UPDATE: New USDA Proposed Rule To Hit Foreign Ownership And Broaden Reporting Requirements And Penalties

*This alert updates Wiley’s February 20, 2026 client alert, Recent Developments in Law and Policy Regarding the Food Supply Chain, Agricultural Land Ownership, and Antitrust Investigations, concerning, in part, the December 29, 2025 advance notice of proposed rulemaking under the Agricultural Foreign Investment Disclosure Act.

In reaction to new Administration priorities and Congressional directives, the U.S. Department of Agriculture (USDA) issued an aggressive proposed rule that would substantially revise the regulations implementing the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA), which requires disclosures of certain foreign ownership of agricultural land. The proposed rule, if finalized, would significantly expand current disclosure obligations by broadening the definition of “agricultural land” to include certain agricultural and forestry support activities, pipeline transportation, solar electric and wind electric power generation, animal processing facilities, farm-product warehousing and storage operations, and agricultural research activities, among others. It would also lower foreign ownership reporting requirement thresholds and substantially increase penalties for non-compliance.

The proposed rule reflects views by the Trump Administration, Congress, and multiple U.S. states that certain foreign ownership of U.S. agricultural land and food systems presents national security concerns that must be addressed immediately. Beyond seeking to improve the quantity, quality, and timeliness of AFIDA data and facilitating information sharing with agencies such as the Committee on Foreign Investment in the United States (CFIUS), the proposal is intended to expand USDA's visibility into foreign ownership and investment in agricultural land and related activities, strengthen federal oversight, and increase compliance with AFIDA's reporting requirements.

Landowners, investors, and companies with “agricultural land” holdings should evaluate how they will be impacted by the rule, especially given that compliance would be required within 90 days of the rule becoming effective. Comments to the proposed rule are due August 10, 2026, and the final rule is expected to be issued by December 2026.

Some of the most significant aspects of the proposed rule include: 

Expanded Coverage of “Agricultural Land” and Reportable Interests

The proposal would significantly broaden what constitutes “agricultural land” for AFIDA purposes. As a result, in addition to traditional farming, ranching, forestry, and timber-production land, USDA proposes to include certain agricultural and forestry support activities, pipeline transportation, solar and wind electric power generation, and land currently in conservation that could be used for farming, ranching, forestry, or timber production. Entities involved in the agricultural and livestock supply chain, including animal slaughter and processing facilities and farm-product warehousing and storage operations, would also become subject to AFIDA disclosure requirements. Land used for agricultural research activities, including agricultural biotechnology, would be considered agricultural land subject to disclosure. USDA additionally proposes to treat land meeting the federal definition of agricultural land as covered regardless of local zoning classification.

The proposed rule would narrow or eliminate several exemptions that have historically limited AFIDA filings. For example, USDA proposes to reduce the reporting exemption for leases of less than 10 years to leases of less than one year. The proposal would also eliminate the current exemption for agricultural land under 10 acres where annual sales of farm, ranch, or timber products do not exceed $1,000, potentially subjecting easements and rights-of-way to disclosure.

These changes could bring a much broader range of transactions and land arrangements within AFIDA’s reporting regime, including short-term lease arrangements, conservation-property interests, renewable-energy uses, pipeline-related interests, and agricultural supply-chain infrastructure.

Beneficial Ownership, Layered Entities, and Foreign Minority Investors

One of the most important compliance implications is the proposed expansion of ownership and control disclosures. Under the current regulations, disclosure is required when foreign interests exceed 50% in the aggregate for entities or 10% for individual owners. USDA proposes to revise the definition of “significant interest or substantial control” by reducing the aggregate foreign ownership threshold to 10% (and is seeking comment on whether a 5% threshold would be appropriate). USDA also proposes to clarify that interests held through shell corporations, trusts, partnerships, and other layered structures will count toward the aggregate ownership threshold and be subject to disclosure if the threshold is met. These changes could substantially expand required disclosures, particularly given the proposed broadened definition of “agricultural land,” as noted above. 

The proposed rule creates reporting requirements for “beneficial owners,” defined as any foreign person who has direct or indirect decision-making authority over the agricultural interest, regardless of the amount of interest possessed. In addition to requiring the identification of all foreign persons holding significant interest or substantial control, entities would be required to specify the nature of the interest held, percentage interests held by each individual and country, aggregate interests held by country, and an ownership diagram depicting the relationships between interest holders. USDA also proposes to require tax identification numbers, foreign passport numbers, and other unique identifiers, where applicable.

Foreign Adversary Scrutiny and National Security Framing

The proposed rule would add definitions for “foreign adversary” and “Foreign Adversary Controlled Entity.” USDA proposes to define “foreign adversary” by reference to foreign countries of concern, including the People’s Republic of China, the Democratic People’s Republic of Korea, the Russian Federation, the Islamic Republic of Iran, or any other country determined to be a country of concern by the Secretary of State. Any interest in agricultural land, no matter how small, held by a foreign adversary or Foreign Adversary Controlled Entity will be subject to disclosure under the proposed framework as will any lease, regardless of its duration.

Penalties and Appeals: More Risk for Late or Incomplete Filings

The proposed rule creates separate penalty schemes for late filings involving acquisitions or holdings, transfers or inheritances, and a newly reportable holding. Initial penalties for late filings would begin at $250 and increase each week by 1.5% of the interest’s fair market value, or 2.5% for foreign adversaries or Foreign Adversary Controlled Entities. The penalty continues to be capped at 25% of the fair market value of the foreign interest in the agricultural land, but downward adjustment of penalties will no longer be available. The proposal would also revise appeal procedures, including reducing the time to request an appeal from 60 days to 30 days and eliminating the option to contest liability by hearing.

Administration 

The proposed rule would shift administration of AFIDA from the Farm Service Agency (FSA) to the USDA’s Office of Homeland Security, which works directly with CFIUS. 

Senate Farm Bill Proposal Signals Additional AFIDA Reforms

Senate Agriculture, Nutrition, and Forestry Committee Chairman John Boozman recently released the proposed text of the Senate version of the 2026 Farm Bill. This text, if passed, would strengthen AFIDA oversight but notably takes a different position on some of the proposed rule’s requirements:

• Lowers the reporting threshold for leasehold interests by requiring disclosure of leases of five years or more, down from the current 10-year threshold. Under USDA’s proposed rule, reporting would be required for all leases exceeding one year.
• Codifies the regulatory requirement that foreign persons holding an interest in agricultural land must notify USDA within 90 days if the land ceases to be agricultural land.
• Establishes a minimum penalty of 5% of the interest’s fair market value for incomplete, false, or misleading submissions, while retaining the existing 25% fair market value cap and preserving USDA’s ability to reduce penalties based on the nature of the violation and other mitigating factors. The proposed rule would authorize penalties up to 25% of the fair market value but prohibit downward adjustments.
• Authorizes the Attorney General to recover unpaid penalties through civil enforcement actions.
• Authorizes USDA to place liens on agricultural land to secure the payment of outstanding AFIDA penalties.

What This Means for Landholders Subject to the Proposed Rule

USDA’s proposed AFIDA rule would move the statute beyond its historical role as a relatively limited agricultural-land disclosure regime. When finalized, the rule would broaden covered land, narrow existing exemptions, expand foreign ownership interests subject to disclosure, and impose more significant penalties for late or incomplete filings. The proposal will affect not only foreign persons with certain interests in agricultural land, but also certain U.S.-organized companies with direct or indirect foreign ownership, agribusinesses leasing land, renewable-energy and pipeline developers, conservation-land holders, and investors using layered ownership structures. Companies with interests in agricultural land or agricultural supply-chain real estate should evaluate existing ownership structures, leases, and filing procedures now to determine how the proposed rule may impact reporting obligations.

Wiley’s Agriculture and Agribusiness and National Security Practice Groups will continue to monitor developments related to the proposed rule and are available to assist individuals and companies in evaluating the proposed rule’s potential impact and identifying AFIDA reporting obligations. Please contact one of the authors of the alert with any questions. 

Original Alert: 

Recent Developments in Law and Policy Regarding the Food Supply Chain, Agricultural Land Ownership, and Antitrust Investigations

Overview:

The Trump Administration recently made two announcements that will have notable impacts on the U.S. agricultural industry, with a particular emphasis on food supply security. These include:

(1) a proposed rulemaking under the Agricultural Foreign Investment Disclosure Act (AFIDA); and

(2) an Executive Order addressing anti-competitive actions that create food supply chain risk.

These developments signal a heightened federal focus on food and agriculture as matters of national and economic security and bring the potential for additional legislative changes for individuals and companies operating across the agricultural industry.

AFIDA Proposed Rulemaking

The U.S. Department of Agriculture (USDA) issued an advanced notice of a proposed rulemaking under AFIDA. The AFIDA statute, enacted in 1978, requires foreign persons who acquire or transfer an interest in domestic agricultural land to report such transactions to USDA. In the recent notice of proposed rulemaking, USDA stated that its goal was to “obtain valuable, comprehensive, and verifiable information about interests in U.S. agricultural land held by foreign persons.” USDA is seeking comments on ways to improve AFIDA reporting and filing mandates and on any other issues involving AFIDA, “particularly as they relate to national security interests,” and is asking whether requesting legislative changes is warranted.

The notice stated that the proposed rulemaking is intended to address a number of issues including: growing concerns about national security issues that could result from foreign ownership of agricultural land; findings from a recent Government Accountability Office (GAO) report identifying deficiencies in AFIDA implementation; and requirements in the Fiscal Year 2023 Consolidated Appropriations Act for USDA to “establish a streamlined process for electronic submission and retention” of AFIDA disclosures. The comment period recently closed, but parties should follow this closely as follow-up actions by USDA on these matters could be impactful.

Executive Order on Security Risks in the Food Supply Chain

President Trump recently issued an Executive Order (EO), “Addressing Security Risks from Price Fixing and Anti-Competitive Behavior in the Food Supply Chain.” In explaining the background for the EO, the EO stated “[a]n affordable and secure food supply is vital to America’s national and economic security. However, anti-competitive behavior, especially when carried out by foreign-controlled corporations, threatens the stability and affordability of America’s food supply.” Additionally, the EO noted certain sectors in the food supply chain that are vulnerable to anticompetitive conduct, including “meat processing, seed, fertilizer, and equipment.”

The EO directs the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) to establish a “Food Supply Chain Task Force” that will investigate anti-competitive behavior in the food supply chain, particularly when carried out by foreign-controlled corporations. The agencies are tasked with identifying whether the increased presence of foreign-controlled corporations in food-related industries poses a threat to national and economic security. The EO cites price-fixing claims in the food industry and the vulnerability of certain agricultural sectors to anticompetitive behavior as justifications for increased antitrust scrutiny over the food supply chain and foreign control. It authorizes DOJ and FTC to remedy any anti-competitive practices uncovered in the investigations by pursuing enforcement actions or proposing a new regulatory framework. The Task Force is required to provide joint briefings to Congress summarizing progress and any recommended congressional actions within 180 days of the EO’s release, and then again within 365 days.

 WHAT IT MEANS FOR INDUSTRY and OTHER STAKEHOLDERS:

Heightened AFIDA Reporting Requirements

The advanced notice of proposed rulemaking on AFIDA reporting requirements demonstrates the Administration’s continued focus and concern regarding foreign ownership of agricultural land. Reforming the AFIDA process was listed as a priority in the Trump Administration’s National Farm Security Action Plan, and there have been several recent legislative attempts to strengthen AFIDA reporting requirements, including the bipartisan AFIDA Improvements Act of 2025 (H.R. 4362) and the Farmland Security Act of 2025 (H.R. 1629). As indicated in the National Farm Security Action Plan, USDA launched a new online portal to report transactions involving foreign acquisitions of U.S. farmland on January 22, 2026. While the information gathered by the online portal remains the same as that of the current submission form, the creation of the digital portal signals that there will be continued efforts to modernize the AFIDA reporting process. 

Potential changes to the AFIDA reporting process may include requirements to provide additional details about the agricultural land in question, including geospatial information and ultimate beneficial ownership. They may also include increased civil penalties for AFIDA violations. While the changes to the AFIDA process that USDA will propose are uncertain, because the Committee on Foreign Investment in the United States (CFIUS) uses AFIDA data in its national security reviews, heightened AFIDA reporting requirements may indicate a shift towards greater CFIUS scrutiny over transactions in the agricultural sector.

CFIUS Implications

Given the EO’s emphasis on food security as a national security issue and focus on foreign-controlled corporations, increased scrutiny by CFIUS on agriculture related transactions is very likely. This action aligns with recent bipartisan legislative proposals, such as the Protecting American Agriculture from Foreign Adversaries Act of 2025 (H.R. 1576) and the Agricultural Risk Review Act of 2025 (H.R. 1713), that would restrict foreign ownership of farmland, particularly by foreign entities affiliated with China. These bills add the Secretary of Agriculture as a permanent member of CFIUS and direct CFIUS to review transactions involving countries of concern, as required in disclosures under AFIDA, that the USDA believes to be under the jurisdiction of CFIUS. The emphasis on agriculture as an element of national security is additionally present in the recently signed MOU between USDA and the U.S. Department of Defense/War, which establishes a framework for the agencies to “more closely [] defend the nation’s food and agricultural systems, strengthen domestic productivity, and address emerging security threats to American agriculture” in line with the National Farm Security Action Plan. 

The issues highlighted in the EO fall within the scope of CFIUS’s jurisdiction, particularly given the ongoing inclusion of the USDA in CFIUS cases, as detailed in an MOU between the agencies published in July 2025. USDA’s role within the CFIUS process for transactions relating to “agricultural land, agriculture biotechnology, [and] the agriculture industry” was formalized in the Consolidated Appropriations Act of 2024.

CFIUS has the authority to review covered transactions involving foreign acquisition of certain U.S. businesses and real estate to determine the national security risks. Although the EO does not specifically address CFIUS standards or reviews, it directly calls for addressing national security considerations in analysis of transactions involving food and agriculture.

Antitrust Implications

This EO is part of a series of federal actions aimed at strengthening competition in the domestic food supply and reinforces this as a priority for the Trump Administration. For context, in September 2025, the Antitrust Division of the DOJ and USDA issued a Memorandum of Understanding describing the continued cooperative relationship between the two agencies in monitoring competition for agricultural inputs. President Trump additionally directed DOJ to investigate price fixing in the meat packing industry in a social media post in November, citing “foreign-dominated conglomerates that control America’s meat supply.” This comes on the heels of a reported DOJ investigation into collusion among egg producers in the spring of 2025 (which spawned a wave of private antitrust lawsuits in late 2025) as well as the DOJ’s ongoing litigation involving benchmarking and information sharing among meat processors.

Moreover, recently, members of Congress and the Administration have been discussing antitrust issues in the agriculture industry. Senator Chuck Grassley (R-IA) recently wrote to the FTC and the DOJ advocating for the agencies to use federal trust regulations on fertilizer companies. The Senator also reintroduced legislation, the Fertilizer Research Act (S. 2808), which would require USDA to study competition in the fertilizer industry and provide more price transparency in the market. Rep. Nikki Budzinski (D-Ill.) who introduced the companion Fertilizer Research Act in the House (H.R. 6192) said she is working to include it in the upcoming Farm Bill.¹ At the American Farm Bureau Convention in January, Secretary of Agriculture Brooke Rollins said that the fertilizer industry had “vulnerabilities to price-fixing”.²

Given these initiatives, producers and suppliers across the food supply chain should prepare for increased antitrust scrutiny by federal, state, and private antitrust enforcers. Such companies should proactively assess and update their compliance programs—including policies governing pricing, information sharing, trade association participation, and interactions with competitors and customers—to mitigate heightened enforcement risk in an evolving regulatory environment.

Wiley’s cross-disciplinary attorneys have extensive experience at multiple government agencies. Our Food & Drug, FTC and Consumer Protection, National Security, International Trade, Antitrust and Strategic Competition/Supply Chain teams have unparalleled experience and expertise representing a broad range of U.S. and multinational clients in complex matters. For more information on this EO and any other food security issues, please contact any of the attorneys listed on this alert.

Footnotes

1. Rachel Shin, Morning Agriculture, Politico Pro (Feb. 3, 2026), https://subscriber.politicopro.com/newsletter/2026/02/ag-antitrust-busters-00761450.

2. Id.