44 .ir i1 [ I. rI E ia' rLBM Ao AE .BUHAA,*IRCO AGICLURLEXERMNTSATO AUURNiNI VERSITY, AUUNUIESIY ' LBM FOREWORD This publication examines data describing landownership patterns in Alabama. Analyses of the nature and extent of land ownership are concentrated in three areas: privately held land, farm and ranch land, and foreign interest in agricultural land. Discussion focuses on Alabama with national and/or regional data used as a basis for comparisons. Two separate data sources were used. Landownership data were drawn from aggregated regional and Alabama data collected as part of the 1978 Resource Economics Survey conducted by the Natural Resources Economics Division (NRED), Economics, Statistics, and Cooperatives Service (ESCS, now Economics and Statistics Service-ESS), United States Department of Agriculture (USDA). Appreciation is expressed to Douglas G. Lewis, Agricultural Economist, NRED, ERS, USDA, for provision of data from the overall survey relevant to the region and Alabama. Leon E. Danielson provided invaluable assistance in securing these data and in providing the land ownership totals for the United States (2). Analyses of foreign interests in agricultural land were conducted using forms submitted to the USDA in compliance with the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978. Appreciation is expressed to the. Agricultural Stabilization and Conservation Service (ASCS), USDA, and the Alabama Department of Agriculture and Industries for providing copies of the forms submitted by foreign entities. CONTENTS Page FORE~WORD................................................3 INTRODUCTION.............................................5 OBJECTIVES...............................................5 DATA AND METHOD...................................... NATURE AND EXTENT OF LANDOWNERSHIP.................... 6 7 8 8 Private Land....................................... Ownership ........................................... Land Use........................................... Land Value......................................... Farm and Ranch Land................................. Ownership .......................................... Size of Units........................................ Acquisition..........................................14> Tenure Status....................................... Net Farm Income.................................... 9 10 11 11 13 16 16 Owner Characteristics................................ Foreign Interests Agricultural Land................... Patterns of Foreign Ownership........................ in 18 24 24 SUMMARY AND IMPLICATIONS................................. SELECTED REFERENCES....................................... 33 37 APPENDIX A ......................................... Tables 1-6 ........................................ APPENDIX B............................................. 38 38 44 Legal Requirements, Definitions, and Terminology Related AFIDA................................ to 44 FIRST PRINTING 3M, NOVEMBER 1983 In formation contained herein is available to all persons without regard to race, color, sex, or national origin. Private Landownership in Alabama J. L. Adrian and J. E. Dunkelberger INTRODUCTION NO INPUT is more basic to the agricultural industry than land. Food and fiber production for both domestic and foreign markets is dependent on the viability, use, and maintenance of the land base. Considerable change has occurred recently in the pattern of farmland ownership and use in the United States. The nature and impact of these changes have not been adequately documented and understood, especially at the state level. Market forces coupled with governmental prescriptions and interventions are generally assumed to guide allocation of the land base toward efficient utilization consistent with societal needs. Such an assumption is not unreasonable when policy decisions are formulated using timely and accurate information. By providing a compilation of previously unavailable landownership information for Alabama, this report should prove widely beneficial to persons charged with responsibility for policy formulation. Information defining the extent of absentee, foreign, and family ownership plus the characterization of owners by age, sex, race, income, education, and occupation should be useful in the design of programs to facilitate greater efficiency in agriculture. Other potential uses involve the design of programs in such areas as technical and economic aid, taxation, land use, conservation, and rural zoning and urban encroachment. Policy areas such as these should be approached more efficiently by public officials possessing this type of information. OBJECTIVES The general objective of this report is to examine private ownership of farmland in Alabama. Specific objectives are to analyze 'Associate Professor and Professor, respectively, Department of Agricultural Eco- nomics and Rural Sociology. 6 ALABAMA AGRICULTURAL EXPERIMENT STATION the nature and extent of: (1) private ownership of land in Alabama and provide comparisons made with ownership patterns for the United States and region, (2) farm and ranch land ownership in Alabama and provide comparisons with ownership patterns at national and regional levels, and (3) foreign ownership of agricultural land in Alabama and provide comparisons with national patterns. DATA AND METHOD Data used in this report were derived from two sources. Objectives 1 and 2 were addressed with data collected as part of the 1978 Landownership Survey conducted by the Economics, Statistics, and Cooperatives Service (ESCS or now ESS, Economics and Statistics Service) of the USDA. The Landownership Survey comprised the second part of the 1978 Resource Economics Survey, a 12-part effort developed to secure information concerning total private land and farmland resources in the United States. The first component of the Resource Economics Survey, called the 1977 National Resource Inventory, emphasized identification of the quality and use of land while the second part, the 1978 Landownership Survey, concentrated on identifying the nature of landownership and characteristics of owners. Data summaries from the 1978 Landownership Survey were compiled by the Natural Resources Economics Division, Economic Research Service, United States Department of Agriculture (NRED, ERS, USDA) for Alabama and the region and were provided to the Alabama Agricultural Experiment Station. U.S. totals presented in this publication were excerpted from an earlier report utilizing this data source (2). The 1978 Landownership Survey was conducted on a land area sample basis with expansion factors used to generalize for the United States. Data were initially obtained by defining land use (farming, residential, and commercial) and then ascertaining the identity of the owner and relevant ownershi? characteristics. 2 Data defining ownership of privately held farm and ranch land 2This approach resulted in area estimates somewhat more precise than previous estimates gained from U.S. Census data using general population characteristics and numbers of owners. Estimates of farmland ownership parameters are believed to be more accurate than those for nonfarmland because most of the privately owned land throughout the United States is associated with agriculture. Also, greater credence should be given to percentage distributions reported than to numerical values for particular categories. Other details of the methodology used in the survey are described by Lewis (7, pp. 33-91). PRIVATE LANDOWNERSHIP IN ALABAMA 7 are presented for the United States, the South, and Alabama. Emphasis is given to analyzing ownership patterns for Alabama noting important deviations from national and regional characteristics. To facilitate the comparison of state characteristics, nine states most similar to Alabama in terms of agriculture are grouped with Alabama and defined as the South (Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia). Privately held land is discussed with respect to use and estimated value, while farm and ranch land is evaluated in terms of size, time of acquisition, tenure status, net farm income generated, and characteristics of owners, such as sex, race, residence, age, education, occupation, and nonfarm family income. Objective 3 was addressed with data provided by the Agricultural Foreign Investment Disclosure Act (AFIDA) reports filed for Alabama by foreign entities between February 1, 1979, and December 31, 1981. Of the 271 reports filed during the reporting period, 91 reported land holdings, 168 reported land acquisitions, and 12 reported land dispositions within the State. Eleven of these reports were judged to be duplicates and were eliminated from the study giving a total of 260 ownership units reporting. Foreign activity as represented by these units was evaluated in terms of holdings and acquisitions. Since some of the material required by the AFIDA Act necessitates legal clarification and technical description, legal requirements of AFIDA and definitions of terms used in the Act and in this report are included in Appendix B. This material was excerpted primarily from the report made to Congress by the Economic Research Service of the USDA concerning foreign ownership of agricultural land in the United States (10, pp. 2-6). Areas emphasized in the analysis include specification of foreign activity, characteristics of foreign entities, interests held, date and method of acquisition, land use, and tenure status. NATURE AND EXTENT OF LANDOWNERSHIP Who owns the land? In a country consisting of approximately 2.3 billion acres, this is a significant question. In 1978, the federal government was the largest landowner, holding about 762 million acres, or one-third of all land (7). Much of this federal land is located in national forests and preserves located in the Western States. In addition, a sizeable amount is used for high- 8 ALABAMA AGRICULTURAL EXPERIMENT STATION ways, recreational areas, and public buildings. Also, American Indians either own or hold trust rights to 2.3 percent, or 56 million acres. State and local governments hold almost 6 percent of the land, or 136 million acres. Private landownership accounts for the remaining 1.35 billion acres, representing 59 percent of the land area. PRIVATE LAND Ownership Alabama has approximately 30.2 million acres of privately owned land subdivided into more than 1.04 million ownership units, Appendix A table 1.3 Individuals and families hold 99 percent of these land parcels, representing 79 percent or 24 million acres, figure 1. Little difference in the distribution of ownership units or acreage is noted for individual and family units between Alabama and either the United States or the South. They hold 94 percent of the ownership units in both the United States and the South and 83 and 78 percent of the acreage in these areas. Average size of these units is 35, 25, and 23 acres in the United States, the South, and Alabama, respectively. This includes farm tracts as well as home and commercial acreages. Nonfamily owners account for 9,000, or 1 percent, of the land parcels and 6.2 million acres in Alabama. Corporations are the most common nonfamily owners, holding 1,000 units. These units have an average size of 4,200 acres. Nonfamily corporations account for 14 percent of the private land in the State. Individual proprietors represent 66 percent of the ownership units and own 40 percent of the State's privately held land. They account for 12 million acres and 688,000 land parcels, Appendix A table 1. Much smaller percentages of private land are owned by family members as joint tenants or in partnership. Twenty-six percent of the private land or 255,000 units are held jointly by family members. Even fewer acres, amounting to 11 percent, are in family partnerships and only 2 percent are held by family corporations. Landownership patterns in Alabama are generally consistent with those observed throughout the United States and the region, especially in terms of acreage. For ownership units, Alabama 3Land units refer to parcels of land involving legal acquisition of any unit from less than an acre to large acreages. PRIVATE LANDOWNERSHIP IN ALABAMA Percentage 100 90 " ... ] Nonfamily units 80 'Family corporation 70::!Family .. "60 .60 ""Family :"""" partnership ownership 50 40 30 50-:. Individual ownership 20 10 O U.S. South Ala. Ownership Units U.S. South Ala. Acres Owned FIG. 1. Ownership of privately held land by owner type: United States, South, and Alabama, 1978. tends to have more individual owners and family partnerships and fewer family ownerships (husband-wife), figure 1. Ownership units are dominated by family ownership and individual owners in the United States, with the distribution being about equal at 46 and 44 percent, respectively. As in Alabama, individual owners are dominant throighout the South, accounting for 54 percent of the units. Land Use There are four primary categories of land use: farm and ranch, commercial, residential, and other (nonfarm, forest, and wasteland). Appendix A table 2 shows the distribution of ownership units and acres across these different uses of private lands. Commercial and residential uses are combined in this discussion. Farm and ranch lands account for the major portion of privately owned land for all political subdivisions and about onefourth of the ownership units, figure 2. In the United States, some 82 percent of all land is in farms and ranches as compared 10 ALABAMA AGRICULTURAL EXPERIMENT STATION Percentage 100 90 -Other 80 70 Residential commercial land - Frm and ranch 60 50 40 30 20 10 O U.S. South Ala. U.S. South Ala. Ownership Units Acres Owned FIG. 2. Use of privately held land: United States, South, and Alabama, 1978. with 69 percent in the South and 63 percent in Alabama. The reason for this difference is the high proportion of "other" (nonfarm forest, idle land, and wasteland) in both Alabama and the South. Alabama has almost 32 percent of its private land in this category, while 25 percent of the private land in the South is so classified. The majority of privately owned land parcels is devoted to commercial and residential uses. Across both Alabama and the United States, about 70 percent of the units are used for these purposes with a somewhat smaller proportion in the South allocated in this manner. Land Value Table 1 shows the estimated dollar value of land per acre for each land use category. As discussed in the previous section, farm and ranch land represents the major portion of all private land. The estimated value Alabama owners assigned to their land in 1978 was $391 per acre, considerably below the $599 estimated PRIVATE LANDOWNERSHIP IN ALABAMA 11 TABLE 1. ESTIMATED VALUE PER ACRE OF PRIVATELY HELD LAND BY TYPE USE: UNITED STATES, SOUTH, AND ALABAMA, 1978 Land-use type United StateS1 Value Dol. Acreage Pct. South2 Value Dol. Acreage Pct. Alabama Value Dol. Acreage Pct. 554 Farm and ranch land .... Residential-commercial .. 20,491 321 Other3 ................. Total .............. - 82.1 4.2 13.7 100.0 599 9,757 241 - 69.0 5.6 25.4 100.0 391 9,468 138 - 62.8 5.6 31.6 100.0 1Excludes Alaska and Hawaii. 2Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. forest, idle or wasteland. Source: 1978 ESCS Landownership Survey. 3Nonfarm, for the South or the $554 estimated for the United States. Values reported for the State are well below the figure of $530 per acre provided by the USDA (5). A factor affecting this differential may be that landowners were asked to place a value on farmland irrespective of alternative uses. Potential nonagricultural use of farmland would be reflected only when recent land sales had occurred. Also, much of the privately owned farmland in Alabama lies in relatively sparsely populated areas where residential and commercial land use alternatives are limited. Only a few rural areas in the State have experienced the population turnaround occurring in some rural areas throughout the South and the United States, although declines in population have slackened in most rural areas (1). Alabama has a larger proportion of its land in the nonfarm, forest, idle, or wasteland category. Owners of this land report a value of $138 per acre, which is about $100 and $185 below similar land throughout the South and the United States, respectively. Values for residential and commercial lands in Alabama and the South are more nearly comparable. Although this category of land in Alabama is valued at $300 per acre less than that for the region, the estimated value of $9,468 per acre is consistent with the fact that the State is less industrialized and urbanized than most states in the region. FARM AND RANCH LAND Ownership Major differences in ownership patterns for privately held farm and ranch land are not evident for the geographic areas examined. 12 ALABAMA AGRICULTURAL EXPERIMENT STATION Percentage 100 Scorporation { -- Nonfamily units Family partnership 70 60 50 [ Family ownership Individual U.S. South Ala. Ownership Units U.S. South Ala. Acres Owned FIG. 3. Ownership of privately held farm and ranch land by type of owner: United States, South, and Alabama, 1978. Comparatively, only slightly more ownership units and a somewhat larger proportion of the acreage are held by individuals and families in Alabama than in the United States, figure 3. Alabama conforms more t the national than regional pattern with regard to to the distribution of individual and family ownership. Similar proportions of ownership units are held by individual owners (47 percent) and family owners (45 percent). However, the amount of acreage held by individual owners is larger than that held by families in the State. Individuals own 44 percent of the farm acreage with an average unit size of 60 acres, Appendix A table 3. Family ownership units involve only 34 percent of the farmland, averaging 47 acres per unit. Family partnerships account for an additional 13 percent of the land held in 13,000 ownership units. Average size of these units is 150 acres. Separate parcels of farmland held by family corporations are considerably smaller than those existing in either the region or the United States, 310 acres versus 430 and 620 acres, respectively. Only 2 percent of the farmland units in the State are not owned by individuals or families, figure 3. These units involve 7 percent PRIVATE LANDOWNERSHIP IN ALABAMA 13 of the acreage and have an average size of 258 acres. Nonfamily partnerships account for most of these parcels (3,000), averaging 100 acres; nonfamily corporations account for the largest portion of the acreage with an average size of 1,300 acres on 300 units. Size of Units Land units, as defined in this study, represent parcels of variable sizes depending on the number of acres involved at the last transfer of ownership. The relationship between number of land units and size of the units is inverse. Fewer units of large acreage exist but such units account for a large portion of farm and ranch lands. In the United States, about 30 percent of the land units are smaller than 10 acres and represent less than 1 percent of the farm acreage, figure 4 and Appendix A table 4. Conversely, approximately 5,000 land units as large as 10,000 acres represent 11 percent of all farmland. The majority of land units are small. More than 71 percent of the land units represent tracts of fewer than 100 acres. Such units account for only 13 percent of the land acreage. Percentage 100 90 "" ® 2,000 or more 500-1,999 80 70 60 E- 180-499 E~ 100-179 * 50-99 50 40 30 20 10-49 U Less than 10 U.S. South Ala. Ownership Units U.S. South Ala. Acres Owned FIG. 4. Size of farm and ranch land holdings: United States, South, and Alabama, 1978. 14 ALABAMA AGRICULTURAL EXPERIMENT STATION The pattern of land holdings by size for the United States and the South reveals only slight differences, whereas the distribution of acreage shows considerable difference. Both land holdings and acreage are more highly concentrated in small land parcels in both the South and Alabama than in the United States. Thirtyseven and 41 percent of the land units in the South and Alabama are smaller than 10 acres, respectively. These units represent about 2 percent of the farmland in both areas. Farm and ranch units of less than 100 acres account for about 85 percent of all units and 30 percent of the acreage in these areas. Relatively little farmland in Alabama is in large parcels with only 10 percent exceeding 2,000 acres per unit. This partially reflects the concentration of large forest holdings owned by timber and pulpwood firms in the State. Acquisition Two points about farmland ownership are of particular interest. One relates to when the land was acquired or the period of time that an owner has held the land. A second relates to how the land was obtained or the nature of the acquisition process. Consideration is given to kinship involvement in land transfer. In this section, only data for the South and Alabama are presented. When Acquired Thirty-seven percent of all farmland units in the South had been acquired in the 9 years from 1970 through 1978, table 2. Alabama has experienced a slower rate of turnover than the South with 5 percent fewer units changing hands during this period. TABLE 2. TIME OF FARM AND RANCH LAND ACQUISITION IN NUMBER AND PERCENT OF OWNERSHIP UNITS AND ACRES OWNED: SOUTH AND ALABAMA, 1978 Date acquired South' Ownership units Acres owned Thou. Pct. 37.1 Mil. 39.3 Pct. 27.0 Alabama Ownership units Acres owned Thou. 75 Pct. 32.0 Mil. 3.0 Pct. 20.1 18.1 2.7 22.9 54 22.2 32.3 22.6 507 1960,69 ....... . 19.5 2.9 18.9 44 18.6 27.1 14.3 321 1950-59 ....... . 18.8 2.8 10.0 24 14.4 20.9 13.2 295 4940-49 ....... 16.8 2.5 12.3 29 14.6 21.2 10.7 240 Before 1940 ... 6.7 .9 3.9 9 3.2 4.6 2.1 47 Not reported .. 100.0 14.8 100.0 235 100.0 145.4 100.0 2,242 Total .... iTen Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. Source: 1978 ESCS Landownership Survey. 1970-78 ........ 832 PRIVATE LANDOWNERSHIP IN ALABAMA 15 Moreover, the proportion of the farm acreage changing hands was 7 percent less for Alabama than for the South. Differences are reflected in the larger number of land units in Alabama acquired during the 1950 through 1959 period or before 1940. Compared to the South as a whole, 55 percent of Alabama farmland was obtained before 1960 versus 48 percent for the region. It is clear that the transfer of farmland in the State has not been as active as in most other Southern States. How Acquired One can legally obtain land through direct purchase or some form of nonpurchase transfer. The primary form of transfer is through direct purchase; however, the nature of this transfer is often influenced by a kin relationship between purchaser and seller. Both dimensions of the transfer process are considered. In the South, 76 percent of the ownership units were obtained by purchase and 22 percent by a nonpurchase means, table 3. Nonpurchase units account for 38 percent of the acreage transferred. Inheritance is the primary transfer mechanism for both nonpurchased units and acreage. Similarly, kinship plays some part in the transfer of a sizeable portion of purchased acquisitions. Almost one-fourth of farmland parcels were purchased from relatives. These units tend to be smaller than those purchased from nonrelatives, averaging 50 versus 65 acres per unit. Alabama differs considerably from the South with regard to the proportion of ownership units purchased and nonpurchased. Purchased units account for 14 percent fewer units. The acreage involved in these units, however, totals a similar proportion. TABLE 3. OF OWNERSHIP UNITS AND ACRES OWNED: METHOD OF FARM AND RANCH LAND ACQUISITION IN NUMBER AND PERCENT SOUTH AND ALABAMA, 1978 Acquisition method South' Ownership units Acres owned Alabama Ownership units Acres owned T'hou. Pct. Mil. Pct. Thou. Pct. Mil. Pct. Purchased: 51.1 105 44.5 7.6 75.6 52.0 52.2 Nonrelative . 1,170 18.1 40 17.0 2.7 18.2 Relative .... 528 23.5 26.3 Nonpurchased: 21.0 33.8 3.1 22.8 79 33.2 451 20.1 Inherited ... .3 2.2 2 1.0 2.8 1.9 28 1.2 Gift ........ .2 1.6 .4 1.2 1 1.7 12 .6 Other .... .9 5.9 4.0 8 3.3 53 2.4 5.8 Not reported .. 100.0 100.0 14.8 145.4 100.0 235 2,242 100.0 Total .... 'Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. Source; 1978 ESCS Landownership Survey. 16 ALABAMA AGRICULTURAL EXPERIMENT STATION Farmland units purchased from relatives occurred less often in Alabama than in the South. Evidently, land transfer practices differ in the timing and procedures used for conveying farmland from one generation to the next. In Alabama, the transfer is more likely to be delayed until death of the owner rather than at some prior time, such as at retirement from farming. Tenure Status Three aspects of land tenure include whether the land is op- erated by the owner, a renter, or a lessor, table 4. Data interpretation for Alabama must be viewed as tentative because tenure status was not reported for about one-fourth of the farm acreage. This represented 16 percent more unreported acreage than for the region. TABLE 4. TENURE STATUS OF FARM AND RANCH LAND IN NUMBER AND PERCENT OF OWNERSHIP UNITS AND ACRES OWNED: SOUTH AND ALABAMA, 1978 Land tenure South1 Ownership units Acres owned Alabama Ownership units Acres owned Owner operated Rented out ... Leased out: Cash ....... Share ....... Other ...... Not reported . Total .... Thou. 984 525 294 178 32 229 2,242 Pct. 43.9 23.4 13.1 7.9 1.4 10.3 100.0 Mil. 66.8 33.0 19.3 12.6 1.6 12.1 145.4 Pct. 45.9 22.7 13.3 8.7 1.1 8.3 100.0 Thou. 111 62 26 9 2 25 235 Pct. 47.1 26.1 Mil. 5.9 2.7 Pct. 39.6 18.1 13.4 2.0 11.2 4.0 .6 3.9 .7 .1 .9 24.2 3.5 10.8 100.0 14.8 100.0 iTen Southern states'including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. Source: 1978 ESCS Landownership Survey. The proportions of ownership units in the various tenure statuses are relatively similar for Alabama and the South. Slightly more farm units in the State are owner operated and rented out to others. Leased units, on the other hand, are less common in Alabama. Leases involving share arrangements in lieu of cash payment apply to only 4 percent of all units in Alabama, but to 8 percent of units in the region. Net Farm Income all reports that deal with farm income consider the Virtually farm operation as a whole rather than in terms of the various parcels of land that comprise it. However, here the data represented reflect estimates of income derived from each land parcel separately. TABLE 5. NET FARM INCOME OF FARM AND RANCH LAND OWNERS BY OWNERSHIP UNITS AND ACREs OWNED: SOUTH AND ALABAMA, 1977 Incomel South2 Ownership units Thou. Pct. 10.1 1.2 2.2 6.7 39.4 34.0 26.4 7.6 2.5 1.2 .9 4 1.6 12.4 100.0 Acres owned Mil. 22 Pct. 15.3 3.2 7.6 4.5 15.9 35.1 20.7 14.0 7.6 3.5 2.2 1.9 5.5 20.6 100.0 Ownership units Thou. 16 Pct. 7.3 1.3 1.9 4.1 54.9 35.1 31.1 4.0 1.8 1.3 .4 .1 .1 .8 100.0 Alabama Acres owned Mil. 2.4 Pct. 16.3 6.1 3.4 6.8 26.2 30.4 19.6 10.8 6.1 2.7 2.0 1.4 3.4 17.5 100.0 Net loss ..................... 227 $10,000 or more ............ $3,001 to $9,999 ........... $1 to $3,000 ............... No net farm income ......... 883 Below $10,000 ............... 762 $1 to $2,999 ................ $3,000 to $9,999 .. . ...... $10,000 to $24,999 ........... . 56 $10,000 to $14,999 ......... $15,000 to $19,999 ......... $20,000 to $24,999 .......... 36 $25,000 and above ............ Not reported ................. 278 2,242 Total .................. 23 51 11 119 76 5 3.9 4.5 .9 8 30 145.4 2 17 235 .5 2.6 14.8 'Excludes corporations and other business organizations. 2Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Ten nessee, and Virginia. Source: 1978 ESCS Landownership Survey. 18 ALABAMA AGRICULTURAL EXPERIMENT STATION A considerable proportion of the land units analyzed produced no net farm income in 1977, table 5. Almost 40 percent of all units in the South reported no income and 10 percent reported losses. Of the units showing net gain, 26 percent reported income of less than $3,000 annually. The situation for Alabama. farmland is distinct from the region as more than one-half of the units reported no net farm income in 1977. The fact that 10 percent more farm acreage in Alabama produces no net income probably results from more of the nonincome producing units in other states being classified as not reported. Just over one-fourth of the farmland in Alabama had no net farm income in 1977 and an additional 16 percent generated a loss of income. Owner Characteristics This section reviews survey data profiling owners of farm and ranch land in Alabama and the South. Characteristics considered include the owner's or principal owner's sex, race, residence, age, education, occupation, and nonfarm family income. Information concerning individuals who control farmland is important for a better understanding of who is making decisions relative to the use of the land resource. Sex The vast majority of ownership units in both the South and Alabama are controlled by men, table 6. Eleven percent of Alabama's land units and 14 percent of the acreage are held by women as either an individual or principal owner. However, this figure may conceal the influence women exert on decisions affecting farmland use in joint husband-wife ownership situations and partnerships. Race Whites own 84 percent of the farmland units in Alabama and control 87 percent of the acreage, table 6. Black landowners account for virtually all of the remaining units and 5 percent of the acreage. Throughout the South, the pattern of landownership by blacks is consistent with that for Alabama. Blacks own 10 percent of the land units and about 4 percent of the farmland. Other minorities, such as American Indians and Hispanics, own about 10,000 land units involving a small number of acres. TABLE 6. SELECTED CHARACTERISTICS OF FARM AND RANCH LAND OWNERS BY OWNERSHIP UNITS AND ACRES OWNED: SOUuIT AND ALABAMA, 1978 Characteristic Sex Male................... Female................. Not reported............ Total ............... Race Suh Ownership units Thou. Pct. 1,776 390 76 2,242 1,934 212 10 86 2,242 55.3 392.4 407.6 469.0 409.7 397.2 111.3 2,242.5 79.2 17.4 3.4 100.0 86.2 9.5 .4 3.9 100.0 2.5 17.5 18.2 20.9 18.3 17.7 4.9 100.0 Acres owned Mil. Pct. 109.3 22.4 13.7 145.4 lbm Ownership units Thou. Pct. 204 27 4 235 198 30 7 235 .5 44.0 34.2 72.5 30.4 45.8 7.7 235.1 86.9 1.g 100.0 84.2 12.7 3.1 100.0 .1 18.7 14.5 30.8 12.9 19.6 3.4 100.0 Acres owned Mil. Pct. 11.7 2.0 1.1 14.8 12.9 1.0 1.2 14.8 .1 1.1 2.4 3.5 3.1 3.1 1.6 14.9 79.1 13.5 7.4 100.0 86.6 4.7 8.7 100.0 .1 7.4 16.1 23.5 20.8 20.8 11.3 100.0 75.2 15.4 9.4 l10.0 86.4 3.5 .1 10.0 100.0 1.9 7.8 16.0 22.9 21.5 17.8 12.1 100.0 White.................. Black.................. Other.................. Not reported............ Total............... Age Younger than 3O......... 30-39................... 40-49................... 50-59 ................... 60-69 ................... 70 and older ............. Not reported .......... ... Total ................ Education 8 or less years ............ 9-11 years ................ 12 years ................. 125.5 5.0 .4 14.5 145.4 2.8 113 23.3 33.3 31.3 25.9 17.5 145.4 19.5 2.9 62 26.6 30.3 31.0 20.8 695 15.4 2.3 66 28.0 14.2 406 18.1 20.6 24-.2 3.6 68 29.2 31.9 21.9 493 22.0 1.8 12.1 15 6.2 8.4 17.2 11.8 188 years .............. 2.4 16.1 5.3 13 16.4 13.2 23.8 295 16 or more years........ . 12.7 4.7 11 14.9 7.3 21.6 165 Not reported ............. 14.8 100.0 100.0 235 145.4 nc d 100.0 2,242 rr Total................ hT\I\ Irr\ 100.0 Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, TeniTen Southern states including Alabama, A nessee, and Virginia. 13-15 Source: 1978 ESCS Landownership Survey. L0 20 ALABAMA AGRICULTURAL EXPERIMENT STATION Age Farmland in Alabama is controlled by older owners, table 6. Almost two-thirds of the ownership units and 65 percent of the acreage are held by individuals 50 years of age or older. Average size of units held by those over 50 is 65 acres. Conversely, owners younger than 30 years of age hold about 500 ownership units totaling less than 100,000 acres or 0.1 percent of the State's farmland. Ownership of farmland parcels increases considerably among people 30 to 39 years of age; however, the average size of these parcels is only about 25 acres. Farmland owners are somewhat older in Alabama than in the South. A larger portion of the South's owners are younger than 30 years of age and hold more of the farmland. Conversely, the elderly in the region, 70 years of age and older, hold somewhat fewer ownership units and 3 percent less land than comparable individuals in Alabama. Education Owners of Alabama farmland are not highly educated, table 6. More than half have not finished high school and one-fourth completed 8 years or less of schooling. Average size of ownership units held by the less educated is 47 acres. Size increases markedly with educational attainment beyond high school. Owners who completed some college held, land units averaging 120 acres, while those units owned by persons who completed college had an average size of 185 acres. Although the better educated are more likely to own large units, they account for only 12 percent of all parcels and 28 percent of the acreage. Compared to the South, Alabama landowners are somewhat more likely to have a high school education or less. In the State, 84 percent of the landowners are at this educational level versus only 71 percent of owners in the region. Acres owned by these individuals represent about the same proportion of the farmland, however. Residence All but 3 percent of the farmland units in Alabama are owned by in-State individuals or partnerships, figure 5 and Appendix A table 5. The vast majority of the owners reside in the same county as the parcel. Land ownership by noncitizens of the United States is minimal. 4 4Detailed consideration of foreign ownership of Alabama farmland is analyzed in the following major section. PRIVATE PRIVATE LANDOWNERSHIP IN ALABAMA Percentage 100 LANDOWNERSHIP IN ALABAMA 21 21 90 807060- Same county SDifferent county L Another state 504030- 2010- A O Ownership Acres Units Owned South I1 Ownership Acres Units Owned Alabama FIG. 5. Farmland units and acres owned by residence of principal owners: South and Alabama, 1978. Occupation Persons identifying their principal occupation as being a farmer or farm manager represent a small segment of farmland owners, table 7. Only 14 percent of the ownership units are held by farmers in Alabama. They account for 26 percent of the farm acreage, with the likelihood that some additional units are owned by part-time farmers and people retired from farming. Owners in blue collar occupations hold 43 percent of all farmland units and are the most prevalent owner type. Units owned by blue collar workers are small, averaging 27 acres. Retired persons hold another one-fourth of the land units, averaging 61 acres in size. White collar workers in the State own 9 percent of the farm parcels involving 18 percent of the farmland. Farmers and retired persons control more than half of the farm acreage in the State. Across the South, 9 percent more ownership units are held by persons in white collar occupations and 15 percent fewer by those in blue collar occupations than is true in Alabama. But, because of the small size of many of these ownership units, people in white collar occupations control a similar portion of the farmland. An- 22 TABLE 7. ALABAMA AGRICULTURAL EXPERIMENT. STATION OCCUPATION NUMBER AND PERCENT OF FARMLAND UNITS AND ACRES OWNED BY OF THE PRINCIPAL OWNER: SOUTH AND ALABAMA, 1978 Occupational type South' Ownership units Acres owned Thou. Pct. Mil. Pct. Alabama Ownership units Acres owned Pct. Mil Thou. Pct. 26.4 3.9 14.0 32.9 32.9 47.8 16.2 362.7 Farmers ........ Nonfarm: 17 .6 2 .6 9 .0 2 1 .3 16 .7 24 .3 18 .4 4 1 2 .1 3 White collar . 18.2 2.7 43.3 101.8 12.3 17.9 27.6 620.3 Blue collar4 ... 2.7 .4 3.8 8.9 4.3 6.3 5.7 Other5 ....... 126.7 25.0 3.7 25.7 60.3 21.0 30.5 24.8 Retired ........ 556.4 10.1 1.5 4.2 9.8 12.8 18.6 7.3 163.8 Not reported .... 100,0 14.8 100.0 235 100.0 145.4 100.0 Total ...... 2,242 iTen Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. 2Includes farm managers, laborers, and foremen. 3Includes professionals, technicians, managers, administrators, and sales and clerical workers. 4Includes craftsmen, operatives, laborers, and service workers. 5Includes military personnel, housewives, unemployed workers, and those not specified. Source: 1978 ESCS Landownership Survey. other difference is the somewhat larger proportion of land in the region held by individuals giving farming as their principal occupation. Nonfarm Family Income Relatively few owners of Alabama farmland represent families with no nonfarm income, table 8. Only 11 percent of the ownership units and 14 percent of the acreage are held by such individuals. However, many owners have limited or low nonfarm incomes. About 44 percent have incomes of less than $10,000, with 15 percent of these having incomes of less than $3,000. These owners account for one-third and almost a tenth of the acreage, respectively. Few owners have nonfarm incomes above $25,000. Nonfarm family income information was reported somewhat less frequently across the South than in Alabama. No report was available for 16 percent of the ownership parcels involving almost one-fourth of the farm acreage. Also, a smaller proportion of the land ownership units regionally is held by persons with nonfarm incomes above $10,000 annually. Most importantly, the vast majority of persons throughout the South who own parcels of farmland have nonfarm family income either from their own nonfarm sources or from wives or other family members. TABLE 8. NUMBER AND PERCENT OF FARMLAND UNITS AND ACRES OWNED BY ANNUAL NONFARM FAMILY INCOME OF' THE PRINCIPAL OWNER: SoUTH AND ALABAMA, 1978 South .Income Alabama Acres owned Mil. Pct. 19.6 50.4 13.5 34.7 11.8 14.7 8.2 18.6 8.9 5.9 3.8 .9.1 5.3 3.8 24.1 100.0 Ownership units Thou. Pct. 25.5 103.8 in dollars Ownership units Thou. Pct. 7.6 47.2 14.2 19.8 13.2 25.1 10.6 9.7 4.7 4.4 3.4 1.0 15.7 100.0 Acres owned Mil. 2.0 4.8 Pct. 13.5 33.3 No nonfarm income....... 172.3 Less than $10,000 ......... 1,057.8 . $1-$2,999 ...... $3,000-$6,999 .......... $7,000-$9,999 ......... $10,000-$24,999............562.0 $10,000-$14,999..... $15,000-$19,999..... $20,000-$24,999..... $25,000 and above.......... 99.4 $25,000 to $49,999 ... more.... $50,000 351.0 Not reported .............. 2,242 Total................ 10.9 44.3 27.1 79.6 13.3 35.0 145.4 4.7 20.9 235 nessee, 8.9 2.9 14.8 100.0 'Ten Southern, states including Alabama, Arkansas, -Georgia, Kentucky', Louisiana, Mississippi, North Carolina, South and Virginia. Source: 1978' ESCS Landownership Survey. and 14.6 22.3 7.2 33.9 17.8 5.6 10.5 2.0 2.0 - 3.6 1.5 9.4 14.2 8.7 24.4 12.2 6.8 5.4 10.1 5.4 4.7 19.7 100.0 Carolina, Ten. 24 ALABAMA AGRICULTURAL EXPERIMENT FOREIGN INTERESTS IN AGRICULTURAL LAND STATION Foreign ownership of agricultural land is an issue that received much attention in the mid- and late 1970's. Grave concern was expressed by many individuals and groups relative to the invasion of foreign interests and suspicion of their motivations and intentions. Factual information was scarce, however, on which to evaluate the nature and extent of foreign ownership of agricultural land and to make appropriate policy decisions. Congress attempted to remedy this situation with passage of the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978. 5 Patterns of Foreign Ownership United States Nationally, 12,587 disclosure reports had been filed by foreign hndividuals or entities as of December 31, 1981 (10). These reports applied to approximately 12.7 million acres of agricultural land in the United States. This represents slightly less than 1 percent of the privately owned land (both farm and nonfarm) and 0.6 percent of all public and private land in the United States. Foreign ownership of farmland increased about 4.9 million acres from the prior year's total. This increase can be partially attributed to the under-reporting of foreign land ownership in 1980, when 2.3 million acres acquired that year were not reported until 1981. In addition, 2.1 million acres were reclassified as foreign owned in 1981, when a major U.S. corporation became 20 percent foreign owned. 5 Regulations prescribed by the Act became effective February 2, 1979. Briefly stated, all foreign persons holding agricultural land as of February 1, 1979, were required to submit a report of such holdings to the Secretary of Agriculture by August 1, 1979. Also, all foreign persons who acquired or disposed of agricultural land after February 1, 1979, were required to report such activity within 90 days of the transfer. Any foreign person who possesses land or any who holds agricultural land and who subsequently becomes a foreign person also must submit a report within 90 days of such change in ownership status. Information to be supplied by foreign persons is specified by the Act. The Secretary of Agriculture was empowered to obtain such information relative to foreign holdings as deemed necessary. Information requested included legal name and address of the foreign person, country of citizenship, nature of the legal entity (including country of origin and principal place of business), type interest held, legal description, acreage, purchase price or other consideration given, current and intended use in the case of a land holding, and intended land use in cases involving acquisitions. With respect to dispositions, the seller was required to provide the legal name and address of the purchaser and the individual's country of citizenship. If the purchaser was not an individual or government, the nature of the entity, country of creation, and principal place of business were ascertained. Non-compliance with requirements of AFIDA results in the foreign owner being subject to a civil penalty of up to 25 percent of the fair market value of the interest held in the land parcel. DIVATF n t. f M I AL ]AILIRDIP LA(V JtF Y1 EI cit n i r i 1V / Al ARAkAA ./y D/+ IYI. i c n IN Foreign entities hold only partial interests in several parcels of U.S. agricultural property. Thus, when holdings are adjusted accordingly, total holdings are reduced to 11.3 million acres across the United States. Foreign persons and entities from Canada, France, the United Kingdom, West Germany, and the Netherlands Antilles account for 78 percent of this foreign held acreage. Excluding Maine, which has the largest foreign held acreage, foreign ownership is concentrated in the Southern and Western regions (10). Alabama, Florida, Georgia, South Carolina, and Texas account for 25 percent of all such holdings. Reports filed on holdings in California, Colorado, New Mexico, Oregon, and Washington include another 22 percent. Rhode Island is the only state for which no AFIDA reports have been filed. Corporations have interests in 85 percent of the foreign held acreage, while partnerships and individuals account for 8 and 6 percent, respectively. The remaining percentage is held by estates, trusts, associations, institutions, and other entities. Sixty-four percent of all foreign holdings are owned by U.S. corporations in which foreign ownership represents 5 percent or more of the capital stock. Other acreage is held by foreign individuals or entities not affiliated with any U.S. corporation. Forestland is the dominant use to which foreign held agricultural land is allocated, accounting for 56 percent of the total foreign acreage. An additional 13 percent of foreign ownership involves cropland, while pasture and other agricultural uses such as orchards and vineyards represent 26 percent. The remaining 5 percent includes nonagricultural and unreported uses. Alabama Reports filed between February 1, 1979, and December 31, 1981, show the extent to which foreign individuals and entities have involvement with agricultural land in Alabama. Land evidencing foreign involvement totals 572,036 acres, table 9. The majority of this activity, 461,144 acres or 81 percent of the total, involves land held prior to 1979. Acquisitions during the reporting period included 101,102 acres and dispositions amounted to 9,790 acres for a net increase in foreign interests of 91,312 acres. Thus, as of December 31, 1981, foreign individuals and entities owned or partially controlled 552,456 acres of agricultural land in the State. This represents 1.83 percent of the privately owned land and 1.69 percent of the total land area, table 10. Much of 26 26 ALABAMA ALABAMA AGRICUTURA AGRICULTURAL EXPERIMENT XEIEN STATION TTO TABLE 9. AGRICULTURAL LAND TRANSACTIONS REPORTED BY FOREIGN ENTITIES BY COUNTY, ALABAMA, FEBRUARY 1, 1979-DECEMBER 31, 1981 TransactionsCurrent Holdings Disposition Acquisition Total interests2 CountylTforeign Autauga.......... Baldwin BarbouT Acres 4,830 100 Acres Acres 496 841 813 315 1,300 320 Bibb .......... Blount ........... 12,403 Butler ........... 7,411 9,093 Cherokee ........ 16,112 Chilton.......... Choctaw .......... 38,466 16,462 Clarke ........... Cleburne ........ 230 .......... Colbertt 2,159 Conecuh......... Coosa ............ 3,199 Covington......... 9,440 Crenshaw.......... 12,684 Cu~liman.......... 230 Dale............. Dallas............34,471 8,630 DeKalib........... 796 Etowah. ........... 14,173 Fayette........... 1,819 Greene........... 8,781 Hale............. 2,993 Jackson........... 430 Jefferson ........ 460 Lawrence ........ Lee.............. Limestone ....... 5,461 Lowndes.......... Macon ........... . Madison Marengo.......... 26,638 903 Marion............ 1,182 Marshall........... Monroe........... 35,322 1,180 Morgan........... Perry............. 47.005 4,700 Pickens............. 4,317 Pike.............. 5,895 140 1,479 2,503 413 96 7,488 70 48 106 108 345 40 681 2,544 305 20,465 7,900 418 1,925 Acres 5,326 941 813 320 12,718 8,711 14,988 16,112 40,085 18,965 413 230 2,255 Acres 5,326 941 813320 12,718 8,711 3,198 16,112 39,805 18,965 413 230 2,255 7,488 3,269 9,488 12,790 230 34,924 8,670 796 14,854 4,363 .9,086 23,458 7,488 3,269 9,488 12,578 230 34,708 8,670 796 14,854 4,363 9,086 23,458 430 430 460 7,900 7,386 418 460 7,900 418 7,386 917 2,268 2,495 8,292 485 3,358 7,016 632 957 6,810 12,192 1,828 Randolph Russell 2,268 2,495 35,847 1,388 4,540 42,338 1,180 49,465 4,700 5,274 6,810 12,192 2,268 2,495 34,013 1,388 4,540 42,338 1,180 45,809 4,700 5,274 6,810 12,192 ...... St. Clair........... .... 3,535 3,535 3,535 38 Shelby.......2,575 1,118 Sumter.........075 517 Talladega .... Tuscaloosa......... 6,509 40 6,657 Walker.......... 19,583 Washington ... :. 4,916 796 Wilcox.......85,049 1,244 Winston........... 101,102 9,790 STATE........... 461,144 'Counties not included had no foreign activity reported. IHoldings plus acquisitions less dispositions. 2,613 4,193 517 6,509 6,697 19,583 90,761 1,244 572,036 2,613 4,193 517 6,509 6,697 19,583 89,169 1,244 552,456 PRIVATE LANDOWNERSHIP IN ALABAMA 27 TABLE 10. FOREIGN INTERESTS. IN. AGRICULTURAL LAND BY FEBRUARY 1, 1979-DEcEMBER 31, 1981 COUNTY, ALABAMA, Interests interests Acres Pct. No. 391,100 0.96 5 Autauga.......... 1,234,950 .17 5 wm............ adBarb, 583,400 .15 813 1 our............. 399,500 .06 320 1 Bibb, 417,850 2.30 12,718 5 Bloun nt............ 497,900 1.58 15...08,711 er... 386,500 .58 tCher 3,198 rokee......2 453,200 2.92 16.112 Chiltton........... 3 583,600 7.21 39,085 Choc,taw.......... 19 834,340 3.43 18,965 ke.......14 361,270 .07 413 1 Clebi urne.......... 395,600 .04 230 1 Coib ert........... .41 524,850 2,255 Cone °cuh.......... 4 430,950 1.36 7,488 2 Coos a............. 675,600 .59 3,269 2 Covi rigton......... 1.72 392,900 9,488 2 Cren shaw.... 480,850 2.28 12,578 man........... 1 Cully .04 344,300 230 1 ... . .. . . Dale 637,000 6.28 34,708 6 as........ Dally 495,700 1.57 8,670 DeK :ab........... 2 358,300 .14 796 E tow vah............ 1 402,000 2.69 14,854 3 Faye tte............. e 421,300 .79 4,363 3 one............ 418,350 1.64 9,086 6 Hale 720,350 4.25 23,458 4 jack: son........... 717,500 .08 430 Jeffe arson......1 459,370 .08 460 Lawsrence.......... 1 396,360 1.43 7,900 1 .. . . . . .. 383,500 .08 418 4 Lim(estone......... 462,500 1.34 7,386 Lowy ,ndes.......... 7 399,500 .41 2,268 3 Mac on............ 487,400 .45 2,495 Mad ison........... 2 621,000 6.16 34,013 Mar4 engo.......... 37 479,400 .25 1,388 L~fl...........2 Mar: 389,400 .82 14,540 5 Mar shall.......... 675,000 7.66 42,338 Moniroe............ 16 388,200 .21 1,180 1 Mor "gan........... 47 1,000 8.29 45,809 Parr y............. 10 570,500 .85 4,700 Pickyns.......1 422,550 .95 5,274 2 .. . . . . .. Pike 371,900 1.23 6,810 Ran Adolph....... .. 4 418,500 2.21 12,192 sel........3 417,850 .64 3,535 sSt.4 Clair......2 515,700 .47 2,613 2 Shel by............ 582,700 .76 4,193 6 Sum 481,100 .09 517 TallLadega.......... 1 1.18 855,700 6,509 3 Tusi 516,500 1,21 6,697 Wal Ikea.......3 678,800 3.54 19,583 4 thington.., . 575,500 16.14 89,169 Wilc cox............ 29 401,550 .23 1,244 1 Win iston........... 32,651,850 100.00 552,456 STALTE........... 'Counties not included had no foreign ac.ctivity reported. 2Represents the number of reports filed. C~outyl Contl Ownership units2 p Current foreign interests Acres 5,326 941 Total foreign Total land area in total land area Pct. 1.36 .08 .14.08 3.04 1.75 .83 3.56 6.82 2.27 .11 .06 .43 1.74 .48 2.41 2.62 c07 5.45 1.75 .22 3.70 1.04 2.17 3.26 .06 10 1.99 .11 1.60 .57 .51 5.48 .29 1.17 6.27 9.73 .82 1.25 1.83 2.91 .85 .51 .72 .11 .76 1.30 2.88 15.49 .31 1.69 1.30 ,caloosa.. . . . ter............ 260 Alm WO 28 ALABAMA AGRICULTURAL EXPERIMENT STATION the farmland held by foreign owners is in the form of long term timber management and cutting contracts. 6 Parcels held by foreign interests are distributed throughout 51 of Alabama's 67 counties, figure 6. No foreign activity was reported in Bullock, Calhoun, Chambers, Clay, Coffee, Elmore, Escambia, Franklin, Geneva, Henry, Houston, Lamar, Lauderdale, Mobile, Montgomery, and Tallapoosa counties. The largest concentration of foreign interests is located in the southwestern portion of the State. Wilcox County has the most foreign interests reported with 16 percent of the total land area of the county accounting for a like percentage of the foreign interests for the State. Foreign ownership is also relatively prominent in five other counties: Perry, Monroe, Choctaw, Dallas, and Marengo. Each of these counties accounts for between 6.2 and 8.3 percent of the foreign ownership in the State. In total, they account for 52 percent of the foreign acreage and 45 percent of the ownership units. Organizations are the most common entities having interests in agricultural land in Alabama, table 11. Of the 260 ownership units filing reports, 252 were submitted by organizations. Average size of parcels held by these entities is 2,229 acres with a range from 5 to 66,289 acres. All but one of the organizations, a partnership, are corporations. Ownership units held by organizations indicate that 91 percent are U.S. corporations with foreign interests. More than two-thirds of these indicate that their organization was created under Alabama law. Of the non-domestic organizations having interests in Alabama's agricultural land, eight were created under the laws of the Netherland Antilles, seven by the United Kingdom, and two each by the Caymen Islands and Luxemburg. Ninety-two percent of the organizations identifying their principal place of business noted domestic activity. Of these, 82 percent or 197 firms identified Alabama as their primary business location. The Netherland Antilles (7), Caymen Islands (2), and Luxemburg (2) were specified as principal places of business by firms identifying their business as primarily non-domestic. Land parcels owned by foreign individuals are small, averaging 67 acres with a range from 38 to 163 acres, table 11. The United Kingdom (3), Canada (2), Egypt (1), Iran (1), and Syria (1) were identified as countries where individual owners held citizenship. 6As indicated in Appendix B, foreign ownership or interest is defined to mean at least a 5 percent or larger interest in the entity. 10 years duration are exempt under the regulation. Also, leaseholds of less than PRIVATE LANDOWNERSHIP IN ALABAMA 29 ~LAUDERDALE :MADISON IMESTONE' JACK I 5,009 25,00cacre > 25,000 FIG. 6. Foreign interests in agricultural land in Alabama, December 31, 1981. 30 W. ALABAMA AGRICULTURAL EXPERIMENT STATION TABLE 11. FOREIGN INTERESTS IN AGRICULTURAL LAND BY TYPE OF OWNER, ALABAMA, FEBRUARY 1, 1979-DECEMBER 31, 1981 Ownership units' Landholdings Av. size Low Range High Type owner Acres Individual .......... Oiganizations: ...... Corporation ....... Partnership ....... Total ......... 8 252 251 1 260 538 561,708 561,278 430 562,246 Acres 67 2,229 2,236 430 2,162 Acres 38 5 5 430 5 Acres 163 66,289 66,289 430 66,289 'Represents the number of reports filed. Almost three-fourths of the foreigners having interests in Alabama agricultural land hold a whole fee interest in the property (that is, the owner holds the estate in its entirety) while another 2 percent possess a partial fee interest, table 12. Entities holding whole fee interests account for 45 percent of the acreage. A purchase contract, an option, and "other interests held" account for the remaining ownership units. The "other" interest category is comprised primarily of long term leases or long term timber cutting and management contracts." These account for 24 percent 7 of the ownership units and slightly over half the acreage. Average size of these parcels is almost 5,000 acres. Disregarding the 64 ownership units failing to report acquisition date, 1979 was the year of greatest foreign activity in the State with 68 reports filed, table 13. However, in terms of acreage involved, 1980 was the most active year with 12 percent of the total. It must be noted that it is difficult to adequately define the degree of activity because 71 percent of the acreage was represented by reports lacking specification of acquisition date. Perhaps this was because many foreign entities only acquired an interest in the property rather than fee ownership. Cash is the dominant means by which foreign entities acquire interests in agricultural landholdings in Alabama, figure 7 and Appendix A table 6. One-half of the acquisitions were by this method. Other methods, primarily long term timber management and cutting contracts, and credit or installment transactions, account for another 22 and 13 percent of the ownership units, respectively. On an acreage basis, the "other" methods category is most important, accounting for 55 percent of the total. 7AFIDA regulations require only leases of 10 years or more to be reported. PRIVATE LANDOWNERSHIP IN ALABAMA 31 TABLE 12. FOREIGN-OWNED AGRICULTURAL LANDHOLDINGS BY TYPE OF INTEREST HELD, ALABAMA, FEBRUARY 1, 1979-DECEMBER 31, 1981 Type of interests Ownership units1 Landholdings Acres Acres 1,326 81 253 2,635 4,992 2,466 - Range Low Acres 5 40 253 2,635 8 2,466 - High Acres 21,374 163 253 2,635 66,289 2,466 - Fee Interest: Whole ................ Partial.2 ............... Option .................. Purchase Contract ....... Other ................... No report ................ Total ............... 190 6 1 1 61 1 260 251,912 483 253 2,635 304,497 2,466 562,246 1Represents the number of reports filed. 2Fee interest partial is used for parcels owned only in part by the foreign investor; that is, a percentage interest of less than 100 percent. TABLE 13. CHARACTERISTICS OF ACQUISITIONS OF AGRICULTURAL LANDHOLDINGS BY FOREIGN ENTITIES, ALABAMA, FEBRUARY 1, 1979-DECEMBER 31, 1981 Acquisition date Ownership unitsl 47 54 68 27 64 Landholdings Acres 19,272 69,323 14,377 61,213 398,061 Av. sizeRange Low Acres 410 1,284 211 2,267 6,220 2,162 High Acres 3,084 15,075 2,463 16,000 66,289 66,289 Acres 6 5 9 40 150 5 1981 ................ 1980 ................ 1979 .................. Pre-1979 ............ No report ........... 562,246 260 Total ........... 'Represents the number of reports filed. Forestry is the dominant use to which foreign entities allocate agricultural land in Alabama, table 14. At least part of the parcel is allocated to forest use in 95 percent of the cases. Average size of these units is 2,224 acres with a range from 4 to 66,289 acres. In terms of acreage, land allocated to timber or forest uses accounts for 98 percent of the acreage held by foreign interests. Multiple land uses are noted for 42 percent of the parcels. In terms of acreage, 70 percent is allocated to a single use while 27 percent involves two uses. Three percent involves three and four uses per parcel. Some concern has been expressed relative to the shift of land to nonagricultural uses by foreign interests. Indications are that important changes in the use of land held by foreign interests are not anticipated in the short run. More than 90 percent of the respondents noted no plans to change present use. Seven percent indicate a change to other agricultural uses while 2 percent intend to shift out of agriculture. 32 __ 32 ALABAMA ALBAMA AGRICULTURAL AGRICULTURA EXPERIMENT STATION XEIEN TTO Percentage 100of 901- * Owner units EAcres 80 60 50 40 30 20 I0 0 Cash Gift/ Trade Credit/ Inherit Instal. Method of Acquisition Other FIG. 7. Foreign interests in agricultural landholdings by method of acquisition, February 1, 1979 - December 31, 1981. TABLE 14. USE OF AGRICULTURAL LAND HELD BY FOREIGN INTERESTS, ALABAMA, FEBRUARY 1, 1979-DECEMBRa 31, 1981 Use Ownership units' holdings Land- Av. size Low Range High 12 Cropland............... 11 Pastureland............. Timberland or 549,891 247 forestland............ 982 14 Other agriculture... 3,261 84 Nonagriculture.... 3,732 1 No report.............. 'Represents the number of reports filed. Acres 3,776 1,104 Acres 315 100 2,224 70 39 13,732 Acres 12 8 4 1 1 - Acres 1,200 500 66,289 256 441 - Direct control of land is exercised by 93 percent of the foreign owners completing this section of the AFIDA form, table 15. This includes '79 percent of the acreage involving foreign interests. Managers and tenants directly operate the remaining 3 and 4 percent of the ownership units, respectively, or 2 and 5 percent of the total reported acreage. Cash or fixed rental agreements are the only rental arrangements identified with 21 percent of the PRIVATE ' LANDOWNERSHIP IN ALABAMA 33 LAND HELD BY FOREIGN TABLE 15. TENURE ARRANGEMENTS ON AGRICULTURAL INTERESTS, ALABAMA, FEBRUARY 1, 1979-DECEMBER 31, 1981 Tenure Ownership units Total Av. size Range High Low Acres Current Acres 2,227 3,332 2,803 Acres 5 163 48 Acres 66,289 12,635 16,000 Foreign owner ...... Manager ............. Tenant ............ 200 6 8 445,394 9,989 22,428 No report .......... Rental agreement Cash or fixed rent ... No report .......... 46 55 205 84,435 289,915 272,331 1,386 5,271 1,377 11 8 5 21,374 66,289 21,374 Intended change None .............. New ............... No report .......... 51 163 46 235,950 234,071 92,225 4,823 1,436 2,005 21 5 11 66,289 16,000 21,374 1Represents the number of reports filed. ownership units involving this type use. These account for 52 percent of the acreage. New tenure arrangements are expected for 63 percent of the ownership units which represent 42 percent of the acreage. No changes in tenure are noted for 20 percent of the parcels or 42 percent of the acreage. This high percentage of tenure changes can be attributed to large timber corporations since they are considered new managers when they acquire an interest in the land. SUMMARY AND IMPLICATIONS The nature of ownership and control of agricultural land, coupled with societal decisions about land allocation and use, can substantially influence the ability to produce food and fiber. The purpose of this report is to define and analyze the nature of land ownership with emphasis given to privately held land, farm and ranch land, and foreign interests in agricultural land. Selected national and regional characteristics of land ownership are presented to provide comparisons with Alabama. The more than 30 million acres of privately held land in Alabama, 93 percent of the total land area, are estimated to be owned by slightly more than a million individuals and entities. Ownership is highly concentrated in the hands of individual and family owners with 99 percent of the ownership units and 79 percent of the acreage represented by this group. Of the two groups, individual owners are most prevalent with 66 percent of the ownership units and 40 percent of the acreage. Average size of individual 34 4 .r ALABAMA ALABAMA AGRICULTURAL A(~vsp% ICnlvlTU4AAL FXPF~iR moiMFWT1v EXPERIMENT STATION TAI V and family parcels is 23 acres while nonfamily parcels average 693 acres. Nonfamily corporations are the dominant nonfamily owners in terms of acreage with 14 percent of the total and an average size of 4,190 acres. Almost two-thirds of the privately held land in Alabama is used for farming despite the fact that only a fourth of the owners hold farmland. Virtually all the remaining privately held land is allocated to "other" (nonfarm forest, idle, or wasteland) uses. Average sizes of farm and ranch, residential-commercial, and "other" parcels are 64 acres, 1.5 acres, and 135 acres, respectively. Individual and family (husband-wife) owners are dominant owner types for Alabama's farm and ranch land with control of 47 and 45 percent of the ownership units, respectively, and 44 and 34 percent of the acreage. Farm and ranch parcels owned by individual and family units are a fourth the size of nonfamily units, 60 versus 257 acres. Relative to privately held land, ownership of farm and ranch acreage by nonfamily corporations is not as prominent. Generally, owners of farm and ranch land parcels in Alabama can be classified as white, male, over 50 years of age, with a nonfarm occupation, and residing in the same county as the land. Although the specific percentages differ when the distribution by acreage is evaluated, the same profile of characteristics appears. Farm and ranch land ownership patterns in Alabama differ little from those for the South. Notable exceptions include the fact that owners in the region are less frequently males and generally younger in terms of ownership units and less frequently hold nonfarm occupations in terms of acreage. More farmland ownership units and a larger portion of the acreage are controlled by individuals and families in Alabama than in the Nation or South. Landholdings in the South and Alabama are more concentrated in small land parcels than is true for the United States. In terms of ownership units, purchase of farm and ranch land is a more common method of acquisition in the South than in Alabama. Relatively, inheritance is the more frequent means of transfer in Alabama. However, by acreage, method of acquisition differs little between the two areas. Foreign interests in Alabama farmland involve less than 2 percent of the privately held land and even less of the total land area. While these portions are small, the importance of foreign PRIVATE LANDOWNERSHIP IN ALABAMA 35 ownership to traditional agriculture in the State is lessened further because of the fact that most foreign owned land is devoted to the production of timber and is concentrated in the southwestern section of the State where production agriculture is less important. Organizations are the most common type entities holding interests in land, with corporations comprising the largest portion. The majority of these firms are chartered under Alabama law. Ninety percent of the organizations specify their principal place of business as the United States and 82 percent identify Alabama as their primary business location. This situation should not result in complacency, however. Foreign ownership should continue to be monitored, especially at the county level and in areas where foreign ownership is relatively extensive. While foreign ownership does not seem to be extensive in Alabama and thus may not justify great concern, several other issues do merit attention. The concept of the "family farm" is alive and prominent in the State with 98 percent of the ownership units and 93 percent of the acreage of privately held farm and ranch land controlled by individuals and family related organizations. What about the nature of this ownership? What does the future hold? Insight was gained relative to these questions by evaluating the age, occupational status, and income (farm and nonfarm) of farmland owners. Almost three-fourths of the individuals reporting their age are more than 50 years old. Forty-six percent are over 60 and 23 percent are over 70 years of age. In addition, only 14 percent of the ownership units and 26 percent of the acreage are held by individuals listing farming as their occupation, and 26 percent of the ownership units and 25 percent of the acreage are included in the "retired" grouping. Taken together, these facts about the ownership of agricultural land in the State suggest a changed situation from that existing in the past and one that merits serious' attention in future years. Do these circumstances foretell major shifts in the ownership of the primary agricultural resource? Or, will farmers continue to be the prime purchasers of rural property? Certainly, farmers will not be major purchasers of farmland when net farm income is low. For example, data from 1977 indicate that 55 percent of the ownership units and 26 percent of the acreage evidenced no net farm income, and 7 percent of the units and 16 percent of the acreage experienced losses. 36 36 ALABAMA ALABAMA AGRICULTURAL AGRICULTURA EXPERIMENT STATION XEIEN TTO Indications are that farmers are coping with low returns to agriculture through nonfarm employment. Owners of 56 percent of the ownership units and 39 percent of the acreage indicated nonfarm occupations, most commonly of a "blue collar" nature. Only 11 percent of the ownership units and 14 percent of the acreage was owned by persons or families who received no nonfarm income. Off farm employment is important to the livelihood of the majority of owners. About half of the ownership units and 40 percent of the farmland acreage in Alabama are owner operated. Even further increases in nonfarm ownership of the land resource seem probable. Coupled with this shift will be more rental and lease arrangements for those who will actually farm Alabama's agricultural land. This will result in larger farm operating units and the potential for more distinct segments within the agricultural sector. That is, the gap between the many small, part-time farms and the larger units will become greater as the latter group expands to improve efficiency. Both governmental and private agencies serving agriculture should be conscious of these potential shifts. Consideration should be given to programs which will reduce problems created by these changes, lessen the exodus of land from agricultural uses, and maintain the viability of Alabama agriculture. While surpluses and low prices are a problem today, indications are that these problems will not persist. Governmental programs dealing with such areas as credit, supply management, technical assistance, conservation, land use, and taxation (preferential treatment)-should be beneficial in maintaining the further development of the agricultural sector. These are issues which will gain importance in the future. PRIVATE LANDOWNERSHIP IN ALABAMA 37 SELECTED REFERENCES CALVIN L. 1975. The Revival of Population Growth in Nonmetropolitan America. Report No. ERS-323, Economic Research Service, U.S. Department of Agriculture. (2) DANIELSON, LEON E. 1981. North Carolina Landownership Data. Economics Information Report 65. Department of Economics and Business, North Carolina Agr. Ext. Ser., North Carolina State University at Raleigh. (3) DE BRAAL, J. PETER AND T. ALEXANDER MAJCHROWICZ. 1981. Foreign Ownership of U.S. Agricultural Land, February 1, 1979 Through December 31, 1980. U.S. Department of Agriculture, ESS, Agr. Info. Bull. No. 448. (1) BEALE, (4) EICHLER, MARILYN E., J. PETER DE BRAAL, GENE WUNDERLICH, AND JUDITH GREEN. 1980. Foreign Ownership of U.S. Agricultural Land. Agricultural Economics Report No. 447. Economics, Statistics, and Cooperative Service, U.S. Department of Agriculture. (5) JEREMIAS, RONALD A. AND JOHN F. JONES. 1981. Farm Real Estate Market Development. Supplement No. 1 to CD 85, Economics and Statistics Service, U.S. Department of Agriculture. (6) LEwIS, DOUGLAS G. 1980. Who Owns the Land? A Preliminary Report for the Southern States. Staff Report NRED 80-10, Economics, Statistics, and Cooperative Service, U.S. Department of Agriculture. (7) LEwis, JAMES A. 1980. Land Ownership in the United States, 1978. Agr. Info. Bull. No. 435. Economics, Statistics, and Cooperative Service, U.S. Department of Agriculture. (8) MOLNAR, JOSEPH J. AND JOHN L. ADRIAN. 1980. The Structure of Black- Operated Agriculture in Alabama: Characteristics and Trends. Ala. Agr. Exp. Sta. Cir. 246, Auburn University. (9) U.S. CENSUS or POPULATION, 1980: Alabama. Bureau of Census, U.S. Department of Commerce. PC(1)2A. (10) USDA, ERS. 1982. Foreign Ownership of U.S. Agricultural Land Through December 31, 1981. A report to the Congress Under the Agricultural Foreign Investment Disclosure Act, 1982. APPENDIX A TABLES 1-6 APPENDIX A TABLE 1. OWNERSHIP OF PRIVATELY HELD LAND BY OWNER TYPE: UNITED STATES, SOUTH, AND ALABAMA, 1978 Type of owner United States1 Ownership Acres units owned Mil. Pct. Mil. Pct. South2 Ownership Acres units owned Mil. Pct. Mil. Pct. Alabama Ownership units Mil. Pct. Acres owned Mil. Pct. Individual ownership ........... 15.0 44 458 34 4.88 54 107.4 40 0.688 66 12.01 40 Family ownership: Husband-wife ................ 15.4 46 435 32 3.30 36 66.4 24 .255 24 7.85 26 Partnership .................. 1.1 3 143 11 .35 4 27.6 10 .089 9 3.42 11 Corporation ................. .. 3 1 77 6 .04 -_3 9.7 4 .001 .69 2 Subtotal ................... 31.8 94 1,113 83 8.57 94 211.1 78 1.033 99 23.97 79 Nonfamily ownership: Partnership .................. .3 1 30 2 .06 5.1 2 .004 .46 2 Corporation ................. .9 3 151 11 .17 2 43.7 16 .001 4.19 14 Miscellaneous ................ .7 2 54 4 .32 4 11.0 4 .004 1.59 5 Subtotal ................... .1.9 6 235 17 .55 6 59.8 22 .009 1 6.24 21 Total ................. .33.7 100 1,348 100 9.12 100 270.9 100 1.042 100 30.21 100 'Excludes Alaska and Hawaii. 2Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. SUnreported percentages (-) indicate a value of less than 1 percent. Source: 1978 ESCS Land Ownership Survey. APPENDIX A TABLE 2. USE OF PRIVATELY HELD LAND: UNITED STATES, SOUTHi, AND ALABAMA, 1978 United States' Land-use type Ownership units Thou. Farm and ranch land3 .... Residential-commercial 4 Others.................... 2 1 ,2 14 Southe Ownership units Thou. 5 ,1 82 Alabama Acres owned Mil. 147 12 Acres owned Mil. 938 48 Pct. 22.4 6 9.3 Pct. 82.1 4 .2 Pct. 27.7 64 .1 Pct. 69.0 5 .6 Ownership units Pct. Thou. 235 663 Acres owned Pct. Mil. 14.9 1 .3 6,876 2,243 24.7 6 9 .8 62.8 5 .6 205 Not reported............. 3,100 33,727 1,348 Total ................ 'Excludes Alaska and Hawaii. 2Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. 3lncludes cropland, pasture, woodland, wasteland, and farmstead. 4Residential, commercial and similar urban type land. 5Nonfarm forest, idle, or wasteland. Source: 1978 ESCS Land Ownership Survey. Sub-total............. 2,538 30,627 8.3 100.0 157 1,143 13.7 100.0 660 8,085 1,035 9,120 8.2 100.0 54 213 57.9 270.9 25.4 100.0 52 739 303 1,042 5.5 100.0 7.5 23.7 6.5 30.2 31.6 100.0 APPENDIX A TABLE 3. OWNERSHIP OF PRIVATELY HELD FARM AND RANCH LAND BY TYPE OF OWNER, SOUTH, AND ALABAMA, 1978 UNITED STATES, Type of owner United States' Ownership Acres units owned Mil. Pct. Mil. Pct. South2 Ownership Acres units owned .Mil. Pct. Mil. Pct. 67.9 44.5 18.3 4.3 135.0 2.6 4.0 5.0 11.6 7 .V AN Alabama Ownership Acres units owned Mil. Pct. Mil. Pct. 0.110 .107 .013 .001 .231 .003 .001 l Individual ownership.......... 3.0 44 336 36 1.21 54 Family ownership: Husband-wife ............... 3.0 44 335 36 .82 36 Partnership ................... 4 6 114 12 .14 6 Corporation..................1 1 62 7 .01 -3 Subtotal..........6.5 95 847 90 2.18 96 Nonfamily ownership: Partnership...........1 1 18 2 .02 1 Corporation...........1 1 37 4 .01 Miscellaneous ................. 2 3 36 4 .04 2 Subtotal ........ .4 5 91 10 4 .07 100) Total . .. .. .. 938 6.Q 100 92.25 'Excludes Alaska and Hawaii. 2Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, nessee, and Virginia. 3Unreported percentages (-) indicate a value of less than 1 percent. Source: 1978 ESCS Land Ownership Survey. Hus d .a "&f .............. vJ VV J 1V y~ 1VV 46 30 13 3 92 2 3 3 8 V 47 45 6 - 6.62 5.00 1.91 .31 13.84 14R7 44 34 13 2 93 O2 98 n 1 - .004 .. JJ 2 V .31 .39 .33 1.03 3 2 7 V 1'IOI Mississippi, North Carolina, South Carolina, Ten- APPENDIX A TABLE 4. SIZE OF FARM AND RANCH LAND HOLDINGS IN NUMBER AND PERCENT OF OWNERSHIP UNITED STATES, SOUTH, AND ALABAMA, 1978 UNITS AND ACRES OWNED: Size of holdings (acres) United States' Ownership units Thou. Pct. 2,015 1,926 989 . 880 . 770 . 252 . 40 5 South2 Ownership units Thou. Pct. 827 720 320 195 144 34 3 -3 Alabama Acres owned Mil. Pct. 2 17 22 24 39 27 7 2 Acres owned Mil. Pct. 7 48 120 120 221 217 143 107 Ownership units Thou. Pct. 95 70 34 19 13 4 - Acres owned Mil. Pct. 0.3 1.7 2.4 2.4 3.4 3.1 1.2 .3 Less than 10 .......... 10-49 ................. 50-99 ............... 100-179 . .............. 180-499 ............... 500-1,999 ............. 2,000-9,999............ 10,000 or more ........ 29.3 28.0 14.4 12.8 11.2 3.6 .6 .1 0.8 5.1 7.6 12.8 23.8 23.2 15.5 11.4 36.9 32.1 14.2 8.7 6.4 1.5 .1 - 1.9 12.1 15.2 17.5 26.9 19.1 5.8 1.5 40.6 29.9 14.5 7.7 5.6 1.7 - 2.3 11.3 16.4 16.3 22.7 20.7 8.0 2.3 Total .. ......... 6,877 100.0 938 100.0 2,242 100.0 145 100.0 235 100.0 14.8 100.0 "Excludes Alaska and Hawaii. 2Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. 3Missing information (-) indicates the number of units or acres was less than .05 percent. Source: 1978 ESCS Land Ownership Survey. APPENDIX A TABLE 5. NUMBER AND PERCENT OF FARMLAND UNrrS AND ACRES OWNED BY THE RESIDENCE OF PRINCIPAL OWNER: SOUTH AND ALABAMA, 1978 Residence of owner Southi Ownership units Thou. Pct. Acres owned Mil. Pct. Alabama Ownership units Thou. Pct. Acres owned Mi. Pct. Same county................1,964 Same state (different county) .... Another state................ Another country....... Not Total..........2,242 87.6 9.6 2.2 - 119.6 17.5 7.3 - 82.3 12.0 5.0 .7 100.0 219 9 4 - 93.2 3.8 1.7 1.3 100.0 12.0 1.9 81.1 12.8 4.7 1.4 100.0 ..... ........ 216 49 13 .7 reported........ 100.0 .6 1.0 145.4 3 235 .2 14.8 'Ten Southern states including Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. was less than .05 percent. 2Missing information (-} indicates the number of units or Source: 1978 ESCS Landownership Survey. acres PRIVATE LANDOWNERSHIP IN ALABAMA 43 APPENDIX A TABLE 6. FOREICN-OWNFD AGRICULTURAL LANDHOLDINGS BY METHOD OF AcQulsrrsoN, ALABAMA, FEBRUARY 1, 1979-DECEMBER 31, 1981 Method of acquisition Ownership units' Landholdings ARange Low High Acres 8,630 15,075 7,900 70 66,289 21,374 66,289 Acres 76,502 Cash...................... 131 44,829 35 Credit or installment ... 25,539 Trade............15 150 3 Gift or inheritance........... 312,120 57 Other...................... 113,106 19 No report.................. 562,246 260 Total.................. 'Represents the number of reports filed. Acres 584 1,281 1,703 50 5,476 5,953 2,201 Acres 11 40 5 40 8 338 5 44 ALABAMA AGRICULTURAL EXPERIMENT STATION APPENDIX B LEGAL REQUIREMENTS, DEFINITIONS, AND TERMINOLOGY RELATED TO AFIDA This section was excerpted primarily from De Braal and Majchrowicz (3, pp. 2-5). It is intended to specify the legal requirements of AFIDA and provide an explanation of particular definitions and terminology inherent with AFIDA. Legal Requirements Each foreign entity holding land is required to file a report. Therefore, if two individuals own land as a partnership, the partnership is to file one report as a partnership, with the partners' names and citizenships listed on the back of the form. Occasionally, however, two people will file as individuals, each filing a separate report on the same land with a partial interest of, for example, 50 percent listed on each form. Because there is no way to accurately identify land by location, two individuals such as these cannot be distinguished from one partnership. This can occur when there is no legal partnership but individuals own the land as tenants in common. If they file together on one form, they are automatically considered a partnership. If they file separately, they are generally considered individuals. Therefore, the data on individuals and partnerships and the number of reported parcels should be used with caution. The Act is designed to impute foreign person status to certain U.S. entities holding direct and indirect interests in U.S. agricultural land. For purposes of the Act, this is accomplished by defining each successive link in a chain of U.S. entities containing foreign interests as a "foreign person." However, only the "foreign person" who actually holds the direct interest in the land, the first layer or tier, is considered the reporting entity. This entity may not actually be foreign, but under the Act it is deemed a "foreign person" because another "foreign person" holds a significant interest or substantial control" in it. In some instances, that second tier also may not actually be foreign but may be deemed "foreign" under the Act for the same reason. The indirect "foreign" owner of the real estate may be at the end of a string of U.S. entities, each of which is owned at least 5 percent by the preceding U.S. entity defined to be a "foreign person." Under the regulations, the reporting entity is required to disclose, PRIVATE LANDOWNERSHIP IN ALABAMA 45 in addition to information about the land held, acquired, or transferred, certain information about the second-tier interest. The regulations also provide that the second-tier entity may be asked to disclose information about the third tier. According to the regulations, the reporting entity, whether U.S. or foreign, must, if such entity is a person other than an individual or government, provide information (names, addresses, citizenship, and the nature of the entity) on all foreign persons individually holding a 5-percent or more interest in the entity. This 5-percent standard differs from the standard for determining whether an entity is required to file at all. In the latter instance, if several foreign persons cumulatively own 5 percent or more of the entity, and no single individual owns a 5-percent interest, the entity is defined as a "foreign person" and is required to file a report. However, such an entity may not be required to list the names (and so forth) of the foreign holders individually holding less than 5 percent of the entity. AFIDA requires reporting "any interest" other than a security interest (a mortgage or other debt-securing instrument). The regulations exempt leaseholds of less than 10 years duration, contingent future interests, and those noncontingent future interests that do not become possessory upon termination of the present estate. In addition, nonagricultural easements and rights-of-way are exempt. In an interpretation issued by the U.S. Department of Agriculture (USDA), an interest solely in mineral rights is also exempt. U.S. agricultural land owned by a U.S. entity deemed a "foreign person" under the Act (the party legally responsible for providing the information required by the Act) is reported from the standpoint of the U.S. entity rather than that of the foreign shareholder. The AFIDA procedures provide for land to be reported by parcels. All land held in the same manner (type of interest), located in one county, and acquired at the same time is considered a parcel and is to be reported on a single form. Land does not have to be adjacent to be considered part of one parcel. This parcel concept is intended to ease the reporting burden. Data deficiencies,are noted and highlighted as appropriate. The "Not Reported" category in the tables means that no response was provided to the particular question. Note, too, that the acreage figures reported do not necessarily mean that they are wholly 46 ALABAMA AGRICULTURAL EXPERIMENT STATION owned by foreign investors; that is, numerous parcels are held by U.S. entities considered foreign persons under the Act and a number of parcels are owned only in part by foreign investors. Definitions and Terminology "Holdings" is applied to those lands held by foreign persons or entities as of February 1, 1979. "Acquisitions" and "dispositions" refer to land acquired and disposed of, respectively, by foreign persons or entities on or after February 2, 1979. "Foreign person," as defined in the Act, includes any individual who (1) is not a U.S. citizen or national, (2) is not a citizen of the Northern Mariana Islands or the Trust Territories of the Pacific Islands, or (3) is not lawfully admitted into the United States for permanent residence. Any person who holds an Immigration and Naturalization Service Form 1-151, 1-155, or 1-551 (green card) is considered lawfully admitted for permanent residence and is exempt from the requirements of the Act. Foreign governments, entities which are created under the laws of or have their principal place of business in a foreign country, and U.S. entities in which there is a significant foreign interest or substantial control are also defined as foreign persons under the Act. "Individuals" are defined to include one person or a husband and wife. "Partnerships" include all legally defined partnerships, joint ventures, and tenancies in common which include two or more persons who are not married. The term "partnership" does not differentiate between joint tenancies and tenancies in common. "Agricultural land" is defined in the Act as all land used for agricultural, f6restry, or timber production purposes. The regulations further refine this definition by including idle land if its last use within the past 5 years was for agricultural, forestry, or timber production purposes. The Act exempts all land, however, that is held in parcels of less than 1 acre and that does not produce agricultural, forestry, or timber products for personal use generating more than $1,000 in annual gross sales. "Significant foreign interest or substantial control" means at least a 5 percent or more interest in the entity. Alabama's Agricultural Experiment Station System AUBURN UNIVERSITY With an agricultural research unit in every malj(r so area, (il Auburn University K!) i serves the needs of field cnc~p. livestck. forestrx, and h~r ticultural producers in each region in Alabama. very citi ze n o f th e State h as a stakei in this resarch pro~gram,~ since amn adivantalge irm nl e and nore economical «-ays of producing and handling farm products di- 0 ________ rectly benefits the conlsuming public. 2 Research Unit Identification ® Main Agricultural Experiment Station, Auburn. a E. V. Smith Research Center, Shorter. Tennessee Valley Substation, Belle Mina. Sand Mountain Substation, Crossville. North Alabama Horticulture Substation, Cullman. Upper coastal Plain Substation, Winfield. Forestry Unit, Fayette county. chilton Area Horticulture Substation, clanton. Forestry Unit, coosa county. Piedmont Substation. Camp Hill. Plant Breeding Unit, Tallassee. Forestry Unit, Autauga County. Prattville Experiment Field. Prattville. Black Belt Substation, Marion Junction. The Turnipseed-Ikenberry Place, Union Springs. Lower Coastal Plain Substation, Camden. Forestry Unit, Barbour County. Monroeville Experiment Field, Monroeville. Wiregrass Substation, Headland. Brewton Experiment Field, Brewton. Solon Dixon Forestry Education Center, Covington and Escambia counties. 20. Ornamental Horticulture Field Station, Spring Hill. 21. Gulf Coast Substation, Fairhope. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.