Syngenta AG is facing demands from Arkansas to sell its farmland in the state over national security concerns regarding the seed and pesticide developers' alleged ties to China.
Gov. Sarah Huckabee Sanders said Tuesday that one of the world's largest agribusinesses must "give up its land holdings in Arkansas" in the next two years or face legal actions. Syngenta, owned by Chinese state-owned enterprise ChemChina, has about 160 acres in the state through its subsidiary Northrup King Seed Co valued at $1.12 million.
The announcement comes as state and federal lawmakers increasingly target Chinese ownership of U.S. farmland. The Senate this summer approved provisions banning "foreign adversaries" from purchasing farmland as part of its massive annual defense bill, though it still needs signoff from the House.
Close to half of U.S. states have laws on the books that restrict foreign ownership of U.S. farmland, with 11 enacting legislation within the past year, said Micah Brown, a staff attorney at the University of Arkansas’ National Agricultural Law Center. Although foreign ownership laws have been on the books in some cases since the 1700s, this is among the first times a state has actually taken action.
“Arkansas is really kind of the first to enforce their foreign ownership law,” he said.
Syngenta's farmland in Northeast Arkansas is used mostly for seed research. At a press conference in Little Rock, Sanders alleged that Chinese state-owned enterprises filter their findings back to their homeland, “stealing American research and telling our enemies how to target American farms.”
Arkansas Attorney General Tim Griffin issued a letter on Tuesday to Syngenta Seeds LLC and subsidiary Northrup King Seed Co, saying if the land is not divested in the next two years he “shall commence an action in the circuit court,” which could lead to a judicial foreclosure of the property. Syngenta is also facing a $280,000 civil penalty, or 25% of the fair market value of the property, for failure to report foreign ownership under state law in a timely manner.
Syngenta declined to immediately comment on the matter. A company spokesperson told Reuters that it was disappointed and called the decision "a shortsighted action" that will hurt Arkansas farmers.
Under the Agricultural Foreign Investment Disclosure Act, foreign investors who acquire, transfer or hold an interest in U.S. farmland must report it to the U.S. Department of Agriculture.
Syngenta filed its form pertaining to Craighead County with the USDA on March 8, 2022, according to Griffin’s letter, but Arkansas did not receive a form until June 30, 2022.
Approximately 40 million acres of U.S. agricultural land were owned by foreign entities as of Dec. 31, 2021, with China making up less than 1% of that total, according to USDA’s latest report. Around 3.1% of all privately held farmland is foreign-owned.