Farming subsidies a ‘drain on water resources’

Government subsidies in rich countries are discouraging farmers from using water efficiently by reducing the costs of water, according to an OECD report.

Agriculture is the highest user of water in OECD countries (the 30 rich countries in the Organisation for Economic Co-operation and Development), and is becoming ever thirstier as more and more land needs irrigation in warming climate, the report says.

Subsidies for irrigation and lower water charges for farmers are giving them the wrong signals and encouraging inefficient water use by artificially reducing costs.

And while governments are adjusting policy to increasing water scarcity, farmers are getting a conflicting message due to a lack of coordination between agricultural, environmental and water policies, says the report, Water and Agriculture: Sustainability, Markets and Policies.

OECD countries include France with its sky-high farming subsidies and Australia, the world’s driest continent, in the grip of its worst drought for a century.

For all countries, “the major challenge for the sustainable use of water resources in agriculture is to manage community expectations to meet social and environmental aspirations, while ensuring that food and fibre is produced competitively and profitably,” the report states.

Irrigated farming, which accounts for a large and growing share of agricultural production, is an increasingly contributing to water overuse as droughts become more frequent and severe in a warming climate. It is also more energy-intensive than other farming practices.

The overexploitation of water in farming is causing rivers to dry up, aquifers to lose the ability to recharge themselves, and pitting the interests of farmers against those of water-dependent wildlife, the report said.

The OECD also called for more policies aimed at reducing water pollution from fertilisers, pesticides and livestock farming. Agriculture has also been slower than other sectors in tackling the water pollution it is responsible for, while public concern about the effects of farming on water quality has gone up.

These problems are aggravated by subsidies for water and energy use by farmers, leading to less resource-efficient practices, the OECD said.

It also recommended market-based tools like water trading and nutrient trading as ways of making water management more efficient and flexible.

Other recommendations made in the report, which was produced by a range of agricultural, environmental and water industry actors, include:

· Better coordination between agricultural, environmental and water policies

· More research into how farming affects water resources

· More clarity on property rights allowing water withdrawal and discharge

· Clearer division of responsibilities in water management

· More participation in integrated water management policy from farmers

The report is available from the OECD website.

Goska Romanowicz

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