Arkansas Takes On Foreign-Land Ownership With New Rule
In a nationwide first, Arkansas, under the direction of Gov. Sarah Huckabee Sanders, will enforce foreign-ownership land restrictions. On Oct. 17, Sanders ordered a China-owned company to drop farmland in northeast Arkansas.
Specifically, Sanders directed Northrup King Seed Co., a subsidiary of Syngenta owned by Chinese Communist Party (CCP)-controlled ChemChina, to divest of 160 acres of Craighead County farmland within two years. ChemChina is listed by the Department of Defense as a Chinese military company carrying threat potential to the U.S.
“I'm announcing that Syngenta, a Chinese state-owned agrichemical company, must give up its land holdings in Arkansas,” Sanders asserted.
Additionally, Arkansas Attorney General Tim Griffin levied a $280,000 fine against Syngenta for failure to disclose ownership.
“… In this particular case, the latest the disclosure the ownership of this land could have been filed was June of last year,” Griffin explained. “It was late, and so under that law … the AG can fine a civil penalty … up to 25% of the value of the property. The property in this case is $1.12 million, according to Syngenta's own federal filing.”
“This is the first time that we’ve seen some kind of foreign ownership law enforcement action,” noted Micah Brown, staff attorney for the National Agricultural Law Center, in a University of Arkansas release. “There’s been a lot of attention on states enacting these laws, but there wasn’t much enforcement action, if any at all.”
Sander’s action stems from Act 636, passed in 2023 by the Arkansas state legislature. Act 636 blocks “prohibited foreign-party-controlled business” from owning public or private land directly or through affiliation. The “prohibited foreign-party” text refers to entities subject to the federal International Traffic in Arms Regulations, or ITAR. China is in the ITAR crosshairs.
Empty Cupboard
Foreign ownership of U.S. farmland has come to the fore in 2023. Beyond Arkansas, a Florida law bans Chinese nationals from property ownership. Montana banned farmland (near military areas) sales to six countries — including China. Alabama, Louisiana and Texas have pending legislation aimed at regulation of foreign farmland ownership.
“Most of the 2023 enactments were directed toward what I call the ‘Big Four: It's China, Iran, North Korea and Russia,” Brown said.
Significantly, Sanders' announcement comes a decade after the Arkansas rice industry was targeted by CCP espionage. Chinese national Weiqiang Zhang studied biotech crop production at Kansas State University and gained employment at Ventria (a Kansas-based private biopharmaceutical corporation) as a seed breeder.
He gained access to a climate-controlled seed room and stole samples representing $75 million in research. Zhang then used USDA letterhead to send counterfeit letters to six crop research colleagues in China, inviting them on a tour of Ventria and several more U.S. agriculture stops. Zhang’s delegation made the rounds (including Dale Bumpers National Rice Research Center in Stuttgart, Ark., where Zhang’s main accomplice, Wengui Yan, worked as a research geneticist) in 2013. However, while attempting to exit the U.S., the delegation was nabbed by U.S. Customs agents during a routine luggage inspection that revealed hundreds of stolen seeds, including corn, rice, soybeans, and wheat. Zhang was sentenced to roughly 10 years in prison.
State-Owned Enterprises
And if ChemChina refuses to relinquish farmland ownership in Arkansas?
“To the extent actors are out of the country, it’s hard to physically get access to them,” Griffin stated. “But to the extent that they have assets within the state, we can take legal proceedings against that. I have full confidence that they’re going to divest themselves of the property and they are going to pay the fine.”
“Because of the nature of China's government structure, SOEs—state-owned enterprises—are a way of doing business and so the idea that there's all these prosperous, large and growing Chinese companies that don't have ties to the Chinese government—direct ties—that’s just not the case,” Griffin added. “There are varying degrees of ties, but in this case, these are Chinese-government owned.”
For information on foreign ownership of U.S. farmland, see National Agricultural Law Center resources.
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