDA information. In addition, although Congress required USDA to create an online submission process and public database for AFIDA data by the end of 2025, USDA does not have plans and timelines to do so, in part because USDA has not received funding. USDA also does not sufficiently verify and conduct quality reviews to track the accuracy and completeness of its collected AFIDA data. GAO's review of AFIDA data current through calendar year 2021 found errors, such as the largest land holding associated with the People's Republic of China being counted twice. USDA has begun efforts to identify AFIDA non-compliance through data mining, according to officials, and has opportunities to expand this practice. But without improving its internal processes, USDA cannot report reliable information to Congress or the public about where and how much U.S. agricultural land is held by foreign persons.
Why GAO Did This Study
USDA estimated that foreign investment in U.S. agricultural land grew to approximately 40 million acres in 2021. These investments may have consequences for U.S. national security. For example, there may be foreign ownership of U.S. agricultural land close to sensitive military installations.
CFIUS is an interagency committee that reviews certain foreign transactions to determine potential effects on U.S. national security. These include foreign investments in U.S. agricultural land. In addition, USDA's AFIDA statute, enacted in 1978, requires foreign persons acquiring or transferring agricultural land to file a disclosure form with USDA.
GAO was asked to review foreign investments in U.S. agricultural land. This report examines the extent to which (1) USDA shares information related to foreign investments in U.S. agricultural land with CFIUS for its national security reviews, and (2) USDA's processes enable it to collect, track, and report reliable data on foreign investments in U.S. agricultural land. GAO reviewed laws, regulations, and agency guidance; analyzed USDA data; and interviewed agency officials.
Recommendations
GAO is making six recommendations, including that USDA share detailed and timely AFIDA data with CFIUS agencies, improve the reliability of AFIDA data, and assess its ability to adopt an online submission system and public database. USDA generally agreed with our recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | The Secretary of Agriculture should ensure that the Chief Operating Officer of FPAC-BC, in coordination with relevant CFIUS member agencies, establish a process to provide detailed and timely AFIDA transaction data relevant to foreign investments in agricultural land to CFIUS member agencies, including DOD and Treasury. Such information could include whether a party has filed a disclosure, who filed it, and when it was filed. (Recommendation 1) |
USDA concurred with this recommendation. In July 2024, USDA officials stated that, as of February 2024, the department had procedures in place to flag AFIDA transactions for CFIUS review. Specifically, USDA officials send Farm Service Agency form filings (FSA-153) from investors from the People's Republic of China, Russia, North Korea, and Iran to DOD and FBI counterparts, as well as to USDA's Office of Homeland Security-its office responsible for coordinating with CFIUS agencies on national security issues. USDA officials told us that it will be difficult to provide real-time filings except through the manual process without a funding appropriation sufficient for development and maintenance of an online filing portal. In addition, officials indicated that the real-time filings they can provide through the manual process are limited to those related to investors from the People's Republic of China, Russia, North Korea, and Iran, but not for investors from other countries. The officials stated that if sufficient funding becomes available for a filing portal, FPAC-BC will work to ensure that relevant CFIUS member agencies have access to detailed and timely AFIDA transaction data, either directly through the portal or through weekly or monthly FSA-153 filing summaries. We will continue to monitor the implementation of this recommendation.
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| Department of Agriculture | The Secretary of Agriculture should direct the Administrator of FSA, as FPAC-BC updates the AFIDA handbook, to clarify and provide specific instructions to headquarters and county employees for completing AFIDA responsibilities, including reviewing the accuracy of forms and identifying missing information. (Recommendation 2) |
USDA concurred with this recommendation. USDA officials told us that as of February 2024 AFIDA staff in FPAC-BC planned to review the handbook processes to identify relevant improvements in calendar year 2024. They will then develop specific steps for FSA field staff and AFIDA specialists to best validate accuracy of the AFIDA data. In addition, USDA officials noted that they will update the FSA-153 filing form based on their evaluation of the data it captures and public comments, and will then submit the revised form to the Office of Management and Budget for approval. In July 2024, USDA officials told us that these efforts are still underway. We will continue to monitor the implementation of this recommendation.
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| Department of Agriculture |
Priority Rec.
The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC and the Administrator of FSA to jointly complete an analysis to determine the extent to which the agency can satisfy the requirements of the Consolidated Appropriations Act, 2023 to create an AFIDA online submission system and public database within its expected budget. If the analysis shows that the agency would be unable to meet the requirements of the Consolidated Appropriations Act, 2023, USDA should report the results to Congress and recommend appropriate legislative changes. (Recommendation 3) |
USDA concurred with this recommendation. In March 2024, USDA officials stated that it is difficult to modernize AFIDA information technology without additional funding and that there is no timeline for the creation of the new AFIDA online submission process. USDA put forward a request for $1 million for AFIDA, which was included in the agency's final budget for fiscal year 2024. In July 2024, USDA officials told us that as a first step in creating an online AFIDA filing portal, USDA is working to capture the best possible data. To this end, in 2023, USDA evaluated the data captured on the FSA-153 form and developed a new form to improve the accuracy of the data it captures, such as leaseholds and the impacts of foreign investment. According to USDA officials, the department posted the proposed revised FSA-153 form in the Federal Register in December 2023. In July 2024, USDA officials said they planned to finalize revisions to the form, including incorporating public comments and submit it to the Office of Management and Budget for approval by November 2024. We will continue to monitor the implementation of this recommendation.
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| Department of Agriculture | The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC to improve its verification and monitoring of collected AFIDA data, such as reviewing and validating information throughout the AFIDA data collection process. (Recommendation 4) |
USDA concurred with this recommendation. In July 2024, USDA officials told us that FPAC-BC staff met weekly from January 2024 through May 2024 to discuss the review and validation of AFIDA data. In particular, they focused on improving three types of potential AFIDA data errors: (1) data entry errors made by headquarters staff when they manually enter information form hard copy FSA-153 forms into the existing Microsoft Access AFIDA database, (2) errors made by filers when filling out the FSA-153 form that AFIDA staff have not identified, and 3) outdated data in the AFIDA database that do not match current property tax records. As of February 2024, FPAC-BC officials were also considering other internal control actions that could add rigor to AFIDA processes. USDA officials plan to complete these efforts in September 2024. In addition, as of February 2024, FPAC-BC officials said they are working with FSA field staff to identify whether USDA's more than 200 records on reported holdings by investors from the People's Republic of China, Russia, Iran, and Cuba include accurate information about current land ownership. We will continue to monitor the implementation of this recommendation.
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| Department of Agriculture | The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC, in coordination with the Administrator of FSA, to continue data mining activities that compare AFIDA data to FSA program data to identify suspected non-filers. (Recommendation 5) |
USDA concurred with this recommendation. USDA officials told us that as of February 2024 they were requesting agricultural land transaction data from states with new laws requiring disclosure of such transactions and from other U.S. government agencies that may have such data. In July 2024, USDA officials told us that these efforts are still underway. We will continue to monitor the implementation of this recommendation.
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| Department of Agriculture | The Secretary of Agriculture should direct the Chief Operating Officer of FPAC-BC to ensure its AFIDA reporting is complete, such as incorporating country information from additional foreign persons beyond the primary investor when available. (Recommendation 6) |
USDA generally concurred with this recommendation. In July 2024, USDA officials told us that for new filings starting in 2023 and beyond, the department will provide data on secondary and higher interests associated with investments from the People's Republic of China, Russia, Iran, and North Korea. Officials stated that this information will be included in the Foreign Holdings of U.S. Agricultural Report through December 31, 2023. However, USDA officials noted that to accurately capture secondary and higher interests for all countries, they would need an online filing portal with the burden placed on the filer to accurately provide the information. We will continue to monitor the implementation of this recommendation.
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