By Jeremy Stroud, University of Oxford, with contributions from Michael DiPaolo, AQUAOSO
Introduction
Water is a foundational resource that underpins all economic, social, and environmental activity. Of the many ways in which water impacts humans, its intersection with agriculture is perhaps the most prevalent. The agri-food matrix accounts for 72 percent of freshwater use, and it empowers healthy communities, economies, and societies.(1) As such, technological innovations that enable progressive stewardship, management, and water use lead to both economic and social success.
Since 1983, humans have increased their water use by about 1 percent each year, the vast majority of which is allocated to food and agricultural processes.(2) As agricultural businesses and asset owners increasingly measure water use in their operations, greater attention is being paid to advances in irrigation and digital technology.
These technologies are driven by necessity, as many freshwater aquifers and surface water systems are depleted or polluted at a faster pace than natural replenishment, causing water stress.(3) As this issue is exacerbated in many of the world’s most productive agricultural regions, innovations that address these challenges are particularly valuable for society.
Agricultural water tech provides a foundation to support operational stakeholders who work within the parameters of an ever-growing series of requirements and regulations. These include large-scale movements such as environmental, social, and governance (ESG) reporting, with stricter enforcement from the Biden administration in the U.S. and new disclosure regulations in the E.U. Additional pressure continues from regional regulations such as California’s Sustainable Groundwater Management Act (SGMA), and post-Brexit, U.K. water quality regulations.(4,5,6,7,8) These policies, established to intervene on a multitude of legitimate water issues, place pressure on agricultural businesses throughout value chains to improve and report on water-related impacts.
The Rise of Agricultural Water Technologies
To comply with new regulatory structures, farmers and processors are driven to adopt on-farm technologies, such as irrigation-tech, to reduce or optimize water use. Agricultural finance institutions – the businesses that provide debt or equity capital to farmers – are also rapidly adopting water data technologies to digitize their processes and mitigate water risk in their portfolios.
This article explores the burgeoning ecosystem of technologies set to address the first group, with future installments discussing innovations in the second and third categories.
The three classifications of agricultural water technologies offer connectivity towards a common goal of better water management. Much like biodiversity is essential to natural ecosystem health, an integrated technological platform can support both sustainable water use and agricultural stakeholders’ financial success. The integration of on-farm and digital technology brings all agricultural stakeholders – the constituents of supply chains and watersheds – together to achieve a common goal of better water management. Agricultural water technologies may be placed into three broad categories(9):
1~ Enhancing water use productivity
2- Increasing the quality and quantity of water supply
3- Digitizing and optimizing localized water management processes at scale
Photo of irrigation pivots enabling agriculture in South Africa by Wynand Uys
Enhancing Water Use Productivity
Agricultural water efficiency gains have been emblematic of societal advancement for the better part of 10,000 years.(10) The benefits of enhanced agricultural productivity per water unit used naturally cascades to other parts of society, particularly in regions where water is scarce. Many of the most promising agricultural water technology firms were founded in geographies, such as Israel, California, and Australia, that face regional scarcity issues. Israel is an exemplary case study of a country that has fostered water innovation out of necessity and is now exporting that technology globally. These innovations have culminated to transform the country’s agricultural sector, given its fertile yet arid climate, with the value of produce grown rising by 1500 percent since the 1960’s.(11) Nearly 90 percent of Israeli wastewater is recycled to provide over half of the country’s irrigation water.(12) The technologies mentioned below are some examples of mechanisms that have combined to increase agricultural water use efficiency from 64 percent to nearly 80 percent in Israel over the past several decades.(13)
Drip irrigation, perhaps the most significant water technology advancement of the past century, was invented by Polish-Israeli engineer, Simcha Bass, who later founded Netafim, a leading digitized agricultural water tech company based in Israel. Drip devices distribute low volumes of water directly to plant roots through a network of tubes and pipes, achieving nearly double the efficiency of traditional pivot sprinklers pictured above.(14) Further productivity gains were had when liquid fertilizer could be precisely deployed through the drip lines in a process aptly named ‘fertigation’.(15) The greatest constraint to adopting these systems are the significant capital costs associated with purchase and installation.
Variable-rate irrigation systems address structural constraints for heterogeneous and undulating terrain by assessing where water is needed the most. This technology has since been enhanced by implementing mobile drip irrigation systems (MDI) that incorporate irrigation pivots with drip lines instead of sprinklers to cover a greater land mass with high accuracy.(16) At a lower cost than micro-irrigation, innovations like these can incrementally build on the ideas and efficiencies that came before them. MDI systems now include sensors to control for water losses through wind-drift, soil evaporation, crop transpiration, rapid percolation, and runoff.
Some market nano-irrigation products claim to offer up to 99 percent evaporation efficiency.(17) On the extreme end of water preservation, ultra low-flow drip lines now combine with soil-moisture sensors and plant-thirst sensors, such as that from Saturas, to attain remarkable water savings.(18) Saturas offers an innovative product that places in-tree chips to monitor stem-water potential and accurately inform irrigation needs for optimal crop health. To continue reading about agricultural water productivity technologies, more information may be found through journal articles, public media, and educational programs such as this free class offered at Wageningen University in the Netherlands.
These productivity-enhancing technologies are a sample of what is being used on farms today and additional enhancements bode well for future use. These technologies contribute to a larger, multi-faceted societal progression to improve water management in agriculture. Technologies that maximize the economic and environmental utility of this important and fleeting resource are critical.
Photo of vineyards in California by Tim Mossholder
Conclusion
Enhanced irrigation efficiency is vital to the preservation of water resources, particularly in arid and semi-arid regions that can benefit the most from investment in agricultural water technology. The trend of improvement in drip irrigation technologies, MDI systems, and stem-water potential monitoring chips demonstrates this progression. An effort to continue this innovative trajectory should persist as a part of a constituent-centric engine. Attaining global water resiliency requires a common mission of sustainability between water providers and water users, working toward the longevity of financial stability. This effort should be collaborative and stakeholder-inclusive to equitably accommodate all relevant perspectives from the agricultural, institutional, and public sphere.
Agricultural water supply and quality-related technologies will be covered in Part 2. From this standing, the foundations are laid to explore the digitization of water data management, which assists agricultural financial institutions and agri-food stakeholders to identify, monitor, analyze, and mitigate risk in their portfolios, all of which will be covered in Part 3.
Market participants can find common ground through technology-optimized water management and work together to attain sustainability in their operations so that water-related financial risk is minimized. These technologies only scratch the surface of what is possible in the future. An enticing wave of data management offerings to optimize decision-making, as well as an enhanced use of machine-learning and IoT in irrigation processes are all in development for implementation in the near future. With increasing climatic and human-induced challenges in over half of the inhabitable world, water management is accelerating to the top of agendas for many governments, commercial actors, and communities.(19) Improving water use efficiency, enhancing supply, and optimizing processes for the resource’s most consumptive sector, agriculture, is a critical dimension of technological advancement for all of society.
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A special thank you to industry experts: Blake Atkerson, Mark Jackson, Bernice Miedzinski, Alex Parrillo
Citations:
1- UN Water, 2021
2- FAO AQUASTAT, 2017
3- Edward Barbier, 2019
4- Tyson, 2021
5- AQUAOSO, 2021
6- Harvard, 2020
7- AQUAOSO, 2020
8- UK Department for Environment, Food & Rural Affairs, 2021.
9- Reinder, 2020.
10- Mithen Steven, 2010.
11- Megersa & Abdulahi, 2013.
12- Tal, 2017
13- Girma & Jamal, 2015
14- Netafim, 2021.
15- The World Bank, 2010.
16- Yost et al., 2019.
17- SolarDripper, 2020.
18- Botha, 2019.
19- Boretti & Rosa, 2019.
ABOUT THE AUTHOR:
Jeremy Stroud offers insights on global agri-food and water investments, with a focus on sustainability and commercial outcomes relating to farmland, infrastructure, water resources, and renewable energy. He is currently an investment consultant and graduate student at the University of Oxford. He has several years of experience supporting boutique investment firms, consumer packaged goods companies, and sector-focused media outlets. With an interest in sustainable farmland investing and water management, Stoud places a long-term lens on projects relating to the natural environment.
*All views, data, opinions and declarations expressed are solely those of the author(s) and not of Global AgInvesting, GAI News, or parent company HighQuest Group.