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Saudi Arabian Company Purchases Land to Outsource Drought to California

Saudi Arabian Company Purchases Land to Outsource Drought to California



WESTERN UNITED STATES - For the past several years, the drought-stricken nation of Saudi Arabia has been using a new strategy to help conserve water—growing in California. If you’re asking yourself why would the country choose one of the most notoriously parched states in the U.S. as the home of its most water-thirsty crops, you’re not alone. The answer? It’s looser water restrictions for growers.

Starting in 2014, Saudi-owned Almarai dairy company has purchased about 14,000 acres of farmland in the Western U.S.—enough to feed its 170,000 cows. Paying $31.5 million in January for 1,790 acres of land in California’s Palo Verde Valley and $47.5 million for more than 9,800 acres in La Paz County, Arizona. These two purchases are on top of buying about 2,000 acres in California last year.

Through several decades of drought conditions, Saudi Arabia was growing its own water-intensive crops like grains, alfalfa and more for its cattle, but it reversed that policy about eight years ago to protect scarce supplies, reports the Associated Press (AP).

Now, to further conserve its dwindling water supplies, the country has adopted bans on selected crops. This year, the country will no longer produce wheat, and in December, the government announced the country will stop growing livestock feed derived from crops like alfalfa in a process over the next three years.

The company, Almarai, says the expansion into California and Arizona was part of a “natural progression” in its effort to diversify its supply. Jordan Rose, an attorney for the company’s Arizona unit, explained to AP that Almarai needs to be certain that it is always able to fulfill constant demand. To learn more about Almarai, watch the video below.

Despite the enduring drought conditions in the U.S, the country is attractive to water-seeking companies because it has strong legal protections for agriculture, despite its higher-than-average land prices.

“Southern California and Arizona have good water rights. Who knows if that will change, but that’s the way things are now,” Daniel Putnam, an Agronomist at the University of California, Davis, told AP.

Over the last decade, both Saudi Arabia and the United Arab Emirates have increasingly become large buyers of American hay in response to their governments pushing stricter water laws. AP reports that, together, they accounted for 10 percent of U.S. exports of alfalfa and other grasses last year.