While the Smithfield-Shuanghui sale was unanimously approved by the boards of both companies and is expected to be official in the second half of this year, Smithfield Foods shareholders, along with federal government anti-trust regulators, still must give their approval to the sale. The total package deal is valued at $7.1billion, which includes Smithfield’s debt. It is estimated that Smithfield Foods may own as many as 50,000 acres of Missouri farmland, not counting land owned in other states. To date, this is one of the largest purchases of a U.S. food corporation by a Chinese company.
Missouri has decades-old statutes that basically ban foreign ownership of Missouri farmland, though these statutes are virtually untested. Some existing foreign farmland owners acquired their land by working around these laws and shifting their property into majority-held U.S. subsidiaries and corporations.
In 2011 the House agriculture committees began looking more deeply into the issue of foreign ownership of Missouri farmland. The Missouri Department of Agriculture issues a required annual report of state farmland owned by foreign entities. The Department’s last report was Dec. 31, 2012, and it revealed a total of 201,268 acres of foreign-owned farmland in the state, a 109,811-acre increase over the previous year’s report.
The total acreage owned by foreign investors represents .70% of the reported 28,900,000 acres of Missouri farmland. According to the Missouri Department of Agriculture’s report that lists the country of ownership and the number of acres of foreign owned farmland in our state, the largest non-U.S. owners in Missouri are Italian investors, who own 102,771 acres. The largest non-U.S. owners in Newton County are New Zealanders, who own 3,500 acres, but who own 18,578 total acres statewide. It was obvious that current law is not working if its intent is to slow or stop foreign investors from purchasing our state’s farmland.
Late in Session this year, my committee on Agriculture Policy heard proposed legislation to address foreign ownership of land in Missouri. We decided not to vote the bill out of committee, as we needed time to do more research and to more closely examine the issue. Though many of those on the agriculture committees are against selling our state’s farmland to foreign interests, it is important to point out that not every person in the Legislature is opposed to it.
What our proposed legislation would have done was to limit foreign ownership of farmland to ½ of 1% of Missouri’s total farm acreage. It would also have given the Missouri Department of Agriculture the right to accept or reject any foreign land purchase. Furthermore, when we examined the report, we discovered we were already at 7/10 of 1%, well over the ½ of 1% of our targeted allotment.
The last week of Session, the representative from north Missouri who carried the foreign ownership bill decided to place it as an amendment on two omnibus bills, Senate Bill 9 and Senate Bill 342. In the amendment, the percentage allowed for foreign ownership of Missouri farmland was raised to a full 1%, or approximately 289,000 acres. In addition, this amendment gave the Missouri Director of Agriculture—a governor-appointed position—a major say in potential foreign land ownership.
SB 9 and SB 342 are the two ag omnibus bills that Governor Nixon recently vetoed, stating that they would remove all restrictions on foreign purchases of Missouri farmland. However, the legislation did not open the door to foreign investors, as was the impression given. It actually sought to cap their ownership at 1% and not allow for unlimited purchases of our farm acreage.
The surprise announcement of the Smithfield-Shuanghui sale was made public on May 29, almost two weeks after the close of Session. How good is this sale for Missouri, and the United States as a whole? Shuanghui International Holdings is poised to acquire a major U.S. food entity, and how one views foreign ownership of our nation’s farmland and food corporations will determine how one views this sale.