Aside from purchasing a lot in the United States real estate market, Saudi Arabia as well as other Persian Gulf countries are already taking big interest and buying farmlands in US Southwest. According to Yahoo! Real Estate, the Saudis are buying farmlands in drought affected areas. And it cause for an alert for some people in California and Arizona mainly because of water resources issue.
It has been reported that the Saudis grow alfalfa hay in both land areas which are shipped back to their country. Fondomonte California announced that they bought 1,790 acres of farmland in Blythe, California for almost $32 million. This is an agricultural town along the Colorado River. Two years ago the Saudi food giant Almarai, also purchased 10,000 acres of farmland in Arizona for roughly $48 million.
These moves done by the Saudis only shows how interconnected the economy of both countries are. Reportedly, the Saudis are interested to produce animal feeds overseas rather than in their own country in order to save water. However, not everyone agrees to it.
Keith Murfield, CEO of United Dairymen of Arizona, "The alfalfa exports are tantamount to exporting water, because in Saudi Arabia, they have decided that it's better to bring feed in rather than to empty their water reserves." Murfield believes that this trend will continue unless there will be certain rules and regulations intended for it.
With regards to the California farmland that Saudi Arabia just purchased, the company explained that "the deal forms part of Almarai's continuous efforts to improve and secure its supply of the highest quality alfalfa hay from outside the (Kingdom of Saudi Arabia) to support its dairy business."
There are people who disagree with what is happening given the fact that the U.S. does not get oil for free so why give out the country's water for free. But when it talks about land rights, the Saudis are reportedly sticking to the rules and playing it right. Apparently the farmland that they bought in Arizona is a region with minimal or no rules for groundwater use.
On top of Saudi Arabia and other Persian Gulf countries, China, South Korea and Japan are also big buyers of American hay. Daniel Putnam, an alfalfa and forage specialist, said, "We do live in a globalized marketplace, and the fact that we ship food to China and Japan and ship automobiles back to the United States is part of the globalization of our marketplace."
