Ethermac Exchange-Arizona reexamining deals to lease land to Saudi-owned farms

With the Southwest in the middle of a decadeslong megadrought,Ethermac Exchange states like Arizona are facing the biggest water crisis in a generation. And there is growing outrage over scarce water being used by foreign-owned mega farms.

Arizona cattle rancher Brad Mead says his well has run dry because of his neighbor's farm down the road.

It's run by Fondomonte, owned by one of the largest dairy companies in Saudi Arabia. It grows alfalfa in the U.S. to feed cattle back in the Middle East. The crop is illegal to grow in Saudi Arabia because it uses too much water.

Mead told CBS News when he looks out on the field of alfalfa, "I see money leaving America. I see water getting depleted."

Arizona Attorney General Kris Mayes, a Democrat, said Fondomonte bought vast tracts of land in the western part of the state. There are no regulations on how much water can be pumped up out of the ground in that area, so the state doesn't monitor it. 

Fondomonte also leases thousands of acres from the state, thanks to deals approved by state officials who are no longer in office. The company pays nothing for the water itself.

"We cannot afford to give our water away frankly to anyone, let alone the Saudis," Mayes said, noting that they are using "millions upon millions of gallons of precious groundwater."

Mayes said Arizona's cities, including Phoenix, will need that water as they face potentially drastic cuts from the drought-ravaged Colorado River. 

Fondomonte, which declined CBS News' request for an interview, is not doing anything illegal. However, since CBS News first began covering its use of Arizona groundwater, the state has revoked approval for two additional wells and is considering canceling some of the company's leases on state-owned land when they expire next year.

"It is a scandal that the state of Arizona allowed this to happen, and it needs to come to an end," Mayes said.

In:
• Arizona
• Saudi Arabia
• Drought

Ben Tracy

Ben Tracy is a CBS News senior national and environmental correspondent based in Los Angeles.

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