Overview
The Agricultural Foreign Investment Disclosure Act (AFIDA) was enacted by the U.S. Congress in 1978 to monitor and control the extent of foreign ownership of U.S. agricultural land. Under this law, foreign individuals and entities that purchase, sell, or hold agricultural land in the United States must disclose their holdings to the Department of Agriculture (USDA). The regulations ensure a detailed collection of data on the extent of foreign investment and its distribution across the country, which is invaluable for policy assessments and decision-making.
Key Points:
- Requires detailed reporting by foreign investors.
- Applies to acquisitions, transfers, and holdings of agricultural land.
- Enforced by the USDA’s Economic Research Service (ERS).
Examples
-
Foreign Corporation Investment: A Canadian corporation acquires 500 acres of farmland in Iowa for agricultural production. Under AFIDA, the corporation must report this acquisition to the USDA.
-
Individual Foreign Investor: An individual from France inherits 100 acres of timberland in Georgia. Even though the land was not bought, the foreign owner must report the holding due to its agricultural classification.
-
Sale of Agricultural Land: A Japanese company sells 1,000 acres of ranch land in Texas. Both the selling and purchasing entities must report the transfer to the USDA under AFIDA requirements.
Frequently Asked Questions
What is considered agricultural land under AFIDA?
Agricultural land includes all land used for farming, ranching, forestry, or any type of agricultural production. This also encompasses lands that can be converted to agricultural use.
Who must report under AFIDA?
Any foreign individual, corporation, or entity that acquires, transfers, or holds interest in U.S. agricultural land must report to the Secretary of Agriculture.
What happens if a foreign investor does not report their holdings?
Failure to report under AFIDA can result in significant civil penalties, including fines up to 25% of the fair market value of the interest held in the agricultural land.
How frequently must reports be updated?
Foreign persons must report any change in the ownership or status of their agricultural land holdings within 90 days of the transaction or event.
Are there limits on how much land a foreign entity can own?
AFIDA itself does not impose limits on the amount of land that can be owned but mandates disclosure and reporting for oversight purposes. States may have additional restrictions.
Related Terms
- Foreign Investment in Real Property Tax Act (FIRPTA): A United States tax law that imposes income tax on foreign persons selling U.S. real property interests.
- Agricultural Land: Land designated primarily for farming, forestry, ranching, and other agricultural purposes.
- Disclosure Laws: Legal requirements for providing specific information to appropriate government bodies and the public.
Online Resources
- USDA Economic Research Service (ERS) - AFIDA Program Overview
- AFIDA Reporting Forms and Guidelines
- Official AFIDA Regulations (Electronic Code of Federal Regulations)
References
- Agricultural Foreign Investment Disclosure Act of 1978. Pub. L. No. 95-460, 92 Stat. 1263 (1978).
- USDA Foreign Agricultural Service (FAS) AFIDA Annual Report Summaries.
Suggested Books for Further Studies
- “Foreign Direct Investment in the United States: Benefits, Suspicions, and Risks with Special Reference to FDI from China” by Edward Montgomery Graham and David M. Marchick.
- “The Impact of Foreign Direct Investment on U.S. Agricultural Land Prices” by Dean M. James.
- “Global Capital and National Governments” edited by Stephen B. Cohen and Jerome Booth.
