Attorney General Tim Griffin announced Tuesday he is ordering a Chinese-state owned company to divest its ownership of farmland in Arkansas.
Syngenta Seeds, LLC, a company that makes genetically modified corn, wheat, soybeans, vegetable and sunflower seeds, owns about 160 acres of farmland in Craighead County through a subsidiary, Northrup King Seed Co., according to the Attorney General's Office.
In May 2017, China National Chemical Corporation, also known as ChemChina, acquired 80.7% of the company's shares according to a Syngenta news release. The company lists its legal addresses in Wilmington, Del., and Basel, Switzerland, according to its federal disclosure, saying "the landowner entity" changed from Switzerland to China in 2017. In 2022 the U.S. Department of Defense listed ChemChina as a Chinese Military Company that operates in the United States.
At a news conference at the State Capitol on Tuesday, Gov. Sarah Huckabee Sanders said the Arkansas land Syngenta's subsidiary uses is for seed research and that its landholdings in northeast Arkansas are a major security concern.
"Seeds are technology," Sanders said. "Chinese-state owned corporations filter that technology back to their homeland, stealing American research and telling our enemies how to target American farms. That is a clear threat to our national security and to our great farmers."
The state's move to force Syngenta to divest its landholdings in Arkansas is the first such action taken since a newly passed state law took effect. Act 636 prohibits certain "prohibited foreign-party-controlled business" from owning agriculture land in Arkansas. Countries that are banned from owning farm land in the state are listed under the federal International Traffic in Arms Regulations, which includes China.
"Syngenta is disappointed by today's announcement by the State of Arkansas about a bill that was passed in April. Nothing new was announced today," a Syngenta spokesperson said in a statement. "The order for Syngenta to divest itself of 160 acres of agricultural land in Craighead County, which the company has owned since 1988, is a shortsighted action that fails to account for the effects of such an action, intended or not, on the U.S. agricultural market."
Under Act 636, the Arkansas Department of Agriculture reports ownership of agricultural land by a "prohibited foreign-party-controlled business" to the Attorney General, who can initiate legal action in circuit court.
Griffin said the company has about two years to divest its stake in Arkansas land before the state will force a change in ownership. The attorney general also announced he is imposing a $280,000 civil penalty on the company, which is 25% of the land's value, for failing to timely disclose its ownership, according to a news release.
"I thank Secretary Wes Ward and the Department of Agriculture for their help in obtaining information to assist my office in determining the ultimate foreign owners of this land in Craighead County," Griffin said in a news release. "It is this kind of teamwork across state government that will help us all continue to protect the interests of Arkansans for generations to come."
Syngenta said in an email that its land holdings are examined by the federal government and that it uses the land to develop and test its products. The company also said after "an internal review" it updated its federal disclosure after its change in ownership and filed a copy with the state of Arkansas.
"No one from China has ever directed any Syngenta executive to buy, lease, or otherwise engage in land acquisition in the United States," a Syngenta spokesperson said.
Micah Brown, staff attorney at the National Agricultural Law Center, called Tuesday's announcement the first attempt by a state to make a Chinese-owned company divest its landholdings.
"This is the first time that we've seen some kind of foreign ownership law enforcement action," Brown said in a news release. "There's been a lot of attention on states enacting these laws, but there wasn't much enforcement action, if any at all."
Brown said laws targeting foreign ownership of American land is nothing new, but rising tensions between the United States and China, along with other nations, had led to a wave of new state laws limiting state-owned actors from owning farms.
"Most of the 2023 enactments were directed towards what I call the 'Big Four: It's China, Iran, North Korea and Russia," he said.
Sanders said the law was not targeted at Americans who may also have Chinese or Russian citizenship, but those "who pledge allegiance to a hostile foreign power."