State of Arizona Terminates Land Lease of Saudi-Owned Fondomonte After Investigation

On Monday, Arizona Gov. Katie Hobbs announced the state land department has terminated one of four lease agreements with Saudi-owned dairy company Fondomonte Arizona. In addition, the department gave a notice to the company that the additional three leases will not be renewed after the February expiration.

In April, after an investigation by Arizona state attorney general Kris Mayes, permits were cancelled. The permits were to allow access for Fondomonte Arizona, a subsidiary of Almarai Co. to drill 1,000 feet into the water table to pump 3,000 gallons. Fondomonte Arizona grows alfalfa in Arizona and then ships it back to Saudia Arabia to feed livestock. The state’s investigation detailed Fonomonte had substantially defaulted on their 2016 lease.

The decision not to renew the three additional lease is based on the state’s water shortage. Allowing excessive amounts of water to be pumped from the land, free of charge is not in the best interest of the Trust’s beneficiaries

Attorney General Mayes issued the following statement on Governor Hobbs decision to terminate and not renew Fondomonte’s leases in Butler Valley:

I commend Governor Hobbs for taking action against Fondomonte’s default on their Butler Valley lease in Western Arizona, and for deciding to not renew the company’s additional Butler Valley leases. This decision to protect Arizona’s precious groundwater resources and uphold the integrity of our state land trust is a good step in the right direction for the future of Arizona. However, we must take additional steps to urgently protect Arizona’s water resources – especially in rural Arizona.

The Arizona Attorney General’s Office worked closely with Governor Hobbs’ administration on these inspections, which confirmed what we have suspected – Fondomonte has been in violation of its leases for many years.

And while today’s announcement is commendable, it should have been taken by state government much earlier. The failure to act sooner underscores the need for greater oversight and accountability in the management of our state’s most vital resource.

It has been long evident to Arizonans across our state that these leases never should have been signed in the first place. The decision by the prior administration to allow foreign corporations to stick straws in the ground and pump unlimited amounts of groundwater to export alfalfa is scandalous.