Arizona to cancel Saudi farm leases

October 4, 2023

Arizona Gov. Katie Hobbs (D) said this week that her administration is terminating land leases that have given a Saudi-owned company virtually free access to pump groundwater in the state.

The deal was signed in 2015 under then-Gov. Doug Ducey (R). It allowed the Saudi company Fondomonte to purchase nearly 10,000 acres of land for $47.5 million near Butler Valley in Vicksburg, Arizona, which about 100 miles outside Phoenix.

Fondomonte has been exporting alfalfa to feed its cows in the Middle East, as Saudi Arabia has practically exhausted its own underground aquifers there. In Arizona, Fondomonte has been pumping as much water as it wants at no cost.

The result has been strained aquifers in Arizona, threatening future water supplies to Phoenix. 

This July, a Washington Post investigation found that state land planners have been raising alarms about Fondomonte’s presence in the Butler Valley since Ducey signed the deal eight years ago.

Gov. Hobbs’ office has undertaken its own investigation, finding that Fondemonte had violated some of its own lease terms, such as the storage of hazardous materials and other issues. 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.”

While Fondemonte has said it will appeal the lease cancelation, the Arizona governor’s office said the State Land Department also decided not to renew three other leases the Saudi-owned company had in Butler Valley due to the “excessive amounts of water being pumped from the land—free of charge.”

Arizona cities such as Phoenix and Tucson have restrictions on how much groundwater they can pump under a 1980 state law aimed at protecting the state’s aquifers. But in rural areas, little is required of water users to pump from underground aquifers besides registering wells with the state and using the water for activities, including farming, that are deemed a “beneficial use.”

Fondomonte also owns farms in Southern California’s Palo Verde Valley, an area that gets its water from the receding Colorado River, though those operations have attracted less scrutiny. 

Amid historic drought conditions, Arizona entered an agreement with California and Nevada this past spring to take less water from the Colorado River over the next few years.

PHOTO: Butler Valley, per Arizona Dept. of Water Resources

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