Why is Saudi Arabia buying so much U.S. farmland?
04/15/2016 / By JD Heyes / Comments
Why is Saudi Arabia buying so much U.S. farmland?

As the American Southwest continues to suffer through a punishing drought, a number of area residents – especially U.S. farmers – are becoming increasingly frustrated by the fact that the government of Saudi Arabia is buying up large tracts of farmland, using precious water to grow food that is ultimately shipped back to the Arab kingdom.

As CNBC and The Daily Sheeple note, the Saudis aren’t the only Middle East countries buying up American soil; other nations in the region are doing so as well. Much of the land purchased has been bought in Arizona and California, and quite frankly is upsetting to many.

As CNBC reported further:

Saudi Arabia grows alfalfa hay in both states for shipment back to its domestic dairy herds. In another real-life example of the world’s interconnected economy, the Saudis increasingly look to produce animal feed overseas in order to save water in their own territory, most of which is desert.

But, of course, they don’t mind using our water resources, even if they are also dwindling.

The buying trend continues

Last month privately held company Fondomonte California announced that it had purchased 1,790 acres of farmland in Blythe, California, an agricultural town nestled along the Colorado River, for almost $32 million. Two years earlier, the firm’s parent company, Almarai – one of Saudi Arabia’s largest food companies – bought 10,000 acres of farmland about 50 miles away, in Vicksburg, Arizona, for a price tag of about $48 million.

The buying trend is not likely to abate anytime soon, either, say analysts.


“They will continue to come over here and buy properties where they can grow good-quality alfalfa hay and ship it back to the Middle East. It makes logical sense for them to do that because they’re not going to be able to grow it in Saudi Arabia, especially for milk production,” Westec President Joseph Dutra, who has served as a consultant to international companies looking to farm in the U.S., told CNBC.

‘Why are we giving our water away for free?’

It’s not a trend that is popular with everyone. The exporting of alfalfa is akin to “exporting water” because in Saudi Arabia, “they have decided that it’s better to bring feed in rather than to empty their water reserves,” Keith Murfield, CEO of Tempe-based United Dairymen of Arizona, a group that also buys alfalfa, told the financial news network. “This will continue unless there’s regulations put on it.”

“We’re not getting oil for free, so why are we giving our water away for free?” asked La Paz County Board of Supervisors Chairman Holly Irwin. She represents a rural area in western Arizona where food conglomerates tied to the Saudis and the United Arab Emirates come grow alfalfa for export.

“We’re letting them come over here and use up our resources,” she added. “It’s very frustrating for me, especially when I have residents telling me that their wells are going dry and they have to dig a lot deeper for water. It’s costly for them to drill new wells.”

But because there is a lot of money involved, things are not likely to change anytime soon. Also, there is the issue of land rights and, as owners of the land, the Saudis and other countries appear to be following the rules, CNBC noted. The region of Arizona desert where the Saudis have purchased land is one with little-to-no regulation on use of groundwater. That is a different situation than in 85 percent of the rest of the state which has strict groundwater rules in place.

“You can use as much water as you’d like, as long as it’s put to a beneficial use, and you’re not required to report your water use,” said Michelle Moreno, a spokesperson for the Arizona Department of Water Resources.


The Daily Sheeple


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