The General Accounting Office yesterday released inconclusive results in its first attempt to determine whether foreigners are buying up U.S. farmland at an alarming clip, as some have suggested.
A GAO spot check of land ownership in 25 counties in five states found that only three-tenths of 1 percent of crop land (44,700 acres) was owned by nonresident aliens, primarily German and Swedish investors, and some of unknown nationality from the Netherlands Antilles tax haven.
The GAO, which prepared the report for Sen. Herman E. Talmadge (D-Ga.), chairman of the Senate Agriculture Committee, cautioned that "reliable data is difficult to obtain." The GAO investigators turned up evidence of foreign ownership of 6.3 percent of the farmland in one area, Johnson County, Ga.
Talmadge said that the need for legislative action would depend on the extent of foreign ownership.
"If we have a large amount of farmland owned by aliens it could present problems for our farmers and for our consumers," he said.
Several magazine and newspaper articles have drawn attention to foreign land purchases in this country, including purchases by Arab investors. American farmland is considered an attractive investment because of the currently favorable exchange rate between the dollar and West European currencies. Many European investors also are attracted by the increasing importance of U.S. farm exports in the world economy, and by the political stability of this country.
However, the extent of the investments has been extremely difficult to document, partly because only two states (Iowa and Minnesota) require nonresident aliens to file annual reports on their agricultural landholdings.
The five states surveyed by the GAO were California, Kansas, Georgia, Missouri and Oklahoma. As a result of the inconclusive findings. Talmadge asked the GAO to expand its survey to nine other states. He also requested the Department of Agriculture to have its county officials report any foreign farmland purchases of which they have knowledge.
State legislation on foreign ownership varies greatly.
Nine state (including Oklahoma, one of those in the survey) generally prohibit aliens from owning land or sharply curtail ownership, while five others have ceilings on total acreage.
Even in these states, determining what is happening has proved difficult because land records are kept at the county level. Some land purchasers operate through "fronts" that do not identify the nationality of the actual property owners.
American companies as well as foreign ones use the Netherlands Antilles to shelter income earned in the United States, so some of the foreign-owned land uncovered by the GAO may actually be in the hands of offshore subsidiaries of U.S. firms.
A major concern is that foreigners are bidding up prices of land beyond the level at which U.S. family farmers can afford to pay. A lawyer who handles real estate in Kansas told the GAO that foreigners were overpaying by $200 an acre on some property. However, he added that it did not appear that local farmers wanted the land the foreigners were buying. But in Georgia, local residents told GAO that foreigners were pricing land out of their reach.
The Department of Agriculture has urged that the problem be seen in perspective. 1975 Commerce Department assessment calculated possible foreign ownership here of 4.9 million acres. The Agriculture Department noted that is less than 1 percent of the nation's 1.3 billion acres of private land.