Gov. Scott Walker will consider modifying a controversial provision in his budget proposal that would lift limits on how much land foreign investors can own in Wisconsin.
As the state's top agriculture official speculated that the proposal was prompted by the need for more investments in Wisconsin's paper industry, Walker's spokesman said the change is intended solely to clarify language that was confusing to potential foreign investors.
"This provision is a technical fix for areas of the law that conflict. It has nothing to do with ag, and it has nothing to do with the paper industry," Cullen Werwie said. "If legislators would like to make modifications to the budget proposal related to this specific issue, we're open to looking at their changes."
Walker is seeking to remove a 125-year-old statute that limits foreign investors from certain countries from owning no more than 640 acres in the state. The provision has drawn bipartisan criticism from legislators.
Ben Brancel, secretary of the state Department of Agriculture, Trade and Consumer Protection, said he believed the provision was driven by the paper industry's need for wood to feed paper and pulp mills.
"Some of those take significant acreages of timber, and in order to find investments for a strong, viable paper industry, it may require some foreign investments," Brancel said. "That's probably what is driving the initiative in the budget."
State law already exempts many foreign investors from the land ownership limits under international treaties. But Werwie said last week the law needed to be changed because it conflicted with language in those treaties, specifically the General Agreement on Trade in Services, a 1995 World Trade Organization treaty.
Werwie said a recent call from a Croatian official to Walker's office highlighted how some foreign investors aren't aware that the law exempts countries from the limits if they have a treaty with the United States such as favored-nation status.
"I think it's causing confusion out there," Werwie said. "Then the effective result of doing what we did is nothing, other than to help (foreign investors) understand what applies to them."
Bill Oemichen, the president and CEO of the Cooperative Network and former top administrator of the trade and consumer protection arms of DATCP, called that a circular argument. The Cooperative Network has asked the governor to take the provision out of the $88 billion budget and have it debated separately.
"If people have tried to make (the law) sound more complicated than it is, that is an argument then to say that it needs to be gotten rid of," said Oemichen. "The fact of the matter is the law provides exemptions, and if the person just makes the showing that they are exempted, the law will allow them to go forward. It seems like the law does what it needs to do."
State Sen. Dale Schultz, R-Richland Center, continued his call to remove the provision from the budget.
"It pays to enter into discussions with an open mind," said Schultz, a member of the Senate agriculture committee. "On the other hand, I think there are an awful lot of people who have worked very hard to keep Wisconsin the way it is with our rich, natural resources. Timber and farmland are two of those things. I think it's prudent to say let's hold up here and have a discussion."