R48094 — Foreign Ownership, Control, and Influence (FOCI) Risks in the Food and Agriculture Sector

In recent years, congressional concerns over potential risks to domestic food security posed by foreign ownership, control, and influence (FOCI) of critical infrastructure in the U.S. food and agriculture sector (FA Sector) have grown. FA Sector critical infrastructure encompasses many elements of the nation’s food supply chain. Examples include farms, grain elevators, certain testing laboratories, meatpacking facilities, and supermarkets. The U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) are the designated Sector Risk Management Agencies (SRMAs) for the FA Sector (1 of 16 federally designated critical infrastructure sectors). The SRMAs identify four main categories of risk to FA Sector-related functions: food contamination and disruption (accidental or intentional), disease and pests, severe weather, and cybersecurity. Partnerships are premised on the overarching assumption that private-sector owners of critical systems and assets are good-faith actors in a shared enterprise focused on ensuring availability and continuity of “national critical functions.” However, FOCI risks more often relate to the control, exploitation, or malicious use of otherwise operable systems and assets by self-interested foreign adversaries—instances where the good faith of asset owners cannot be assumed. This type of risk has not been consistently or systematically assessed within the existing critical infrastructure security and resilience (CISR) voluntary partnership framework. Potential FOCI risks in the FA Sector include prioritization of foreign markets over domestic food security considerations; intellectual property (IP) theft of strategically important genetic engineering research; illicit or forced technology transfer; control of agricultural land and basic agricultural inputs; access to sensitive infrastructure information (e.g., vulnerability assessments based on voluntary disclosures by private-sector entities); and control of critical cyber systems, assets, and networks. The Biden Administration has released several policy directives that address various infrastructure and supply chain issues specific to the FA Sector or—more broadly—to FOCI risks affecting multiple sectors. This includes a 2022 National Security Memorandum (NSM), “Strengthening the Security and Resilience of United States Food and Agriculture” (NSM-16), which contains provisions that expand federal regulatory reviews of foreign acquisitions of agricultural firms to include food security (in addition to national security) and that mandate supply chain security assessments by federal agencies (including USDA in the FA Sector). Many recent assessments note trends toward consolidation and foreign ownership within key segments of U.S. agriculture. For example, a USDA report identified the growing ownership concentration in meat and poultry manufacturing, pesticides and crop seeds, and farm machine parts as sources of potential supply chain risk, although it did not specifically identify FOCI as a factor. A 2021 joint report on FA Sector risks by the Department of Homeland Security (DHS) and the Office of the Director of National Intelligence (ODNI) warned of the possibility of a “takeover of [an] important supply chain entity by foreign investors” as part of an economic coercion and manipulation campaign. Foreign-owned or -controlled multinationals already have large, legally acquired holdings in various FA Sector segments. Some Members of Congress have expressed concern about the People’s Republic of China’s (PRC’s) acquisition of major food processing and agrochemical firms that have significant market share in the United States. Some public interest groups allege that multinationals may abuse IP protections for agrochemicals and genetically engineered seed, effectively control use of agricultural land, and gain access to farm-level data. Multinationals counter that IP protections allow for investments in new technologies and provision of innovative products at affordable prices to U.S. food producers. Foreign acquisitions of U.S. farmland have also caused concern, prompting legislative proposals that would restrict certain acquisitions. According to USDA, as of December 31, 2022, foreign entities—mainly Canada and some Western European countries—held an interest in 44.3 million acres of U.S. agricultural land, or about 3.4% of the total. PRC-linked holdings are small by comparison but have garnered scrutiny. Policy options for Congress exist in several areas related to FOCI risks in the FA Sector. These areas include (1) federal reviews of foreign investments and acquisitions of FA Sector assets, (2) requirements for data and reporting of foreign land purchases, (3) resourcing of SRMA programs and activities, (4) assessments of FOCI risk, and (5) IP protections in the bioeconomy and farming.

Curated by CRS — every bill listed in this report's relatedMaterials. Edge type cited_in_report, gold confidence.

• HR 5078 — FARMLAND Act of 2023 · 118th Cong
• HR 4577 — Protecting U.S. Farmland and Sensitive Sites From Foreign Adversaries Act · 118th Cong
• HR 3378 — Agricultural Security Risk Review Act · 118th Cong
• S 2393 — Food and Agriculture Industry Cybersecurity Support Act · 118th Cong
• S 2312 — Food Security is National Security Act of 2023 · 118th Cong
• S 2060 — FARMLAND Act of 2023 · 118th Cong
• HR 1448 — DARE Act of 2023 · 118th Cong
• HR 1219 — Food and Agriculture Industry Cybersecurity Support Act · 118th Cong
• S 1066 — SOIL Act of 2023 · 118th Cong
• HR 917 — Protecting Military Installations from Foreign Espionage Act · 118th Cong
• HR 683 — PASS Act of 2023 · 118th Cong
• HR 558 — To amend the Defense Production Act of 1950 to prohibit certain foreign countries from purchasing or · 118th Cong
• HR 513 — FARM Act · 118th Cong
• S 369 — Protecting Military Installations and Ranges Act of 2023 · 118th Cong
• S 168 — PASS Act of 2023 · 118th Cong
• S 68 — FARM Act · 118th Cong