Arizona farmers see booming tech industry as competition for water

PHOENIX — Arizona farmers struggling to grow crops because of drought conditions now have another challenge — tech companies that also rely on large amounts of water are expanding throughout the state.

“Big semiconductor plants, cloud servers, databases, warehouses — all of this coming in, it does create competition against agriculture,” said Chelsea McGuire, director of government relations for the Arizona Farm Bureau.

McGuire said the competition for water comes at a time when farmers are getting less water from the Central Arizona Project and other sources.

Historically low water levels from the Colorado River triggered the U.S. Bureau of Reclamation to announce last August that it would be reducing water allocations for some users who receive water through the CAP.

Farmers in Pinal County were among the hardest hit. In January, they started receiving about a third of the water supply that’s normally available to them.

“It’s kind of a literal drop in the bucket, but anything is going to help,” McGuire said, referring to the amount of water farmers are now getting through the CAP canals.

Water cutbacks have forced farmers to diversify or reduce the amount of crops they’re able to grow.

Some in Pinal County have had to cut back production by half. They now worry tech companies, including the semiconductor plants expanding in Arizona, will create competition for water use.

Chris Camacho, president and CEO of the Greater Phoenix Economic Council, disagrees. Instead, he believes water conservation efforts have made it possible for the agriculture and tech industries to coexist in Arizona.

“These new fab plants, most people think that they consume a lot of water,” Camacho said. “In reality, we’re still using less than 5% of our water allocation for these industrial users. And at the same time, they recycle and reuse and reinject into the aquifer over 90% of their process water used.”

He added these companies are a huge boost to Arizona’s economy.

The two massive semiconductor plants Intel is building on its Chandler campus and the plant that Taiwan Semiconductor Manufacturing Co. is building in north Phoenix, for example, collectively will generate up to $30 billion over the next few years, according to Camacho. They will also create between 5,000 and 10,000 jobs.

“These companies can choose anywhere around the world to locate these high-valued plants, and they’re creating high-wage jobs,” Camacho said. “At the end of the day, they’re creating a new tax base that helps diversify our economic base.”

McGuire said she understands the economic benefits these companies bring but emphasized the state has limited water resources. She added she worries about the future of Arizona’s $23 billion agriculture industry.

“We welcome any kind of economic development,” she stressed. “But let’s make sure that we’re not developing one sector of our economy at the expense of our food security.”

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