Better by the Drop:Revealing the Value of Water in Canadian Agriculture

A summary of Better by the Drop, a 2013 report published by the Blue Economy Initiative

FOOD FOR THOUGHT

Global food demand is set to double by 2050, but the availability of fresh water is on the decline

With 3,300 km3 of annually renewable water, Canada is one of only five countries in the world that can significantly expand its agricultural exports

Can we unlock this economic potential by developing a strategic approach to the way we use and manage water?

BEI REPORT TACKLES SOME TOUGH ISSUES

Canada’s most productive food-growing regions are our driest—and getting drier. Will we be able to expand production there?

Based on water availability and the economic return on “water” investment, which crops should we grow and where?

Some countries target certain crops for domestic production and decide what they’ll import based on water availability. What lessons are there for Canada?

Water for food, or water for fuel? What’s the global impact of this trade-off, and what role can Canada play?

Which regions are getting the “crop-per-drop” ratio right? What impact would an increase in food productivity have on the

long-term health of our fresh water systems?

ISSUE 1: FOOD DEMAND IS ON THE RISE

Population growth

Changing diets, with increased demand for meat

Urbanization

ISSUE 2: AVAILABILITY OF CROPLAND IS SHRINKING

Urban expansion

Rising oceans

Soil degradation

These factors are sharply reducing the land area available for food production in many regions.

Acreage used for bio-energy production rather than food

ISSUE 3: FRESH WATER IS INCREASINGLY SCARCE

Without water, nothing can grow

Climate change

These factors are curtailing fresh water availability in many of the world’s traditional ‘breadbaskets’.

Water pollution

Groundwater overdraft

WHAT’S NEEDED FOR A COUNTRY TO BE A SUCCESSFUL FOOD EXPORTER?

Sufficient fertile land and water Suitable climate for the key export commodities Reliable infrastructure Efficient commercial and financial services

FIVE COUNTRIES HAVE WHAT IT TAKES TO FEED THE WORLD

Only five countries possess the ‘Goldilocks’ combination of ample precipitation and low ratios of population to arable land:

Canada

Brazil

Argentina

Russia

United States

Water 3,300 km of annually renewable water

Land Second highest ratio of arable land per capita

Growing Seasons

Extended seasons in parts of Canada due to warming in the continental interior and higher latitudes

Infrastructure

Agri-food infrastructure, well-known and well respected national identity, well-established producers and producer associations, and sophisticated intermediary sales, finance and distribution services for agricultural commodities. Canada’s transportation and shipping infrastructure is competitive with any other exporting nation.

CANADA’S COMPETITIVE ADVANTAGES

OUR TOP FOOD EXPORTS AND EXPORTING REGIONS

Canada is ranked number one in global production of lentils, peas, linseed (flax seed), and rapeseed (canola), and second in oats and blueberries (as ranked by the United Nations).

Agricultural production is estimated to contribute $139 billion annually to Canada’s economy

In 2011, beef was the most valuable commodity in Canada, followed by rapeseed, pork, milk and chicken

Canada ships more than half the peas, lentils and linseed available to other nations, and roughly a third of the world’s canola

Canada exports between 56-93 per cent of its national production of key food commodities

VALUE OF FOOD COMMODITIES PRODUCED IN CANADA BETWEEN 2001-2011

Source: FAO (2011)

VALUE OF TOP FOOD COMMODITIES EXPORTED FROM CANADA 2001-2010

Source: FAO (2011)

ON THE OTHER HAND

Canada’s farm belt is getting drier The most fertile regions are most at risk We are degrading the water we have There’s a limited opportunity to grow crops in Canada's boreal

region and the Canadian Shield

OUR FARMLAND

Provinces with irrigated agriculture: Saskatchewan Alberta British Columbia

Provinces that primarily rely on rainfed agriculture: Manitoba Ontario Quebec Maritime provinces

TOTAL VIRTUAL WATER REQUIREMENT

British Columbia , Okanagan Valley – Irrigation water needed per year

FIVE WAYS TO MAXIMIZE WATER PRODUCTIVITY

1

2

3

4

5

Improve irrigation efficiency

Grow crops that are water efficient

Distinguish between irrigated water use (blue and grey water) and rainfed production (green water)

Reduce the area under irrigation

Establish virtual water metrics (the volume of water required to produce a quantity of food or any other product)

P.S ON WATER MATH

Crop-per-Drop

Dollar-per-Drop

$

crop

water required to produce it

farm product’s water efficiency=

crop-per-drop

market price for that crop

=xeconomic value of the virtual water

TO SUM UP

When water is plentiful in a growing region, a rational strategy may be to pursue the highest export dollar value regardless of a crop’s water intensity.

But as water supplies become more strained, new alternatives can arise when individual farmers, irrigation districts, agri-food producers and government authorities know which farm products deliver the most ‘crop-per-drop’ under different conditions.

SEVEN RECOMMENDATIONS

1 Develop drought/flood contingency plans

2 Provide incentives for innovation in water efficiency

3 Establish virtual water and water footprint analysis pilot projects

4 Create national virtual water inventory and risk assessment tool

5 Support farm level research, education and access to information

6 Implement true cost accounting to capture externalities

7 Evolve toward full water footprint/life cycle assessment

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