Nader Noureddin* believes that appropriate pricing of water is critical for sustainability In the next 50 years, water will become more precious than petroleum. It may cover two-thirds of the earth's surface, but humans can only consume a fraction of that. Only 2.5 per cent of the world water is not saline. And only one third of that proportion is accessible. That means humans need to survive on less than 0.08 per cent of all the earth's water. Yet over the next two decades, our usage is estimated to increase by about 40 per cent. According to the United Nations, which last week marked its 16th annual World Water Day, the human right to water entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic use. An adequate amount of safe water is necessary to prevent death from dehydration, reduce the risk of water-related diseases and provide for consumption, cooking, personal and domestic hygienic requirements. Accordingly, the right to water does not mean that water must be free, but it does mean it should be affordable for all. Note too that the right to water does not mean that countries are obliged to supply water to neighbouring countries lacking the resource. Right now, tragedies are taking place as a result of increasing water scarcity. World Health Organisation and UNICEF figures for 2008 show that about 1.1 billion people suffer from a lack of access to water, while 2.6 billion lack access to adequate sanitation, and about 5,000 children under the age of five die every day due to preventable diseases such as diarrhoea. Their deaths are directly linked to a lack of clean water and sanitation. Every individual has a right to a minimum allocation of about 20 litres of water per day, regardless of geographic location or social status. A recent report by the World Water Council published at the end of 2008, pointed that while the world's population tripled in the 20th century, the use of renewable water resources has grown six-fold. Within the next 50 years, the world's population will increase by another 40 to 50 per cent from 6.2 billion to reach nine billion. This population growth -- coupled with intensified industrialisation and urbanisation -- will result in increased demand for water, and will have serious consequences on the environment. Agriculture is the greatest consumer of water, using as much as 66 per cent and up to 90 per cent in arid regions. The remaining 34 per cent is being used in households, which account for 10 per cent, industry, 20 per cent, and evaporation from reservoirs, accounting for four per cent. The future state of water management for agriculture will be determined by a growing scarcity of water, competition, and growing concerns about environmental impact. In the coming decades feeding the world's growing population and satisfying its need for raw materials will call for increased output from both irrigated and rain-fed agriculture. Some of this will come from an increase in the irrigated acreage, though the scope for this will be much more limited than in the past. The larger proportion of extra output will have to come from a more efficient use of water resources already being exploited, as epitomised in the slogan, "More crop per drop." Agriculture can also expect growing competition from other sectors for water consumption, particularly from the encroachment of growing cities onto farmland. "More crop per drop" implies the reduction of losses from the transport and distribution of irrigation water, and its more efficient application to crops. The more efficient use of water in rain-fed systems will have a major part to play, in some cases supplemented by irrigation water. Communities and households will need to capture more water through catchments for local productive purposes. These developments call for major changes in the way in which water is used in agriculture and rural activities, and have major cost and financing implications. It has been estimated that the annual costs of managing water resources to meet the Millennium Development Goals (MDGs) hunger targets could lie in the region of $45 to $50 billion over the next 10 years, rising to $65 to $70 billion thereafter. These costs relate to conventional irrigation, upgrading rain-fed systems, and complementary investments in soil and water management, research, extension, and so on. Investment is needed in the rehabilitation and adaptation of existing infrastructure as well as the creation of new structures and systems. Some investment, especially in major infrastructure, will fall to governments and public agencies. Much however, will be undertaken by private farmers at all scales and of different types. Financing of all kinds will no doubt be conditional on supportive policies, reformed institutions, sound projects and creditworthy borrowers. In order to attract the required amount and types of funds, the sector as a whole will need drastic reform. One of the fundamental obstacles the sector faces in attracting finance is the universal fact that irrigation water provided from public schemes is either free or massively under-priced. Free or cheap water for farmers is an ingrained habit, which in many countries is seen as a necessary part of national policies for cheap food and food self-sufficiency. Such policies have a strong emotional and political appeal, but the use of cheap water in their pursuit may be unsustainable and could produce distortions. In most cases irrigation water prices are well below the cost even of operating and maintaining the infrastructure, and make no contribution to recovering capital costs. This does not discourage farmers from investing in facilities for their own private use, but does explain why there has been so little commercial finance for the supply of irrigation water for sale. Many public irrigation agencies are effectively bankrupt and have difficulty attracting finance without large public subsidies. In this situation not enough new and replacement investment takes place and the infrastructure is condemned to a lingering death. As things stand, financing prospects depend on forces outside the control of farmers and their national governments. The prices of internationally- traded crops are set in world markets, and even domestically-consumed products are influenced by external trading conditions. And when addressing the issue of financing one also needs to recognise the many different functions entailed in water for agriculture. For one, agriculture performs a social function, which may justify public subsidy. And apart from providing water from surface or underground sources for irrigating crops and watering livestock, there is also the cost of other functions such as drainage, water quality management, the enhancement of rain-fed farming, aquaculture, and multipurpose projects including flood control and hydropower, and water supply to rural households for productive use. * The writer is professor of soil and water management at Cairo University.
