Chinese balloon raises concerns about foreign-owned farms in Utah and other states

Harlowton, Mont. • Near the banks of Montana’s Musselshell River, rancher Michael Miller saw a large, white orb over the city of Harlowton last week, a day before US officials revealed they were tracking a suspected Chinese spy balloon over the state. The balloon caused a stir in the city of 900, which is surrounded by cattle ranches, wind farms and nuclear missile silos scattered behind chain-link fences.

Miller worries about China as a growing threat to the US, but wonders how much intelligence could be gleaned from a balloon. China’s bigger threat is the US economy, he said. Like many across the country, Miller wonders if tougher laws are needed to ban the sale of farmland to foreigners so power over agriculture and the food supply doesn’t fall into the wrong hands.

“It’s best not to have a foreign company buying up land, especially one that’s not really kind to us,” Miller said. “They will only take over us economically instead of militarily.”

Miller’s concerns are increasingly shared by US lawmakers after the Chinese balloon’s journey across American skies ignited tensions between Washington and Beijing.

In Congress and in state buildings, the balloon’s journey reinforced decades-old concerns about foreign land ownership. US Senator Jon Tester, a Democrat, is sponsoring legislation that includes agriculture as a factor in national security decisions to allow foreign real estate investment.

“The bottom line is that we don’t want people from China to own our farmland. It’s contrary to food security and national security,” Tester told The Associated Press.

At least 11 state lawmakers are also considering action to address the concerns. These include Montana and North Dakota, where the US Air Force recently warned that a $700 million corn mill proposed by the American subsidiary of a Chinese company near a military base would endanger national security.

City council members in Grand Forks, North Dakota, suffered a barrage of criticism from townspeople Monday night before voting 5-0 to abandon the plan. The move came a year after a joint press release by local officials and the North Dakota governor called the project “extraordinary” and said it would create jobs and strengthen the agricultural industry.

Angry residents of the city of 59,000 near the Minnesota border have called for the resignation of council members they say have been trying to push through the plan and fend off Chinese threats to national security.

“You decided, for some reason, that this is such a fantastic thing for our city that you got blinders,” said Dexter Perkins, a geology professor at the University of North Dakota. “You went all in when there was a ton of unanswered questions.”

Prior to the Air Force warning, officials said they were unable to comment on national security matters.

According to the US Department of Agriculture, foreign companies and individuals control less than 3% of US farmland. Of these, those with ties to China control less than 1%, or about 600 square miles (340 square kilometers).

But in recent years, transactions involving agricultural and non-agricultural land have come under scrutiny, particularly in states with a large US military presence.

Restrictions on foreign individuals or corporations owning farmland vary widely across the United States. Most states allow it, while 14 have restrictions. No state has a total ban. Of the five states where the federal Department of Agriculture says companies with ties to China own the most farmland, four do not restrict foreign ownership: North Carolina, Virginia, Texas and Utah.

The fifth, Missouri, has a cap on foreign land ownership that lawmakers want to tighten.

Proponents of property restrictions often speculate about the motives of foreign buyers and whether those with ties to adversaries like China intend to use land to spy or exercise control of the US food supply.

Texas banned infrastructure deals in 2021 with people linked to enemy governments, including China. The policy came after a Chinese army veteran and real estate magnate bought a wind farm in a border town near a US Air Force base. This year, Texas Republicans want to expand that with a ban on land purchases by individuals and organizations from enemy countries, including China.

Critics see it as anti-foreigner hysteria, with the Asian-American community in Texas particularly concerned about the impact on immigrants looking to buy homes and set up businesses.

In Utah, concerns centered on a Chinese company’s 2015 purchase of a racetrack near an army depot and Chinese-owned farms that export alfalfa and hay from drought-stricken parts of the state.

Lawmakers are considering two proposals this year that would, to varying degrees, ban companies with ties to foreign governments from owning land.

“Do we really want some foreign country to come in and buy our farmland, our forests, or our mineral rights?” asked Republican state representative Kay Christofferson, who is sponsoring one of the bills. “If it compromised our sovereignty — particularly in an emergency situation or during a national security threat — I think we would lose our ability as a state to be independent and self-sufficient.”

Caitlin Welsh, director of the Global Food Security Program at the Center for Strategic and International Studies, said the scramble to limit foreign land ownership was due to rising tensions between the US and China. Welsh shares concerns about US opponents buying land near military bases like Grand Forks, but said concerns about China’s control of the food supply were overdone.

“China is just a small part of the bigger picture of foreign ownership,” Welsh said. “When it comes to food security, the biggest risk is that foreign owners may pay a higher price for agricultural land, which then drives up prices.”

The restrictions have met resistance in states with strong property rights. In Wyoming, two proposals to limit foreign land ownership fell through this week, although Republicans, who control the statehouse, showed sympathy for concerns about expanding China’s sphere of influence.

“We’ve had a lot of problems with China on the air lately. Big balloons fly overhead. We consider this to be national and state security law for Wyoming and the United States,” said Rep. Bill Allemand, a Casper Republican.

Lawmakers on Monday rejected Allemand’s proposal to ban the ownership of more than an acre of land by people from China, Russia and countries the US government considers state sponsors of terrorism. Skeptics said police surveillance would be difficult due to the complex web of title companies and holding companies in agricultural properties.

“It’s very easy to get around,” Republican Rep. Martha Lawley said. “We may end the day feeling good, but we have embraced a great responsibility.”

Questions about foreign investment are increasingly fueling a debate about whether cities and states should roll out welcome mats or close doors to potential threats. The problem can pit local officials interested in economic development against state and federal agencies concerned with national security.

That was the case first with the proposed corn mill in Grand Forks, where officials last year praised the plans. But days after the US Air Force shot down the Chinese balloon, which China claims was just a weather balloon, sentiment had fizzled and the city changed course.

“There’s something I’ve learned through this process, and that’s to slow down sometimes and make sure we fully understand it before we move on to the next level,” Grand Forks Council Member Ken Vein said before committing to it agreed to give up the corn mill.

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Mead Gruver in Cheyenne, Wyoming, David Lieb in Jefferson City, Missouri, Acacia Coronado in Austin, Texas, and AP reporters in the US contributed coverage.