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Saudi Arabia, seeking foreign farmland to boost its food security, has bought 12,000 hectares of Argentine farmland just as the country is attempting to limit foreign farm ownership. Saudi Arabia's largest dairy company said Wednesday it is buying Argentine farm operator Fondomonte S.A. for $83 million to secure access to a supply of animal feed.

Almarai said the deal is in line with the Saudi Arabia’s policy of "securing supplies and conserving local resources." Saudi Arabia is winding down a 30-year-old programme of self-sufficiency in wheat which was said to be depleting valuable water reserves.

The deal also "forms part of Almarai's continuous efforts to improve our supply chain and ensure access to the highest quality feed", the group said.

While Alamarai is best known as a dairy group it also has large poultry operations.

The Foodomonte takeover "forms another step in Almarai's strategy of securing its supply of farm feed", the group said.

The move may have been precipitated by Argentina’s new “Land Law”. The law passed by Argentina’s Chamber of Deputies on December 16 seeks to limit land ownership by foreigners. The measure passed by a landslide and is expected to pass the Senate later this week. The legislation is based on a 2010 report from the FAO that suggests countries “find ways to ensure that foreign ownership of land does not have negative effects regarding food security, agricultural employment, and the development of family farming.” The law would limit individual foreign ownership of rural land to 2,500 acres per titleholder, and will limit land purchases by foreigners to 15 percent of all land in the country.

In June this year China's largest farming company, Heilongjiang Beidahuang Nongken Group, formed a joint venture with Argentina's Cresud SA to buy land and farm soybeans. Cresud is one of Argentina's top agriculture firms with control over more than 1 million hectares of farmland that produce grain, cattle and milk.

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