Farmers fluent gold

In many parts of the world, water is a crucial resource for the cultivation and production of agricultural crops. During a visit to Australia, this became obvious.

Text: Per Hansson

Muddy river and bare landscape. Photo.

When water has a clear price and value, the production calculation and the strategic decisions get a different colour.

During a study trip, I visited farms in southeastern Australia in the states of Victoria and New South Wales. The area has been hit hard by many years of drought, which has affected all agricultural production.

The rain isn’t sufficient

Characteristic for the area is that there is a tradition of using irrigation in farming. The water comes from rivers, groundwater and, to some extent, the collection of rainwater in connection with considerable rain.

Until 2002, the right to water was linked to the ownership of land. In a major reform, the right to water could be traded. This meant, among other things, that the state became an active buyer of water to ensure a sufficient quantity in rivers and other waters. The control and regulation of groundwater also became clearer.

Landscape with field and cloudy sky. Photo.The consequence for the cultivation was that water was traded as other means of production with drastic changes as a result. We went through an area that was completely dominated by milk production 15 years ago, based on irrigated pasture. In connection with a global milk crisis a few years ago, many milk producers sold their water rights to save the farm’s finances. They hoped to manage cultivation of crops based on the normal precipitation in the area normally.

The precipitation wasn’t normal, and the intended crops did not grow. The landscape has, of course, completely changed its character and the farmers’ economy is completely run down.

Money buys it all

In another area, the plan was to plant almonds on 10 000 hectares. The land was owned by a larger company which, with the help of a lot of capital, acquired the land, invested in planting almonds and, of course, water rights to this water-consuming cultivation.

The resource water is a crucial factor in many parts of the world to make it possible to produce food for a growing population. Australia is an example of an attempt at a market solution. It remains to be seen if it is a working solution.