Arizona to cancel leases allowing Saudi-owned farm access to state's groundwater

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Arizona to cancel leases allowing Saudi-owned farm access to state's groundwater
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Arizona governor Katie Hobbs said this week her administration is terminating land leases that for years have given a Saudi-owned farm nearly unfettered access to groundwater in the parched southwestern state

FILE - This image shows an Almarai logo in Cairo, Egypt, April 26, 2023. Fondomonte Arizona, a subsidiary of Saudi dairy giant Almarai Co., grows alfalfa in Arizona that feeds livestock in the water-stressed Persian Gulf kingdom. Arizona Gov. Katie Hobbs said her administration was terminating land leases that for years have given the Saudi-owned farm nearly unfettered access to pump groundwater in the parched southwestern state.

An investigation by the governor's office found that the foreign-owned farm had violated some of its lease terms. Hobbs called it unacceptable that the farm “continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease.” Fondomonte raised eyebrows when in 2014 it purchased nearly 10,000 acres of land for $47.5 million about 20 miles away from Butler Valley in Vicksburg, Arizona. Since then, worsening drought in Arizonato the company's water use and the broader issues of foreign-owned farms and groundwater pumping.

The department manages land owned by Arizona, which in Fondomonte's case, had been leased to the company. Butler Valley's groundwater is especially important because of state law that in theory allows for it to be pumped elsewhere. That makes its water of interest to cities like Phoenix, also dealing with water supply-related stress and a fast-growing population.

Almarai’s holdings in the Southwest are just one example of the farmland the company and its subsidiaries operate outside Saudi Arabia. It farms tens of thousands of acres in Argentina, which has also faced severe drought conditions in recent years.

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