USDA to Beef Up Security Plan for Foreign Agriculture Investment

The Bottom Line

• USDA’s National Farm Security Action Plan recasts agriculture as a central national security concern.
• The anticipated memorandum of understanding institutionalizes USDA’s role in foreign investment reviews.
• Foreign investors in agricultural assets should expect deeper scrutiny, more robust mitigation, and higher risks of not receiving notifications if they forgo filings.

The US signaled a security risk management shift in the food and agriculture sector in July with the Department of Agriculture’s National Farm Security Action Plan. While the USDA isn’t a permanent member of the US Committee on Foreign Investment, the plan places CFIUS at the center of a new, more integrated federal posture toward foreign investment in farmland, agricultural supply chains, and agricultural biotechnology.

The plan comes with concrete steps to harden visibility and enforcement under the Agricultural Foreign Investment Disclosure Act, or AFIDA, modernize data and reporting, and channel national security policy tools toward agricultural assets and infrastructure.

These moves, taken together with recent CFIUS and state-level activity, mark an evolution from the prior framework that addressed agriculture largely through the lens of proximity-based real estate jurisdiction, non-notified monitoring, and sporadic interagency engagement.

Baseline Framework

CFIUS has broad jurisdiction to review foreign controlling acquisitions of US businesses, certain non-controlling covered investments in sensitive US businesses, and foreign acquisitions of specified rights in covered real estate near military installations, ports, and other sensitive sites. In real estate, CFIUS focuses on acquisitions of rights to access, exclude, improve, or develop, or attach fixed structures, near identified military installations, and also in certain covered ports.

CFIUS has expanded its covered installations list—adding eight bases in 2023 and 59 bases in 2024—to mitigate threats from foreign investments in agricultural land near military installations. An example of this is the Fufeng Group’s (a food manufacturer with ties to the Chinese Communist Party) 2021 purchase of more than 300 acres of agricultural land near Grand Forks Air Force Base. While CFIUS ultimately determined that the transaction fell outside of its enforcement jurisdiction, the City of Grand Forks terminated the development agreement in 2023, driven by local and federal pressure to address national security concerns.

For corporate transactions, CFIUS review is mandatory for certain US businesses involving critical technologies and certain government-linked investors. Otherwise, filings are typically voluntary but can be strongly advisable when a transaction could present national security risk. CFIUS can impose mitigation, recommend presidential prohibition or divestment, and review non-notified transactions—even years after closing.

AFIDA, separately, requires foreign investors to report holdings and transactions in US agricultural land to USDA. As the Government Accountability Office found in January 2024, AFIDA’s paper-based reporting, data completeness, enforcement, and interagency sharing have been deficient, undermining the national security community’s situational awareness and CFIUS’s ability to leverage AFIDA data in risk screening.

USDA’s 2025 Plan

The USDA plan reframes agriculture as a top-tier national security domain and sets seven lines of effort, with two having direct consequences for CFIUS practice and several others indirectly shaping CFIUS risk analyses and processes.

Most notably, the USDA commits to signing a joint memorandum of agreement with the US Treasury Department, as chair of CFIUS, to ensure regular coordination related to reviews of covered foreign transactions that involve farmland, agricultural businesses, agricultural biotechnology, or the agriculture industry.

While the USDA isn’t a CFIUS member, Section 787 of the Consolidated Appropriations Act of 2024 requires CFIUS to include the agency as a member on a case-by-case basis. Along those lines, the memorandum suggests persistent, systematic USDA participation in scoping national security risks such as biosecurity, supply chain dependence, and research security when transactions implicate food and agriculture.

The likely scope includes farmland and agriculture-adjacent sectors such as agricultural biotechnology, food processing, temperature logistics, and critical infrastructure tied to food and agriculture. The USDA’s risk articulations are expected to inform both foreign direct investments and foreign real estate transactions.

The plan also calls for aggressive reforms to the AFIDA process, including an online filing system, enhanced filings that include geospatial information and land-use purposes, higher civil penalties for late or false filings, and a public-facing portal to report AFIDA violations and adversarial foreign influence in farmland transactions. These reforms build on USDA’s late-2023 proposed AFIDA rulemaking to expand data capture, address GAO criticisms, and speed interagency sharing.

As a result, AFIDA may become a near-real-time national security data source, with geospatial precision and enforcement heft. This would enable CFIUS to better identify non-notified real estate and business transactions involving agricultural land and to evaluate transactional risk in context, such as proximity to critical infrastructure, irrigation networks, feedlots, or sensitive research facilities.

The plan also targets countries of concern such as China, Russia, Iran, and North Korea, and unnamed “foreign adversaries.” China is of particular concern to national security, as investors reportedly purchased farmland close to as many as 19 military bases throughout the US, and overall hold more than 345,000 total acres of US farmland as of Dec. 31, 2022.

Targeting risk from such countries, the USDA will require grantees to certify that key participants aren’t owned or controlled by foreign adversaries, aren’t party to malign foreign talent programs, and will disclose gifts or contracts from countries of concern.

The USDA will identify critical agricultural inputs and materials, conduct sector risk assessments, and coordinate with law enforcement and the intelligence community to protect cybersecurity concerns. It also will work with Congress and individual states to end the direct or indirect purchase or control of US farmland by nationals from countries of concern or other foreign adversaries, according to the plan.

While legislative specifics aren’t embedded in the plan, congressional proposals in recent sessions aim to make agricultural transactions more squarely and mandatorily reviewable, and the USDA’s support could catalyze those efforts.

A Shifting Landscape

If USDA’s plan is executed as designed, it will entrench the agency as a key player in the CFIUS review process, improve data collection, and strengthen enforcement by:

Shifting from ad hoc to institutionalized USDA involvement in CFIUS. CFIUS historically has consulted the USDA informally on agriculture-related risk analyses. But a formal USDA–Treasury agreement stands to institutionalize USDA’s subject-matter input—on land use, biosecurity threats, animal and plant health, and research security—across a wider set of transactions.

Moving from incomplete visibility to a geospatial AFIDA dataset. The GAO’s 2024 report found AFIDA processes to be “flawed” and that it doesn’t regularly share information with CFIUS. A digitized, geocoded AFIDA system, coupled with higher penalties and a tip portal, could increase the quality and timeliness of information reaching CFIUS, making non-notified detection more likely.

Sharpening risk signaling and enforcement. By tying multiple actions to countries of concern and foreign adversaries, the USDA puts foreign investors from (or with ties to) these jurisdictions on notice: Transactions touching agriculture will attract deeper US government attention and could face steeper resistance, especially where farmland or sensitive biological assets are involved, especially so in the case of China.

Creating significant implications for foreign investment in agricultural assets. Farmland acquisitions may face more frequent CFIUS outreach to the extent that it has jurisdiction to review an underlying transaction, particularly for non-notified transactions by investors from countries of concern or foreign entities with opaque ownership. There could be a greater probability of mitigation measures such as divestiture, land-use restrictions, or data and technology restrictions, as well as closer federal-to-state coordination where state farmland restrictions apply.

Transactions involving agricultural biotechnology and biologicals may be treated similarly to dual-use critical technology deals, with enhanced mitigation to prevent technology transfer and data access to adversaries. Accordingly, the USDA’s research-security screening of grantees will inform CFIUS due diligence and mitigation design.

Food processing and logistic assets, particularly those adjacent to ports or military bases, can remain. Cyber and data risks will be salient to CFIUS risk mitigation and could lead to requirements for exclusive US network administration and data localization controls. Investments that increase US dependence on adversary-controlled inputs could face mitigation or opposition where national security vulnerability is identified.

Even non-controlling investments into a US business with governance, information, or access rights—typical of venture financings—can be considered covered investments. With improved AFIDA data and USDA tip-lines, CFIUS non-notified outreach could be more likely, so investors should anticipate higher exposure and consider proactive filings where risk signals exist.

With structured USDA–CFIUS coordination, AFIDA’s modernization transforms a compliance registry into a tactical data feed, and then USDA’s research and cyber posture supplies CFIUS with sector-specific risk frameworks.

Previously, data fragmentation and low AFIDA deterrence were the norm, with infrequently assessed penalties, paper-based processes, and GAO flagging errors and underreporting, while CFIUS agencies had irregular access to information. Now, enhanced cooperation raises the prospect of increased CFIUS review of farmland transactions.

State law overlays are also more prominent now, with rapid growth in state restrictions on foreign ownership of agricultural land and critical-infrastructure-adjacent property. The USDA’s plan explicitly contemplates working with states to further restrict farmland access by foreign adversaries, reinforcing CFIUS risk positions and increasing multilevel scrutiny.

Enforcement Expectations

For market participants, several practical takeaways emerge.

It is essential to conduct a CFIUS–AFIDA–state triage early in any transaction touching agricultural land. Parties should assume USDA participation and prepare for USDA-informed diligence questions regarding biosecurity protocols, animal and plant health risks, research affiliations, supply chain dependencies, cyber hygiene, and land-use plans, assembling documentation to demonstrate risk mitigation.

Investors from, or with exposure to, countries of concern should anticipate heightened scrutiny and implement governance controls to address beneficial ownership and influence. Where CFIUS has authority and the risk profile is non-trivial, a voluntary CFIUS notice or declaration can reduce retroactive uncertainty.

Parties also should monitor AFIDA rulemaking and penalties, ensuring that filings to the agency are timely, accurate, and geospatially complete, and build AFIDA compliance as a deal workstream.

For market participants, the path forward is careful diligence, transparent ownership, early engagement with CFIUS where risk indicators are present, and deal structures that anticipate USDA-informed mitigation.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Massimo F. D’Angelo is partner at Blank Rome and co-chair of its real estate industry group.

Anthony Rapa is partner and co-chair of the international trade practice group at Blank Rome.

William M. Pekarsky is an associate at Blank Rome.

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