Saudi Business to Leave Arizona Valley Amid Groundwater Spat

The company came under fire for its use of groundwater to grow forage crops.

Almarai logo in Cairo, April 26, 2023.
Almarai logo in Cairo, April 26, 2023.
AP Photo/Amr Nabil, File

PHOENIX (AP) β€” Arizona officials said a Saudi-owned company they targeted over its use of groundwater to grow forage crops is moving its farming operation out of a valley in the Southwestern state's rural west.

Gov. Katie Hobbs and the Arizona State Land Department announced late Thursday that Fondomonte Arizona is officially no longer pumping water in the Butler Valley groundwater basin. Some residents of La Paz County had complained that the company's pumping was threatening their wells.

A statement by Hobbs says an on-site inspection had confirmed that Fondomonte was moving to vacate the property. Fondomonte has several other farms elsewhere in Arizona that are not affected by the decision.

A call placed Friday seeking comment from Fondomonte's Arizona office was not immediately returned.

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.

Foreign and out-of-state U.S. farms are not banned from farming in Arizona nor from selling their goods worldwide. American farmers commonly export forage crops to countries including Saudi Arabia and China.

Fondomonte, a subsidiary of Saudi dairy giant Almarai Co., held four separate lease agreements in the Butler Valley Basin to grow alfalfa that feeds livestock in the Gulf kingdom. In October, Arizona's 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 the fourth lease would be canceled as well.

The Arizona governor's office said the State Land Department decided not to renew the leases the company had in Butler Valley due to the "excessive amounts of water being pumped from the land β€” free of charge."

Fondomonte appealed the cancellation, and that process is still pending. The last lease ended on Feb. 14.

Another company, the United Arab Emirates-owned Al Dahra ACX Global Inc., grows forage crops in California and Arizona, including on Butler Valley land it leases from a private North Carolina-based company. It is a major North American exporter of hay.

Hobbs took credit for the end of Fondomonte's operation in the valley.

"I'm not afraid to hold people accountable, maximize value for the state land trust, and protect Arizona's water security," she said.

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