Today, I am signing into law S. 3384, the Agricultural Foreign Investment Disclosure Act of 1978.
This legislation establishes a nationwide system to monitor foreign purchases of U.S. farmland and directs the Secretary of Agriculture to evaluate the effects of such foreign investment on family farms and rural communities. The bill establishes a series of detailed reporting requirements that will apply to all foreign citizens who hold or acquire a significant interest in American agricultural land.
For some time, many of our Nation's farmers have expressed concerns that increased foreign investment in U.S. farm real estate has driven land prices up. There have also been fears that foreign investors may be more willing to subdivide their land or divert it to other uses. While recent surveys by the Commerce Department and the General Accounting Office suggest that foreign ownership of domestic farmland is still very low, I recognized that we need more information on farmland ownership patterns before we reach definite conclusions.
S. 3384 should help fill that information gap. Together with a study under way in the Agriculture Department to determine the best long-range approach to monitoring foreign investment in U.S. real estate, this legislation will help give us a sound, factual basis for future policy decisions.
I must, however, caution those who expect immediate results from the studies required by S. 3384. The information obtained through the bill's reporting requirements will have to be analyzed carefully. The policy options that arise from such analysis will have to be considered in the light of overall U.S. trade policies, including our opposition to unnecessary restrictions on international investment flows. It will be particularly important to evaluate whether various economic trends, including higher real estate prices and absentee ownership of land, are actually due to foreign investment and whether they reflect other domestic social and economic factors.
At a time when government efficiency is at the front of our people's minds, I am glad that the Congress has given us an opportunity to evaluate the efficiency and effectiveness of this monitoring system by requiring a report from the Secretary of Agriculture at the end of 1 year. I hope that that evaluation, which will coincide with the completion of the study required by the International Investment Survey Act, will provide a sound basis for shaping future Federal efforts in this area.