Foreign corporations and individuals have increased their holdings of Maryland farmland 53 percent since June 1980, according to new Department of Agriculture figures.
The 43,000 foreign-owned acres, up from 28,000 in 1980, represent 2 percent of all Maryland farmland. Several other states share that percentage, but only Maine exceeds it with 5 percent of its land foreign-owned. Only .6 percent of the nation's privately owned farmland is in foreign hands.
In a few Maryland counties such as Kent on the eastern shore, however, foreigners own more than 5 percent of the fertile land, almost 9,000 acres. In Kent, Queen Anne, Frederick, Allegany, Washington and Cecil counties, foreign interests own more than 3,000 acres. In several other counties there is little or no foreign ownership.
"There has been a great deal of investment here in a very short period of time," said Alan Musselman, executive director of the Maryland Agricultural Land Preservation Foundation, a division of the state Department of Agriculture.
Foreign ownership of Maryland farmland has been blamed for soaring land prices, although those land prices had been increasing for years before foreign investment was common. It has caused government officials to look closely at the purchases.
Steady increases in foreign land ownership since the early 1970s prompted Congress to require periodic reporting in 1979. One state senator has led an unsuccessful fight to ban such transactions, although some state and local officials said it has caused no harm. Some real estate agents see the trend as a boon.
But Musselman still is worried that foreign interests, mostly West German and other European countries, are concentrating on buying Maryland's most valuable farmland, that on the Eastern Shore. For them, it is a hedge against political and economic uncertainty at home. It also is the third most valuable agricultural land in the nation.
The farms usually are worked by local farmers who rent or share-crop the land. One German family lives on its farm in Queen Anne County, but officials said that is uncommon.
State and local officials said that it is rare that farmers are displaced by foreign buyers, because the land usually is purchased from retiring farmers or from the estates of deceased farmers. But others argue that foreign buyers are pushing land prices up -- prices that now hover around $2,600 an acre.
"On the Eastern Shore, foreigners are out-bidding old farmers who want to expand and new farmers who want to get in," Musselman said. "A young farmer buying land at $3,000 an acre is just not going to make it."
Queen Anne County Assessor Charles E. Anthony has kept track of foreign purchases in his Eastern Shore county for years. "The first sale was in October 1975," he said. "It brought $288,000. The same farm sold for $504,000 in 1978. That gives you an idea of what is happening here."
James Clark Jr., who is president of the Maryland State Senate and lists his occupation as "farmer," has been fighting unsuccessfully for two years to ban foreign farm purchases. Only Iowa has such a law.
"A foreigner has a certain privileged position by buying our land . . . " said Clark. "He's not subject to state taxes for one thing, which gives them a preferential position. I didn't think that was proper."
But Clark said real estate interests and even some farmers who want to see the value of their land continue to increase did not back the law.
Others see nothing dire in the jump in foreign ownership. Phil Widing is a Kent County farmer and real estate agent who sells and manages foreign-owned land. Widing oversees 13 farms owned by West Germans and leased by local operators. Some of the foreign buyers, he said, lost family land in communist-ruled East Germany after World War II. "They're strictly motivated by security, the kind of people we'd be glad to have as neighbors," said Widing, who got out of residential real estate five years ago to concentrate on the booming market in agricultural property.
Farmland is becoming too expensive for beginning farmers with or without foreign buyers bidding up land prices, Widing said. At least, foreigners are keeping their land in farms, giving young farmers land to rent.
"If you want to preserve farmland, the foreign investor is the way to go," he said. "They are the real stewards of the land."