The amount of U.S. agricultural land wholly or partly owned by foreigners increased nearly 63 percent last year, to 12.7 million acres, and now represents nearly one percent of all privately held agricultural property in the nation, according to the Agriculture Department's annual survey.
The foreign holdings are still widely scattered, however, and provide no basis for the common belief that substantial amounts of farmland are being bought by foreigners and taken out of agricultural use, the survey says.
Only in Maine do foreign interests own more than 3 percent of the agricultural land in a state. In Maine, timberland owned by paper companies with substantial foreign ownership accounts for 14.1 percent of the state's 18.8 million acres of privately held farm land.
The Agriculture Department report, which is required by the 1978 Agricultural Foreign Investment Disclosure Act, exaggerates the scope of foreign land holdings because of the way Congress defined foreign ownership.
Under that law, land owned by any corporation in which foreigners hold 5 percent or more of the shares must be registered as foreign-owned. When Canadian investors acquired a 20 percent stake in Scott Paper Co. last year, for example, Scott's 2.1 million acres of timberland in Maine and other states were included in the list of foreign-held acreage. More than half of all the farmland listed by the Agriculture Department as "foreign owned" is owned by U.S. corporations in which foreigners hold interests of more than 5 percent, but less than 50 percent, the report says.
According to the annual report, prepared by J. Peter DeBraal and Alexander Majchrowicz of the Natural Resource Economics Division, the overall current value of the 12.7 million acres classified as foreign-owned is $8.45 billion.
As with foreign investment in U.S. industry, most of the outside money comes from Canada and Europe, and very little comes from Saudi Arabia or other oil-exporting countries. Offshore corporations based in the Netherlands Antilles and Liechtenstein are also major landholders.
Timberlands account for more than half of the foreign-held acreage, with cropland, vineyards and pasture making up the rest. "Concern has been expressed about farmland being purchased and taken out of agricultural production," the report says. "Foreigners do not appear to be proceeding in this direction in any substantial degree. No change in intended use was reported for 92 percent of the acres."