A Saudi-owned farm in the middle of the Arizona desert has attracted national attention and criticism since Reveal’s Nate Halverson and Ike Sriskandarajah first broke this story eight years ago. The farm is using massive amounts of water to grow hay and export it to Saudi Arabia in the midst of a water crisis in the American West.
Since then, megafarms have taken hold here. And the trend isn’t fueled just by foreign companies. Many people have no idea that their retirement funds are backing massive land deals that result in draining precious groundwater. Halverson uncovers that pension fund managers in Arizona knew they were investing in a local land deal, which resulted in draining down the aquifer of nearby communities. So even as local and state politicians have fought to stop these deals, their retirement fund has been fueling them.
And it’s not just happening in Arizona. Halverson takes us to Southern California, where retirement money also was invested in a megafarm deal. This time, the farm was tapping into the Colorado River to grow hay and ship it overseas. And it was happening as the federal and state governments have been trying to conserve river water.
Halverson’s investigation into water use in the West is just one slice of his reporting into a global scramble for food and water, which is featured in an upcoming documentary, “The Grab” by director Gabriela Cowperthwaite. “The Grab” will be coming soon to a theater or screen near you.
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Learn more: “The Grab”
Read: State Pension Fund is Helping a Middle Eastern Firm Export Arizona’s Precious Groundwater (Reveal)
Credits
Reporter: Nathan Halverson | Producers: Michael Montgomery and Ike Sriskandarajah | Editor: Cynthia Rodriguez | Fact checkers: Kim Freda and Nikki Frick | Production managers: Steven Rascón and Zulema Cobb | Digital producer: Nikki Frick | Original score and sound design: Jim Briggs and Fernando Arruda, with help from Claire Mullen | Interim executive producers: Taki Telonidis and Brett Myers | Host: Al Letson | Special thanks to “The Grab” team: Gabriela Cowperthwaite, JoeBill Muñoz, Mallory Newman, Amanda Pike, David Ritsher, Emma Schwartz, Yinuo Shi, Débora Souza Silva, Jonathan Ingalls, Davis Coombe, Blye Pagon Faust, Nicole Rocklin and Impact Partners
Support for Reveal is provided by the Reva and David Logan Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the Hellman Foundation, the Robert Wood Johnson Foundation, and the Park Foundation.
Support for the documentary “The Grab” was provided by Impact Partners, Maiken Baird, Nina and David Fialkow, The Betsy and Jesse Fink Family Foundation, the Caldwell Fisher Family Foundation, Doree Friedman, Anil Godhwani, Jan McAdoo, Debbie L. McLeod, the Meadow Fund, The Rogovy Foundation, Nancy Stephens and Rick Rosenthal, Lessing and Babbie Stern, Jeff and Laurie Ubben, Lauren and John Driscoll, the 11th Hour Project, David desJardins and Nancy Blachman, Doc Society, the Fred Gellert Family Foundation, Maggie O’Donnell, SFFilm and the Threshold Foundation.
Transcript
Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal’s radio stories is the audio.
Al Letson: | From the Center for Investigative Reporting and PRX, this is Reveal. I’m Al Letson. Today we’re talking about something so essential to daily living that for this man, it’s more precious than gold. |
Wayne Wade: | Gold is worth quite a bit. Water’s worth more than gold if you don’t have it. |
Al Letson: | Wayne Wade is a retired industrial electrician. He’s worked in mines, gas plants and oil fields, and after his kids grew up, he and his wife settled in La Paz County, Western Arizona. They fell in love with the desert. |
Wayne Wade: | You have to be here year-round to see the seasons and when the plants bloom, it’s just something you don’t get any place else. |
Al Letson: | But then the water level in their well started dropping each year, forcing them to go deeper into the earth. It was expensive, tens of thousands of dollars. At the same time, industrial mega farms were moving into their community and growing crops to send overseas. |
Wayne Wade: | I was raised on a farm. I’m not against farming, but we need to take care of it too. It needs to be taken care of in the right way. |
Al Letson: | Wayne is referring to the water. Like much of Arizona, La Paz gets very little rain, but the county does sit on top of an enormous ancient aquifer, and these farms were pumping up huge amounts of that groundwater. |
Wayne Wade: | If the water leaves, I think the people will leave. |
Al Letson: | Ultimately, Wayne and his wife did leave La Paz County along with others forced out as their wells went dry. |
Wayne Wade: | You just take and take and take, and pretty soon there isn’t anything to take. |
Al Letson: | Wayne is at the center of a global scramble for water, and Reveal reporter, Nate Halverson, has been collecting stories like his in Arizona and across Africa and Asia as well. His reporting came together in our new documentary called The Grab, directed by Gabriela Cowperthwaite, and one of the stories the film focuses on, the story of Wayne’s community, was something that we first reported here on Reveal in 2015. Nate recently went back to Arizona, and I caught up with him while he was there. Hey Nate, how you doing? |
Nate Halverson: | Hey, Al. Good to talk with you. |
Al Letson: | So where are you exactly? |
Nate Halverson: | I’m out here in the Sonoran Desert, 100 miles west of Phoenix. I’m literally standing next to a Saguaro cactus with its bristly arms shooting up into the sky surrounded by desert scrub brush, roadrunners literally running in front of me on the road out here. |
Al Letson: | I am so jealous because the Sonoran Desert is one of my favorite places in the world. It just has this beauty about it. I love it so much, its solitude, everything about it except for the lack of water. So why are you there? Are you there on some kind of Zen retreat? |
Nate Halverson: | Oh man, I wish, but sadly, no. I’m back now, because I guess to steal your line now, “There is always more to the story.” |
Al Letson: | Dude, you don’t have to steal my line. It’s yours. Take it anytime you’d like. So what more is there about this story? |
Nate Halverson: | Our original investigation, that one exposed that these foreign mega farms were actually using up Arizona water to grow crops and ship them overseas. People like Wayne Wade were outraged, and that outrage from the locals has only gotten more intense. I wanted to know who decided it was okay for places like La Paz to lose control of their water supply. It turns out this scramble for water is also about a scramble for profit. |
Al Letson: | And because I know you, I know that that means you’ve been following the money. |
Nate Halverson: | Yeah, that’s right. And some of this information, like the people who are financing some of these deals, has been hidden away until now. |
Al Letson: | It’s a crucial part of the story and we’re going to get to it later in the show. But to understand what Nate’s going to tell you, we need to rewind a little bit. We need to go back several years to when this investigation started. Here’s Nate’s first journey in the Arizona desert where he was joined by Reveal’s former producer and my friend, Ike Sriskandarajah. |
Nate Halverson: | I see white sands with some scrubby bushes in the desert. And I don’t know, Ike, what is it like, 115 degrees right now? It is sweltering hot. |
Ike Sriskandara…: | And just beyond that scrub grass is a gigantic hay field. And just beyond that are rows and rows and rows of processed golden stacks of hay, an entire city of hay. How does this make sense? |
Nate Halverson: | We’re driving with Charlie Havranek in his jacked up GMC truck with huge tires. Charlie is a real estate agent, a farm consultant, and the kind of guy you want showing you around the desert. |
Charlie Havrane…: | Anybody want a bottle of water? I got cold water in that ice chest there. |
Nate Halverson: | We pull up in front of a farm outside Vicksburg, Arizona. |
Charlie Havrane…: | And you’re looking at hundreds of thousands of tons of hay waiting for export. |
Ike Sriskandara…: | It looks like the Fort Knox of stacked hay. |
Charlie Havrane…: | And all of that is going to be exported to Saudi Arabia. |
Nate Halverson: | Saudi Arabia’s largest dairy company, Almarai, about 15 square miles of land in the Arizona desert, and converted it into hay fields. Let that sink in for a minute. A dairy based in one desert is growing hay halfway around the world in another desert, and they’re able to do it because of groundwater. Lots of it. We pull over next to an electric groundwater pump. |
Charlie Havrane…: | That’s the sound of that electric motor turning. It runs a turbine pump down below that lifts the water up. |
Nate Halverson: | It looks like an oversized fire hydrant sitting on top of a 12-inch metal pipe that goes straight down hundreds of feet to the aquifer below. |
Charlie Havrane…: | 16 to 1,700 gallons a minute. |
Ike Sriskandara…: | The pumps, which are scattered across the fields, are running night and day. So over the course of a year in an area that normally only gets five inches of rain, they pump up 10 feet of water onto the land. |
Charlie Havrane…: | We are basically mining ancient water. This is water that was probably part of an ancient sea or seepage from rainstorms and accumulation of water over the eons of time. Very productive ground once you’ve got the water for it. |
Nate Halverson: | By buying the land instead of just purchasing the hay, Almarai can better control its prices, and this is the most productive ground in the country for growing hay. Unlike in Iowa or Nebraska with their idle winters, in the Arizona desert, you can grow hay all year long, assuming you have the water. |
Abby York: | Where we’re at now is outside of any kind of groundwater pumping regulation, so they’re able to pump as much as they can get. |
Nate Halverson: | Abby York is a land use expert at Arizona State University. She met us at Almarai. I asked Abby if the groundwater here might run out one day. |
Abby York: | There’s definitely concern that within 50 years, a few decades, that water levels will have dropped significantly. So if you look at some of the policy reports from the state, that’s what they’re indicating. |
Nate Halverson: | That means within a generation or two, this part of Arizona could go dry. And the Saudi’s hay operation just accelerates this problem. Arizona’s groundwater law from 1980 limits pumping in big cities like Phoenix, but in many rural areas, like La Paz County, water use is not regulated, and this is where Almarai has moved in. |
Abby York: | There’s no way that we can change how they’re using this land. If there were problems, it would be very difficult to stop. So the decisions are wherever the corporate headquarters are, in this case, in another country. |
Ike Sriskandara…: | If I’m understanding you correctly, the local land use here, the local decisions on how much water to use is actually being made in Riyadh? |
Abby York: | Yeah, right. |
Nate Halverson: | We were really surprised by this, that in the middle of a drought, an executive halfway around the world is making decisions that might deplete the aquifers here. |
Ike Sriskandara…: | We wondered if people were flipping out about this. So we went to Kirby’s Country Market just a few miles from the Saudi farm and we asked locals if they cared that the Saudis were buying land here. |
Speaker 7: | No, whoever they could sell it to, they’re welcome to sell it to whoever they want. |
Speaker 8: | If I knew exactly where it’s going, it could make a difference to me. |
Ike Sriskandara…: | Would it make a difference if it was going to Saudi Arabia? |
Speaker 8: | No, it wouldn’t make any difference to me. If it was going to Saudi Arabia, that’d be fine. |
Speaker 9: | No, it would not. It don’t bother me none. They got to make money and that’s out there to make money. That’s what they’re for. |
Ike Sriskandara…: | Are you at all concerned about water? |
Speaker 10: | Well, I worry about losing the water, yeah because the water table goes down every year, and we’re afraid we’re going to run out of water here one of these days. |
Ike Sriskandara…: | Saudi Arabia knows what happens if you farm the desert too long. About 30 years ago, the Saudis began digging deep under the sand for something other than oil. |
Elie Elhadj: | You’ll bring in enough dollars and find enough water and you’ll grow the desert green until either the dollars become scarce or the water runs out. |
Ike Sriskandara…: | That’s Elie Elhadj. He’s a former CEO of a major Saudi bank. He also wrote a critical report about Saudi Arabia’s foray into agriculture. He called it Camels Don’t Fly, Deserts Don’t Bloom. |
Elie Elhadj: | There is no magic in turning the desert green. |
Ike Sriskandara…: | With the groundwater, Saudi Arabia became an agricultural powerhouse. |
Elie Elhadj: | The Saudi desert became the sixth-largest exporter of wheat in the world. |
Ike Sriskandara…: | Elie says “Exporting crops like wheat and hay is the same thing as exporting water.” |
Elie Elhadj: | Agricultural goods are encapsulation of water, virtual water. |
Ike Sriskandara…: | So why would a country with so little water become the world’s sixth-biggest exporter of wheat? |
Elie Elhadj: | Well, frankly, it’s crazy. And time really proved that it was an insane decision. |
Ike Sriskandara…: | Saudi Arabia has nearly run out of groundwater, and dairy companies like Almarai have been told to begin growing nearly all their hay in other places, like Sudan, Ethiopia, Argentina, and Arizona. All of it will get shipped back home to feed their dairy cows. We reached out to Almarai and the Saudi government for comment on our story, but they declined. |
Elie Elhadj: | Bottom line is that the current generation sucked the aquifers dry to deny future generations of their rightful endowment. |
Nate Halverson: | Saudi Arabia isn’t the only one running low on water. Other countries like China and India are discovering they don’t have enough farm water to meet growing demands either, and like the Saudis, they’re looking overseas, putting increased strain on the world’s water. |
Ike Sriskandara…: | As Nate and I were driving away from the Saudi farm, we noticed another big farm along the road. The name of it, Al Dahra. |
Nate Halverson: | It appears to be another Middle Eastern company has come out here and has started up a huge other hay operation. |
Ike Sriskandara…: | We pulled in where we saw a line of semis all being filled with hay. So we climbed up to a truck driver’s window to talk. |
Nate Halverson: | That makes it a lot easier for us. |
Speaker 10: | Yeah, yeah, yeah. |
Nate Halverson: | Thank you. |
Ike Sriskandara…: | Oh, I never get to see inside these. |
Nate Halverson: | This 18-wheeler was being loaded with 44,000 pounds of hay, and he told us it was going to a shipping port in California, and from there onto China. We went inside the small office and met Nathan Melton, the farm’s manager. Nathan has deep roots here. His family farmed in Arizona for generations growing melons, cotton and other crops. |
Nathan Melton: | I’m not in the family business no more. This is all corporate farming now and it’s just different. |
Ike Sriskandara…: | How long ago did the folks start leasing this land? |
Nathan Melton: | We’ve been here two years now. |
Ike Sriskandara…: | And who do they lease it from? |
Nathan Melton: | It’s IFC. It’s a big corporation out of North Carolina. |
Nate Halverson: | Corporations are tapping into free and unregulated water supplies in rural counties like La Paz and growing crops that are shipped halfway around the world. |
Nathan Melton: | If we were going to say we were going to ship hay overseas back then, you would’ve laughed, but that’s what we do and it makes money. A lot’s changed over the last 10, 15 years. |
Al Letson: | That story was from Nate Halverson and Ike Sriskandarajah. In a moment, Nate follows the money flowing into the International Farming Corporation. It’s a billion dollar investment firm with some surprising investors. |
Holly Irwin: | And then you start connecting the dots on some of this stuff and you start thinking, “Oh my God, I can’t make this up.” |
Al Letson: | That’s coming up next on Reveal. From the Center for Investigative Reporting and PRX, this is Reveal. I’m Al Letson. Reveal’s Nate Halverson has been investigating the global battle for water. Water we drink, water we use to grow crops and water that in many parts of the world is disappearing like in Arizona where in 2015 Nate found corporate mega farms were moving into the desert and pumping out massive amounts of water from the state’s endangered aquifers to grow hay. |
Speaker 14: | Nathan Halverson is the first reporter to break this story in the national press. |
Speaker 15: | A dairy company based in a country known for its huge oil supplies is after something even more precious in Arizona, water. |
Speaker 16: | There is no cost for the water being pumped from the wells or restrictions on how much they use. |
Al Letson: | Media coverage at the time was focused on Almarai, the dairy company from Saudi Arabia that quickly became one of the biggest water users in the state. The people of La Paz County where all this was happening, they were getting angry. |
Speaker 17: | I know that there’s areas that are being farmed now that were not farmland two years ago. Large, large tracks miles and miles of green that wasn’t there two years ago. How is that possible? |
Al Letson: | This tape is from a meeting in La Paz with members from the state’s water department. The hall was packed and tense with armed sheriff’s deputies keeping close watch. |
Speaker 18: | You are saying it’s perfectly legal for these people to come in here, drain the aquifer and the local people have to re-drill their wells that they’ve lived there for years. |
Speaker 19: | We got to move on, but yes, they’re not breaking the law. |
Al Letson: | People told the officials more and more wells were running dry and they were blaming the new mega farms. Holly Irwin, a county supervisor, tried to empathize and respond to what she was hearing. |
Holly Irwin: | I feel your pain. I want conservation measures put in place so we can all grow as a community where you guys can stay here and so can they, but we need to do something and something’s got to give. |
Al Letson: | This meeting was in 2017 and as the reality of the situation sank in, it motivated Holly, a Republican to do something she’d never done before. Take political action on an environmental issue to save the aquifers and save the rural way of life here in the desert and in the process she found out what’s happening here goes way beyond Almarai. This is where Nate picks up the story. |
Nate Halverson: | This spring I went to visit Holly in La Paz County. She came here 29 years ago to raise a family. |
Holly Irwin: | We love the whole rural western atmosphere of Arizona and enjoy the river and all of the outdoor activities that comes with it. |
Nate Halverson: | One of her favorites off-roading with the family on four-wheelers through hundreds of miles of rocky trails. She’s shown me videos. |
Holly Irwin: | You just have open desert or we can take trails that’ll take us through mountain passes and canyons and stuff like that. It’s amazing. You can just keep going for miles. |
Nate Halverson: | Holly’s been barreling over hills and through ditches since her dad bought her a mini bike at age 10. Today it’s just a way to let off steam. |
Holly Irwin: | [inaudible]. |
Speaker 20: | Look at your mama go. |
Speaker 21: | That’s my mama. |
Holly Irwin: | It’s called decompressing from dealing with all of the stress with the water issues that we’ve had here in La Paz County. |
Nate Halverson: | Holly was elected county supervisor here in 2008, but ever since that Saudi hay story came out, the water issue has consumed her working life and she wants to take me out into the desert, not on her ATV, but in her government issued SUV so I can see what’s been happening since our original story several years ago. At first the desert doesn’t look much different. It’s still got its postcard beauty, but then abruptly it all changes to hay, specifically alfalfa hay. |
Holly Irwin: | Now we’re back into the alfalfa as you can see. This is all alfalfa. It’s depressing. It really is. |
Nate Halverson: | This is the Saudi farm? |
Holly Irwin: | This is the Saudi farm. I wanted to take you by here so you can see how much it’s changed. |
Nate Halverson: | The fields now cover far more land and there’s clusters of giant hay barns scattered across miles of land. Those didn’t exist last time I was here. Holy cow, these are hay trucks. |
Holly Irwin: | And look, they’re all waiting in line to get in. |
Nate Halverson: | Those are semi-truck that have two trailers behind them and there are 30 of them, so that’s 60 semi-trailers just covered in hay. |
Holly Irwin: | I told you, right? |
Nate Halverson: | Arizona is now exporting nearly 100 times as much hay compared to a decade ago. Hay brings in a lot of money. It’s one of the most valuable crops in the US. Arizona doesn’t track hay exports or their impact on water, but some researchers at the University of Arizona did just that and they estimate that in Arizona the water used to grow exported hay is now equivalent to the water used by roughly a million people in Phoenix. As we drive on, you can see the impact. There’s a little church whose well went drive and a trailer park also with water problems. And then we pull over just next to some desert homes, just past one of the encroaching farm fields. So what’s happening to people out here’s domestic wells, these people that have retired out here? |
Holly Irwin: | Okay. So if you look out here, I know this family that live out here and they’ve had to replace their well twice. Not just once, but twice. |
Nate Halverson: | How much is that? |
Holly Irwin: | Anywhere from 25 to 35,000. |
Nate Halverson: | That’s a lot for retirees. |
Holly Irwin: | It is. It’s a lot. |
Nate Halverson: | Not even the government knows how much water is left in these aquifers. Holly keeps asking the state’s water department to conduct a hydrologic study, but they keep ignoring her. And it’s an important study because it’s the only way to know for sure how much water is being used, how much is left, and how long until it goes kaputt. La Paz County is not a wealthy community. The average individual income here is 26,000 a year. Many folks are retirees from working class jobs and lots of residents live in mobile homes and trailer parks are out on the open desert. Holly says it’s this lack of wealth that makes the community more vulnerable to having its groundwater grabbed. She wanted to know when all of this got started and who was behind it. So she gets the idea to start digging into dusty old county records in search of answers and she leads me into her office to show me. Holly, this is so many boxes and so many documents. This is a gold mine. |
Holly Irwin: | I had to go back to what we call… We call it the dungeon where we keep historical boxes and documents and stuff like that. |
Nate Halverson: | The dungeon. |
Holly Irwin: | The dungeon and pulled boxes and I went back to the creation of our county. |
Nate Halverson: | Wow. When was that? |
Holly Irwin: | That was in 1982 of which I fully believe that we were created for that sole purpose. |
Nate Halverson: | What purpose? |
Holly Irwin: | For water. |
Nate Halverson: | La Paz has been known as a place to mine, not gold or oil, but water. And in the past it was the big cities coming here for the water. It’s an old story going back nearly 40 years. That’s when Phoenix comes calling. In 1986, the city purchased about 20 square miles of farmland so that they could have access to the water below. Phoenix wanted it as a backup water supply for the future and its plan was to eventually pump up the water and transfer it through a canal to the city. |
Holly Irwin: | You start watching city of Phoenix buy property, Scottsdale buy property, and you have cities buying property solely for the purpose of water. |
Nate Halverson: | These deals were controversial at the time because rural communities like La Paz felt their water was being grabbed by the big cities, but at the end of the day, this was water destined to stay in the state as a public water supply. That changes in 2012 when Phoenix does an about face and sells its own backup water. It says it doesn’t need the groundwater anymore and it will be too expensive to transport. Here’s the thing that I find striking. Back in the 80s, people recognized literally the time right now when they’re going to need the water and that was almost 40 years ago. It’s like they were psychic, but somewhere along the way they lost track that they wanted this water for the people of Arizona and they started selling it. |
This is where the International Farming Corporation enters the picture. Remember IFC is that multi-billion dollar investment company we heard about earlier. IFC buys the land from the city of Phoenix. Then it gets to work drilling bigger, deeper wells to tap into all that precious groundwater so it can then lease some of the land to the farming company Al Dahra. Now stay with me here. This isn’t the Saudi owned farm. This is the other big hay producer in La Paz County, Al Dahra from the United Arab Emirates. What this all means is that Phoenix’s once public water supply is no longer staying in Arizona. It’s being shipped overseas in the form of hay. I want to hear firsthand what this all means for the residents living next to the IFC farm. | |
Mary Goodman: | Hi. |
Nate Halverson: | Hey Mary. So I go visit Mary Goodman. Mary moved out here about 25 years ago after retiring from her nursing job in the Los Angeles area. |
Mary Goodman: | This is a triple wide and we put it in 2005, did all the work ourselves. |
Nate Halverson: | Mary and her husband Bill, came out to the desert because it was beautiful and because for a lot of people, this is a place where you can afford to live on your pensions and savings. This mobile home in the desert, it was their dream retirement. |
Mary Goodman: | We’ve put our money, our lives, our sweat and blood. So we’ve got everything the way we want it. He has a nice workshop and I’ve got my plants. It’s our life. |
Nate Halverson: | It’s their life, but the water table is dropping every year. Some of their neighbor’s wells have already gone dry and IFC, it just keeps drilling deeper. Now it’s down to 1500 feet. If you had to drill your well a 1000 or 1500 feet, could you all afford to? |
Mary Goodman: | No way. Not at $30 a foot. We couldn’t afford it. |
Nate Halverson: | It’s a race for the water and they can’t keep up. Mary worries that their well could run out of water before… Well, before they die. |
Mary Goodman: | I’m 75 and my husband’s 12 years older than I am. We’re getting up towards the end of stuff here folks. I just get really nervous. Do we just stay here and maybe take comfort in we’ll be dead before we run out of water? Because we can’t live here without water. |
Nate Halverson: | Last year a state test near the Goodman’s found the water was dropping about five feet per year and at that rate, the Goodman’s might only have another 10 years of water in their well and they say nobody from the state is out here helping folks as their wells go dry. |
Mary Goodman: | We’re kind of like the ugly redheaded stepchild out here maybe, nobody seems to care. You feel powerless. I mean, you live in a place where they can give your water away. |
Nate Halverson: | Mary’s hit on an important point. What’s happening here goes way deeper than corporate mega farms. It’s about the Arizona water policies that attracted these companies in the first place. So I go to Arizona State University to see a lawyer named Sarah Porter. |
Sarah Porter: | I’m Sarah Porter, director of the Kyle Center for Water Policy at ASU Morrison Institute for Public Policy. |
Nate Halverson: | Sarah and I talk nitty-gritty about the Arizona Groundwater Management Act. It’s legislation from the 1980s that governs much of what happens with Arizona’s water today. It was a fight to get the law passed. Cities, agriculture and mining companies were all competing for what they wanted it to say. Ultimately, groundwater ends up being regulated in urban areas like Phoenix, but not in rural areas like La Paz. They essentially remain free for all’s. This lack of regulation created a business opportunity for farm investors to come in from around the world. I have a newspaper ad that I clipped and it’s a color ad and it says “Water problems? Come to Arizona. We have unregulated water.” |
Sarah Porter: | Yeah. Yeah. |
Nate Halverson: | Sarah now sits on Arizona, governor Katie Hobbes’s Water Policy Council, which was created earlier this year to tackle the issue of groundwater in rural areas. She says if state lawmakers aren’t going to reign this in, they should at least be upfront about what’s happening. |
Sarah Porter: | If it’s going to be the policy of the state to allow landowners to mine out all of the groundwater in an aquifer, then we should also talk about having better public consumer protections. We need to make sure that people don’t invest their treasure in their own little acreage and then discover that a giant industrial scale agricultural operation has moved in next door and is going to be causing their wells to go dry. |
Nate Halverson: | But that’s already happening in places like La Paz. |
Sarah Porter: | I also think we have to live with the possibility that it may be the choice of some rural areas to simply manage their groundwater in a way that I think we could call unsustainable and use up all the water in their aquifers. That may be the will of some rural areas. |
Nate Halverson: | I talked to supervisors in those counties like Holly Irwin and she says she doesn’t have the power to stop people from pumping her water. |
Sarah Porter: | She doesn’t, and one of the big problems is that once the big water user is there, it is much, much harder to solve the problem. |
Nate Halverson: | So what happens to people in La Paz County? |
Sarah Porter: | The reality is that the water demand is the water demand. |
Nate Halverson: | So the people’s wells are going to go dry and that’s the future? |
Sarah Porter: | It could be. It could be. Yeah. |
Nate Halverson: | That’s it? |
Sarah Porter: | That’s the reality. We’re really talking about an existential situation for some of those places. |
Nate Halverson: | Existential meaning they’re going to lose their well and they’re going to lose their life savings? |
Sarah Porter: | Yeah. No water, no town. |
Nate Halverson: | The people in La Paz, do you envision they’re going to get compensated when the value of their… |
Sarah Porter: | No. No, I don’t think so. |
Nate Halverson: | They’re just going to lose their life savings and that’s that? |
Sarah Porter: | Yeah, or whatever they wind up doing. Maybe someone will discover an orebody where they are. I don’t know. A groundwater supply in an unregulated rural area of Arizona is a low value water supply and that’s [inaudible]. |
Nate Halverson: | So its buyer beware? |
Sarah Porter: | It is. That’s really what we live with. It’s buyer beware, but let’s keep everything in proportion. I don’t know what the population of La Paz County is off the top of my head, but like 30,000? |
Nate Halverson: | La Paz is less than that, 16,000 people. Part of public journalism is standing up for the folks that don’t have the power. |
Sarah Porter: | Yeah. Yeah. |
Nate Halverson: | And I hear what you’re saying. That is a small percentage of the population, but for those folks it’s going to hurt. |
Sarah Porter: | It doesn’t diminish their experience that there aren’t very many of them. They never should have relied on that water. It’s not their fault that they did, but they were relying on a water supply that they didn’t have a right to. |
Holly Irwin: | You’re going to tell me that they don’t have a right to have water in their homes? Families have invested over generations to be here. It makes me angry. Extremely angry. |
Nate Halverson: | I’ve come back to meet with Holly at our office in La Paz. She’s frustrated by the idea that this is just the way it is and also by the inability of Arizona’s lawmakers to protect water. What she wants is the state to determine how much water is left in the aquifers and give her some local control to monitor and set limits if necessary. She thinks this is the only way to slow the global scramble for water and the profit-driven water market it’s created. |
Holly Irwin: | You’re literally fighting money. That’s what you’re doing. You’re fighting the rich people. |
Nate Halverson: | And Holly isn’t just fighting rich corporations. In my reporting, I uncovered something startling. The Arizona government itself is investing in these mega farms in the western United States. I found that the Arizona state retirement system gave $175 million to the International Farming Corporation, which then used some of the money for the mega farm in La Paz County. This raises a key question. How much did the state know about exactly where its investment money was going? I’m wondering if we can go over to the county Recorder’s Office because people have to file deeds of trusts if there’s a mortgage or who gave them the money to buy the land? |
Holly Irwin: | I mean, we can walk over there if you want and see… |
Nate Halverson: | So we head over to the Recorder’s Office where land sales and mortgage records are kept. |
Holly Irwin: | Here is our Recorder’s Office. |
Nate Halverson: | Hi. Is there a way that we could look up an LLC? |
Holly Irwin: | Yeah. |
Nate Halverson: | Thanks. We find a computer terminal and start searching. At first it looks like a bust. Yeah, Holly, this is kind of looking like a dead end. There’s no… I mean, we can see that the year that they bought it, which is what we knew and they bought it from the city of Phoenix and there’s easements and mechanical stuff, but there’s nothing in all of these records and there’s 56 documents. |
Holly Irwin: | Oh, wow. |
Nate Halverson: | Yeah, but there’s nothing that shows… Wait a minute, what’s this? Arizona State… |
Holly Irwin: | Retire… Pull that up. |
Nate Halverson: | Isn’t that your pension fund? |
Holly Irwin: | Yes. Yes. |
Nate Halverson: | Holly and I are seeing this document for the first time. It shows that state retirement fund managers knew specifically that part of their investment in IFC would be used for the mega farm here in La Paz, the one that’s next to the Goodman’s home. The document even says that if IFC were to ever sell its land in La Paz, the retirement system wanted the right to make the first offer to buy it and it was all about making money. |
Holly Irwin: | Oh my God. Oh my God. Wow. That’s wild. I don’t know why our state retirement would have any part of any land deal. |
Nate Halverson: | Your pension fund is the money behind this massive deal that bought the Phoenix of Arizona’s backup water supply and is now shipping it overseas in the form of hay. Holly and I leave the Recorder’s Office and I tell her I’m going to Phoenix to see if I can get answers from state officials about why any of this makes sense. Is there anything you really want me to try to dig out? You really want to know? |
Holly Irwin: | I want to know why they’re investing our pensions, money that we’ve worked hard for only to have companies utilize the water and shipping it overseas. |
Nate Halverson: | How does that make you feel? |
Holly Irwin: | It makes me angry. It’s unbelievable that the state can do that with our retirement fund. I’ve been fighting for years to keep the water here and it’s just frustrating. Everywhere you look around, you know that this water is being depleted and alfalfa’s being shipped overseas. |
Al Letson: | When we come back, Nate digs deeper into those pension fund investments and finds out they go way beyond Arizona. |
Kris Mayes: | It is bonkers, right? If it was a movie, you wouldn’t believe it. |
Al Letson: | Next on Reveal. From the Center for Investigative Reporting in PRX, this is Reveal. I’m Al Letson. Our reporter Nate Halverson is investigating an investment firm that’s been fueling the rise of a corporate mega farm in the parch western Arizona Desert. The International Farming Corporation is one of the largest private landowners in the rural desert community of La Paz and Nate discovered that one of IFC’s big investors is the state of Arizona’s own retirement system. School teachers, state workers, city and university employees. They’re all connected to the water crisis in La Paz. And Nate’s come to Phoenix to try and get answers. His first stop, the Arizona State Attorney General’s office. |
Kris Mayes: | Hello. |
Nate Halverson: | Hi. |
Kris Mayes: | How are you? You must be Nate. |
Nate Halverson: | Yeah, Kris, thanks so much for taking the time. |
Kris Mayes: | Nice to meet you. |
Nate Halverson: | I meet Kris Mayes at our office in Downtown Phoenix. The walls are lined with photos and mementos from her career as a newspaper reporter and attorney. In 2022 Mayes, a Democrat nearly one election is the state’s top law enforcement officer. Her campaign was about voting rights, public safety and water. |
Kris Mayes: | If there’s one thing, Arizona depends on its water. That’s why I was outraged when I heard that Arizona is giving our water to a Saudi Arabian owned farm to grow crops for export back to the Middle East for free. I’m Kris… |
Nate Halverson: | Mayes tells me, she used the mega farm owned by the Saudi Arabian company in her election campaign to highlight the absurdities of state water policies. |
Kris Mayes: | This is a story at bottom about the neglect and negligence of state government over a number of years. That’s why so many Arizonans say, “Are you kidding me? Why are we allowing a Saudi owned corporation to stick a straw on the ground and suck so much of our water out and send alfalfa back to Saudi Arabia and not charge them a dime for the water?” It is bonkers. If it was a movie, you wouldn’t believe it. |
Nate Halverson: | The water crisis and how it’s impacting rural communities touches Mayes at a personal level. |
Kris Mayes: | I grew up in western Arizona. My family and I would often go to a place called the Santa Maria River, which is barely a river anymore, because of drought and climate change, but I love western Arizona. |
Nate Halverson: | I pull out some of the documents I’ve uncovered about whose funding IFC. |
Kris Mayes: | Don’t know what you found, but knowing you you found something. |
Nate Halverson: | If you look here on page 77 of the report, I was able to definitively show that state pension fund money went into lands being leased by another Middle Eastern company that’s growing the alfalfa and shipping it overseas to China, the Middle East, anywhere presumably that’ll pay top dollar for it. |
Kris Mayes: | Is this the Emirati farm? Oh my God. |
Nate Halverson: | And so that is… |
Kris Mayes: | Can I have a pen? |
Nate Halverson: | Mayes squints her eyes and starts taking notes. This isn’t the Saudi owned farm that she campaigned against. This is the farm company from the United Arab Emirates. The Emirati farm is actually state pension fund money. |
Kris Mayes: | Its state pension fund money? |
Nate Halverson: | So all of your presumably pension funds… |
Kris Mayes: | Correct, were all in that pension fund, yes. As individuals, every state employee is… Yeah. |
Nate Halverson: | So the state employee money has gone into exporting the state’s water? |
Kris Mayes: | I think Arizonans are going to be outraged about this. It just exacerbates an already terrible situation and shows again, the abject failure of our government to protect our people and to protect our future as an Arizonan and as the Attorney General. This is obviously really shocking and hard to believe, but in a way maybe not given what’s gone on in the past. |
Nate Halverson: | I ask Mayes if it’s a conflict of interest that state employees who are in charge of managing the aquifers are also financially benefiting from letting IFC pump as much water as it wants in LA Paz County. |
Kris Mayes: | That’s a tough one. I think I’ll not comment on that. I really need to think it through and we really need to get to the bottom of it and obviously your reporting is going to kickstart that process. |
Nate Halverson: | Mayes tells me “The state can’t keep making these mistakes with its water.” |
Kris Mayes: | Water in Arizona is life. Our very survival as a state depends on our doing better when it comes to water. |
Nate Halverson: | I share with Mayes the doomsday scenario for La Paz County that I’d heard from Sarah Porter of the Governor’s Water Council. The farms are there, there’s nothing we can do about it. And the people who live out there, yes, they’re going to lose their wells and their home value because there’s no value in their home once they lose their wells. And that’s what it is. |
Kris Mayes: | I’m sorry. No, that’s not the case. In many cases, these communities well predate these farms. As a state we have to act with urgency because people are actively being harmed. There are small farmers and cattle ranchers whose wells have gone dry. There’s a trailer park that apparently has had its well go dry and all because of the deep water farming that’s going on in this area and that’s just not okay. |
Nate Halverson: | What can you do about it as Attorney General? |
Kris Mayes: | Well, I’m attacking it from pretty much every angle that I can within the boundaries of my authority. |
Nate Halverson: | Mayes has tried to stop the Saudi owned farm from expanding, but so far she’s only managed to revoke two well permits because of “Improper paperwork.” She’s also called on the state’s water agency to fulfill its mandate and assess how much water is left in rural aquifers. They still haven’t done it. You know Holly Irwin, the County Supervisor? |
Kris Mayes: | Yes, very well. Yes. |
Nate Halverson: | Holly’s been asking for that hydrologic study for eight years since the Saudi story came out. |
Kris Mayes: | Yeah. It is outrageous. It is begging for a hydrological study. This is one of the greatest scandals in the history of Arizona. |
Nate Halverson: | Mayes says lawmakers need to pass legislation to reform the state’s water laws and if they don’t, she’s even proposing going around them. |
Kris Mayes: | We have an obligation to protect all Arizonans, whether it’s a ballot initiative in the next year or two or it’s a lawsuit by me, we are going to get this done. |
Holly Irwin: | It doesn’t matter what you are, you should be able to work the issue and leave the politics behind you and get to some solutions. |
Nate Halverson: | Holly Irwin, the Republican County Supervisor from La Paz, has forged close ties with Kris Mayes and other powerful Democrats. Mayes calls her the Erin Brockovich of water in Arizona. That growing bipartisanship gives Holly some hope that her desert community can survive. |
Holly Irwin: | It’s an emotional rollercoaster. Some days you want to give up. Some days I cry and just to turn around and to get up and fight another day. I hate being told no. That’s one of my biggest things is, I hate being told there’s no solution. |
Nate Halverson: | I want to talk to the executives at the International Farming Corporation to ask them about what’s happening in La Paz because the company’s trademark pledge is to “Leave the land better than we found it.” And that’s not what I’m hearing is happening from the Goodman’s or from Holly or from the Attorney General. So I call IFC executives, leave them messages and emails. Eventually their PR firm reaches out. Yeah. Hi Jenna. This is Nate Halverson with Reveal. I’m out here in Arizona and I’m working on a story. We speak for five minutes and she says she’ll get back to me. A few days later I get the answer, executives won’t talk to me. Instead, the rep sends me an email saying that “IFC complies with state water laws, uses advanced irrigation systems and is committed to the long-term success of the local agricultural communities.” And the statement acknowledged a need to balance water availability with demand. Next, I reach out to the Arizona State Retirement System. I request an interview with executive director Paul Matson. I even go to his offices in Phoenix. Hey. |
Speaker 25: | Hello. |
Nate Halverson: | Good morning. |
Speaker 25: | How can I help you? |
Nate Halverson: | I’m a journalist with the Center for Investigative Reporting and I’ve been emailing with Paul Matson… Again, no interview. One of the things I wanted to ask was whether the State Retirement System considers the impact of their investments on rural communities like La Paz. A spokesperson did send me an email that boils down to this. Arizona’s Retirement System has a mandate of “maximizing returns” within prudent risk and this particular investment was an alternative to the stock market that they say would perform well even during high inflation. The retirement system wouldn’t say how much it made off the fund due to “Confidentiality provisions,” but it did say IFC was cashing out the fund and within a year the state’s investment would be down to zero. |
Even without interviews there are other ways to get insights into IFC. I get my hands on an IFC prospectus, a highly detailed document intended for its investors and in it IFC spells out its vision. Company executives see water as essential to making money. As water gets more scarce in places like Southern California and Arizona, they say “Controlling those limited supplies will drive profits.” It’s almost like the crisis the west is going through, the heat waves, the droughts, the falling level of the Colorado River. They’re almost like selling points to investors. Opportunities for making a profit. And I don’t have to go far to find other places where IFC bought up land. | |
This past spring I drove west along Interstate 10 to where the sparkling emerald green Colorado River narrows. A bridge takes me across the state line and into another desert town Blythe, California. 150 years ago, Blythe hit the jackpot when it comes to water rights. In 1877 it was the first place in the US to be granted a legal right to Colorado River water. And because of that, it’s at the front of the line so that before LA or Phoenix get their water, Blythe takes all it wants. This teeny town gets more water than the entire state of Nevada. And just like in La Paz, big farming investors have moved in. About 10 years ago, IFC came here again backed by the State of Arizona’s Retirement Fund. We’re pulling up and this looks just like Arizona. | |
This hay is stacked so tall that if they collapsed, I would 100% die. The hay is probably two stories tall. Just before I got here, IFC sold this land to another investment firm. This one from New York. IFC is also planning to sell their property in La Paz and had it listed for three times what they paid for it. This is their model for making money. They buy the land, rent it to a farming company for several years and then sell. If all goes well, the retirement fund gets a good payout. IFC moves on. The next company takes over and in this case continues to grow hay, lots of hay. This time instead of with groundwater, they’re growing it with Colorado River water, which has wound its way all the way down from the Rocky Mountains through the Grand Canyon, through the desert to get here. | |
Flocks of Starlings are roosting on a giant tree. The land around me is flat with green squares of alfalfa criss-crossed by narrow dirt roads. Alfalfa’s bringing in big bucks. And a lot of the hay in this area is for export. As I sit here and stare at this effectively virtual water, I know that someone’s going to come and start stacking it up onto an 18-wheeler. I’ve seen so many 18-wheelers packed with hay, which is then going to slowly make its way halfway around the world to places where water has also become a huge issue. This global grab for water driven by countries like Saudi Arabia and the United Arab Emirates is now being funded by pension funds across the US, not just Arizona’s. It’s retirement money for New York City teachers, union workers from California and Michigan, even Carnegie Hall, all invested in land deals here in the arid West. It’s big business so long as there’s water. | |
Al Letson: | That was Reveals Nate Halverson. Our new documentary film, The Grab features more of Nate’s reporting on the scramble for food and water resources, not just in Arizona but around the globe. To find out more about the documentary, visit thegrabfilm.com. Michael Montgomery was the lead producer for this week’s show. He had help from Ike Sriskandarajah. Cynthia Rodriguez was the editor. Special thanks to Gabriela Cowperthwaite, JoeBill Munoz, Mallory Newman, Amanda Pike, David Ritsher, Emma Schwartz, Yin Wu [inaudible], Debora Souza Silva, Jonathan [inaudible], Davis [inaudible]. And to Impact Partners, Nikki Frick is our fact-checker. Victoria Baranetsky is our general counsel. Our production managers are the Wonder Twins, Zulema Cobb, and Steven, my brother from another Mother Rascon. Score and sound designed by the dynamic duo, Jay Breezy, Mr. Jim Briggs and Fernando, my man yo Arruda. Our post-production team this week also includes Claire C-note Mullen. Our CEO is Robert Rosenthal. |
Our COO is Maria Feldman. Our interim executive producers are Taki Telonidis and Brett Myers. Our theme music is by [inaudible] Lightning. Support for Reveals provided by the Reva and David Logan Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Robert Wood Johnson Foundation, the Park Foundation, and the Hellman Foundation. Reveal is the co-production of the Center for Investigative Reporting and PRX. I’m Al Letson, and remember there is always more to the story. |