CFIUS Expands to Include Secretary of Agriculture

In the latest sign of the U.S. Government’s expanding view of national security risks, the Secretary of Agriculture has become a member of the Committee on Foreign Investment in the United States (“CFIUS”) stemming from concerns regarding foreign ownership of agricultural land and companies in the United States. The Consolidated Appropriations Act, 2024 (the “Minibus”), enacted into law on March 9, 2024, provides for the Secretary of Agriculture to be included as a CFIUS member on a case-by-case basis in connection with agriculture-related transactions subject to CFIUS review. The inclusion of the Secretary of Agriculture in CFIUS does not expand the scope of CFIUS’s jurisdiction over agriculture-related transactions. However, CFIUS operates by consensus, which means the Secretary of Agriculture will need to approve any transactions in which the Secretary of Agriculture participates in reviewing in order for CFIUS clearance to be issued.

Secretary of Agriculture CFIUS Membership

The members of CFIUS include the heads of the Departments of the Treasury, Justice, Homeland Security, Commerce, Defense, State, and Energy, as well as the Office of the U.S. Trade Representative and the Office of Science & Technology Policy. Various other White House agencies and other U.S. Government departments are observers or non-voting members of the Committee.

The Minibus provides for the Secretary of Agriculture to participate as a member of CFIUS for transactions subject to CFIUS jurisdiction involving agricultural land, agriculture biotechnology, or the agriculture industry (including agricultural transportation, agricultural storage, and agricultural processing). The Secretary is specifically tasked with notifying CFIUS of agricultural land transactions involving foreign governments and entities of concern, including China and Russia, or national security risks posed by foreign persons required to submit reports under the Agricultural Foreign Investment Disclosure Act (“AFIDA”). (The minibus also requires the Secretary of Agriculture to create an electronic submission process and internet database for AFIDA filings.)

Implications

Proposals to include the Secretary of Agriculture as a member of CFIUS to focus the Committee’s attention on agriculture and food supply as national security concerns have been made over the last several Congresses. (Sen. Grassley of Iowa, a major proponent of such actions, first introduced a bill to add the Secretary of Agriculture to CFIUS in 2016.) Recently, following high-profile Chinese acquisitions of land near U.S. military facilities, there has been a push at both the federal and state levels to impose prohibitions or restrictions on Chinese and Russian investors from purchasing U.S. real estate, farmland, and agricultural companies. To date, those efforts have not been successful at the federal level, but we expect both the Biden Administration and Congress to continue to pursue measures to protect national security in connection with U.S. agriculture and food supply.

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