Thirsty Tapas: The Price of Agricultural Water Use

Rowan Lanning

In 1948 the Universal Declaration of Human Rights affirmed the right of everyone to adequate food. However it was not until late July of 2010 that the UN General Assembly recognized the human right of all humans to water, declaring the access to clean drinking water and sanitation as a human right. We can all agree today that the right to food and water should be a basic and universal one, but the right to water within the context of food and its production is a more complicated discussion.

Water as a rival and non excludable economic commodity provides goods in drinking and irrigation water, and services in both recreation and amenity as well as hydroelectric power that are utilized by individuals, industries, and agriculture. Yet the scope of imbalance in resource consumption is startling. Agriculture accounts for about 80% of the entire nation’s consumptive water use, as a major draw of both ground and surface water, and globally accounts for majority 70% but up to 90% of consumptive water use (where consumption refers to withdrawals net of returns flows and evaporation)

source: http://www.fao.org/docrep/007/y5582e/y5582e04.htm

Water is demanded by industrial and domestic sectors, but the agricultural sector is by far the main user of the natural resource. What’s worse, the agricultural sector often inefficiently manages and consumes their water resources to the point of high levels of waste, which has been encouraged by subsidized low charges for water use, or for low energy tariffs for pumping. Water is essential for agriculture whether animal farming or monoculture production. To produce 1kg of daily food for a person, about 2,000 to 5,000 Liters of water are required. To produce 1kg of beef requires 15,500 L of water, which is three times the water used for daily food consumption.

Water use for agricultural production is intrinsically tied to the environment it is present in. Both yield and use stem from bioregional factors like slope, climate, and soil type/permeability, and no matter the source, irrigation techniques and technology and their adoption remain a source of high curiosity in the field. A study from UC Berkeley analyzed the role of prices in agricultural water use with interesting implications for the design of water pricing and delivery policies in the states. This study revealed that in many areas of the US, water allocation is typically based on queuing systems, sets of laws defining property rights that dictate who has priority access to water, when and how water may be used, and how much water may be used, as opposed to standard markets. This queuing system tends to be a “first come first serve” basis as a use-it-or-lose-it system of water property rights, leading to high levels of inefficiency and inequity, which is described economically, through the following figure from the aforementioned study at Berkeley.

Screen Shot 2017-11-21 at 1.42.15 PM.png

If a unit of water provided to junior rights holders (those who do not receive enough water when scarcity exists) has a positive marginal variable product (MVP), queuing is inefficient since senior rights holders (those who DO receive enough water when scarcity exists) apply water to the point where their MVP will be equal to 0, as there’s no real incentive for senior rights holders to adopt modern technology since water is typically just diverted as needed according to a farmer or organization’s place in the hierarchical queue. The study suggested a move from queuing to markets, but there are additional problems implicated by shifting water resources to a market system for agricultural users, as private market, or for-profit companies that operate water systems for regions or communities will often end up operating as monopolies due to the high economies of scale, which has lead to pricing problems.

Thus, the issue of inefficient use of water use in food production typically falls on the irrigation technology and individual decisions of farmers and organizations. Since vegetable and fruit crops return more per dollar invested in irrigation water than monoculture field crops, farmers in countries with higher water stresses and increased irrigation costs may need to shift the variety of crops they grow. For example, in Israel, 1000 L of irrigated water produces $0.79 worth of groundnuts, but only $0.12 worth of wheat. There are also currently 263 transboundary river basins sharing water resources, resulting in an increase of agriculturally driven water conflicts globally from averaged 5 per year in the 1980s to 22 in 2000, the cost of which was an estimated $55 billion from 1990-1997. Now that’s an expensive bill for a bite to eat.

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