Valley legislators amended bills to prevent foreign powers from owning agricultural land and having rights to water and food production.

But concessions to the bill may have little impact on what lawmakers want to resolve.

Senator Melissa Hartado (D-Bakersfield)’s Senate Bill 224 prohibits foreign government- and state-backed corporations from owning agricultural land in California and restricts who has water rights on what land. I plan to create an inventory of

The issue of land ownership by foreign powers came up in national debates after the pandemic showed the fragility of the global economy.

Foreigners Siphon U.S. Water Supply Shrink

Saudi Arabian companies rent land from the Arizona Land Department to grow alfalfa and send it back to the country to feed cattle. In 2016, drought-stricken Saudi Arabia banned alfalfa farming.

Farmers and local governments in states along the Colorado River are fighting for reduced water supplies. La Paz County Farm News Owned by the Almarai Company — the Saudi dairy giant drew national attention when two new wells were approved.

The well approval was revoked in April.

News similar to this has spurred discussions to limit ownership of agricultural land in California.

However, Saudi Arabia does not directly control Almaray, so SB 224 would not have affected the deal.

SB 224 only prohibits foreign government direct investment

Hurtado, who drafted the bill, said it was important to pass the bill because farmland is tied to water, energy and food. “And in times of drought, it’s even more important to understand who owns our water, at least here in California, and manage it properly.”

However, the bill’s provisions only ban governments or state-owned enterprises.

Sullivan Gross, president of the AG division of real estate brokerage Pearson Realty, said he had never seen a foreign government invest directly in agricultural land. And there are enough workarounds that make it very difficult to tie the business to the government.

“How does the title company go back and read all the bank statements?” Gross said.

In 2013, Chinese company WH Group acquired Virginia’s Smithfield Foods, the largest pork producer in the United States. When news of the purchase surfaced, the U.S. Senate intervened in the investigation, citing national security concerns.

The $4.7 billion purchase was 30% above market rates. According to PBS Newshourprompting many to speculate that the Chinese government was involved in the deal.

There were concerns that US companies would be unable to compete if the Chinese government got involved.

May 1st, unnamed source A man who works at the Smithfield, Missouri, plant told a local news station that 37 sow farms out of 132 company-owned and 109 contract farms in Missouri will be closed.

Canada is the largest land owner in America

USDA truck ag foreign ownership of landAccording to the latest data in December 2021, foreign investors hold about 40 million acres of forest and agricultural land. This is an increase of 2.4 million acres from the December 2020 report.

Texas has the largest land owned by foreign investors at 5.3 million acres. Maine is her second, followed by Colorado. Only 2.8% of his private agricultural land in California is held by foreign investors.

Canadian investors make up the majority of foreign investment, owning 31% of land owned by citizens of other countries. A Chinese investor holds less than 1% of his land owned by foreigners.

So while people think about Russia and China, there are also countries with US allies that could be affected, Grosz said. There is a Canadian fund that has invested in farmland in California.

“Now you’re telling them they can’t?” Gross said. “What are the benefits of that?”

American producers are also investing in other countries such as Mexico, Australia, Chile and Peru. That’s because crop cycles are different in these countries, he said, Grosz said.

Grosz said retaliatory action could be taken in those countries.

Earlier this year, Canada banned foreign ownership of residential real estate in the country. In total, 24 states are considering restrictions on foreign investment in agricultural land.

Hurtado wants conversations to create solutions

Many farming groups oppose the bill in its current form, including American Pistachio Growers, the California Farmers’ Council, and the Nisei Farmers League.

Hurtado hopes the debate about foreign-owned farmland will get people thinking, even if the bill doesn’t pass.

Last year, Hartado and State Senator Dave Cortese (D-San Jose) wrote to U.S. Attorney General Merrick Garland calling for an investigation into possible drought and water rights violations in western states. They wanted to take a closer look at hedge funds that bought land with water rights.

Gov. Gavin Newsom has vetoed the previous bill in 2022 after it passed the Senate and Congress. Newsom said in a veto message that jurisdiction over the bill lies outside the California Department of Food and Agriculture.Hurtado changed agency to the California Governor’s Office of Emergency Services.

“We need to have a conversation. We need to do this,” said Hartad. “We need to find the right solution and this helps keep the conversation going.”