The Food Journal and Food, Nutrition & Science

An alliance between The Lempert Report and The Center for Food Integrity

Water

Water

The Food Journal

February 12, 2015

Water, water everywhere and not a drop to drink. From the California drought to the fight for water rights in developing nations, we are in the midst of a growing global water crisis. 

The World Wildlife Fund (WWF) in its Living Waters report shows us that agriculture is, by far, the biggest user of water. What we eat and wear requires much more water than what we drink. You would be surprised at the amount of water it takes to produce some of the food and beverages we consume and the clothing articles that we wear everyday! Thinking about the amount of water it takes to make or grow products or our food is called the water footprint.

“Virtual water” studies take this a step further. In these studies researchers express the imports and exports of products in a different way. Rather than looking at the economic value bought or sold they convert all the products into their “water equivalents.” The largest water exporters are the U.S., Canada, Thailand and Argentina. Those importing the most water are Sri Lanka, Japan, The Netherlands, Korea and China.  

WWF produces another report that adds yet another dimension for us because it shows us how many planet earths we are using to support our current, collective lifestyles. In 2008 we were, as a collective humanity, using 1.3 worlds. We were using 30 percent more of the world’s resources than were being replenished. By 2030, if the world continues to adopt more of a “western” lifestyle, we will need 4.5 earths to supply our needs. We will need to produce as much food in the next 30 years as has been produced in the past 10,000 years.

Today agriculture uses 70 percent of the available water while industrial uses and households use 20 percent and 10 percent respectively. At the present time, without trying to address the growing future needs for water, 2 billion people are impacted by water shortages around the world.  

Ninety-seven percent of our water is salty. Seventy percent of what remains is frozen so we really only have about .75 percent to use for our needs. People in different countries use very different amounts of water. In the U.S. each person uses about 150 gallons per day while the average Chinese citizen uses 23 gallons. As lifestyles and incomes change developing countries will demand and use more water. There will be more and more people who use more water than they did before.  

What Does Water Cost? 

Water costs also vary widely. In Buenos Aires water costs about one cent per 100 gallons while that would cost $3.03 in Copenhagen.  

According to a special report in May of 2010 the Economist, “Water, it is said, is the new oil: a resource long squandered, now growing expensive and soon to be overwhelmed by insatiable demand.” They went on to say, “As it is, wars are about to break out between countries squabbling over dams and rivers. If the apocalypse is still a little ways off, it is only because the four horseman and their steeds have stopped to search for something to drink.”

In fact, various studies show that there are countries that are buying or leasing land to produce food for their own food security. This is generally called “land grabs” or “seizing land”. The key point is that these counties lock up land for “captive” production. They are getting land and water to produce food – not for the open market, but to export to their own country. Often these deals occur in developing countries where land rights are questionable and poor farmers may be displaced. Most of the land leases are in Africa, Asia and Latin America.

On average, water resources are typically not priced to reflect their basic supply costs (the amount charged for water is often discounted relative to the operational and capital expenditure needed to treat and deliver the resource to end users), according to Richard Farnsworth, Business Media Relations Manager for SABMiller, a South African multinational brewing and beverage company headquartered in London, England, United Kingdom.

One can then look at the extent to which water charges capture the full costs of water, which would then extend to opportunity costs, economic externalities and environmental externalities. Even further down this continuum is the subject of the value of water, which incorporates a number of more intangible concepts such as the value of return flows, intrinsic values, and more,” says Farnsworth.

Dr. Nick Brozovic, Director of Policy for the Robert B. Daugherty Water for Food Institute at the University of Nebraska says that industrial and residential users generally pay for water, and those prices are set through a regulatory process and related to the costs of the utility supplying the water. For agricultural water users, on the other hand, there is enormous variability in the price paid. Many water rights have no ‘price’ associated with them, though the water users incur costs to pump water out of the river or ground. (Read our full interview with Dr. Brozovic under Interview and Commentaries.)

“For surface water users, such costs are modest, but for farmers pumping water from hundreds of feet below ground the pumping costs can be very large. Similarly, the costs of drilling a new well are significant. Finally, when we look at water markets, spot and permanent prices of water vary enormously over time and by geographic region. However, arguably those prices have been set ‘fairly’ as they have both a willing buyer and a willing seller,” says Brozovic.

How Is All This Regulated?

Up until a couple months ago, California was the only western state that lacked groundwater regulation. A new bill now requires the identification of local groundwater management agencies, the establishment of sustainability plans for most groundwater basins, and the establishment of measurable objectives and milestones for reaching sustainability. The impact of how this new bill with change the way farmers use water is not directly known at this date and the timeline for implementation is long, says Steve Patricio, president and CEO of Westside Produce.

Patricio points out that California’s agricultural use of groundwater is directly related to surface water availability and cost. Costs of all water are going through the roof and availability is very questionable due to alternative demands (urban, industrial, environmental and so on) and the regulatory climate. 

“The world we compete in is just being defined for both surface and groundwater. California agriculture will be driven by the highest and best use of water and the ability and desire of the agricultural community to compete and pay for any water that comes available, surface or ground. The controversy that exists is the distrust of government and the regulatory community as to the implantation of the rules,” he says. 

California surface water has been highly contentious since before California joined the United States of America. Many surface water rights were codified by Spanish land grants, Mexican land grants, Pueblo rights, and so on, and these rights were acknowledged and confirmed and negotiated by all parties prior to California agreeing to become a state. For the first 50 plus years these “prior rights,” along with additional California appropriated rights, were negotiated, debated and fought over to the point that the California state government and the Federal government agreed to a senior water rights doctrine in which those rights would have preference.

“We spent the next 100 years still fighting and in fact trying to reopen all of the prior agreements and reallocating these senior rights. In essence, for 150 plus years we have fought over the surface water we can see. How is fighting over what we cannot see underground going to be any better? You can’t regulate what you can’t measure,” says Patricio.

Brozovic adds, “There’s a lot of disagreement about how to manage groundwater, and even whether any management is needed, even in areas with rapid water table declines. My own opinion is that one of the must-haves for useful and effective groundwater management is local governance that includes the water users affected by the rules. Here in Nebraska, we have a system of local districts to manage groundwater. These districts operate quite autonomously through elected boards, are funded through local taxes, and have strong powers to develop rules to deal with local problems. Some of the districts have successfully introduced metering on all irrigation wells within their district, together with volumetric pumping restrictions. Around the U.S., there are several other states with similar local groundwater districts and with various levels of autonomy and power.”

What Role Does Industry Play?

Retailers are the primary source of information in our communities about food. As pillars of the community and trusted information sources understanding the future demands about water and other resources that influence the price, availability and sourcing of food is important to retailers and customers, alike. Resource availability and the use of agricultural improvements will impact our future supply chains.

By informing consumers and helping us understand the need for efficient water use to produce our food and fiber retailers help us understand the issue and help us understand and support farming practices that produce more per drop of water! Knowing how much water it takes to produce our food and fiber may also encourage us all to decrease food waste and secure a more secure and abundant future food supply for us all.

Manufacturers have a large role to play, too. Working with WWF, SABMiller identified its key growing regions by crop and have undertaken a high-level water stress vulnerability assessment. Based on these finding they have then undertaken further third party “deep dive” hydrological assessments in growing regions facing water stress in order to get an accurate understanding on what the key risks are. This then enables them to tailor an approach that is appropriate to the scale and nature of the risk. 

“SABMiller is in the process of rolling out its group water risk assessment process. Through this process we undertake detailed hydrological water risk assessments for our facilities in order to understand key vulnerabilities in the watershed they are located in. This helps inform our facilities of potential risks and allows us to develop appropriate action plans, in collaboration with stakeholders, to mitigate these risks,” says Farnsworth. “Ultimately we recognize the importance and key role that water has in supporting not only sound economic development but also social development – and water stress is what holds back this prosperity and growth. Tackling water stress collectively can release the untapped prosperity at every level, from rural livelihoods, through to company growth and for entire national economies.”

What Role Do Consumers Play?

Water stress is a shared risk that requires a shared response, continues Farnsworth. From their experience in working in partnerships with local stakeholders in water stressed areas, Farnsworth says it is clear that everyone needs to change the way they think about and consume water – since none of us can solve the water stresses we all face, alone. 

“We need to change in the way that we, as society, think about and manage water resources. This by default requires everyone to make a change,” says Farnsworth.

Industry certainly has a very important role to play in reducing water consumption in water stressed areas along with agriculture, another significant water user. However, consumers should also be encouraged to play a role. Also, Brozovic says we have to start with an understanding that almost all water issues are hyper-localized.

“You have to understand at a local level who’s using water, what they’re doing with it, and why, before you can start thinking about policy change. That said, in many of the places that I’ve worked around the world, there is a desire by the people who use water to conserve it for future generations. This gives me hope that policies can be put in place that can make a meaningful difference,” says Brozovic.

Interview on Water and Policy with Dr. Nick Brozovic: Director of Policy, Robert B. Daugherty Water for Food Institute at the University of Nebraska, January 2015

How do you rank water on the spectrum of environmental issues related to agriculture?

I’d certainly put water very near the top! A World Economic Forum survey recently ranked water crises as the number one societal risk over the next ten years. There are a number of important environmental issues around water and agriculture, related to both water quality and water quantity. Many of these issues are long-term, and addressing them also takes a long time, but public awareness tends to spike around specific events such as droughts or algal blooms. Because water is important to so many high-value agricultural products, as well as for the food industry, there is a lot of concern among farmers, industry, and the public, about how water is managed. Needless to say, there’s a lot of disagreement, too!

While some countries are discovering significant groundwater reserves, others (like the USA) are depleting theirs. We know we need to develop new underground freshwater resources but how do we avoid any negative impacts on people and nature in the long term? And how does policy on water affect this process?

The rate at which groundwater reserves are being pumped worldwide is of enormous concern, and there is a long list of potential negative impacts on people and nature, including ground subsidence, water quality issues, and decreased stream flows. But it’s also important to note that even in the U.S., the picture is pretty complicated. In some regions, there has been rapid decline in groundwater levels. Parts of California or Texas stand out. At the same time, there are other parts where water levels have been stable over many decades, despite extensive pumping. An example would be parts of the High Plains Aquifer in Nebraska. The USGS recently put out a very nice study that highlights the variability (you can see a write up we did on this topic at the Daugherty Water for Food Institute at http://bit.ly/HPaquifer).

Policies to manage groundwater effectively have been very hard to develop. In the U.S., where there are policies, they are set at a state or local level. Unlike surface water systems, where the government typically operates the delivery infrastructure, groundwater pumping and delivery is often controlled entirely by the people and companies using the water. There are millions of wells in the U.S., and many times that worldwide. It’s actually quite hard even to know who has pumps, and how much they’re pumping.

In terms of policies, how to manage groundwater is an area of active debate. One reason for this is that in many parts of the world, including much of the U.S., there are no policies in place to manage groundwater. Not only that, but even when there are rules in place in theory, in practice there may not be much happening on the ground to administer rules. 

There’s a lot of disagreement about how to manage groundwater, and even whether any management is needed, even in areas with rapid water table declines. My own opinion is that one of the must-haves for useful and effective groundwater management is local governance that includes the water users affected by the rules. Here in Nebraska, we have a system of local districts to manage groundwater. These districts operate quite autonomously through elected boards, are funded through local taxes, and have strong powers to develop rules to deal with local problems. Some of the districts have successfully introduced metering on all irrigation wells within their district, together with volumetric pumping restrictions. Around the U.S., there are several other states with similar local groundwater districts, and with various levels of autonomy and power.

How profound is (and will be) the effect of water scarcity on food and energy security?

As we’re becoming increasingly aware, food, energy, and water are tightly interlinked. Droughts like the one we’ve seen in California recently strain the linkages enormously. If we have periods of extended drought, there will be large impacts on water scarcity that will have profound impacts on food and energy security.

Is water as a resource priced fairly?

This depends who you ask. Industrial and residential users generally pay for water, and those prices are set through a regulatory process and related to the costs of the utility supplying the water. For agricultural water users, there is enormous variability in the price paid. Many water rights have no ‘price’ associated with them, though the water users incur costs to pump water out of the river or ground. For surface water users, such costs are modest, but for farmers pumping water from hundreds of feet below ground the pumping costs can be very large. Similarly, the costs of drilling a new well are significant. Finally, when we look at water markets, spot and permanent prices of water vary enormously over time and by geographic region. However, arguably those prices have been set ‘fairly’ as they have both a willing buyer and a willing seller.

Up until a couple months ago, California was the only western state that lacked groundwater regulation. What do you find to be the most important issue relating to property rights and water right now?

There is a large difference between committing to groundwater regulation and implementing it. California doesn’t have meaningful groundwater regulation across the entire state yet, though some individual areas within the state already have it. California has really just committed to a process that will provide management at a point that is years in the future, if the process is followed correctly.

Property rights around water also vary enormously from state to state, from user to user, and between surface water and groundwater. In some cases, water rights don’t belong to the users but to the state, and the users simply have a right to use the water the way they have in the past. In my experience, there’s often a lot of resistance to quantifying property rights and measuring water use, because these things are seen as first steps to restrictions. On the other hand, with strong property rights comes a degree of certainty that should be appealing in the longer term. Strong property rights for water should also translate into higher land prices for land parcels and owners that have those rights. Similarly, new allocation systems such as water markets that can help with drought management for farmers, and increase water reliability for cities and industries, rely on strong property rights.

What kind of policy changes do we need to help better conserve water?

This is a question with enormous scope! I think I’d start with an understanding that almost all water issues are hyper-localized: you have to understand at a local level who’s using water, what they’re doing with it, and why, before you can start thinking about policy change. That said, in many of the places that I’ve worked around the world, there is a desire by the people who use water to conserve it for future generations. This gives me hope that policies can be put in place that can make a meaningful difference.