Ariz. to terminate leases to Saudi-controlled farms

Saudi-controlled farms on leased land were kicked out due to unabated groundwater pumping, Arizona officials announced.

Arizona Governor Katie Hobbs has announced the termination of state land leases that granted a Saudi-owned farm access to pump groundwater in the dry southwestern state.

Driving the news: The canceled lease belonged to Fondomonte Arizona, a subsidiary of Saudi dairy giant Almarai Co., which grows alfalfa in Arizona to feed livestock in Saudi Arabia.


  • Hobbs cited lease violations as the reason for the termination, stating that the foreign-owned farm had “continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease.”
  • Fondomonte Arizona plans to appeal the governor’s decision to terminate its 640-acre lease in Butler Valley, but other leases in the area will not be renewed next year.
  • The governor’s office discovered violations related to the company’s storage of hazardous materials, as well as excessive amounts of water being pumped “free of charge” from the land.

Go deeper: Butler Valley’s groundwater is important due to state law that allows it to be pumped elsewhere, making it valuable to cities like Phoenix, which is dealing with water supply-related stress and a rapidly growing population.

  • In rural areas, little regulation exists for groundwater pumping besides well registration and using water for activities deemed a “beneficial use.”
  • Almarai Co. also has farming operations in Southern California’s Palo Verde Valley, sourced from the shrinking Colorado River, which have attracted less scrutiny.
  • The governor’s actions to crack down on the foreign-owned farm were praised by Kris Mayes, the Arizona Democratic attorney general, who called it a “step in the right direction” and criticized the prior administration for allowing foreign corporations to pump unlimited amounts of groundwater for agricultural purposes.
  • Foreign entities and individuals control about 3 percent of U.S. farmland, with Canada being the largest holder.
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