Top Legal Issues in Agriculture and AgTech

The following topics merit close attention from companies, investors, lenders, developers, and technology providers operating across the agriculture value chain.

Agribusinesses are operating in a trade environment marked by rapid changes in customs policy, tariff exposure, and global business compliance expectations. Importers and exporters of agricultural inputs, machinery, seed, food products, fertilizers, crop protection products, and technology-enabled equipment should reassess tariff classification, country-of-origin determinations, valuation, duty-mitigation strategies, and customs documentation as enforcement and policy priorities continue to evolve.

Supply-chain resiliency remains a core legal and business issue in the agriculture sector, particularly in light of fluctuations in the availability of the Strait of Hormuz. Companies sourcing globally should evaluate sanctions, forced labor, export control, and trade remedy risks, particularly where equipment, ingredients, packaging, or critical inputs move through jurisdictions subject to heightened scrutiny or rapidly changing trade restrictions.

From a transactional and contracting perspective, agribusinesses should review tariff-allocation clauses, price-adjustment mechanisms, delivery terms, force majeure provisions, customs representations, and supplier audit rights. Early coordination among trade, procurement, sales, finance, and legal teams can help preserve optionality when policy changes affect input costs, export markets, or supply continuity. Additional insight on these topics from ArentFox Schiff’s International Trade group can be found here.

AI is increasingly embedded in agriculture through precision-agriculture platforms, robotics, autonomous equipment, yield forecasting, crop protection, livestock monitoring, food safety, logistics, weather and climate analytics, customer engagement, and product development. These tools can improve efficiency and decision making, but they also create legal risk when output affects planting decisions, input recommendations, pricing, safety, labor, or customer communications.

As AI laws and guidance evolve, developers and deployers should evaluate data rights, privacy, explainability, bias, cybersecurity, intellectual property ownership, product liability exposure, and responsibility for automated or semi-automated recommendations. Contract terms with growers, dealers, distributors, customers, and vendors should allocate responsibility for training data, model outputs, human oversight, performance claims, and third-party claims, and should be reviewed against these emerging statutory constraints. With federal efforts to preempt state AI laws remaining unresolved, the regulatory landscape is likely to continue shifting from state to state.

Companies will want to build AI governance that is proportionate to the risk of each use case. Practical steps include inventorying AI systems; reviewing data sources and licenses; documenting human review; validating outputs used in agronomic or operational decisions; updating customer-facing disclosures; and coordinating product, privacy, cybersecurity, regulatory, and litigation teams before deploying high-impact tools.

Federal and state policymakers continue to focus on foreign investment in US agricultural land, food production assets, and strategically sensitive real estate as a national security issue. For example, Congressman John Moolenaar (R-MI), chairman of the Select Committee on China, and 13 bipartisan cosponsors, recently introduced a bill addressing the Committee on Foreign Investment in the United States (CFIUS) framework, which targets foreign adversary (currently China, Cuba, Iran, North Korea, Russia, and the Bolivarian Republic of Venezuela) purchases of agricultural land and real estate, to take additional steps aimed at safeguarding US national security and food security. 

The legislation, if passed, would expand CFIUS jurisdiction to cover the purchase or lease by, or concession to, a foreign adversary person of private or public real estate located in the United States, subject to existing statutory limitations and exceptions. Thus, transactions involving listed foreign adversary-linked parties would receive more direct and stringent federal scrutiny than ordinary real estate transactions involving other foreign persons. This bill reflects the broader concern that ownership and control of agricultural assets can implicate national security, food security, and rural economic policy. 

For agricultural investors and operating companies, the policy trend is important even when a transaction does not ultimately require a CFIUS filing. Parties should expect more diligence around foreign ownership, control, and other investment-related rights; proximity to sensitive sites; access to sensitive data or infrastructure; and potential links to foreign governments or foreign adversary-controlled entities.

Government relations and national security strategy should be integrated into transaction planning. Investors, lenders, landowners, and agribusinesses can monitor federal and state proposals, evaluate whether advocacy or public comments are warranted, and prepare communications that explain the agricultural, rural-development, conservation, and food-supply benefits of their projects. For more coverage by AFS on this issue, continue reading here.

Foreign investment in agricultural real estate has also come under increased focus at the regulatory level. On June 25, the US Department of Agriculture (USDA) issued a notice of proposed rulemaking that would substantially revise the regulations implementing the Agricultural Foreign Investment Disclosure Act, with comments due August 10. The proposal would broaden who must report, add process and content requirements for reports, increase penalty accrual rates, shorten certain reporting and appeal timelines, eliminate penalty appeal hearings, and remove agency discretion to reduce penalties. 

The proposal would also expand reportable interests in agricultural land to reach additional land uses and ownership interests that matter to modern agriculture and rural infrastructure. Covered categories would include agricultural production under cover, solar and wind electric power generation, pipelines, support activities essential to agriculture and forestry production, supply-chain entities for animal and agricultural products, agricultural and biotechnology research land, forestry production, and certain conservation land that could be used for farming, ranching, forestry, or timber production. Importantly, the proposed rule would have retroactive application — meaning that any foreign persons who were not required to make a filing under the current rule but would be required to make a filing under the proposed rule would be required to file within 90 days of the proposed rule becoming effective. In addition, the proposed filing requirement would apply to any holding of an interest in land, not just in connection with an acquisition or transfer.

Agricultural real estate investors, funds, developers, lenders, and operators should review ownership and lease structures, consider whether newly reportable holdings may exist, evaluate fair-market-value penalty exposure, and assess whether to submit comments to the proposed rule. Interested stakeholders have been particularly focused on the impact the proposed rule would have on compliance burdens, confidentiality considerations, investment-fund liquidity, and the treatment of renewable energy or infrastructure projects on agricultural land. 

The regulatory landscape for gene editing technology used in agriculture is also evolving rapidly in 2026, both domestically and abroad. In June, the European Union (EU) formally adopted a new regulation for plants developed using certain new genomic techniques, or NGTs, the term used by the EU to describe techniques that can help breed new innovative plant varieties faster and with higher precision compared to conventional plant breeding techniques. The adoption of the NGT regulation is the culmination of a lengthy legislative process first instituted in July 2023 and represents a significant modernization of the EU’s approach to regulating organisms modified using genetic engineering.

As discussed here, the regulation creates a two-tier framework. 

1. NGT1 plants. NGT plants with modifications that could be obtained naturally or through conventional breeding under defined equivalence criteria, will be regulated like conventional plants, paving the way for commercialization of innovative plant products without the risk assessments required by the EU’s onerous GMO regulations. 
2. NGT2 plants. Other NGT plants that do not meet NGT1 criteria, including NGTs with herbicide-resistance traits, remain subject to GMO-style risk assessment, authorization, traceability, labeling, and monitoring obligations with adaptations. 

Plant and seed breeders should map product pipelines against the NGT1 equivalence criteria and the list of traits excluded from NGT1 treatment, including herbicide tolerance and known insecticidal effects. Breeders should also prepare for patent-disclosure transparency, continued prohibition of NGTs in organic production, Member State variation, and incentives for sustainability-linked NGT2 traits such as climate resilience, disease resistance, yield stability, and more efficient use of natural resources.

In the United States, USDA is also considering updates to its regulatory framework for genetically engineered organisms. In May, USDA issued a Request for Information (RFI) seeking comment from stakeholders on regulatory considerations related to the review of genetically engineered organisms subject to the Plant Protection Act. The RFI sought feedback on strengths and weaknesses of USDA’s current and prior iterations of its regulations implementing the Plant Protection Act, and on key elements of a regulatory framework for genetically engineered organisms, to assist the agency in identifying factors for potential risk-based deregulation to inform future rulemaking.

Environmental litigation remains a central risk for agricultural, infrastructure, renewable energy, and natural resource projects, but the landscape is evolving in light of recent administrative and judicial developments in the National Environmental Policy Act’s (NEPA’s) implementation. 2025 and the first half of 2026 have seen a broader, Administration-wide push to streamline NEPA review processes across agencies as courts and agencies adapt to the NEPA standards described in the US Supreme Court’s 2024 decision in Seven County Infrastructure Coalition v. Eagle County. 

The earliest related effort — the major consolidation of USDA’s NEPA procedures — is currently being challenged in the US District Court for the Northern District of California in Center for Biological Diversity v. USDA. As agencies refine their NEPA processes accordingly, the regulated community can expect faster regulatory processes, streamlined and targeted environmental assessments, a more significant level of deference afforded to agencies’ technical expertise, and more predictability and certainty for in the regulatory approval process. However, agency revisions to their NEPA-implementing regulations in light of Seven County and Administration priorities may prompt additional litigation challenging those more streamlined procedures. 

For the regulated community, the practical consequence is that permitting and federal approvals should be managed with litigation in mind from the outset. Project teams should identify the environmental issues most likely to draw scrutiny, preserve technical support in the record, coordinate closely with agencies, and consider how environmental impacts will be explained if challenged. Additional insights from AFS on NEPA developments can be found here and here.

Additionally, the Supreme Court’s recent decision in Monsanto Company v. Durnell promises to be a seminal decision for the pesticide industry and agriculture. The Court held that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), the federal pesticide law, expressly preempts state-law failure-to-warn tort claims that would require a pesticide manufacturer to add warnings to a label that EPA has reviewed and approved—such as, in that case, to include a warning on the label for the herbicide Roundup that glyphosate was carcinogenic. 

The Court concluded that FIFRA’s preemption clause, which is intended to establish “uniformity” in pesticide labeling across all 50 states, precludes failure-to-warn claims that would require pesticide warning labels different from, or in addition to, the terms of the EPA-approved label. The decision thus enables manufacturers to market products nationwide using a single, EPA-approved label rather than navigating a patchwork of potentially inconsistent state-law requirements. The Court’s strong preemption ruling is also likely to sharply curtail future similar claims challenging glyphosate and other crop protection tools.

Agricultural data privacy is emerging as a distinct issue alongside general consumer privacy law. Recent farm-belt legislative activity, including Nebraska’s first-in-the-nation Agricultural Data Privacy Act, discussed in detail here, reflects growing concern over the collection, use, sharing, sale, and control of farm operations data, including data generated by equipment, sensors, platforms, agronomic tools, and precision-agriculture services.

Agribusinesses should inventory the categories of data they collect and distinguish consumer personal information from farm operations data, geolocation data, equipment telemetry, yield information, agronomic records, and other commercially sensitive agricultural data. Contracts should clearly address consent, ownership, permitted uses, data-sharing with affiliates and service providers, de-identification, sale or licensing restrictions, retention, security, and rights upon termination.

General privacy and online-contracting issues also remain important for agriculture businesses with digital platforms, mobile applications, e-commerce channels, or grower portals. Companies should confirm that privacy notices, terms of use, arbitration provisions, limitations of liability, amendment processes, and user-interface flows are enforceable and consistent with the expanding patchwork of state privacy laws and the particular sensitivities of agricultural data.

8. Immigration Policy Developments

Immigration enforcement remains a practical legal issue for agriculture because farms, processors, distributors, and other facilities often rely on seasonal, dispersed, or time-sensitive workforces. Employers should expect heightened scrutiny of work authorization, I-9 compliance, workplace access, and responses to unannounced government visits.

Companies should prepare site-level protocols before an investigation occurs. Reception, security, HR, legal, and facility leadership should know how to respond to warrants, subpoenas, document requests, employee interview requests, requests for access to private work areas, and requests to remove or copy business records.

Proactive I-9 audits, manager training, and escalation plans can reduce disruption during planting, harvesting, processing, shipping, and other critical operational windows. Employers that identify and correct I-9 deficiencies in advance may be better positioned to demonstrate good-faith compliance and mitigate potential penalties if audited.

Per- and polyfluoroalkyl substance (PFAS) regulation and litigation continue to affect agriculture, food, packaging, inputs, and rural land use. State restrictions on intentionally added PFAS in products and packaging, combined with evolving federal reporting and recordkeeping obligations, require companies to understand where PFAS may appear in packaging, equipment components, processing materials, pesticides, soil amendments, water systems, or supply-chain inputs.

Companies should also consider PFAS risk in transactions, leases, site development, water-management projects, and supplier relationships. Due diligence should address historical use, wastewater and biosolids exposure, packaging specifications, environmental sampling, indemnities, representations, insurance, and contract rights to obtain information from suppliers.

Consumer and competitor litigation risk is also likely to remain active where products or packaging are alleged to contain undisclosed PFAS. Companies should assess their products and packaging, substantiate public statements, preserve supply-chain documentation, and coordinate regulatory, environmental, litigation, and communications strategies before responding to customers, regulators, or plaintiffs.

There continues to be a significant demand for mergers and acquisitions (M&A) due to pent-up undeployed capital, as well as increased interest from financial sponsors, including increased interest from sell-side financial sponsors in selling private companies held by their early-vintage funds in order to open opportunities to launch new fundraising endeavors.

However, in evaluating potential M&A transactions, private companies (buyers in particular) will need to navigate a complex regulatory environment. Regulatory changes from the current Administration have spurred significant M&A activity but also have created uncertainties that chill interest from buyers and sellers alike. For example, the Administration’s approach to trade policy, tariffs, and government subsidies is likely to require parties in agriculture-sector transactions to be prepared for regulatory and geopolitical uncertainties in M&A strategy and execution. But the current Administration’s Federal Trade Commission and US Department of Justice generally have shown greater willingness to negotiate remedies and approve transactions that might have faced more scrutiny previously.

In the remainder of the year, we also expect to continue to see earnouts incorporated into deals to protect buyers against the risk of overpayment if the target business does not perform as well as planned after closing. Companies in the industry should be aware of the risks associated with earnouts, including legal action due to missed milestones and the isolation of the target’s business from the larger business of the buyer, ultimately delaying the buyer’s overall strategy. We also are continuing to see the use of purchase price adjustment escrows, in both representations and warranties insurance (RWI) and no-RWI deals.