As much as 12 percent of known annual agricultural land sales in Maryland may be made to foreign investors, according to a state report released this week.
Although less than one percent of Maryland's agricultural land is known to be in the hands of foreign investors, purchases of that land, especially some of Maryland's best farmland, are increasing among non-Americans, according to figures in a report to the Maryland General Assembly by the state departments of agriculture, assessments and taxation and state planning.
For example, although 4,984 acres were bought by foreign investors during all of 1978, 1,654 acres were brought by them during the first two months of last year.
There are about 3.6 million acres of prime and productive soils in forestry, agricultural and open space uses in the state. Of that amount, 2.6 million acres are in agricultural uses, the report said.
Prompted by fear that Maryland's agricultural land will be bought up by foreign investors who will use it for noncrop activities, legislators have introduced two bills barring non-Americans from buying crop land. The Senate version also would require them within five years to divest themselves of land they already own.
But the state study also points out that despite feelings by some legislators that the land is being purchased by Arabs, "No single foreign owner or nationality predominates in the purchase of Maryland farmland and despite rumors, the land is not being purchased with 'Middle East' monies, but by German, French, Dutch and South American nationals for the most part," the report said.
The report also states that most of the known transactions have occurred on the Eastern Shore and they amounts to less than one-fifth of one percent of Maryland's land and less than one-fourth of one percent of the state's prime agricultural land.
Foreign purchasers also paid a higher cost per acre for land than other buyers but "it is unlikely that they can presently alter Maryland's agricultural economy by diverting goods or altering crop types."
If federal figures are correct, between 8 and 12 percent of the 52,000 to 78,000 acres of farmland that changes hands annualy in the state involved foreign buyers. If state figures are correct yearly purchases would be between 4 and 6 percent, the study said.
However, The study warns that, "It is difficult to identify with certainty the true owners of land. It is very possible to disguise ownership through corporations, straw partners, unrecorded agreements, dummy sales, etc."
"Therefore," the report continued, "probably not all foreign purchasers were actually identified." From December 1975 through February last year, foreign investors in 37 individual transactions were known to have purchased 10,820 acres of Maryland farmland.
Some of the foreign investors are motivated to buy farmland in the state because farm real estate values ranked fifth in the nation at $1,371 per acre and the rate of increase in land values between February 1977 and February 1978 increased 16 percent, the third highest in the nation.
Farmland is also considered a good hedge against inflation and a bargain compared to the price and availability of prime agricultural land in Europe and the Orient, the report continued.
Some states restrict the purchase of agricultural land by foreign investors, but very few are on the East Coast, said Tom Saquella, legislative liaison for the Department of Economic and Community Development, which opposes both bills.