Do Exports of Water-Intensive Crops Hurt Drought-Prone Areas?

By Melinda Burns, Miller-McCune.com. Posted June 20, 2009.

Research on virtual water trade is centered in Europe, where countries such as the Netherlands are dependent on crop imports from Brazil and other water-rich nations. Here, the virtual trade in water is viewed as beneficial because it can relieve the pressure on scarce water supplies in small countries and help developing countries farm out some of the cost of building new dams and aqueducts. Worldwide, studies show, the countries most dependent on imports of virtual water are the Netherlands, Jordan, Japan and Korea, in that order.

But organizations such as the France-based World Water Council caution that "countries can in some cases damage their environment by exporting virtual water."

The UNESCO research shows that Australia, a country now in the grips of its worst drought on record, is the largest net exporter of virtual water in the world. Recently, Australia set up an independent water authority for the first time to set sustainable limits on water use in the country's most important agricultural region. Still, no one is telling farmers what they can and can't grow.

"That is not our role," said Howard Conkey, a spokesman for the country's Department of Environment, Water, Heritage and the Arts.

As the drought deepened last fall in California, the Pacific Institute, one of the world's leading think tanks on water conservation, suggested that a shift of just 25 percent of hay and rice and other low-value, high-water-use field crops in the Central Valley to higher value, more water-efficient vegetable crops could be beneficial both to farmers and the environment.

The institute's report, "More With Less, Agricultural Conservation and Efficiency in California," estimated that such a shift would raise crop value by $5 billion and, at the same time, save 1.1 million acre-feet of irrigation water, an amount equivalent to what seven dams could provide.

Neither hay nor rice ranks in the top five California export crops in terms of total value. In 2007, according to the U.C. Davis Agricultural Issues Center, the state's top-value export crop was almonds, at $1.9 billion. Rice was eighth on the list and hay was 18th, with export values of $313 million and $134 million, respectively.

Peter Gleick, co-founder and president of the Pacific Institute, believes that if the drought "gets bad enough," politicians will start questioning how California uses its water, including for trade.

"I think it's inevitable that the growing scarcity of water is going to force policymakers to come to grips with some of these issues like appropriate exports of water," Gleick said. "We need someone challenging the way water rights are allocated."

But Dan Putnam, an alfalfa specialist with the U.C. Cooperative Extension at Davis, says the institute is "dead wrong" in its analysis of potential crop shifts in the Central Valley. Vegetables are riskier than hay, a bread-and-butter crop that pays the bills and guarantees farmers a steady cash flow, Putnam said. Alfalfa improves the soil in rotation with vegetables, he said, and it has a higher yield per unit of water than, say, walnuts or lettuce. Hay also produces more nutritional value, Putnam said, because of its importance to the dairy industry.

"If you take the viewpoint that only the highest-value uses of water should prevail, that's a policy of urbanization," he said. "A high-rise for lawyers in Sacramento will yield more dollars per unit of water than any agricultural crop. ... What does it matter whether we export hay or not? It is kind of an odd thing to ship hay to Japan, but we ship lumber around the world. We should allow farmers to make intelligent decisions about what crops to grow."

Leimgruber, the Imperial Valley hay farmer and vice chairman of the California Farm Bureau's hay advisory committee, says that's exactly what he's doing. Hay exports help the U.S. trade balance, allow products to be brought into California more cheaply, and employ a lot of local truck drivers and loaders, he said.

"I would rather use the water to grow a product we can sell to Japan than sell to a golf course to grow grass. It's a global market, a whole economic circle."

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