LITTLE ROCK, Ark. – Arkansas is the country’s first state to act to force a Chinese company to divest its land holdings in the state, according to its governor.

In a Tuesday morning news conference, Gov. Sarah Huckabee Sanders said the state would require the China National Chemical Company to divest its land holdings for the Northrop King Seed Company in Craighead County.

“Seeds are technology,” the governor explained. “Chinese state-owned corporations filter that technology back to their homeland, stealing American research and telling our enemies how to target American farms.”

The governor explained that the legislature’s passage of Act 636 during its regular session earlier this year created the law allowing the state to act. The act prohibits land holdings in Arkansas by prohibited foreign parties, such as the Chinese government-owned China National Chemical Company.

Northrop King owns 160 acres for its seed research and development business, valued at approximately $1.12 million. Northrop King is a subsidiary of Syngenta Seeds LLC, which is owned by China National Chemical Company, formerly ChemChina.

It has two years to divest itself of the land holdings, Sanders said.

The governor was joined in making the announcement by Attorney General Tim Griffin and Sec. of Agriculture Wes Ward.

Griffin said that a 2021 law passed by the legislature requires foreign-held companies to report land holdings to the Arkansas Secretary of Agriculture. Since Northrop King was late in filing, it would be assessed the maximum fine permitted by law, $280,000, which is 25% the value of its land holdings, he said.

If the company has not divested of the land in two years Griffin said he would begin enforcement action in Craighead County Circuit Court.

Griffin continued that the technology behind seeds offers potentially major inroads, calling it a “dual-use technology.”

“There is nothing off limits for them [the Chinese government] if they think it will strengthen them strategically whether it be related to engineering or the ability to feed their people,” Griffin said.

Griffin added that the federal government has made prosecutions in Arkansas related to seed technology. He added that China National Chemical Company was owned by China’s government.  

Syngenta responded to the announcement on Tuesday afternoon in a statement expressing disappointment.

“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,” from the statement, which continued: “Our people in Arkansas are Americans led by Americans who care deeply about serving Arkansas farmers.  This action hurts Arkansas farmers more than anyone else.”  

The company’s statement went on to explain that China has never directed its actions and continued to emphasize its work on behalf of American farmers.

“Syngenta’s work in the U.S. – including in Arkansas – continues to benefit American farmers, strengthens American agriculture, and makes the U.S. a more innovative and competitive participant in the global agricultural marketplace.”

ChemChina purchased the Switzerland-based Syngenta in 2016 for $43 billion. The U.S. Department of Defense added ChemChina to a list of Chinese military companies operating in the U.S. in 2022.