AFIDA Rulemaking 2026: New Disclosure Requirements for Foreign Investment in U.S. Agricultural Land

The U.S. Department of Agriculture (USDA) has initiated a formal rulemaking proceeding under the Agricultural Foreign Investment Disclosure Act (AFIDA) to substantially revise the regulations governing foreign investment in U.S. agricultural land. The proposed changes represent the most significant update to AFIDA's implementing regulations since the statute was enacted in 1978.

For Turkish investors, family offices, agricultural companies, and any foreign person holding or considering acquiring an interest in U.S. farmland, timberland, or other agricultural property, the proposed rules create new compliance obligations that require immediate attention.

The Agricultural Foreign Investment Disclosure Act of 1978 requires foreign persons who acquire, transfer, or hold an interest in U.S. agricultural land to report that interest to the USDA's Farm Service Agency (FSA). The statute defines "agricultural land" broadly to include cropland, pastureland, timberland, and other land used for farming, ranching, or forestry purposes.

AFIDA is a disclosure statute — it does not prohibit foreign investment in agricultural land, but it requires reporting so that the federal government can monitor the extent and nature of foreign ownership. Failure to file required reports or filing false reports can result in civil penalties.

The current AFIDA regulations, codified at 7 C.F.R. Part 781, have not been comprehensively updated in decades. The USDA's rulemaking proceeding is intended to modernize the regulations to reflect changes in investment structures, ownership vehicles, and the increased policy focus on foreign agricultural land ownership.

The current regulations require reporting of direct ownership interests in agricultural land. The proposed rules would expand the definition of reportable interests to include:

Indirect ownership interests: Foreign persons who hold interests in U.S. agricultural land through domestic entities — LLCs, limited partnerships, corporations, trusts — would be required to report if they hold a specified ownership or control threshold in the entity. The proposed threshold is a 10% or greater interest in the entity, or any interest that confers the ability to direct the management or disposition of the land.

Leasehold interests: Long-term leases of agricultural land (proposed threshold: leases of 10 years or longer) would be reportable, even if the foreign person does not hold a fee ownership interest.

Options and rights of first refusal: Options to purchase agricultural land and rights of first refusal would be reportable at the time of acquisition, not only upon exercise.

Beneficial ownership through trusts: Foreign persons who are beneficial owners of trusts holding agricultural land would be required to report, even if the trustee is a U.S. person.

Under current regulations, foreign persons have 90 days after acquiring an interest in agricultural land to file the required FSA-153 disclosure form. The proposed rules would shorten this deadline to 30 days for most acquisitions.

For acquisitions through indirect ownership structures (entities, trusts), the 30-day clock would begin when the foreign person acquires the interest in the entity, not when the entity acquires the land.

The proposed rules would require disclosure of additional information, including:

• The identity of all foreign persons with a reportable interest, including beneficial owners
• The citizenship or country of organization of each reportable foreign person
• The purchase price or other consideration paid for the interest
• The intended use of the land
• The source of funds used to acquire the interest
• Any existing or planned financing arrangements

Current AFIDA penalties are capped at 25% of the fair market value of the interest. The proposed rules would:

• Increase the maximum penalty to 50% of fair market value for willful violations
• Establish a minimum penalty floor for non-willful violations
• Create a separate penalty structure for late filings (as opposed to complete non-disclosure)
• Authorize penalties for each day of continuing non-compliance

The proposed rules would authorize USDA to:

• Require foreign persons to provide supporting documentation for their disclosures
• Conduct audits of AFIDA compliance
• Share disclosure information with other federal agencies, including CFIUS, the Department of Justice, and the Department of Homeland Security
• Refer potential violations to the Department of Justice for civil enforcement

The Committee on Foreign Investment in the United States (CFIUS) has jurisdiction to review foreign acquisitions of agricultural land near military installations and other sensitive facilities under the Foreign Investment Risk Review Modernization Act (FIRRMA). AFIDA disclosure and CFIUS review are separate processes, but the proposed AFIDA rules would facilitate information sharing between USDA and CFIUS.

Turkish investors acquiring agricultural land near U.S. military bases, ports, or other sensitive infrastructure should assess both AFIDA disclosure obligations and potential CFIUS jurisdiction.

Numerous U.S. states have enacted or are considering legislation restricting foreign investment in agricultural land. These state laws vary significantly in their scope, covered countries, and enforcement mechanisms. Some states have enacted outright prohibitions on agricultural land ownership by nationals of specified countries; others require disclosure or impose acreage limits.

Turkish investors must assess both federal AFIDA obligations and applicable state-level restrictions for any agricultural land acquisition.

Turkish nationals or Turkish-controlled entities that directly own U.S. agricultural land are already subject to AFIDA reporting. The proposed rules would:

• Require review of existing disclosures to ensure they remain accurate and complete under the expanded reporting requirements
• Impose shorter deadlines for future acquisitions
• Increase penalty exposure for non-compliance

Turkish investors who hold interests in U.S. agricultural land through domestic entities — including private equity funds, real estate investment vehicles, and family holding companies — may not have filed AFIDA disclosures if they believed the indirect ownership structure exempted them from reporting. The proposed expansion of AFIDA to cover indirect ownership would bring these investors within the statute's scope.

Turkish investors with indirect agricultural land holdings should:

1. Identify all U.S. entities in which they hold a 10% or greater interest
2. Determine whether any such entity holds agricultural land
3. Assess whether a reportable interest exists under the proposed rules
4. Consult with U.S. counsel regarding disclosure obligations and any applicable penalty mitigation for voluntary disclosure

Turkish agricultural companies with U.S. operations — including grain traders, food processors, and agribusiness companies — that lease or own U.S. farmland or timberland should review their AFIDA compliance posture in light of the proposed rules.

Turkish family offices and investment funds with diversified U.S. real estate portfolios that include agricultural land should conduct a portfolio-wide AFIDA review to identify all reportable interests and ensure compliance with current and proposed requirements.

1. Portfolio audit: Identify all U.S. agricultural land interests, direct and indirect, held by Turkish persons or entities
2. Existing disclosure review: Confirm that all required AFIDA disclosures have been filed and are accurate
3. Entity structure review: Assess whether any indirect ownership structures create reportable interests under the proposed expanded rules
4. State law review: Identify applicable state-level agricultural land restrictions for each property

1. Monitor the rulemaking: Track USDA's publication of the final rule and its effective date
2. Comment period: Consider submitting comments during the public comment period if the proposed rules create compliance burdens or ambiguities
3. Update compliance procedures: Revise internal compliance procedures to reflect the shorter filing deadlines and expanded reporting requirements
4. Counsel engagement: Engage U.S. agricultural and real estate counsel to advise on compliance with the final rule

1. Pre-acquisition review: For any future U.S. agricultural land acquisition, conduct AFIDA analysis before closing
2. 30-day filing calendar: Implement a compliance calendar to ensure timely filing within the proposed 30-day deadline
3. Beneficial ownership tracking: Maintain records of all foreign beneficial owners of entities holding agricultural land

USDA has opened a public comment period on the proposed rules. Stakeholders — including foreign investors, agricultural landowners, and industry associations — may submit written comments. The comment period is an opportunity to raise concerns about the proposed rules' scope, compliance burdens, and implementation timeline.

ULF New York advises Turkish investors, family offices, and agricultural companies on AFIDA compliance, U.S. agricultural land acquisitions, CFIUS review, and cross-border real estate transactions. Contact us for a consultation on your AFIDA disclosure obligations.