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Hobbs cancels lease for Saudi-owned alfalfa farm in Arizona

Arizona Gov. Katie Hobbs says the state is terminating a lease for a Saudi-owned company that’s been farming alfalfa in Arizona. The company has been criticized for growing a water-intensive crop for export amid the Southwest’s historic drought.

Fondomonte Arizona, LLC has four leases on state trust land in La Paz county. In a press release, Hobbs said she directed the State Land Department to inspect Fondomonte’s farms. She said those inspections turned up some violations of the lease agreements dating back to at least 2016.

She said one of the four leases will be terminated and the other three won’t be renewed when they expire early next year.

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“I’m not afraid to do what my predecessors refused to do — hold people accountable, maximize value for the state land trust, and protect Arizona’s water future,” Hobbs said in the statement. “It’s unacceptable that Fondomonte has continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease." 

The alfalfa that Fondomonte grows is shipped to Saudi Arabia to feed dairy cows. The company pumps massive amounts of groundwater for irrigation.

The Hobbs administration in April had also revoked permits for the company to drill new wells.

In a statement to KJZZ News, Fondomonte said it did not believe its lease should be terminated and was working with the Governor's Office to resolve the issue.

"We believe the state is mistaken that the company is in breach of its lease," the statement said. "As for the other leases the state intends to not renew, this would set a dangerous precedent for all farmers on state land leases, including being extremely costly to the state and Arizona taxpayers. Fondomonte will explore all avenues to ensure there is no discrimination or unfair treatment."

Earlier on Monday, the  state's largest public pension fund announced it would sell off its interest in a separate company that owns a 3,000-acre western Arizona farm that grows alfalfa to ship to the Middle East.

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Katherine Davis-Young is a senior field correspondent. She has produced work for NPR, New England Public Radio, Southern California Public Radio, PRI's The World, Washington Post, Reuters and more.She has a master’s degree in radio journalism from the USC Annenberg School of Journalism.She lives in central Phoenix with her husband, two daughters, and ill-behaved cat and dog. Her side-passions include photography, crosswords and hot sauce.