In the southwestern portion of the U.S., the drought situation continues to raise serious concerns. Dating back to the turn of this century, the amount of rainfall has decreases significantly in this region. Combined with increased temperatures and shrinking snowcaps, long-term forecasts suggest water supplies will become increasingly important. This is especially true for urban sprawls that have expanded greatly in recent years. Phoenix is one such area, and urban planners are already focusing on rural areas outside the city for solutions. But while water basins do exist in Arizona valleys, you might be surprising that significant portions are being sold elsewhere. Specifically, there’s a Saudi-owned agricultural company in control of millions of gallons of water despite the Arizona water shortage. And it’s sparking a major Arizona water controversy in the process.
Fondomonte Arizona is the company that has been in charge of thousands of land acres in the state since 2015. In essence, Fondomonte pumps out significant volumes of water each year from Arizona’s Butler Valley water basin for agriculture. But in the process, many are concerned such practices are accelerating an Arizona water shortage. As demand grows and water basins shrink, it’s inevitable that deficiencies will occur. However, not everyone’s in favor of cutting ties with Fondomonte because of the impacts this might have on domestic farmers. Not only is there an Arizona water controversy regarding domestic versus foreign access. There’s also an argument concerning whether urban areas should be able to tap into water basins in rural private lands. As such, the present Arizona water controversy offers a preview of what may soon become a common global issue.
Fondomonte’s Footprint in Arizona
Interestingly, Fondomonte’s history only dates back to 2015 as far as its operations in Arizona. However, its origins dates back decades through other Saudi-related enterprises related to water conservation efforts. In the face of climate change and droughts, Saudi sought to adopt better agricultural methods many years prior. But this failed to result in a fruitful venture because of progressive water shortages. In fact, industrial scale farming is banned in the Persian Gulf today because of this. Therefore, as an alternative, Saudi began investing in other regions for its agricultural and water-related needs. Ultimately, this involved them in acquiring Fondomonte and expanding into the Arizona area. At the time, an Arizona water shortage did exist but was not as severe. So, there was little to spark any significant Arizona water controversy at the time.
Fondomonte purchased four of the 20 existing state agricultural leases that traverse Arizona’s three water basins. This involved 3,500 acres of leased state land, acquired at a fifth of the price compared to other farming enterprises. This particular area is referred to as the Butler Valley basin. In addition, however, Fondomonte purchased 10,000 acres of private land in Arizona and 3,000 acres in California. All of these lands are used to grow alfalfa hay, which notable requires significant water access. According to recent reports, Fondomonte’s Butler Valley basin water use is enough to supply a ton of 50,000 annually. And this is occurring in the midst of a major Arizona water shortage and drought. It’s not surprising the details surrounding Fondomonte’s water usage is triggering a major Arizona water controversy. Notably, the state land lease expires in 2024, and many are calling for its permanent termination.
Rural Pushback and the Arizona Water Controversy
For many communities, a foreign-owned company extracting regional water for its own domestic needs might cause alarm. This is especially probable for those living in desert-like climates where water scarcity solutions are needed. It’s well known that recent climate changes have led to an Arizona water shortage. But rather than teaming up against Fondomonte, many rural farmers are actually supporting their cause. For many years, there’s been a debate as to whether or not water under privately owned lands is state-owned. Farmers in rural regions believe it’s their own resource to use as they will. However, urban planners in cities like Phoenix disagree, hoping they can access these resources for future deficits. These issues have complicated the Arizona water controversy as of late.
At the same time, Fondomonte is pursuing its own level of influence through state lobbying. Such pursuits aren’t new, as Fondomonte has been investing in such political efforts for nearly a decade. But what’s is new is the threat that Fondomonte could lose its current state land leases in the next year. Should state officials single out Fondomonte in its efforts to address the evolving Arizona water shortage, legal actions are inevitable. This will raise the Arizona water controversy to a new level. Actions might allow the state to increase its lease rate for the land to Fondomonte. But there’s no guarantee it will be able to safeguard these water basins for future urban water protections. And court rulings could undermine long-range plans to tap into private land-water use as well.
A Failure of Public Resource Planning
There’s little question that Arizona has failed to plan well for its advancing water shortage issues. Fondomonte has been operating in the state since 2015, but only recently has the state mandated its water consumption reporting. At the same time, the state also failed to assess the situation from a favorable economic vantage point. Not only did the state charge extremely low lease rates to Fondomonte, but it also didn’t pursue ideal financial arrangements. For example, the state collects $50,000 annually from Fondomonte for the land leases. In contrast, it could receive up to $1.2 million annually by selling these same water resources to Phoenix. In this regard, the state has contributed to the growing Arizona water controversy.
The existing dilemmas related to the Arizona water shortage isn’t all the state’s fault, however. Foreign trade liberalization has facilitated foreign-owned companies like Fondomonte to gain a foothold over U.S. resources. These measures along with improvements in transportation and logistics have helped create such situations. While this may have been tolerated in the past to a greater extent, this is no longer the case. Especially in places like Arizona where water scarcity is becoming a real threat, such practices are concerning. Faced with a similar situation, Saudi Arabia chose to invest efforts elsewhere for water resources. And with an Arizona water shortage looming, it might be time for the state to consider a similar strategy for the future.