Minnesota farmers call foreign investments, billionaire buy-ups of land 'sticky situation'

James Rainwater might not be a household name in Minnesota politics.

But on Tuesday morning at a forum discussion for congressional candidates in southern Minnesota, the attorney corralled the attention of farmers in the open-air shed at Farmfest in Redwood County.

"I hear stories of Bill Gates buying up hundreds of thousands of acres for corporate farms," said Rainwater of Lake City. "I think the little guy needs some help."

It's been a summer of unease in farm country, with a flurry of national reports about Chinese investors and eco-minded billionaires buying up U.S. agricultural lands and gaining control over agribusiness ventures.

In both cases, the nation has looked to North Dakota.

Earlier this year, a Grand Forks fracas erupted after a Chinese-backed investment firm purchased 300 acres of land within 20 minutes of an Air Force base. The subsequent corn mill the group hopes to develop — still pending approval — has drawn intense scrutiny over national security concerns.

Also this summer, in an unrelated action, North Dakota's attorney general approved the sale of parcels of land in Pembina and Walsh counties to Red River Trust, a Washington-based entity with ties to the tech billionaire Gates.

In Minnesota, only 1.6% of the state's farmland is owned by foreign entities, according to the latest U.S. Department of Agriculture report. The state's laws against foreign and corporate ownership of farms keep the state relatively secure from interloping buyers. Only citizens, permanent residents or entities with less than 20% foreign investment can own Minnesota farmland.

"The vast majority — 70 to 80 percent — of farmland is sold to neighboring farmers," said Glen Fladeboe, of Fladeboe Land, a brokerage specializing in the sale of Minnesota farmland.

Doug Spanier, an attorney with the Minnesota Department of Agriculture, said other than exemptions for timber and wind-energy easements on ag land, state law ensures farmland remains controlled mostly by either farmers or their landlords.

"The Midwest states all have some sort of law preventing corporate farms," Spanier said. "And no foreign citizen can own farmland unless they've been lawfully admitted to the United States for permanent residence."

Still, both the cases in North Dakota could, feasibly, happen in Minnesota. It's not against state law for a foreign investor to own a milling plant. And Gates' Red River Trust has announced plans to lease the purchased land back to farmers, which might allay concerns about corporate farming, as it did in the North Dakota AG's perspective.

Officials with Campbell Farms, the Grafton, N.D.-based potato farm that sold to Red River Trust, did not respond to multiple requests for an interview. And it's not believed Gates owns land yet in Minnesota, though he already owns tracts in neighboring Wisconsin and Iowa.

But the mounting public concern has some farmers worried.

At the annual farm industry get-together in southwestern Minnesota last week, chit-chat among the farmers leaning against new combines or standing in line for pork chops centered on historic inflation, which has driven up the cost of fertilizer and diesel fuel.

But just behind the gripes about the cost to fill up the tractor or procure nitrogen came whispers about just who was buying up America's farmland.

"I don't think there's a lot of out-of-state or out-of-nation land purchases in our area," said Dustin Johnson, a farmer from Dawson, who was inspecting heavy equipment on Tuesday. "But it's still bigger investors that are buying land, competing with the farmers for that."

"I'm a little concerned about that [Chinese land buyers]," said Adam Lund, who also farms near Dawson. "But on the flip side, [China is] a huge importer of soybeans and some degree of corn and a lot of different ag products, so it's a sticky situation."

Over the last decade, China's Belt and Road Initiative to invest in global infrastructure has found its way to U.S. farmland, with Chinese buyers owning nearly 200,000 acres by 2020. And alarm over foreign or plutocratic ownership of U.S. farmland arrives at a time of increasing concentration — and even suspicion — in the agricultural supply line.

Last month, U.S. Rep. Dusty Johnson, a South Dakota Republican, called on Gates to appear before the House Agriculture Committee to tell the country what Gates intends to do with his 270,000 acres of land, citing the billionaire's past remarks urging developed nations to abandon animal protein. In late July, Minnesota GOP U.S. Rep. Tom Emmer and a Washington state congressman wrote a letter to the USDA, describing foreign ownership of ag-land as an "insidious threat" to America's ability to feed the country.

And in Grand Forks, the conflict over the corn mill — which city officials tout as an economic opportunity for farmers — has riven the community, with debate sometimes tinged with anti-Asian prejudice.

In Minnesota, the state enacted the alien farm and corporate farm laws in the 1970s, though Spanier insists some prohibition on the former has been around since before statehood. A fight over foreign ag property ownership last flared in the early 2000s, when Dutch dairy farmers sought leniency from state law to remain on their farms. According to a recent exemption, an E-2 visa holder may be a dairy farmer — and only a dairy farmer — on no more than 1,500 acres.

While both direct corporate and foreign ownership is outlawed, wiggle room exists. With its recent acquisition of a leading poultry integrator, for instance, Minnetonka-based Cargill inherits contracts with farmers dispensing birds and seed to growers. And in northern Itasca County, fully 150,000 acres are owned by foreign-headquartered timber operators.

The campaign of late by the nation's richest residents to privately buy up land often, though not always, carries environmental overtones. In Montana, a foundation has purchased nearly half a million acres of land it is converting to a nature preserve. In South Dakota and Nebraska, media mogul Ted Turner owns ranch land home to bison and prairie dogs. And last year, the Land Report announced that Gates is now the nation's largest farmland owner.

The image of the Seattle-reared tech billionaire riding a tractor elicited chuckles from two farmers watching the congressional forums on Tuesday. But a trend evoking associations with England's landed gentry of yore doesn't sit right in the heartland.

"The who of it all is very important," said Minnesota Attorney General Keith Ellison, speaking on the sidelines of Farmfest on Tuesday. "But I have a bigger concern with the naked buying up of farmland and concentrating it in too few hands."

On Tuesday, Ellison and Gary Wertish, president of the Minnesota Farmers Union, unveiled a "trust-buster" UTV (utility task vehicle), emblazoned with a boxing glove on the doorway. The pugilist call for better prices for farmers resonates with small producers who feel the agriculture system has become too unwieldy, corporate and international to navigate from their front porch.

But building a farm economy with only American producers and customers is a notion older than the antique International Harvester tractor sitting in the ditch. U.S.-based agribusiness companies charter ships in the Black Sea and deliver grain around the world. Meanwhile, two of the nation's largest meat producers — Smithfield and JBS — are owned, respectively, by Chinese and Brazilian investors.

In other words, the American farm has long ago gone global.

Acknowledging that consolidation was inevitable, Wertish said he was nevertheless concerned when hearing reports about farmland being sold off to outside entities, whether Gates or foreign investors.

"It's about losing control," said Wertish, comparing the loss of the locally owned farm to the displacement of mom-and-pops by big-box stores. "Because once you lose control, the profits off of that land don't stay in the local community."