Why foreign companies on U.S. farmland are facing new scrutiny
The state of Arizona has pulled its approval for two new well applications from a Saudi company after reviewing the company’s applications.
The two deepwater wells would have provided water for alfalfa farms for the company Fondomonte, which farms on state-owned land west of Phoenix. The wells would have used 6,000 gallons of water a minute, or more than a month’s worth of water use for a family of four every three minutes, according to KTVK in Phoenix.
Democratic Attorney General Kris Mayes said the leases were initially approved but pulled after her office noticed inconsistencies in the company’s applications. She said other leases could be next.
“Most Arizonans that I talk to are outraged by these deals, believe they should be canceled and definitely don’t think we ought to be doing any more of these deals or allowing any more of these wells,” she told KTVK. “This is Arizona’s water and we need to act with the urgency that it deserves.”
Arizona has taken a 21% cut in its usual delivery of water from the Colorado River this year, and corporate and foreign-owned farms and water investors face heightened scrutiny. Mayes said her office is going through other leases “line by line and we are going through the well permit applications line by line.”
Canceling the Saudi company’s permits for the wells became an area of bipartisan consensus during the 2022 campaign. Candidates including Mayes and Republican gubernatorial candidate Kari Lake said they were open to doing so, according to the Arizona Republic, and Democratic Gov. Katie Hobbs criticized the company in her inaugural address, calling its water usage “not right.”
“Our groundwater should be used to support Arizonans, not foreign business interests,” Hobbs said during her address. Groundwater makes up about 41% of Arizona’s water supply, per the Arizona Department of Water Resources.
Lawmakers have introduced efforts to ban foreign ownership of state resources. Arizona Senate Republicans passed a bill earlier this year that would prohibit foreign governments or foreign state-controlled enterprises from buying state land, and Rep. Ruben Gallego, an Arizona Democrat running for U.S. Senate, introduced the Domestic Water Protection Act last year.
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Foreign entities owned nearly 7.6 million acres of U.S. agricultural land as of December 2020, according to a U.S. Department of Agriculture report, which represents 2.9% of all privately held agricultural land and 1.7% of all U.S. land.
In Arizona, 3.8% of privately held agricultural land is foreign held, totaling 295,876 acres.
Most foreign-owned U.S. farmland is owned by countries friendly to the U.S. Canadian owners have nearly 30% of foreign-owned U.S. farmland, and another 33% is owned by entities in either the Netherlands, Italy, Germany or the U.K, according to USDA data reviewed by the Center for Strategic & International Studies, a think tank. About 38% is owned by residents of nearly 100 other countries. Chinese owners make up just 0.05%.
Texas is home to 4.4 million acres of land owned by foreign entities, more than any state, followed by 3.3 million acres in Maine and 1.8 million acres in Alabama, according to the center.
