Snapshot

Why agriculture holds the key to tackling water waste


Water is a precious resource. Ensuring we have enough water for a growing global population in a time of climate change is one of the most important challenges of our time.

But in our view it’s impossible to talk about water without also talking about food. Agriculture uses 65% of the world’s fresh water, but almost half of it is currently wasted. Making our food and water systems sustainable requires a holistic approach.

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The growing global population also puts pressure on the food system. Irrigation is one way to solve this; agricultural yields double when irrigation is used, rather than relying on rainfall. But the challenge is to ensure that this is done efficiently so that water is not wasted.

This is where technology has a crucial role to play. Greater investment is needed in irrigation and drainage systems. It’s not enough just to build such systems; making sure they are adequately maintained is crucial to keeping them running efficiently.

Meanwhile, investment in desalination plants is also critical given the limited supply of fresh water in many regions globally.

Then there are more advanced technologies. For example, soil moisture sensors can be used to check exactly how much water is needed, and when, for crops.

The whole water management system is one where we expect demand to increase substantially. Recycling the 45% of water that is currently wasted will help the global food and water system become more sustainable.

And it’s not just water that is wasted. Food waste is a huge problem and, of course, when food is wasted, the water that was used in its production is also wasted. Around 44% of harvested crops are lost before they reach the consumer. Again, technology is a crucial enabler in reducing that waste.

Using water more efficiently is clearly part of the answer to making our water system more sustainable. There are also ways to simply use less water in agriculture, and this can happen via changes to diets. Consumers, rather than food producers, can be the driving force here.

It’s increasingly well understood that livestock farming – especially for beef – is extremely resource intensive in terms of the amount of land required. Beef cattle are also responsible for a large amount of the harmful gas emissions from the food industry. But beef production additionally consumes a vastly higher amount of fresh water than other sources of protein, such as pulses, as the green bars on the chart below show.

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Again, this just goes to show how the problem of water usage cannot be seen in isolation but has to be tackled alongside food. Both systems need to be made more sustainable as demand grows.

Felix was also a guest on the Investor Download podcast speaking about the food and water crisis. You can listen to the episode by clicking the play button at the top of the page.

You can also subscribe to the Investor Download on Apple, Spotify, Google or wherever you get your podcasts. New shows drop every Thursday at 1700 GMT.

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.