USDA Proposes Tougher AFIDA Penalties for Foreign Adversary Filers

USDA’s Farm Service Agency published a proposed rule in the Federal Register on June 25 that would meaningfully tighten how the agency enforces the Agricultural Foreign Investment Disclosure Act of 1978 — the federal law that requires foreign buyers to report agricultural land acquisitions within 90 days but stops well short of blocking them.

The proposed changes have three main components: eliminating FSA’s existing discretion to reduce civil penalties for late or missed AFIDA filings, creating steeper penalty tiers specifically for entities designated as Foreign Adversary or Foreign Adversary Controlled under federal law, and requiring geospatial data for all reported transactions. A 60-day public comment period runs through August 10, 2026.

What AFIDA currently allows — and doesn’t enforce

Under existing rules, FSA retains discretion to reduce civil penalties when a foreign person or entity files late or skips the required disclosure altogether. That flexibility has long drawn criticism from farm advocates who argue it functionally defangs a law that is already toothless by design.

AFIDA’s penalties can reach 25 percent of a parcel’s fair market value — a number that sounds significant until you consider how rarely it has been imposed at full weight. The Government Accountability Office has flagged concerns about AFIDA data quality in prior reviews, finding that late filings, underreporting, and inconsistent enforcement make USDA’s published figures an imprecise floor, not an accurate accounting.

As this outlet has reported in depth, USDA’s most recent full-year data showed foreign persons holding an interest in approximately 43.4 million acres of U.S. agricultural land as of the end of 2022 — about 1.8 percent of all privately held agricultural land. The agency itself acknowledges those figures likely undercount actual foreign holdings due to the very enforcement gaps the proposed rule aims to close.

The foreign adversary tier

The rule’s most politically visible provision creates a distinct, steeper penalty structure for entities that carry a Foreign Adversary or Foreign Adversary Controlled designation under federal law. The existing AFIDA framework treats all foreign filers under the same penalty schedule; the proposed change would explicitly increase exposure for buyers linked to countries the U.S. government has designated as foreign adversaries — a category that currently includes China, Russia, Iran, North Korea, Cuba, and Venezuela.

That designation framework matters because it connects AFIDA enforcement to the broader national-security conversation around agricultural land. The Chinese acquisition of land near Grand Forks Air Force Base in North Dakota in 2022 — ultimately unwound after federal scrutiny — became a focal point of the current legislative push. Whether targeted penalty tiers will deter large, state-backed acquisitions is a separate question: a buyer with the capacity to route farmland purchases through shell corporations and domestic LLCs is not primarily deterred by penalty schedules.

The Smithfield Foods situation illustrates the jurisdictional tangle. WH Group, Smithfield’s Chinese parent, completed its acquisition years before the current political moment — AFIDA’s disclosure requirements were met, and no penalty mechanism was triggered. A higher penalty tier for Foreign Adversary Controlled entities does not unwind completed acquisitions.

The geospatial data requirement

Buried in the rule’s technical provisions is a change that may prove as significant in practice as the penalty structure: a new requirement that all AFIDA-reported transactions include geospatial data on the reported parcels.

AFIDA’s existing dataset, compiled and published annually by FSA, has been criticized for lacking the granular location information needed to analyze land-use patterns, proximity to sensitive infrastructure, or overlap with agricultural production zones. Requiring geospatial data at the point of filing would make the dataset substantively more useful for researchers, policymakers, and journalists — and would make it harder for reported transactions to obscure the specific parcels involved.

That last point matters most given the 44 million acres of U.S. cropland projected to change hands in the next three years. Better geospatial data won’t slow that transfer, but it would give federal and state agencies a sharper picture of where foreign capital is landing and at what scale.

What the rule doesn’t address

The proposed AFIDA changes are real enforcement upgrades — particularly the elimination of FSA’s discretion to reduce penalties, which closes a well-documented soft-landing for noncompliant filers. But the rule operates entirely within AFIDA’s existing framework: disclosure, not restriction.

A foreign buyer who wants to acquire U.S. agricultural land can still do so. The proposed rule would make it costlier to file late and more dangerous to be caught under a Foreign Adversary designation. It does not close the shell-company gap — the long-documented practice of routing farmland purchases through domestic limited liability companies to sidestep AFIDA reporting entirely. FSA has publicly acknowledged that gap; the proposed rule does not address it.

The rule also does not touch the larger dynamic that corporate and institutional capital is reshaping who owns American farmland at a scale that dwarfs all foreign investment combined. Private equity firms, pension funds, and real estate investment trusts have been buying agricultural land with cash while working farmers compete on borrowed money. None of that falls inside AFIDA’s scope.

Comment period and next steps

Public comments on the proposed rule are due by August 10, 2026. Comments can be submitted through Regulations.gov referencing docket number 2026-12808.

The National Farmers Union, the American Farm Bureau Federation, and advocacy groups tracking foreign agricultural land investment are all expected to weigh in. The outcome will depend in part on how the agency interprets the feedback it receives — and whether Congress moves to codify any of these changes through legislation before a new administration has the opportunity to revisit the rule.

Farm advocates who have spent years calling for stronger AFIDA enforcement are largely supportive of the direction. The consistent caveat: a tougher disclosure regime, however welcome, is not the same as a policy that actually keeps family farm land in family farm hands. At 44 million acres on the verge of transfer, the distance between those two things is not small.