John Phipps: Have Chinese Investors Stolen American Agriculture?

Recently, reporters at website Politico, offered this ominous observation.

“Chinese firms have expanded their presence in American agriculture over the last decade by snapping up farmland and purchasing major agribusinesses, like pork processing giant Smithfield Foods. By the start of 2020, Chinese owners controlled about 192,000 agricultural acres in the U.S., worth $1.9 billion, including land used for farming, ranching and forestry, according to the Agriculture Department.”

This is simply bad reportage. While 192,000 acres seems like big number it begs for some context. Digging down into the source report from the ERS, we discover that while Chinese investors, not the government, have increased their ag holdings, the large majority is “other agriculture land”. I tried semi-hard to find a definition for this category, and the best I can tell you is what it isn’t: cropland, pasture, or forest. Zooming in on cropland, which is what most farmers care about, Chinese investors own measly 33,000 acres. But how about those Canadians, eh? Or compare China to Germany. Chinese-owned cropland numbers are roughly similar to Denmark, and I don’t see Congress obsessed about a Viking raid.

Foreign ownership of U.S. farmland, especially cropland, is trivial, and the Chinese ownership share of that foreign ownership is even more trivial. To be sure, when Chinese investors bought Smithfield Foods, the largest American meatpacking company, eyebrows were raised, but the check was didn’t bounce, and shareholders seemed satisfied. Ask worriers to name any other agribusiness bought by the Chinese. The xenophobic fears of a Chinese economic invasion in agriculture are unsupported by evidence.

The congressional hysteria is merely another facet of what I think will become a steady drumbeat of anti-China rhetoric. Don’t get me wrong. I find little to admire in the Chinese government, although under Hu Jintao’s leadership before President Xi, rapid Chinese economic progress was helping to counter the growing authoritarianism we see today. It has since become a more corrupt and oppressive regime. That said, I have considerable respect the Chinese people, who have essentially gone from no economy to a U.S. rival in my lifetime, despite their government.

Chinese investors haven’t stolen American agriculture. China is just becoming our go-to excuse for all our problems. Anti-China rhetoric sounds like what you say when the other team is a lot better than you anticipated.