(NewsNation) — A Saudi-owned dairy company with farmland in rural Arizona has sparked local tension over its use of the region’s groundwater amid a worsening drought.
For nearly a decade, Fondomonte Arizona, a subsidiary of Saudi Arabia-based Almarai Co., has been growing alfalfa — one of the most water-intensive crops — for livestock in the Gulf kingdom on land it purchased in La Paz County.
But now, the property has become a flashpoint for residents and local officials who are questioning why foreign companies are allowed to take advantage of loopholes in the state’s groundwater laws.
Those laws have allowed the company to draw an unlimited amount of groundwater from wells it operates in the area even as water is becoming a scarce resource across the region.
Last month, the state of Arizona rescinded drilling permits for two additional water wells for the company after authorities discovered inconsistencies in Fondomonte’s well applications. The two new wells would have pumped in just three minutes what a family of four uses in a month, the Associated Press determined.
“We just can’t — in the midst of an epic drought — afford to do dumb things with water in the state of Arizona anymore,” Attorney General Kris Mayes told The Associated Press.
The AG said she thought most Arizonans find it “outrageous” that the state is allowing foreign-owned companies to “use our water for free to grow alfalfa and send it home to Saudi Arabia.”
The situation in the American Southwest is just the latest example of local pushback against foreign entities on U.S. farmland.
In recent months, residents in North Dakota and Michigan have spoken out against plans to bring Chinese-owned companies to their communities.
Foreign entities and individuals control roughly 40 million acres, or 3% of U.S. farmland, according to the U.S. Department of Agriculture. Although, the majority of that land is owned by longtime allies.
Canadian investors hold the most U.S. land, with more than 12.8 million acres of agricultural and nonagricultural land. Investors from the Netherlands, Italy, Germany and the United Kingdom collectively hold 12.4 million acres — about 31% of foreign-held acres in the U.S.
China currently holds 384,000 acres of land in the U.S., which is around 1% of all foreign-held acres. The total holdings for Saudi Arabian investors is about 36,000 acres.
Despite its relatively small portion of the overall pie, China’s foreign investment in agriculture abroad has increased rapidly in recent years. The trend has led some lawmakers on Capitol Hill to raise national security concerns.
Sen. Mike Rounds, R-S.D., and Sen. John Tester, D-Mont., have introduced legislationto prevent foreign adversaries from buying American farmland. At least 11 state legislatures are considering similar laws.
Current Arizona regulations allow virtually unfettered groundwater pumping in the state's rural areas. Climate-challenged countries like Saudi Arabia have increasingly looked to faraway places like Arizona for the water and land to grow forage for livestock and commodities such as wheat for domestic use and export.
On October 2, 2023, the State Land Department notified Fondomonte that three of its four leases in the Butler Valley Basin would not be renewed. Fondomonte was simultaneously notified that one of its leases had been canceled due to an uncured default.
The company, Fondomonte Arizona LLC, uses sprinklers to grow alfalfa in La Paz County and exports it to feed dairy cattle in Saudi Arabia. It does not pay for the water it uses.
Competition for land and other natural resources has proven to be a concern in some areas. For example, Almarai Co., a Saudi-owned dairy giant, owns 10,000 acres of alfalfa land in Arizona that is irrigated from scarce groundwater, with the hay shipped to Saudi Arabia to feed their large dairy herds (Lutz, 2021).
Did Arizona sell its water to the Saudis? No (though this is a commonly searched question on Google). The state Land Department leased land – not water – to Fondomonte. And it did so at well below market rates, without adequate explanation or transparency on the deal.
Fondomonte, which is owned by one of the largest dairy companies in Saudi Arabia, bought vast tracts of desert in western Arizona on top of a massive groundwater aquifer in part because there are no regulations on how much water can be pumped out of the ground.
Boone Pickens owned more water rights than any other individuals in America, with rights over enough of the Ogallala Aquifer to drain approximately 200,000 acre-feet (or 65 billion gallons of water) a year. But ordinary citizen Gary Harrington cannot collect rainwater runoff on 170 acres of his private land.
Nearly 2.25 million km2 of the Kingdom (KSA) are arid, so is a water-scarce nation with limited freshwater resources as have no perennial rivers or other ongoing bodies of water. Saudi Arab is among the driest contents in the globe due to its minimal rainfall with maximum evaporation rates.
Recent interstate conflicts have occur mainly in the Middle East (disputes stemming from the Euphrates and Tigris Rivers shared by Turkey, Syria, and Iraq; and the Jordan River conflict shared by Israel, Lebanon, Jordan and the State of Palestine), in Africa (Nile River-related conflicts among Egypt, Ethiopia, and ...
China currently holds 384,000 acres of land in the U.S., which is around 1% of all foreign-held acres. The total holdings for Saudi Arabian investors is about 36,000 acres.
Fondomonte, a subsidiary of the Saudi dairy company Almarai, also owns thousands of acres of farmland in Arizona and California, producing alfalfa that is shipped overseas to feed cows.
For nearly a decade, the state of Arizona has leased this rural terrain west of Phoenix to a Saudi-owned company, allowing it to pump all the water it needs to grow the alfalfa hay — a crop it exports to feed the kingdom's dairy cows. And, for years, the state did not know how much water the company was consuming.
Saudi Arabia has a sovereign wealth fund called the Public Investment Fund, which has more than $35 billion in American companies like Amazon, Walmart, rideshare and the food delivery company Uber Technologies, as well as the major ticketing platform Live Nation Entertainment.
All told, 43.4 million acres of forest and farmland in the U.S., or 3.4% of all ag land, is foreign owned as of Dec. 31, 2022. Roughly 30 million of those acres are reported as foreign-owned, with the remainder primarily under a 10-year-or-longer lease.
China currently holds 384,000 acres of land in the U.S., which is around 1% of all foreign-held acres. The total holdings for Saudi Arabian investors is about 36,000 acres. Despite its relatively small portion of the overall pie, China's foreign investment in agriculture abroad has increased rapidly in recent years.
In the heart of rural Arizona, the residents of three McMullen Valley counties – Aguila, Salome, and Wenden – are sinking due to the uncontrolled pumping of underground water by companies from Saudi Arabia and the United Arab Emirates.
Introduction: My name is The Hon. Margery Christiansen, I am a bright, adorable, precious, inexpensive, gorgeous, comfortable, happy person who loves writing and wants to share my knowledge and understanding with you.
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