Lee R. Schroeder
The sometimes slightly preferential treatment that our government at all levels occasionally provides to farmers and other agricultural businesses is usually justified as promoting “national food security.” The idea is that America needs self-sufficiency when it comes to America’s ability to feed itself.
Foreign ownership of agricultural businesses and agricultural land is often perceived as a threat to national food security. Several trade associations have been outspoken in this regard, especially the National Farmers Union.
Due to the complexity of attracting non-threatening, positive foreign investment while not jeopardizing food independence, coupled with various other political reasons, the federal government has not formally addressed concerns about foreign ownership of agricultural businesses or agricultural land.
Similarly at the state level, to maintain food independence without adversely affecting the attraction and retention of positive, foreign business investments, many state governments have focused on limiting foreign ownership of agricultural land.
About 3.1% of all American farmland is owned by foreign people and businesses, most of whom are Canadians and investors from western Europe.
The biggest concern in regulating or limiting foreign ownership of American agricultural land is the avoidance of the potential for xenophobia, which is prejudice against people from other countries. Thus, laws based upon someone’s country of residency or citizenship are often evaluated to ensure that the law is customized and tailored to some specific concerns and not foreign residency or citizenship alone.
Since 1979, Ohio has required most non-residents who are also non-citizens of the United States and who own significant real estate in Ohio to inform the Ohio Secretary of State, who, in turn, maintains a database of those property owners.
Earlier this year, Ohio passed a law limiting some foreign ownership of agricultural land.
That new law requires the Ohio Secretary of State to create and maintain a new, master list/database (called a “registry” in the law) of certain people, entities, governments and groups that are on any of the following lists:
• All foreign adversaries as defined by the U.S. Secretary of Commerce,
• All terrorists as defined by the U.S. Secretary of State,
• All countries that have repeatedly provided support for acts of terrorism, as defined by the U.S. Secretary of State and
• Others whom the federal government has identified as providing direct or indirect financial support for terrorism.
The people, entities, governments and groups on the registry are prohibited from owning agricultural land in Ohio. The law allows those on the registry to inherit agricultural land, but beneficiaries and heirs of agricultural land who are on the registry are required to divest themselves from that inherited ownership within two years of initially acquiring ownership.
Some other states’ laws that limit or regulate foreign ownership of agricultural land are perceived as difficult or impossible to enforce.
In contrast, the new Ohio law provides a mandatory process for the Attorney General to acquire agricultural land that is illegally owned by those who appear on the registry and to reimburse the unlawful owners before re-selling that land to lawful owners.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.
