James Rainwater may not be a household name in Minnesota politics.
But on Tuesday morning at a forum discussion for congressional candidates in southern Minnesota, the attorney caught the attention of farmers in the outdoor shed at Farmfest in Redwood County.
“I hear stories about Bill Gates buying hundreds of thousands of acres for corporate farms,” said Rainwater of Lake City. “I think the little boy needs help.”
It’s been a tumultuous summer in farm country, with a flurry of national reports about Chinese investors and green-minded billionaires buying up U.S. farmland and gaining control of agribusiness ventures.
In both cases, the nation has turned its eyes to North Dakota.
Earlier this year, a scandal erupted in Grand Forks after a Chinese-backed investment firm bought 300 acres of land within 20 minutes of an Air Force base. The next corn mill the group hopes to develop – still awaiting approval – attracted intense scrutiny over national security concerns.
Also this summer, in an unrelated action, North Dakota’s attorney general has approved the sale of parcels of land in Pembina and Walsh counties of the Red River Trust, a Washington-based organization with ties to tech billionaire Gates.
In Minnesota, only 1.6% of the state’s agricultural land is owned by non-residents, according to the latest USDA report. State laws against foreign and corporate ownership of farms keep the state relatively protected from meddling buyers. Only citizens, permanent residents or entities with less than 20% foreign investment can own farmland in Minnesota.
“The majority — 70 to 80 percent — of farmland is sold to neighboring farmers,” said Glenn Fladeboe of Fladeboe Land, a brokerage specializing in the sale of farmland in Minnesota.
Doug Spanier, an attorney with the Minnesota Department of Agriculture, said that aside from exempting timber and wind easements on farmland, state law ensures that farmland remains primarily controlled by farmers or their landlords.
“All Midwestern states have some kind of law that prevents corporate farms,” Spanier said. “And no alien may own agricultural land unless he has been lawfully admitted to the United States for permanent residence.”
Still, both North Dakota cases could have happened in Minnesota. It is not against state laws for a foreign investor to own a milling enterprise. And Gates’ Red River Trust has announced plans to lease purchased land back to farmers, which could allay concerns about corporate farming, as it did in North Dakota AG’s prospect.
Officials at Campbell Farms, the Grafton, North Dakota potato farm that was sold to the Red River Trust, did not respond to multiple requests for an interview. And Gates is not believed to still own land in Minnesota, although he already owns land in neighboring Wisconsin and Iowa.
But growing public concern worries some farmers.
At the annual gathering of the agricultural industry in southwest Minnesota last week, chatter among farmers leaning against new combines or standing in line for pork chops focused on historic inflation that has driven up the cost of fertilizer and diesel fuel.
But just behind the complaints about the cost of fueling the tractor or getting nitrogen have been rumors about who exactly is buying up America’s farmland.
“I don’t think there are a lot of out-of-state or out-of-country land purchases in our area,” said Dustin Johnson, a Dawson farmer who was inspecting heavy equipment Tuesday. “But still bigger investors are buying up land, competing with farmers for it.”
“I’m a little concerned about that [Chinese land buyers]” said Adam Lund, who also farms near Dawson. “But on the other hand, [China is] a huge importer of soybeans and to some extent corn and many different agricultural products, so it’s a difficult situation.”
Over the past decade, China’s Belt and Road Initiative to invest in global infrastructure has found its way into U.S. farmland, with Chinese buyers owning nearly 200,000 acres by 2020. And concerns about foreign or plutocratic ownership of U.S. farmland arrives at a time of increasing concentration — and even suspicion — in the agricultural supply chain.
Last month, U.S. Representative Dusty Johnson, R-South Dakota, Gates urged to appear before the House Agriculture Committee to tell the country what Gates intends to do with his 270,000 acres of land, citing the billionaire’s past remarks urging developed nations to abandon animal protein. In late July, Minnesota Republican U.S. Representative Tom Emmer and a Washington state congressman wrote a letter to the USDA describing foreign land ownership as an “insidious threat” to America’s ability to feed the country.
And in Grand Forks, the conflict over the corn mill — which city officials are touting as an economic opportunity for farmers — has torn the community apart, with the debate sometimes tinged with anti-Asian prejudice.
In Minnesota, the state passed alien farm and corporate farm laws in the 1970s, although Spanier insists some prohibitions on the former predate statehood. The fight over foreign farm ownership last flared up in the early 2000s, when Dutch dairy farmers sought leniency from state law to stay on their farms. Under a recent exception, an E-2 visa holder can be a dairy farmer — and only a dairy farmer — on no more than 1,500 acres.
Although both direct corporate and foreign ownership are prohibited, there is wiggle room. With its recent acquisition of a leading poultry integrator, for example, Minnetonka-based Cargill inherited contracts with farmers who distribute birds and seed to growers. And in northern Itasca County, as many as 150,000 acres are owned by foreign-based timber operators.
The the recent campaign by the nation’s wealthiest residents to privately buy up land often, though not always, carries environmental undertones. In Montana, a foundation has purchased nearly half a million acres of land, which it is turning into a nature reserve. In South Dakota and Nebraska, media mogul Ted Turner owns ranch land where bison and prairie dogs live. And last year Land Report announced this Gates is now the largest landowner in the nation.
The image of Seattle-bred a tractor-driving tech billionaire drew laughs from two farmers watching Tuesday’s congressional hearings. But a trend that evokes associations with England’s landed gentry of yesteryear is not exactly in the heart of the country.
“Which of it all is very important,” said Minnesota Attorney General Keith Ellison, speaking on the sidelines of Farmfest on Tuesday. “But I’m more concerned about the bare-bones buying up of farmland and concentrating it in too few hands.”
On Tuesday, Ellison and Gary Worthish, president of the Minnesota Farmers Union, unveiled a “trust-buster” UTV (utility vehicle) emblazoned with a boxing glove on the door. The campaigners’ call for better prices for farmers is resonating with small producers who feel the farming system has become too cumbersome, corporate and international to navigate from their front porch.
But building an agricultural economy with only American producers and customers is an idea older than the antique International Harvester tractor sitting in the ditch. US-based agribusiness companies charter ships in the Black Sea and ship grain worldwide. Meanwhile, two of the country’s biggest meat producers – Smithfield and JBS – are owned by Chinese and Brazilian investors respectively.
In other words, the American farm has long been global.
Acknowledging that consolidation is inevitable, Vertisch said he is nevertheless concerned when he hears reports of farmland being sold off to outsiders, whether Gates or foreign investors.
“It’s about a loss of control,” Vertish said, comparing the loss of the local farm to mom and dad being displaced by big box stores. “Because once you lose control, the profits from that land don’t stay in the local community.”