Farmland Security Act Imposes 100% Land Value Fine for Foreign Disclosure Violations

The newly proposed Farmland Security Act of 2025 is taking a massive swing at foreign investment in U.S. agricultural land, specifically targeting how those investments are reported. This isn't just about paperwork; it’s about putting teeth into the decades-old Agricultural Foreign Investment Disclosure Act (AFIDA).

The New Penalty: Lose the Farm Over Paperwork

The most eye-popping change is the penalty structure for foreign-owned shell corporations—which the bill defines as legal entities with little to no actual business operations. If one of these entities fails to properly report their purchase or lease of U.S. farmland, the Secretary of Agriculture can now fine them an amount equal to 100 percent of the fair market value of the land involved. Think about that: a paperwork violation could cost you the entire value of the asset. For a foreign investor who just bought a $5 million piece of land, an administrative error could result in a $5 million fine.

This extreme measure is clearly designed to be a massive deterrent. However, the bill does offer a safety valve: if the shell corporation fixes the filing mistake or files late within 60 days after the Secretary notifies them of the violation, they avoid the maximum penalty. This 60-day window is a tight deadline, especially for complex international corporations. While increased transparency is the goal, this provision introduces significant financial risk for foreign entities, potentially ensnaring legitimate holding companies or investment vehicles in the process.

More Cops on the Agricultural Beat

To ensure these new rules aren't just empty threats, the bill dramatically increases government oversight. The Secretary of Agriculture is now required to conduct an annual compliance audit, checking at least 10 percent of all submitted reports each year to catch errors or omissions. This means more eyes on the disclosures, which should improve data accuracy.

Crucially, the bill also mandates yearly training for state and county staff. These local officials are often the first to know about land transactions, and this training is designed to help them spot when a foreign entity should have filed a report but didn't. This is smart—it pushes enforcement down to the local level where the transactions actually happen. It also authorizes $2 million annually from fiscal years 2025 through 2030 to fund this enhanced enforcement and training.

What They're Looking For

Beyond enforcement, the bill requires the Secretary to launch new research initiatives and report the findings to Congress every year. This research must focus on a few key areas that concern policymakers: how foreign persons are using agricultural leases, the impact of these arrangements on family farms and the food supply, and trends involving foreign-owned shell corporations buying farmland. For regular folks, this means that for the first time, the government will be systematically tracking and publicizing the real-world effects of foreign ownership on American agriculture, moving beyond simple ownership data to understand the economic impact on the ground.