Senate Panel OKs Bill on Foreign Ownership of Indiana Farmland
Published: Friday, March 1, 2024
A bill banning foreign ownership of Indiana farmland received unanimous approval this week from the Senate Agriculture Committee.
For nearly two hours, lawmakers heard testimony Monday on HB 1183, authored by State Rep. Kendell Culp (R-Rensselaer). Culp appeared before the Senate committee to explain the latest amendment and answer questions from the nine-member panel.
"HB 1183 prevents adversarial countries of the United States from purchasing or leasing Indiana farmland," Culp said, "and now, as amended, it also protects Indiana's military installations."
Currently, the list of adversarial countries includes China, Russia, North Korea, Iran, Venezuela and Cuba.
The committee chair, Jean Leising (R-Oldenburg), said the latest amendment addresses concerns raised by realtors, title companies and banks. Realtors were concerned about the legal responsibility which their agents might face if they failed to catch an illegal land transaction under the new law.
If a foreign adversary tries to purchase Indiana farmland through a shell company, for example, the bill provides that such land would enter a receivership. The company would also pay a fine.
"They would have to divest of that if they found that was the case," Culp said.
The amendment also grants an exemption for Syngenta, which is owned by a Chinese company, to conduct agricultural research at sites in Indiana.
"The biggest change in this bill is we have expanded the language to deal with military establishments," Leising said. "Honestly, it just seems almost like a no-brainer, but not to some people."
The amendment prohibits adversaries from purchasing farmland within a 50-mile radius of a military installation or a 10-mile radius of a maintenance facility or National Guard armory.
Also, students from adversarial nations are given an exemption so they can rent a dorm room or apartment.
So far, the bill has sailed through the House and is likely to enjoy the same success in the Senate. However, some of those who testified during Monday's hearing, including Chris Daily of the American Civil Liberties Union, say the measure is too broad. He said it would unfairly prohibit a person fleeing from an adversarial country from renting or buying farmland here in Indiana, and that its 50-mile setback from military installations is too much.
There were also concerns about how this proposal would affect a person with dual citizenship, but Culp said those individuals would be allowed to buy or rent farmland if they are U.S. citizens.
Canada is the leading foreign owner of U.S. farmland, but Culp said China has been increasing its investment, currently at roughly 400,000 acres, "at an alarming rate."
Overall, foreign ownership of U.S. farmland has been growing by 2.2 million acres per year since 2015. In Indiana, foreign entities own 2.2% of farmland, Culp said.
Twenty-four states have passed legislation to ban foreign ownership of farmland.
Brian Cavanaugh, who formerly worked for the Department of Homeland Security, testified that China poses a significant threat to critical U.S. assets, such as farmland. He added that China is acquiring critical infrastructure "as a means to hold our country at bay."
"Instead of wanting to confront the U.S. with a military conflict, what they are doing is prepositioning stuff in a way that they can cripple our economy, cripple our society, and give them the window to achieve an outcome that they have."
Andy Tauer, executive director of public policy for Indiana Farm Bureau, said INFB members are concerned about the rapid rise of foreign investment in the Hoosier state and what that might mean for food security and national security.
Another Farm Bureau speaker, Kevin Underwood of Tippecanoe County, said food security is national security.
"I've heard it said that one day without food a person will complain," he said. "Two days without food and they will consider stealing. Three days without food and they will likely go to murder."
Mark Shublack of the Indiana Economic Development Assn. said his group supports the bill but believes it should be "nuanced." He urged lawmakers to look at the unintended consequences of passing legislation that could hurt economic growth. One example is a development park that is zoned for commercial or industrial use but has some farmland on it.
In Northwest Indiana, a group of Farm Bureau chapters are opposing Culp's bill because of a proposal to build a corn milling plant on several hundred acres in the Kingsbury Industrial Park in LaPorte County. The 6,000-acre park served as a munitions depot during World War 2 and the Korean War but is now abandoned. The site is served by two Class 1 railroads, water, sewer and electricity and has been identified by local planners as a site for future economic development.
Mark Parkman, LaPorte County Farm Bureau president and a member of the county's redevelopment commission, did not attend Monday's hearing in Indianapolis but said he has talked with several key lawmakers, urging them to include an exception for farmland in industrially zoned areas. So far, his efforts haven't persuaded Culp or other lawmakers to include that language.
"I can guarantee you that if this bill passes the way it is written right now, we won't have the opportunity" for this project.
The company seeking to build the corn milling plant is Fu Feng, the same Chinese-owned company that was prevented from building a plant near a military base in North Dakota nearly one year ago.
"Yes, it's been farmed in the past, but it has facilities all the way around it," Parkman said of the Kingsbury site. "It's not what the majority of people in Indiana believe is Indiana farmland."
He said the corn mill plant will annually buy 25 million bushels of locally produced corn and convert it into amino acid feed products for the livestock industry. He said that would be the equivalent of 500 semi loads of corn per week.
Parkman said the size of the plant would be a game-changer for local grain producers. It would create 300 jobs and have an $800 million economic impact for LaPorte County.
"As farmers, this is where we want to see growth," Parkman said.
During his turn at the podium on Monday, Tauer was asked by Leising about the corn milling project proposed for LaPorte County.
"You guys are going to get some pressure from them (LaPorte County FB) to say, 'Why would our own farm organization be opposed to allowing us to have a mill that we need for delivery of grain?'" Leising said.
In his response, Tauer said he appreciates the idea of a new market but said INFB members spoke clearly last summer when they adopted language supporting a ban on foreign ownership of farmland.
"That's where we're at," he said. "We already know we're going to have some folks in that part of the state upset with us."
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