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Foreign Agricultural Land Holdings to Face Increased Scrutiny

agriculture agricultural foreign

Foreign Agricultural Land Holdings to Face Increased Scrutiny

The Agriculture Foreign Investment Disclosure Act (AFIDA) was passed in 1978. The act states that all foreign persons (and entities) who acquire, hold, or transfer agricultural land interests must report those holdings and/or transactions to the Secretary of Agriculture (part of the US Department of Agriculture). Those who fail to do so are subject to penalties from the USDA’s Farm Service Agency, the entity tasked with the public inspection. As of December 31, 2020, the Farm Service Agency reported that foreign-held acres numbered 37.6 million. While that might sound like a considerable amount, those who track foreign investments posit this number is severely under-counted.

A bipartisan act introduced by Jon Tester, a Democrat from Montana, and Mike Braun, a Republican from Indiana, aims to strengthen AFIDA. The Protecting America’s Agricultural Land from Foreign Harm Act of 2023 would prohibit the purchase of land by anyone directly associated with a host of governments – namely, North Korea, Iran, China, and Russia. Support for the measure has strengthened as cases of Chinese Communist Party (CCP) affiliated entities acquiring property adjacent to American military bases come to light.

 High-profile examples such as a prominent Chinese agriculture company, Fufeng Group, attempting to purchase property near Grand Forks Airbase (North Dakota) and a billionaire tightly connected to the CCP successfully acquiring hundreds of thousands of acres near the Texas Val Verde Air Force base rung alarms. The USDA is being scrutinized more heavily after some members of Congress uncovered improper management and reporting of foreign purchases. The new reform would raise the maximum fine to 30 percent (from 25 percent) of the property’s value and permit the USDA to impose liens on the property in extreme cases.

Moreover, the bill pressures the Government Accountability Office (GAO) to take a more active role in assessing the effectiveness of AFIDA and its administration. For a government as big as the United States, from 2000 to 2022 there were only a handful of employees working directly on AFIDA. This is clearly insufficient. Supporters of the bill point to data transparency as one of the critical improvements. To access the USDA’s annual reports on US foreign land investment one must make a Freedom of Information Act request. This bill, however, requires the USDA to make the AFIDA database completely public, thus bypassing an often-onerous administrative step (that few engage in).

The farm bill is up for reauthorization this year. It is expected that the Protecting America’s Agricultural Land from Foreign Harm Act will be added as an amendment to the bill, part of a set of legislation passed every five years.


Global Agricultural Industry is on the Verge of Modernization with the Increasing need for Crop Production

Fertilizer applicators is type of agricultural machinery, which is used for application of fertilizers in the agricultural field. Fertilizer applicators are of various types including sprayer, floaters, pull type, and other combinations of various types.

The fertilizer applicators are available in different sizes and shapes, depending on applications. For instance small fertilizer applicators is available for garden uses, and the sizes may vary from small to a large sized applicator used in the large agricultural fields. Increasing use of fertilizers in large agricultural fields is expected to push the demand for the fertilizer applicators, during the forecast.

Global Fertilizer Applicators Market Dynamics

The fertilizer applicators market is projected to grow during the forecast period, due to technological advancements and introduction of new fertilizer applicator equipment in the agricultural machinery market. The demand of fertilizer applicators is increasing in agricultural industry, from emerging countries. Modernization of agricultural industry and replacement of human labor in developed as well as developing regions is accelerating the demand for fertilizer applicators, from all over the world. Need for high output from the limited fertile land, is expected to push the new technologies application in agricultural industry.

Increasing mechanization in the agriculture sector is expected to push the growth in the research and development for the ease of agricultural operations, and rise in its output. Initiatives from the governments of the various emerging countries for the manufacturing in their own countries, for instance “Make in India” campaign by Indian government, is also driving the market for fertilizers applicators in India.

Fertilizer Applicators Market Restraints

High cost is always a challenge in the agricultural machinery and equipment market. The new development and innovations in the fertilizer applicators adds new cost of research and development. Therefore the newly developed and advanced fertilizer applicators are costlier than those of the conventional and old one. This is expected to be a restraining factor for the fertilizer applicators market growth.

The farmers and growers in the emerging countries are used to with the old and conventional fertilizer applicators, hence the resistance for acceptance of the new technologies and machinery is a challenging task for the manufacturers of fertilizer applicators.

Fertilizer Applicators Market Trends

New developments in the market have been observed with up gradation in technology. Large capacity and efficient fertilizer applicators are being developed for the ease of operations in the agricultural fields. Product differentiations with the competitive pricing has been seen in the marketplace of the fertilizer applicators. Increasing number of manufacturers from the countries such as India and China, are pushing the competition in the market. New shapes and designs of the fertilizer applicators are being developed for the improvement in its operation.

Global Fertilizer Applicators Market: Regional Outlook

Agricultural industry is going through a dynamic shift towards the modernization, especially in emerging countries such as India and China. The global fertilizer applicators market is anticipated to be dominated by Asia Pacific region with China leading the market both in terms of production and consumption. India is expected to witness high growth in demand for fertilizer applicators owing to the growth in the agricultural production and economic development in the country. North America is anticipated to hold significant share in the fertilizer applicators market and the growth in agricultural sector in the region and is anticipated to drive the demand for fertilizer applicators, in the coming years.

Investments and improvement in economy recovery in Brazil and Argentina is projected to drive the fertilizer applicators market in Latin America. Initiatives by various emerging economies in Middle East and Africa to diversify the economy is projected to witness significant growth in demand for fertilizer applicators during the forecast period.

The Global Fertilizer Applicators Market: Regional analysis includes:

  • North America (U.S., Canada)
  • Latin America (Mexico, Brazil, Argentina, Chile, Peru)
  • Western Europe (Germany, Italy, France, U.K, Spain, BENELUX, Nordics)
  • Eastern Europe (Russia, Poland, CIS)
  • Asia-Pacific (China, India, ASEAN, South Korea)
  • Japan
  • Middle East and Africa (GCC Countries, South Africa, Turkey, Iran, Israel)

The global fertilizer applicators market report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, inputs from industry experts and industry participants across the value chain. The global fertilizer applicators market report provides in-depth analysis of parent market trends, macro-economic indicators and governing factors along with market attractiveness as per segments. The global fertilizer applicators market report also maps the qualitative impact of various market factors on market segments and geographies.

US Agriculture

US Agriculture Companies Expect Another Banner Year 

China’s Covid-19 rebound and elevated crop prices are poised to make 2023 another potent year for US agriculture. US net farm 2022 income reached its highest level since 1973 (adjusting for inflation). Corn and wheat prices skyrocketed after the Russian invasion of Ukraine with some regions noting up to a 19% jump from 2021. This is encouraging news for farming, but high inflation has also increased grocery prices for the rest of the economy. 

Demand for livestock feed, vegetable oils, and crops (according to grain-trading middlemen Bunge Ltd. and Archer Daniels Midland Co) is expected to remain strong this year. As China continues to open up, imports will naturally rise and keep US farm coffers flush with revenue. Bunge and Archer Daniels Midland generally perform well in the face of trade volatility and crop shortages in other parts of the world. ADM registered an impressive 2022 profit jump of 60% (compared to 2021) and Bunge just reported an 8% increase in earnings for the year. 

Meanwhile, grain exports have been slowly trickling out of Ukraine’s Black Sea ports. This was part of a larger export deal with Russia. While touted as an olive branch of sorts, US Department of Agriculture data notes that the level of exports is still far off from pre-war/Covid times. China’s pent-up demand is very similar to what occurred in the US in 2022. As the country opens Archer Daniels Midland expects a boom in demand for soybean oil and livestock feed for biofuels. Yet, prognostications are fragile as geopolitical tensions, especially around Taiwan, could derail any short-term gains. 

With high grain prices, farmers are expected to augment planting throughout 2023. Farm Progress, a research arm of Informa, anticipates corn acres surpassing 90 million for the year. This would be a 2% increase over last year. Another variable to keep an eye on, however, is weather changes. Multiple years of drought-like conditions have nudged wheat and hay prices higher. Yet, the winter did bring strong precipitation and snow in western US states. 

Net farm income is projected to hit $137 billion in 2023. To put this in perspective, the 20-year farm income average has been $108 billion (adjusted for inflation). $137 billion is a great year, but still down slightly from one of the largest farm net income years – 2021 at $141 billion.    

2022 was a very good year for the agriculture industry and despite incomes facing a slim downward trajectory, expect 2023 to be another boom for US agriculture.