Hobbs Administration Ends Saudi Farm’s Sweetheart Groundwater Deal

A series of controversial land leases that allowed a Saudi-based company to pump unlimited amounts of groundwater from rural Arizona—virtually for free—will not be renewed after they end in February 2024.

Gov. Katie Hobbs announced Monday that an investigation into the leases by the Arizona State Land Department has led to the cancelation of one lease, and a decision not to renew the remaining three when they expire in February.

The announcement came after months of scrutiny over the deals from Hobbs and Arizona Attorney General Kris Mayes. Ending the land deals was one of Mayes’ campaign promises, with her first action against the farms announced in April, when she revoked permits requesting two additional wells that would have had the capacity to extract 6,000 gallons of water per minute.

“I called for an audit of all industrial water leases and for a cessation of all of these leases until we can find out what the heck is going on at the state land department and in the Arizona government,” Mayes told The Copper Courier last August. “We can’t be just giving our water away to the Saudi Arabians.”

@coppercourier

Arizona Attorney General Kris Mayes just saved her state a ton of water—6,000 gallons per minute, to be exact. Here’s everything you need to know about Saudia Arabia’s alfalfa farms in La Paz County. #fyp #drought #climatecrisis #thenvsnow #azpol #azwater #eyetrend #arizona #rainyday #wishyouthebest

♬ Piece Of Your Heart （Cg Remix） – Official Sound Studio

What Was Going On?

Fondomonte, a subsidiary of Saudi Arabian-based dairy company Almarai, has leased land in La Paz County, Arizona, for nearly a decade, pumping groundwater to grow crops that are so water-intensive, they’re illegal to grow in the country Fondomonte operates in.

And they get this water for free.

Fondomonte has leased land in Arizona to grow alfalfa and hay since 2015. And while the company does pay for the land—$25 per acre annually—they’re able to pump water from the land they lease without restriction, and have no requirements to limit the amount they pump, or to report how much water they use.

Shortly after taking office, Mayes began to work with the Hobbs Administration to scrutinize these deals. While Mayes took initial action in April, Hobbs announced this week that her administration had conducted an investigation into the deal, resulting in the immediate termination of one of Fondomonte’s leases and the decision not to renew the remaining three leases once they end next year.

“It’s unacceptable that Fondomonte has continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease,” said Hobbs. “I’m proud my administration has taken swift action to hold defaulting high volume water users accountable and bring an end to these leases.”

Was This Legal?

While the State Land Department found reason to terminate and not renew the company’s leases, the deals Fondomonte brokered allowing them to pump groundwater without accountability or consequence were in accordance with state law, primarily due to the lack of regulation on groundwater in rural Arizona.

Companies and local farmers are able to pump groundwater for free, and without restriction, in all but five regions known as Active Management Areas: The cities Phoenix, Prescott, Tucson, and Pinal and Santa Cruz Counties. But since there is no regulation over how water is drawn from the ground, whoever can dig the deepest can get to the water first—and take as much as they like.

Fondomonte has the resources to dig deeper wells, meaning they can get the groundwater first, and pump it before it reaches other wells. And since they took at such high volume, local residents quickly began to notice that their wells were drying up.

@coppercourier

Saudi Arabian-owned farms have been using an unknown amount of Arizona’s groundwater supply since 2015. . . . . .#aznews #azleg #azpol #azwater #coloradowater #newstok #fyp #arizonanews #krismayes #dougducey #alfalfa #dairyfarms #drought #extremeheat #sonorandesert

♬ original sound – Copper Courier – Copper Courier

Local Farms Compromised for Big Business

Residents of La Paz County began voicing their concerns about Fondomonte’s water usage shortly after the company set up shop. In the 2016 documentary, Camels Don’t Fly, Deserts Don’t Bloom, La Paz County residents Bill and Mary Goodman talked about how, once Fondomente arrived on the scene, their wells began to dry up.

“We’ve had two wells go dry,” Bill said. “And in the last few years, we’ve lost 50 feet of water in our well.”

There aren’t any laws for tracking how much water is used, so it’s unclear how much water is being pumped. But estimates by the state say Fondomonte pumps about $4 million worth – enough to supply over 50,000 single-family homes with water – every year.

When Did This Start?

These deals were set up under the Republican administration of former Governor Doug Ducey. While he said he was concerned about water usage, Ducey never commented directly on the Saudi farms.

But Tom Buschatzke, the Director of the Arizona Department of Water Resources, said in 2015 that the Ducey administration’s “viewpoint is that there is an economic value in growing of crops. Those folks have as much right as any other individual in the state of Arizona to grow their produce, grow their crops, sell them, export them.”

At the time, the money generated by the deals was more important than water. But now, as Democrats have taken control of the governor’s office and as the Colorado River shortages continue and Arizona communities are losing access to water, priorities have shifted.

“It has been long evident to Arizonans across our state that these leases never should have been signed in the first place,” Mayes said. “The decision by the prior administration to allow foreign corporations to stick straws in the ground and pump unlimited amounts of groundwater to export alfalfa is scandalous.”

Proposed Solution by Republicans

Republicans in the legislature introduced two bills this year they said would address this issue. The problem is, neither of them did.

The bills, championed by Sen. Anthony Kern (R-Phoenix), Sen. Wendy Rogers (R-Flagstaff), and Rep. Leo Biasiucci (R-Lake Havasu City), listed seven countries—not including Saudi Arabia—and said no one from these countries could own land in Arizona.

In addition to leaving out Saudi Arabia—meaning House Bill 2376 and Senate Bill 1115 did nothing to address the current water situation—the bills restricted not just companies, but individuals from the right to own property.

“We are singling out certain countries and citizens of those countries from purchasing state lands,” said Sen. Priya Sunderashun (D-Tucson). “And moreover, we are sending a message to people who come from other countries that they should not participate in our democracy.”

Both bills failed to become law, but even if they had passed, they would have failed to address the problem of water usage. To actually do that, water experts and Democrats in the legislature want to establish requirements for all Arizona counties to report how much water people and companies use—like the standard currently required in the Active Management Areas—and to simultaneously establish restrictions on how much water can be used.

Without those two regulations in place, anyone—whether they’re from Saudi Arabia or Sun City—can pump as much groundwater as they want. And, while actions taken by the Hobbs Administration have resolved issues surrounding one company’s groundwater usage, it will take legislative action to prevent a similar issue from arising in the future.

@coppercourier

Republicans’ solution to the Saudi Arabian farm’s use of Arizona groundwater. #aznews #azleg #azpol #azwater #coloradowater #newstok #fyp #arizonanews #krismayes #alfalfa #dairyfarms #drought #extremeheat #sonorandesert

♬ original sound – Copper Courier – Copper Courier