[ASC-media] WHEN WILL THE PRICE OF WATER HIT $80/BARREL?

Cathy Reade creade at squirrel.com.au
Tue Aug 15 12:28:29 CEST 2006


MEDIA RELEASE
CRAWFORD FUND
16 August 2006

WHEN WILL THE PRICE OF WATER HIT $80/BARREL?
WILL WATER BE TOO PRECIOUS TO EXPORT?

To keep agriculture competitive and sustainable as the price of water
inevitably grows, we will need to grow fifty percent more food with the same
amount of water over the next two decades, according to Dr Frank Rijsberman,
Director General of the International Water Management Institute, the
world's pre-eminent research institution on management of water for food and
agriculture. But he says the good news is that this is feasible.

However, Dr Rijsberman warns that with increasing competition for water and
without increased water productivity in agriculture, Australians may decide
they would prefer to reduce food exports that use massive amounts of water,
and keep water for their own use.

Rijsberman is the keynote speaker at Water for Irrigated Agriculture and the
Environment: Finding a Flow For All, the Crawford Fund’s annual development
conference in Parliament House, Canberra on 16 August, before departing to
participate in Stockholm Water Week. The event will be opened at 9am by The
Hon Alexander Downer, Minister for Foreign Affairs, followed by Dr
Rijsberman. A range of speakers will be at a press conference at 12pm in the
Theatrette. The Hon Malcolm Turnbull will make an address at 3.35pm.

Water has been referred to as the “blue gold”, and with droughts that appear
to worsen year by year, some scientists having predicted that water would
soon be more expensive than oil, Dr Rijsberman queried whether the price of
water will spike to US$80 per cubic metre, similar to what has happened for
oil.

“Tap water already costs as much as US$10 for a cubic metre in some
countries (including treatment of waste) and people pay hundreds of dollars
for a cubic metre of bottled water,” he said.

Rijsberman explained that despite the debate raging in many wealthy
countries, the real water issue is not its availability for domestic use,
but for growing food; and the impact on nature of the growing demand for
water to produce more food.

“People need some 20 cubic metres of water per year for their domestic needs
(50 litres per day), a tiny fraction of the water available even in very
water scarce countries that have something like 500-1000 cubic metres of
water per inhabitant per year,” he said.

“Depending on diet, however, people need as much as seventy times more water
(1400 cubic metres) to grow food than for domestic use.”

“We will not run out of bottled water any time soon but some countries have
already run out of water to produce their own food.”

“Egypt, for example, imports over half of its food,” he said, “from
countries like Brazil that have plenty of water to export, and Australia
that may decide it cannot afford to export water at such a rate when there
are droughts at home.”

Rijsberman explained that the current debate in Australia over recycling of
water for drinking and the cost of water infrastructure projects is repeated
throughout Africa and Asia.

“Access to reliable, safe and affordable water for life, for food and for
livelihoods is a key step in the escape from poverty for 70% of the world’s
poor people, the 800 million poor people that live in the rural areas” he
said.

“Without improvements in water productivity, we will have a 50% increase in
the global demand for water in agriculture to meet the expected 50% increase
in the demand for food by 2025. For rich and poor alike, the consequences of
this will be even more widespread water scarcity and rapidly increasing
water prices,” Rijsberman warned.

“The value of water in agriculture today - its productivity - is measured in
cents while the value of water for domestic use or industry is measured in
dollars,” says Rijsberman.

“The consequence is that urban people out-compete farmers for water
everywhere, in rich and poor countries alike, and water is moving out of
agriculture to satisfy rapidly growing urban and industrial demand. Yet most
of the world’s poor live in rural areas and rely on water for their
livelihoods.”

“The really tough water decisions are to balance water for agriculture with
water for nature, as has become clear in Australia,” he said.

“With dams and irrigation, many rivers barely reach the sea anymore. People
have discovered, however, that all water that falls as rain serves a purpose
in nature. Every drop taken and diverted to other purposes is a trade-off.”

“As long as the value of water for nature is not recognized, and water for
agriculture is subsidized, the chances are nature will come out the loser.”

“Rivers are drying up, groundwater levels are falling drastically in key
aquifers, and water pollution is rampant downstream of virtually every city
in Asia. In Australia the response has been to cap the use of water in the
Murray-Darling, make water tradable, and start buying back water from
agriculture to return it to nature.”

He explained that with good government policy, water scarcity increases
should be matched with increases in the price of water and a move from lower
to higher value water uses.

Rijsberman says the good news is that agricultural research can help
determine the value of water in alternative uses, such as nature. And it
also works to increase the value of water in agriculture and so help the
rural poor.

“A combination of smart agronomic/farm management, driven by incentives, for
example, can drive the water needed to produce 1kg of rice down from 2000 to
as little as 500 litres.”

“Water prices are still going to go up – possibly double or treble – but not
up to 80 dollars a barrel – except for designer water like Perrier,”
concluded Dr Rijsberman. ”

Further information, photos, additional press releases, the program,
abstracts and bios available at www.crawfordfund.org or contact Cathy Reade,
0413 575 934 creade at squirrel.com.au for interviews

The ATSE Crawford Fund wishes to thanks the sponsors for this event,
including:
Alliance of the CGIAR Centers; AusAID - the Australian Agency for
International Development; Australian Centre for International Agricultural
Research; Australian Government Department of Agriculture, Fisheries and
Forestry; Australian Government Department of the Environment and Heritage;
CRC for Irrigation Futures; CSIRO Land and Water; CSIRO Livestock
Industries; Grains Research and Development Corporation; International Water
Management Institute; Land & Water Australia; Murray-Darling Basin
Commission; National Water Commission

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