July 11, 2023 - Written by: Nancy Pollard
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Foreign Assets

In an earlier KD post, I stumbled onto an alarming fact about agricultural holdings in California and Arizona, both of which are major food producers in the US. While California is an agricultural kingpin, Arizona produces greens, fruits, and prodigious amounts of meat and milk products. In light of the water shortages that occur in both states, it was shocking to know that over 15,000 acres of active farmland in California and over 10,000 acres in Arizona are owned by Fondomonte, a subsidiary of Saudi Arabia.  Fondomonte also leases thousands of acres of additional farmland. In both states, this subsidiary gets to use water at eyebrow-raising discounts and in some cases for free. Two valuable resources – arable land and water – in the US are used to raise alfalfa, a feed crop that requires a lot of water, which is then harvested and shipped back to Saudi Arabia to feed their livestock.  

Riparian Rights

Perhaps nothing is so misunderstood in the US as Riparian Rights to water and why it is so important to gain some legal clarity. An article by Daina Dravnieks Apple for the University of Idaho explains that 80% of our country’s water is used by the West, and she unravels the twisted history of  Riparian Rights – a term that was intended for land in which water flowed or had an underground source. The owner would have the right of reasonable use of that water as an amenity. The landowner did not own the water as he did the land, but owned the use of the water. So what hasstill from Milagro Beanfield War film evolved under the Riparian Rights doctrine is that landowners, where there is a source of water, have the sole rights to the use of that water, and people who owned land without a source of water on that property had no rights to water that flowed nearby or was naturally stored underground.

The comic novel and film the Milagro Bean Field War as well as the film Chinatown touched on this subject. A  landowner with no access to water had to gain, purchase or lease the consent of the landowner with Riparian Rights to the water. As with the lack of a national curriculum, there is no Federal law that addresses this issue. It is left up to the states to address these issues in each locality. The Gold Rush took this Riparian Doctrine to a new level. 

First Come First Serve

According to a report in The Guardian, a British gold prospector, Thomas Blythe, successfully submitted a Riparian Right  application for the water from the Colorado River that was adjacent to the land he had staked as a gold claim. The Gold Rush in California and Alaska created a lot of  controversial non legal precedents (not even counting the fact that the land was not theirs) including the one attached to the Riparian Doctrine, in which the first person who made the  claim, got the claim. One did not own the land on which one prospected for gold, merely the right to search for and benefit from the minerals extracted from that stake.

And in this particular case,  his claim, through an equally complicated history, is now owned by the Palo Verde Irrigation District, and technically the farmland owners in the district have “unquantified water rights for beneficial use” –  so water for surrounding arid farmland owners is pretty much free. The Palo Verde District is not allowed to sell the water to either the farmers or to a company that sells bottled water (Calistoga). It can only charge for the adminstration’s overhead – at the time of this  article in The Guardian, it was $77 per acre a year. 

Foreign Stakeholders

Setting aside the water rights issue, the reporting of farmland owned by entities of foreign countries is voluntary or only loosely enforced by state governments. Even if fines for non-reporting are assigned, the USDA is short staffed like the IRS, and so fines often go uncollected. And not counting the thousands of acres that are leased by other countries, even incomplete Federal data shows over 40 million acres purchased by foreign entities. It is surprising to know which countries are major farmland owners in the US. Canada is the largest farmland owner at 31%, much of it forested; followed by the Netherlands at 12%; Italy 7%; United Kingdom and Germany finishing fourth and fifth. 

  • Canada (12,845,000 acres)
  • Netherlands (4,875,000)
  • Italy (2,703,000)
  • United Kingdom (2,538,000)
  • Germany (2,269,000)
  • Portugal (1,483,000)
  • France (1,316,000)
  • Denmark (856,000)

In an intriguing sign of rarely recorded bipartisanship, two women senators, Joni Ernst, a Republican Senator from Iowa, and Debbie Stabenow, a Democratic Senator from Michigan, have introduced a bill to limit the purchase of farmland by foreign governments, corporations or partnerships. The senators were alarmed by the amount of farmland China owns – 384,000 acres (more than Bill Gates, but that is another post) –  with some of it near military installations. They want to increase the staff of the USDA to pursue foreign entities who have misrepresented land holdings. Their fears are not misplaced, as China now controls a major part of  US pork production. 

While foreign ownership of arable land is not the only problem facing a new generation of American farmers, it contributes to the unavailability of affordable farmland. Much of our domestic farming is currently under a modern version of serfdom. A handful of global corporations own the seed, the fertilizer and the complex equipment needed to farm the hybridized plants. In some cases, they own the livestock that their farmers must purchase. Our subsidy programs have been jiggered so that taxpayer funded support goes only to farmers who are “under contract” with these corporations. Younger farmers who want to steer away from industrial agriculture and use regenerative, organic or biodynamic farming practices are often excluded from state and Federal tax breaks and subsidies, in addition to being priced out of available land. To find out more and support changes to how your food is grown, below are two good organizations that fight for these important changes in US agriculture. 

Farm Action US

American Farmland Trust

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