Organisation for Economic Cooperation & Development Sustainable Management of Water Resources and Quality in Agriculture: Policy Issues and Challenges Kevin Parris Trade and Agriculture Directorate, OECD, Paris, France Email: [email protected]Presentation to the Agricultural Economics and Social Sciences Seminar Series 2012, Global Challenges to Food Security, Lecture Hall 11, Wednesday 6 June 2012, 12:00 – 13:30, Universitat Hohenheim, Stuttgart‐Hohenheim, Germany www.oecd.org/ agriculture/water www.oecd.org/water
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Organisation for Economic Cooperation & Development Sustainable Management of Water Resources and Quality in Agriculture: Policy Issues and Challenges.
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Organisation for Economic Cooperation & Development
Sustainable Management of Water Resources and Quality in Agriculture:
Policy Issues and ChallengesKevin Parris
Trade and Agriculture Directorate, OECD, Paris, France Email: [email protected]
Presentation to the Agricultural Economics and Social Sciences Seminar Series 2012, Global Challenges to Food Security, Lecture Hall 11, Wednesday 6 June 2012, 12:00 – 13:30,
Membership has expanded over OECD’s 50 year history to embrace 34 countries and the European Union: AustraliaAustriaBelgiumCanadaChileCzech RepublicDenmark
Index 2004-06 Source: OECD Agricultural Outlook 2011
Did Donald Rumsfeld (former US Secretary of Defence )
have something important to say about climate change?
“There are known known's. These are things we know that we know.
There are known unknowns. That is to say, there are things that we know we don't know.
But there are also unknown unknowns. There are things we don't know we don't know.”
Climate change (CC), agriculture and water
Many OECD countries reporting growing incidence, severity and costs of floods and drought for agriculture, with implications for both water resources and quality
In response countries beginning to develop mitigation and adaptation strategies, for example:
improve water use efficiency and water storage;
alter farm practices and systems to adapt to climate change;
change management practices to slow water flows across farmland to protect urban areas
Increased incidence and severity of flooding could mobilise sediments, associated contaminants, and exacerbate agricultural water pollution
More severe droughts likely to increase water stress in areas of scarcity and may reduce pollutant dilution and lead to increasing toxicity problems
Overall task of achieving water policy objectives in agriculture likely to be more difficult under CC, but further research needed
Global challenges for agriculture & water resourcesKey drivers impacting water resource use by agriculture:
World water withdrawal projections +55% by 2050
World population from current 7 billion to 9 billion by 2050
Global food demand from 2000 baseline by +100% 2050
Dietary habits towards more meat and dairy products
Bioenergy production from agricultural feedstocks
Demand to meet environmental and social needs
Land and water constraints impacted by climate change
Limits and potential to improve water use productivity in agriculture
Major new irrigation infrastructure development difficult, because of financial and physical limits
Potential for agriculture to recycle wastewater, but desalinated water costly
High priority to improve irrigation productivity and water productivity of rain-fed systems
Productivity performance varies, partly reflecting different policy reform paths
Source: OECD Environmental Performance of Agriculture At a Glance 2012 forthcoming
Summary of cost recovery rates for water services to agriculture in OECD countries (c.2009)
100% recovery of Operation and Maintenance (O&M) and Capital Costs (CC):
Austria; Denmark; Finland; New Zealand; Sweden; United Kingdom
100% recovery of O&M Costs, but less than 100% recovery of CC:
Australia, Canada, France, Japan, United States Less than 100% recovery of O&M and CC:
Less than 100% recovery of O&M Costs, with CC fully supported:
Korea
Most OECD countries have embarked on water reform programmes by making greater use of water pricing
Great variation in farm water charges within and across countries, but cost recovery rates have been increasing
Recovery of O&M costs common, but recovery rates for capital costs poor, and other policies often used to cover env. costs
Higher water charges and reduced overall farm support has not led to reduced farm output or incomes, e.g. Australia, Israel
Groundwater policies usually rely on licences and other regulatory measures, water pricing rare & illegal pumping occurs
Using water pricing and market incentives to improve water use efficiency in agriculture
Policy messages toward improving the efficiency of water resource use in agriculture
Ensure charges for water supplied to agriculture at least cover full supply costs (operation, maintenance and capital costs) but use social policies to support poorest farmers
Address financing issues related to upgrading and ageing irrigation infrastructures in agriculture
Remove perverse incentives that impede achieving more efficient water use, notably removal of production related agricultural support, but reforms are lowering and changing composition of support
Encourage uptake of technologies (drip irrigation), farm management practices (conservation tillage) and establishing knowledge and information systems, especially to enhance resilience to climate change
Address knowledge and information deficiencies to better guide decision making from farm to national policy scale
Challenges for agriculture and policy makers in addressing water quality issues
Agriculture generates externalities for which there are no markets, both positive (wetland conservation) and negative (water pollution)
Challenge for agriculture is to meet growing demand for food, feed, fibre and fuel, while reducing (encouraging) external impacts of production
Improving water quality a top environmental concern in public surveys, with growing focus on agricultural diffuse and point source water pollution
Designing policies to control diffuse pollution is complex because:
Low pollution concentrations take diffuse pathways into water system
Cumulative effects on water systems from pollution across large areas
Highly variable in space and time and commonly costly to monitor
Frequently require cooperation from sub-national to international scale
Projected agricultural nutrient surpluses to 2050
0
20
40
60
80
100
120
140
160
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Rest o
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OECD BRIICS RoW
kg of
N / ha
/ year
1970 2000 2030 2050
-10
0
10
20
30
40
50
60
70
80
90
N Ame
rica Europ
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an and
Korea
Ocean
ia Brazil
Russi
a India
China
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esia
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rica *
Middle
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Ukrain
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Rest L
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Rest o
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OECD BRIICS RoW
kg of
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1970 2000 2030 2050
PhosphorusNitrogen
OECD OECDBRIIC BRIICRegions Regions
Source: OECD Environmental Outlook
The costs of agricultural water pollution are high for taxpayers, water utilities and consumers
Taxpayers across OECD countries pay € billions annually to assist farmers in reducing water pollution
Water treatment utilities and consumers incur costs of € billions annually, to treat water to remove agricultural and other pollutants
Other water users also incur costs from water pollution, such as eutrophication of water bodies imposing costs on:
Fisheries
Recreational uses (e.g. swimming)
Ecosystems
National monetary costs of water pollution (not all due to agriculture)
Country(year of study)
Type of water quality impact
Monetary Cost and % share of Agriculture Gross Value Added
(GVA)
Cost in Euro Million % share of GVA
France(2010)
Water treatment and eutrophication of surface and coastal waters
€610 – €2200 2% – 8%
Germany(2005)
Water degradation costs €370 – €980 2% – 6%
Netherlands(2010)
Total damage from nitrate and phosphorus
€403 – €754 2% – 3%
Sweden(2009)
Eutrophication:• Coastal• Baltic Sea
€860€492 - €1466 } 1% - 3%
United Kingdom(2007)
Total agricultural damage €340 3%
United States(2009)
Freshwater eutrophication €3050 1%
Key OECD policy messages toward sustainable water quality (WQ) management in agriculture - 1
Use a mix of policy instruments to address water pollution: Each policy instrument has strengthens/weaknesses Growing interest in using innovative policy tools and market approaches (e.g.
water quality trading in Canada, US, payments to farmers by Vittel France and South West Water UK
Key focus of many recent initiatives is in changing farmer behaviour, rather than emphasis just on taxes/subsidies
Enforce compliance with existing WQ regulations, by improving on-farm inspection and imposing penalties more effectively, e.g. currently limited sanctions for not implementing EU Nitrates Directive
Remove perverse support in agriculture to improve WQ, with 29% of total EU producer support in 2008-10 providing incentives to produce and/or use inputs, but share was 62% in 1995-97
Take into account the polluter-pays-principle, but can be difficult with diffuse source agriculture water pollution
19
Key OECD policy messages toward sustainable water quality (WQ) management in agriculture - 2
Set realistic WQ targets for agriculture, that can reveal progress for a given programme and are easily measurable and have a clear time frame
Improve the spatial targeting of policies, to areas where water pollution is most acute, but can be difficult if policy measure is voluntary, e.g. EU Nitrates Directive operates uniformly when sub-catchment targeting optimal
Assess the cost effectiveness of different policy options, to enable informed discussion about production/environment trade-offs in achieving water quality benefits
Take a holistic approach to agricultural pollution policies, some policies may lead to environmental conflicts (e.g. ammonia/nitrate) others to co-benefits (e.g. riparian buffers)
Establish information systems, as farmers, water managers and policy makers need more information for a given policy change of the physical impacts, costs, and farmer reactions
Summary of key policy responses to address agricultural water management challenges
Create incentives, to signal value of water & pollution costs-- water pricing, cost recovery, enforcing regulations, water trading --
Ensure coherence of water, energy and agricultural policies-- unravel policy and institutional conflicts, develop stakeholder vision --
Invest, in improved water management and infrastructure -- farm practices and systems, water storage, manure storage --