Unable to sustain their own livestock in the desert, Saudi Arabia is scooping up more and more American farmland, with the onus now on drought-stricken U.S. states to raise the crops to feed Saudi dairy cows.
Saudi dairy company Almarai, which in 2014 bought 9,600 acres of farmland in Arizona, has expanded its U.S. farmland holdings to 14,000 acres, causing growing worries about the state of local water reserves in drought-stricken Palo Verde Valley in southern California.
Saudi Arabia is mostly desert, and water is scarce. Yet the kingdom has 170,000 dairy cows that need feed. Alfalfa is a popular cattle feed, but unfortunately, it is also a thirsty crop. Since the kingdom is unable to grow alfalfa locally without reducing its water reserves to an even more dangerous level, it is buying land abroad to grow the plant.
Enter the U.S. Southwest.
This region of the United States is the driest, yet it is attractive for the Saudi company because of water rights. California, for instance, has been suffering worsening droughts for the past few years, yet water rights favor farming, specifically in Palo Verde Valley, making the state attractive for the Middle Eastern dairy firm.
While the battle over water rights is intensifying in California, farmers in Palo Verde have “first dibs” on water from the Colorado River. Likewise, where the Saudis bought farmland in Arizona, water rights are friendlier to farmers.
As AP reports, Almarai is by no means the only company taking advantage of favorable legislation in the U.S. Companies from the UAE, China, and Japan, have also jumped on this bandwagon, buying up farmland in the U.S. and elsewhere and then exporting the crops back home. It’s proven, for them, to make more economic sense than to grow at home.
Full article: Saudi Arabia Buying Up Land In The U.S. Southwest To Feed Its Cows (OilPrice)