Saudi Arabian companies have been snatching up farmland in the US Southwest, a move that has local farmers in California and Arizona crying foul. The Saudis are using the land to grow alfalfa hay, which is exported back to feed the country’s dairy herds. Incredibly, the cost of shipping feed across the world is less expensive than growing it on Saudi soil, most of which is desert.
This arrangement is working so well for Saudi companies that food giant Almarai purchased 1,790 acres of farmland in Blythe, California earlier his month for $32 million. That’s in addition to the 10,000 acres the company already owns in Vicksburg, Arizona. Neighboring dairy farmers aren’t too thrilled about the new purchase, but the issue isn’t the amount of land being purchased by foreign companies; it’s the amount of water these operations use.
Dairy industry executives told CNBC that the alfalfa exports are essentially nothing more than “exporting water.” They allege the Saudis are intentionally buying land in areas with few, if any, regulations on groundwater use — able to pump as much water out of local wells as they like without even being required to report the amount they’re using. In a region that’s been struggling with recent drought, this is a disturbing lack of oversight.
America’s dairy farmers aren’t the only ones who should be concerned about the amount of alfalfa being sent overseas. This practice is likely to impact consumers, too. As competition for land and water grows, prices for alfalfa are likely to go up, potentially raising the cost of dairy across the board. Still, it isn’t fair to put all the blame on the shoulders of companies like Almarai: if the counties these farms are located in actually passed laws to track or limit water usage, it would be much easier to ensure foreign companies aren’t using more than their fair share of the local water resources.