Acquisition and Disposition of U.S. Agricultural Land by Foreign Investors: Federal and State Legislative Restrictions, Limitations, and Disclosure Requirements

Foreign ownership of U.S. agricultural land has seen a notable rise—from 14.6 million acres in 2004 to 26.8 million acres by the end of 2015—spurring renewed legal and public attention. This article provides a structured overview of the Agricultural Foreign Investment Disclosure Act (AFIDA), a federal law enacted in 1978 that mandates foreign persons acquiring or transferring interests in U.S. agricultural land, including leases over ten years or indirect ownership via entities exceeding a 10% threshold—to file a Form FSA 153 with the USDA within 90 days. Noncompliance can result in penalties up to 25% of the land’s fair market value, plus cumulative weekly fines.

The article further explores parallel state laws that either mirror AFIDA or impose additional constraints. States such as Alaska, Arkansas, Illinois, Iowa, Maine, Missouri, and Ohio require disclosure of foreign-held agricultural interests, sometimes allowing federal AFIDA filings to satisfy state obligations. Other states enforce acreage limits (e.g., South Dakota restricts non-resident aliens to 160 acres, South Carolina to 500,000 acres), and some impose outright ownership bans, including Iowa, Minnesota, Missouri, Nebraska, North Dakota, and Oklahoma. The combination of federal and state regulations underscores the complexity of agribusiness transactions involving foreign participation, emphasizing the need for early diligence to ensure compliance and avoid financial or reputational consequences.