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for Agriculture in Developing Countries
International conference at ICRISAT Campus, Hyderabad, India, 29-30 January 2007
Organized by the International Water Management Institute (IWMI) and
Food and Agriculture Organization of the United Nations (FAO)
in collaboration with the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT),
International Water and Resource Economics Consortium (IWREC) and
Berkeley Water Institute (BWI)
Research scientists and experts from academia, research institutes and the private sectors met to discuss interactions between energy and water management for agriculture. They addressed two key areas:
- What is the potential of “carbon neutral” biofuels to contribute to the energy economy, and how would such developments affect food prices, demand for water, and incomes of the poor?
- What impacts do rising energy prices have for groundwater use and management, and the financial viability of electricity suppliers?
The maximum potential contribution of biofuels is probably limited to 20% of the petrol and diesel market compared to 2-3% at present. Use in the US and Europe is principally driven by concerns about energy security (US), and climate change (Europe). Elsewhere, including India, the potential of biofuels in employment creation is the primary interest. In Brazil with plentiful land and water, biofuels contribute 35% to liquid fuel transportation on commercial terms. Projected prices of conventional fuels make biofuel production appear commercially attractive in an increasing number of countries.
While food prices are anyway likely to rise in the future, aggressive promotion of biofuel production from traditional crops, such as corn, sugarcane, sorghum or cassava will directly compete with food production likely resulting in higher prices for both food and fodder. At a global scale, impacts on demand for water and incomes of the poor are expected to be moderate, but locally—especially in resource-scarce, poor economies—the impacts on the poor may be substantial.
Biofuels are most likely to increase farm incomes if treated as a business activity involving farmers and industries facilitated by supportive government policies. From a poverty perspective, these gains will somewhat offset the impact of higher prices on poor, urban consumers. At the local level small-scale biofuel production can help communities increase energy self-sufficiency for domestic uses. To ensure that biofuels are grown in appropriate places, careful analysis of resource constraints, in particular land and water, will be required, as well as agronomic information about the crops.
In India, and other countries, subsidized energy prices have encouraged unsustainable use of water resources. As environmental degradation from unsustainable groundwater pumping continues, the total cost of energy subsidies to society grows rapidly and electricity suppliers are financially compromised.
Although evidence is limited to date, higher energy prices discourage irrigation and reduce access to water by the poor. In India, 75% of farmers depend to some extent on groundwater—through direct well ownership or by buying water from well owners—so the implications of higher energy prices may be substantial. Alternatives recommended included revising tariff structures to a higher fixed payment (avoiding the complexities of meter reading and billing); providing separate power supplies to wells and power rationing; and introducing improved irrigation technologies (drip and sprinkler).
The conference participants agreed that rising energy costs are a major threat to future water and food security raising important new challenges for researchers, businesses, and governments.
