Freshwater Crisis, Farming Opportunity

by futurist Richard Worzel, C.F.A.

The following article was part of a presentation made to the California Farm Bureau Federation in December of 2011.

The looming shortage of freshwater is not unique to farmers here – it’s rapidly going global. Many farmers will choose to see the problems ahead with water as a crisis, but it could, instead, become a significant opportunity if they play it properly. Let’s start with the fundamentals of the emerging crisis.

There’s no shortage of water on Earth: three-quarters of the Earth’s surface is covered with it. However only 2½% of Earth’s water is fresh water, and most of that is not where it’s needed, or available when it’s needed. In fact, of that 2½%, more than 2% is frozen, mostly locked up in the Arctic regions (for the moment). That leaves less than ½ of 1% of usable freshwater, the vast majority of it is contained in aquifers. Unfortunately, many aquifers are largely non-renewable resources, being, in effect, fossil water laid down over periods of hundreds, thousands, or millions of years, but which we are depleting in periods of decades. When they run dry, problems will multiply very quickly.

Now, given where we are right now, there are seven major factors contributing to coming water shortages, and they will have differing levels of effects on farmers:

• Population growth here at home will produce modest, but steadily increasing pressure on supplies. Meanwhile, population growth elsewhere, especially in places like India and other developing countries, will be a major source of freshwater difficulties. By the third quarter of this century, it’s estimated that there will be another 3 billion human beings, all of whom will need water. Yet, short of technological breakthroughs (which will come, but not cheaply, and not soon), there are no major new sources of water available.

• Increases in the standard of living will be largely neutral here (unfortunately), but another major cause of stress on water sources in the developing world.

• Agricultural intensification (especially using irrigation in dry areas) will moderately increase water shortages here, but again will be a big cause of water shortages elsewhere as almost 70% of the world’s water is used in agriculture.

• Urbanization will be one of the major causes of shortages of water everywhere as rapidly growing cities ratchet up the demand for an increasing share of static or dwindling water supplies.

• Pollution will be pretty well neutral here, which means it’s not going to get much worse even if it doesn’t get much better as we’ve already done most of our polluting. The same isn’t true in the developing world, where farmers are looking to increase yields by using more fertilizers, and the run-off will contaminate water sources and aquifers.

• Depletion of aquifers (fossil water), which can destroy an aquifer, or at least reduce its long-term capacity, will be a major issue here and everywhere else, particularly as much of the damage to aquifers comes as the levels get low. Worse, predictable as aquifer depletion may be, virtually no government, agency, or voting public ever thinks that the aquifer they’ve exploited for years will ever run dry – until it does. They are then caught by surprise, and completely unprepared. This is one of the most surprising things about the coming water shortages – there should be no surprise at all, but there inevitably is.

• Climate change (which changes where and when water is available) will also be a major issue. While people can argue over whether humanity’s at fault for climate change or not, there’s very little real argument left about whether climate is changing, and farmers are among the first to notice and feel the changes. Moreover, the changes that do occur are more likely to be negative than positive.
For these, and other reasons, the shortage of water is going to force itself on global consciousness. You’ve all probably heard water referred to as “the new oil”, but I say that vastly underestimates the problem. There are substitutes for oil, but there is no substitute for water. Water shortages are going to be felt to varying degrees, but at a rapidly increasing rate all over the world, and are going to affect what farmers can grow, where industries can flourish, and how fast economies can expand.

Likewise, you’ve all heard about carbon neutrality, now you’re going to start hearing about water neutrality. For example, Coke & Pepsi were required by the Indian government to put 1 liter of water back for every liter they withdrew from community sources. If you think about what they sell, you realize how difficult this was for them to accomplish this – but they did. So water neutrality and steadily improving water management is something you should be thinking about, even if you’re already ahead of everyone else on this issue, as water continues to grow scarcer.

Meanwhile, political conflicts are going to continue to grow between user groups (e.g., farmers vs. cities), states (Texas vs. New Mexico, for example) and national governments (especially the U.S. vs. Canada and Mexico). Perhaps the two coming conflicts that will get most attention here are the conflicts between cities and farmers, which are going to get steadily worse, and the conflict between water-rich Canada and water-seeking America.

 

Yet, while farmers here think they know about water scarcity, I think we’re just scratching the surface on this problem, and they would be well advised to look at ways of increasing their water productivity. As water scarcity becomes a worldwide issue, more and more attention will be focused on it, and its perceived value will continue to rise. This will cause more people, groups, and political bodies to try to grab more control over it. It will also attract attention from financial players, like sovereign funds and pension funds, who will start buying water sources to control and toll, which will further escalate the conflicts.

But there’s an upside, too: Those farmers that improve their water management practices can benefit from the water problems of other parts of the world through increased demand for the agricultural products they produce.

One of the big changes to come is that countries, like India, that were self-sufficient or even net exporters of food are becoming net importers simply because they don’t have enough water to grow what they need. This kind of importing of “virtual water” through crops will increase the opportunities for farmers who are proactive in learning how to manage water supplies even more carefully than they do now. I’m not suggesting this will be simple, but there are more water-efficient technologies out there that can help, like those from Israel, and forward-looking farmers should be actively seeking out new techniques, new technologies, and new, possibly GM crops that allow them to grow more with less water.

In summary, water shortages are inevitable, they are going to become increasingly high profile, and they offer real opportunities to those who can be proactive in managing supplies. You know that there will be problems with water, you know that agriculture is a big user of water, and you know that those who are prepared for a problem while their competitors are still struggling to catch up can prosper from difficulties.

So take the plunge – exploit the future of water.

© Copyright, IF Research, February 2012.