Issue link: https://viewer.e-digitaleditions.com/i/131975
agribusiness Drop by drop Baldeep S. Gill examines an essential element of agricultural production: water. As winter approaches we look to secure the most important asset in agricultural production: water. If all goes well, we will be endowed with the right amount of rain at the right time to secure about $50 billion of production value in our second-largest export industry after resources. However, if there is insufficient rain, attention may once again be focused on the consumption of water by agriculture and whether it is warranted. Absolute and relative According to the Australian Bureau of Statistics, Australian agriculture consumed 7,175 gigalitres of water in 2010–11. (As a guide, Sydney Harbour contains about 500 gigalitres.) Of the total, NSW consumed 40 per cent; Queensland, 26 per cent; and WA, six per cent. If we look at the intensity of application, WA applied 4.6 ML/ha (megalitres per hectare); NSW, 4.1 ML/ha; and Queensland, 3.6 ML/ha. At an industry level the picture is even more stark: • Grain production used 300 gigalitres with an intensity of 2 ML/ha in 2010–11. • Livestock used 1,700 gigalitres with an intensity of 2.3 ML/ha. • Rice used only 770 gigalitres but with an intensity of 10.1 ML/ha. Should we be changing the structure and shape of our agricultural production to reduce absolute and relative water usage? Where to start The place to start is always the consumer, both local and global. Behaviour around eating is changing. In developed countries we see high-end consumers eating smaller quantities of healthier food, while those in the lower socio-economic segments are eating larger volumes of less nutritious food. In developing countries the emerging middle class is shifting towards a higher protein diet that 90 includes meat, grains and dairy. Rice is now common in Western diets, too. Agriculture is not driving the shape of production but responding to changing consumer preferences. Another lens We should also consider the quality lens when determining what and why we produce certain commodities. Australia has an international reputation for food quality, standards and testing that places it at the forefront of preferences in many markets, including local consumers. Food can be produced in many countries around the world with less water consumption, often more cheaply and to a lower standard of quality than in Australia. However, choosing food for yourself and your children is based on quality as well as price. Infrastructure Rather than define what foods we should or should not produce, the key question is this: How do we produce food in such a way that we meet market demand in a sustainable manner? In 2010–11, 29 per cent of water consumed by agricultural production came from irrigation channels, 27 per cent came from rivers, creeks and lakes, and 18 per cent came from on-farm dams or tanks. While farmers can make improvements to on-farm water infrastructure, the major call-out should be for investment at national and state levels. Let's hope the upcoming election gives sufficient airtime to this issue. Baldeep S. Gill is an independent financial consultant with 21 years of experience in financial services throughout Australia and the Asia-Pacific region. Email: baldeep.gill@theapcg.com