Arizona, Arabia, Alfalfa: Gulf Agricultural Industry Sparks a Conversation in the American Southwest

Separated by roughly eighty-one-hundred miles of land and ocean, the initially disparate regions of the American Southwest and the Arabian Peninsula are united by the ways in which each region’s hostile desert climate has made water a scarce resource. In each of these locales, burgeoning agricultural industries, such as Saudi Arabia’s growing dairy sector, have proven to be a water-depleting endeavor at multiple steps of the milk supply-chain. More so than perhaps the cows themselves, the hay growing process has emerged as a major hurdle to a self-sufficient Arabian dairy industry. Consequently, given the water-intensive production required by hay crops, agriculture authorities in Saudi Arabia (KSA) and the United Arab Emirates (UAE) have relocated a large portion of their alfalfa production to the American Southwest, thereby allowing these nations to preserve their own decimated domestic water-supplies. Some south-westerners have taken controversially to the Arabian companies that have bought immense acres of American farmland in order to grow and export alfalfa using water resources in the United States. Such gripes stem from the perception that foreign nations are benefiting from ‘free’ water at a time when the southwest United States is in the midst of a drought. Others, however, point to the jobs created by these multinational agricultural enterprises. Regardless of a given stance, as state legislatures in California and Arizona debate impending water-saving measures, officials should in fact turn to the case of Saudi Arabia itself as a warning against deregulated aquifer extraction and amend outdated laws related to agricultural water usage.

After drying-up their own desert aquifers in 2014, Saudi Arabia began purchasing large acres of American farmland in order to grow alfalfa to be exported and consumed by Saudi cattle. That same year, Fondonmonte (the wholly-owned US subsidiary of Saudi farming giant Almarai Company), first purchased over 10,000 acres of alfalfa-growing land near the rural Arizonan town of Vicksburg, Arizona.[1] Nearly two years later, Fondonmonte doubled-down on their southwestern acquisitions, purchasing nearly 2,000 acres in and around Blythe, California.[2] The United Arab Emirates have also established a presence in the same Southwestern region via purchases by the Al-Dahra company.[3] While the Arizonan region of Fondonmonte production has always been a center of agriculture, the water pump capacity used by the company to farm alfalfa stands at 1.5 billion gallons of water, far surpassing that which was needed when the region was used for domestically consumed corn and cotton.

In rural Northwestern Arizona, the laws for the regulation of groundwater consumption are weak, and there are no limits as to how much Fondonmonte is allowed to pump from the region’s aquifer in order to grow alfalfa. This apparent oversight is seemingly the result of Arizona’s antiquated water conservation laws, which were enacted in the 1970s. As told by investigative reporter Ike Skriskandarajah to NPR, “The idea that another country would come and essentially export your water via crops just wasn’t really around 30, 40 years ago. And so the laws that are in place are really inadequate for dealing with this new trend.”[4]

As a motivation to update these regulations, policymakers can indeed look to Saudi Arabia itself, as the unregulated water pumping that completely dried up the Kingdom’s aquifers appear similar to the loose restrictions that exist today in Southwestern Arizona. According to Elie Elhadj of the Water Research Group, Saudi Arabia’s s 1970s policy of limitless water-pumping (a rate that averaged around 5 trillion gallons per year by the 90s) resulted in a total inability to farm wheat due to the Kingdom’s non-existent aquifers. Of this policy, Elhadj stated, “The Saudi Government’s policy largely enriched the ruling elite and resulted in a near total depletion of its precious aquifers.”[5][6] More than any other factor, Elhadj points to Saudi government farming subsidies as responsible for the misuse of water, saying, “subsidies distort the efficient workings of markets. They cause resources to be misallocated.”[7]

Ironically, Arizonan farmers facing the prospect of a drought contingency plan that would redistribute the Colorado river’s resources throughout the state[8] are feeling that Arizona too is prioritizing the interests of large, multi-national companies over local agriculture. A La Paz County Supervisor lamented of the Saudi farms, “They’re coming over here, buying land over here and using our natural resources, and we get nothing. Like I’ve said before, we don’t get oil for free, how come we’re allowing water to just be depleted for nothing.”[9] A California economist, another critic of this large-scale foreign alfalfa farming called alfalfa production a, “shocking waste of a resource,” and even suggested states like California seize the land under eminent domain.[10] However, defenders of the Saudi and Emirati corporations point to the nations’ strict adherence to local laws (however antiquated), and the nearly 600 direct and indirect jobs the two foreign companies have provided to Arizonans and Californians.[11] Additionally, it is important to point out that Saudi Arabia and the Emirates are not alone in establishing international farms in order to conserve domestic water, as Qatar has pursued a similar strategy in Latin America and Africa.[12]

To the dismay of many outsiders, rather than tighten water-extraction regulations, recent state-legislation concerning the topic shows some lawmakers are pivoting to even further deregulation. Already, the majority of Arizona’s groundwater falls under “reasonable use” designations, meaning groundwater is considered a private resource irrelevant to government interference.[13] Still, in the 2018 Arizona legislative session, Governor Doug Ducey had to veto two bills that would have allowed rural Arizonan counties (the prime location for companies like Alamarai) to circumvent what little water regulations the state has in place.[14] Proponents argue that deregulation would make Arizona more attractive for development, an explanation that resonates with Elhadi’s criticism of the big-business focused mindset of water extraction that ultimately dried up Saudi Arabia’s aquifers. Also similar to the case of Saudi Arabia is the role of water subsidies, which for decades had been granted to Arizonan farmers to grow alfalfa and cotton. Just as the Saudi case, subsidized water circumvented the expenses of obtaining the resource, thusly paving the way for water’s irresponsible misuse.[15]

Regardless of where one falls when it comes to supporting Saudi and Emirati alfalfa production, the reality remains that the Southwestern United States is in the midst of an ever-worsening drought.[16] While the large-scale production of alfalfa currently taking place in Arizona and California has had some tangible benefits, those concerned must look no further than Saudi Arabia itself to understand the ramifications of loose water extraction policies. It is mightily important to point out that the Almarai and Al-Dahra companies have followed American law to the letter, however rather than vindicate these companies, this instead indicates that American laws need to be updated in order to contend with the emergence of large-scale multinational agriculture’s role in the Southwestern United States. In order to avoid the same fate as Saudi Arabia, Arizonan lawmakers should enact tiered policies that apply different regulations that distinguish small-scale farms from the immense agricultural operations that benefit from water-regulations that were originally meant to serve the subsistence of Arizona’s frontiersmen.

References:

[1] Danielle Miller, “La Paz County at Odds with Saudi Arabian Farm,” Fox 10 Phoenix, February 23, 2016.

[2] Jeff Daniels, “Saudi Arabia Buying Up Farmland in US Southwest,” MSNBC, January 15, 2016.

[3] Noah Gallagher Shannon, “The Water Wars of Arizona,” New York Times Magazine, July 19, 2018.

[4] “Saudi Hay Farm in Arizona Tests State’s Supply of Groundwater,” NPR, November 2, 2015.

[5] Nathan Halverson, “What California Can Learn from Saudi Arabia’s Water Mystery,” Reveal, April 22, 2015.

[6] Elie Elhadj, “Camels Don’t Fly, Deserts Don’t Bloom: An Assessment of Saudi Arabia’s Experiment in Desert Agriculture,” SOAS, May, 2004.

[7] Elie Elhadj, 2004.

[8] Howard Fischer, “Arizona Lawmakers Take Steps to Approve Drought Plan Before Thursday Deadline,” Tucson.com, January 30, 2019.

[9] Danielle Miller

[10] “Saudi Land Purchases in California and Arizona Fuel Debate Over Water Rights,” The Los Angeles Times, March 29, 2016.

[11] Danielle Miller

[12] “Saudi Land Purchases in California and Arizona Fuel Debate Over Water Rights,”

[13] Noah Gallagher Shannon.

[14] Dustin Gardinier, “Arizona’s Aquifers Threatened, Lawmakers Push to Cut Groundwater Rules,” AZ Central, April 4, 2018.

[15] “Michael Hanemann, “Department of Agricultural & Resource Economics,” University of California Berkeley, CUDRE Working Papers, 2002.

[16] Robinson Meyer, “The Southwest May Be Deep Into a Climate-Changed Mega-Drought,” The Atlantic, December 18, 2018.