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David Kelly, Fondomonte’s general manager, said the company follows the same rules that govern farming operations throughout the state while going out of its way to save water and serve the community.

“All we ask is to be measured according to the same standards as every other farming leaseholder on state land,” he said in an email. “Fondomonte has developed Butler Valley to be one of the most efficient and highly productive farms in not only Arizona, but the entire Southwest. Our Butler Valley operation utilizes best-in-class irrigation technology and equipment with the oversight and diligence of an experienced management team.”

Fondomonte, he said, “should be heralded for its water efficiency.”

State officials now acknowledge that decades of farming and explosive growth have dangerously diminished Arizona’s water reserves. The rising scarcity has deepened rifts between urban and rural communities and turned Fondomonte into a political flash point. The company is hardly alone in using state-owned land to irrigate crops: Fondomonte holds four of the roughly 20 state agricultural leases across Arizona’s three major transport basins, where state law allows transfer of water to cities. But its foreign ownership and strict limits on water use in its home country have fueled outrage here.

Last month, the new governor, Democrat Katie Hobbs, unveiled a long-awaited study showing that groundwater in parts of the Phoenix area was insufficient to meet projected demand over the next century. Her administration also recently sought details about water use on state-owned land. Only after the state threatened to cancel Fondomonte’s leases last month did the company disclose how much it pumps annually in the Butler Valley, according to communications released as part of a public-records request. Its consumption is equivalent to that of a city of more than 50,000 people, experts said.

The governor’s aides are now preparing plans not to renew Fondomonte’s leases in the Butler Valley when they expire next year, according to a staff recommendation obtained by The Post. A decision has not been finalized. If Hobbs acts, a confrontation with the company could follow, with implications not just for foreign companies with interest in American natural resources but also for the future of agriculture as drought intensifies in the Southwest and cities clamor for rural water reserves.

The Saudi-owned farm has split the local community, where Holly Irwin, a La Paz County supervisor who has opposed Fondomonte’s presence for years, said that “foreign companies have come to take our water because they don’t have any left back home.”

But Fondomonte has unlikely allies, including a cattle rancher in the Butler Valley whose land abuts Fondomonte’s farm. Boyce Andersen said he generally is “an ‘America first’ type of person” but is now just as concerned about the valley’s water being “taken by Phoenix” instead of flowing to livestock and crops. He faulted Arizona, not the foreign-owned firm, for the grim trade-offs facing the state.

“Why did our government leadership allow this to happen?” he asked.

Fondomonte’s lush alfalfa fields represent a decades-old Saudi strategy.

An American engineer, Karl Twitchell, who cut his teeth in Arizona’s copper mines, served as an adviser to the first king of Saudi Arabia and led a U.S.-sponsored agricultural mission to the kingdom in 1942. That mission set in motion a years-long process of adapting desert farming methods honed in the American Southwest to similar conditions in Saudi Arabia.

Fondomonte’s parent company, Riyadh-based Almarai, was founded three decades later by a Saudi royal and businessman, Mohammed bin Saud Al Kabeer, and two Irish brothers. The food and beverage giant is still chaired by a member of the Saudi royal family. In 2011, it acquired Luxembourg-based Fondomonte, which was operating farms in Argentina at the time, capitalizing on rising global food demand.

The following year, the company incorporated Fondomonte Arizona and soon moved into La Paz County, one of the poorest and least-populated parts of the state. In 2014, it paid $47.5 million to purchase nearly 10,000 acres in Vicksburg, a town of about 500. In 2015, in the nearby Butler Valley, Fondomonte took over several agricultural leases, for the below-market rate of about $25 per acre. Those leases, totaling 3,500 acres of state land, will expire in February 2024 if not renewed.

Fondomonte also expanded to California, eventually purchasing more than 3,000 acres across the border from Arizona, near the town of Blythe. Its farming operation there is built on another precious water source, the Colorado River, a key artery for several states that governments have allowed to dwindle to dangerously low levels amid hotter, drier conditions and chronic overuse by farming regions in the Southwest.