Regions

Saudi Arabia continues to buy farmland in US

January 21
3:54 AM 2016

Saudi Arabia and Persian Gulf countries are buying farmland in the US mostly in drought-hit areas in Southwest. A Saudi-based company bought 1,790 acres of farmland in California recently. Same company previously purchased 10,000 acres in Arizona. However, local farmers in California and Arizona are not happy over it.

Saudi Arabia-based companies grow alfalfa hay in California and Arizona and export it back to home country supplying for domestic dairy herds. The continuous buying of farmland and increasing cultivation for animal feed is showing a mark of interconnected world in real terms.

CNBC reports that Fondomonte California has bought 1,790 acres of farmland in Blythe, an agricultural town in California. This land is located along the Colorado River. Fondomonte has purchased the land for $32 million. Two years ago, Fondomont's parent company Saudi-based food giant Almarai bought 10,000 acres for $48 million. This land is located in Vicksburg in Arizona.  

The farmland buying by Saudi and other Gulf nations is causing concerns among local farmers. California and Arizona are already suffering from drought conditions. Exporting hay to Saudi Arabia to feed dairy herds is like exporting from the area, which is suffering from years of drought. 

"We're not getting oil for free. So why are we giving our water away for free?" La Paz County Board of Supervisors Chairman Holly Irwin told CNBC as published by Newser. He further said that "we're letting them come over here and use up our resources. It's very frustrating for me, especially when I have residents telling me that their wells are going dry."

Growing alfalfa hay and exporting back to home country is as equal as exporting water. Because, Saudi Arabia doesn't want to waste its water serves for growing alfalfa hay. 

After the California farmland purchase, the Saudi company Fondomonte said: "The deal forms part of Almarai's continuous efforts to improve and secure its supply of the highest quality alfalfa hay from outside the (Kingdom of Saudi Arabia) to support its dairy business. It is also in line with the Saudi government direction toward conserving local resources." 

The local development and groundwater pumping for irrigation has resulted in drop in groundwater table. This has been dropping every year since 2010. So far ground water table fell by 50 feet in parts of La Paz county. State documents reveal there are minimum 23 water wells on lands being irrigated by Alamarai. Each well has water source capacity to pump over 100,000 gallons per day, as published in a report by Zero Hedge.

Keith Murfield, CEO of United Dairymen of Arizona, a Tempe-based dairy cooperative whose members also buy alfalfa, said: "They have decided that it's better to bring feed in rather than to empty their water reserves. This will continue unless there's regulations put on it."

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