House committee examines threats to U.S. food security from Chinese ownership of land, facilities

The House Agriculture Committee took a close look Wednesday at the influence of China on America’s food supply.

The committee also heard testimony concerning Chinese companies activities in the U.S., allegedly stealing intellectual property and purchasing supply chain assets that American farmers depend on to produce crops.

Addressing the problem runs into questions about how to separate legitimate foreign investments from espionage maneuvers, and how to differentiate between spies for the Chinese Communist Party and Chinese immigrants trying to escape the Chinese government’s oppression.

Intellectual property

South Dakota Gov. Kristi Noem testified that members of the Chinese Communist Party contacted the South Dakota state government last summer to coordinate tours of meat packing plants and farms. The party officials said they wanted to help improve trade relations, but South Dakota declined.

“Within days, we received a phone call from the State Department telling us that those were Chinese spies,” Noem said.

The State Department officials said that the spies were planning to steal intellectual property, such as proprietary seed genetics, and the State Department officials wanted to debrief any South Dakota officials who had met with the spies. “The threat is very real to us every single day,” Noem said.

Rep. Raja Krishnamoorthi, D-Ill., testified as the ranking member of the Select Committee on the Chinese Communist Party. He told the story of a farmer in 2011 near the town of Dicer, Iowa. This farmer saw a man digging in cornfields. Authorities investigated and discovered he was looking for proprietary seeds to send back to his employer, a Chinese seed corn company.

The man, Krishnamoorthi said, tried to ship 250 pounds of corn seeds to Hong Kong disguised in microwave popcorn bags. The company wanted to reverse engineer the seeds to produce the same product in China.

The total cost of the intellectual property theft, Krishnamoorthi said, was estimated to be $30 million.

Buying up farmland

The committee and witnesses also discussed how Chinese companies are buying up farmland. Exactly how much agricultural land is in the hands of Chinese companies is hard to know because of what witnesses said are lax reporting requirements.

Rep. Glenn Thompson, R-Pa., chair of the committee, said that the Department of Agriculture estimated in 2021 that foreign investments held 40 million acres of U.S. farmland. This was just an estimate, and there were many gaps in the nation’s reporting framework, Thompson said.

Noem said that between 2010 and 2020, the Chinese Communist Party increased its holding of U.S. agricultural land by 5,300%. Today, it’s estimated the party holds 384,000 acres valued at $2 billion.

“The USDA admits this may not even account for all of the land that has been purchased. Why? Because the federal government does not monitor and track foreign interests in these large transactions. There is little reporting and very few consequences for allowing countries that hate us to buy up our assets,” Noem testified.

Noem referred to reports of a Chinese company that attempted to establish a corn mill that was near a military installation in North Dakota. The Grand Forks, North Dakota, city council denied the company’s building permits.

“China would never allow us to go to their country and buy land in their country. They don't even allow their own people to buy their land. There's no reason we should allow them to come into our country and buy our land and especially not close to our military installations,” Noem said.

Nova Daly, formerly with the U.S. Treasury, said Chinese investors in other states were also buying farm land around nuclear facilities and U.S. military bases. These lands, he said, provide locations for cranes, silos, telecommunication towers, and wind towers in order to gather intelligence.

Supply chains

The Chinese, Noem said, were also buying up facilities along the food supply chain. She said it started decades ago when the Chinese began buying up fertilizer facilities. Then, she said, they bought up chemical companies.

“Now most of our processing facilities are owned by the Communist Party or Chinese government,” Noem said.

Daly said China controls a large portion of the global production of crop protection products and crop nutrient manufacturing facilities. This includes between 60% and 70% of the worldwide market in glyphosate, a valuable herbicide commonly used in the U.S. China, Daly said, controls 40% of the market in phosphorus, which is used as a plant nutrient.

“These are the basic elements that nourish crops, protect them from weeds, insects and diseases,” Daly said.

Daly said that, should China decide one day to just shut off that supply, it would have enormous consequences to the American agricultural system.

“Without crop protection products or crop nutrients, yields will decrease, requiring substantially more land to maintain current production levels. The economic impact of farmers, consumers and our nation would have devastating consequences,” Daly said.

Difficult solutions

Approaches to addressing the problem are not straightforward. “As we address these problems, we have to make sure that the cure is not worse than the disease,”  Krishnamoorthi said.

Rep. David Scott, D-Ga., urged the committee to avoid rhetoric that would target Chinese people. “Know that we on the Agriculture Committee condemn all bigotry, including race-motivated threats and acts of violence,” Scott said.

Krishnamoorthi illustrated the problem with legislation that targets Chinese nationals, as opposed to those with ties to the Chinese Communist Party. He pointed to a Florida law that prohibited individuals from China who are not U.S. citizens or green card holders from purchasing land or buildings in Florida.

Zhiming Xu, a political asylee who was persecuted by the Chinese government, was going to buy a new home in the state, but he was forced to cancel the contract for the purchase because of the Florida law, which put his property and a $30,000 deposit in jeopardy.

“The lesson here is clear: when land purchase bills target individuals who are Chinese immigrants, they often target those outside their intended audience,” Krishnamoorthi said.

Scott also pointed out that China is the United States’ largest trading partner, accounting for $333.7 billion dollars in U.S. agriculture exports in the last fiscal year alone. “My colleagues will often know that we are in an agricultural trade deficit right now. And I'm here to tell you that alienating our trade partners will only deepen that,” Scott said.

The policy recommendations that Thompson outlined for shoring up America’s food security and supply chains include legislation to require disclosure of foreign adversaries purchasing land near military sites, and protecting sensitive farm data, such as satellite images, chemical use, and genetic data of plants American farmers grow.