Agriculture Consumes 70 Percent of Total Freshwater in the World

The fact that nearly a billion people still lack access to clean drinking water today, and that 2.6 billion do not have basic sanitation infrastructure, is usually mentioned on World Water Day, March 22, which passed relatively unnoticed considering it is a resource that will be one of the central points of geopolitics in the future, just as energy is today.

While it is unlikely that wars will actually be fought over water, the increasing demand for water is confirmed by three OECD studies. Due to climate change and excessive consumption, by 2030, half of humanity will live in areas where water supply will be a major challenge. Households, industry, and agriculture will compete for water, leaving little for the maintenance of ecosystems and the natural world. Studies on various water-related scenarios assure that only by implementing proper pricing for water can a balance be achieved between water availability and its consumption, encouraging people to consume less and pollute less while investing more in water infrastructure.

Even now, in many countries, households and industry pay prices for consumed water that reflect the real costs of water supply and treatment, although tariffs vary significantly among different countries. The most expensive water is paid by Danes and other consumers in Western and Northern Europe, costing ten times more than, for example, Mexicans, partly due to the effect of environmental standards. In the past decade, the price of water has been increasingly determined by the share of costs related to wastewater, investments in environmentally friendly treatment methods, and wastewater disposal. In many countries, it is more expensive to dispose of dirty water than to bring clean water to households and other consumers.

For many countries, the challenge is to find the right balance between financial, environmental, and social demands when determining water pricing policies. In Hungary or Mexico, for example, low-income households allocate as much as four percent of their income for water costs. However, the main issue related to water in the future will be consumption in agriculture. This sector currently consumes more than households and industry combined, or over 70 percent of total freshwater in the world. With forecasts of doubling production by 2050, which should feed an increasing number of people on the planet, agriculture will need to focus on improving water consumption efficiency. Studies suggest that farmers should not only pay for the costs of water supply but also bear a ‘fair’ share of the capital costs of water infrastructure. This would not affect production itself, as has been shown in Australia, where the price of water for agriculture has risen so much that water consumption for irrigation has halved, yet production levels have not decreased. Subsidizing the price of water would only lead to waste and greater water pollution, suggests the OECD. (Davorka Zmijarević)