Arizona Gov. Katie Hobbs announced Monday that Fondomonte Arizona, a Saudi Arabian company growing alfalfa for export, is losing its Butler Valley leases on state land.
Hobbs also announced that three other Fondomonte leases would not be renewed in February 2024. The company farmed roughly 3,500 acres in the Butler Valley area and has become a lightning rod in the debate over foreign farmland ownership, water use for a non-food crop that's exported and preservation of precious water supplies in the drought-stricken state.
“After inspections I ordered, it became clear that Fondomonte has been operating in default of their lease since 2016,” Hobbs said on social media. “It’s unacceptable that they have continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease.”
The company was given notice of several issues, including improper fuel storage, in November 2016, but the inspections ordered by Hobbs revealed the problems had not been fixed.
In a statement of her own, Arizona Attorney General Kris Mayes said while the decision by Hobbs is “commendable, it should have been taken by state government much earlier.”
The Arizona Farm Bureau, however, said it was concerned by several aspects of the announcement and the potential for it to reverberate in future decisions.
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“While Arizona Farm Bureau does not have specifics on the situation, we are extremely concerned that this will set a precedent using future, speculative water value as a factor in determining the future of agriculture leases,” said Phil Bashaw, CEO of Arizona Farm Bureau. “This gives farmers and ranchers a lot of uncertainty and makes it difficult to plan the future.
"A solution that solves a water problem but creates a food problem is no solution at all," Bashaw added.
In a statement to CBS5, a Phoenix TV station, Fondomonte said it is “reviewing the notifications” and believes “the state is mistaken that the company is in breach of its lease … We have been in discussions with the Governor’s office and we will continue to work with Gov. Hobbs and the state to resolve groundwater matters and misinformation.”
Fondomonte did not respond to an Agri-Pulse request for comment.
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