Agricultural Subsidies
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Contributed by:L. Kuhl
Article last edited 28 Feb 2013 by Amanda
Article originally added by Lkuhl01
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This article is linked to Competing Demands Among Water Uses in the Apalachicola- Chattahoochee-Flint River Basin
Agricultural production has received far less attention than other water uses in the ACF, and agricultural management has been largely overlooked as a source of potential means of addressing the basin’s water issues. This is surprising, given that agriculture is generally a relatively inefficient user of water and may offer significant “low-hanging fruit” for water savings. Since agriculture is a dominant user of water in the ACF and the primary use of water in the Flint River sub-basin (Georgia Department of Natural Resources 2006), attention should be paid to how agricultural policies and management can be used to improve water management in the basin.
Can agricultural policies, mainly rethinking subsidies, encourage water savings in the Flint River Basin, thereby helping to address basin-wide conflict in the ACF? Agriculture in the Flint River Basin is heavily subsidized. If, as discussed above, direct subsidies heavily influence farmer decisions about which crops to grow, the question of what impact this has on Flint River Basin water use must be considered. Additionally, it seems likely that redirecting government subsidies could potentially improve agricultural water use in the Flint and elsewhere by encouraging farmers to grow less water intensive crops. Changes in subsidies could create incentives to grow different crops, thereby using water more effectively, increasing the resilience of the basin, and reducing the potential for conflict.
Agricultural subsidies are not the only way to manage water use in the Flint River. In fact, it is not the most direct approach, although it may be the most effective. More direct approaches could include water permitting and drought management policy. However, there is awareness that the current tools used to manage water in the Flint are insufficient. Alternative options suggested by Cummings et al (2001) include purchasing/leasing of permits (rather than granting them for free), instituting a water tax, shifting surface water use to ground water use, building small, off-main-stream reservoirs, and increased water use efficiency. While these policy options may help address the specific interest of the paper (enhancing in-stream flows), it is unclear that they are appropriate from a systemic perspective. Shifting to a greater reliance on groundwater in an area expected to be increasingly impacted by droughts does not appear to be a wise direction to move in, and does not address the underlying causes of the problem. The effectiveness of economic incentives for water conservation inherent in permit pricing and water taxes must be considered in light of the economic gains from agriculture, and here again, the role of subsidies is important. It is difficult for price instruments to work in environments in which the market is heavily skewed because farmers will not respond to the price signals as intended by the policy. Surprisingly, in light of the low efficiency of agricultural water consumption, Cummings et al. (2001) suggest that increased water use efficiency has only moderate potential to increase in-stream flows. Following a major drought from 1998-2003, the state realized that current drought management was insufficient. The Georgia General Assembly passed the Flint River Drought Protection Act, which paid farmers to reduce pumping during extreme drought. This compensation plan was designed to reduce the tensions that developed between ecological and agricultural water needs (Watson and Scarborough 2010). While effective in reducing water withdrawals, the plan is very costly, both from an economic standpoint for the state, which is paying farmers, and from an efficiency standpoint, in that agricultural production must be reduced.
In a new approach, the Flint River Soil and Water Conservation District and the USDA are working with the Nature Conservancy to help farmers adopt new technologies and growing practices that reduce the reliance on groundwater withdrawals. The program has three components. First, it works to redesign the current irrigation system to make it more efficient. Beginning in the 70s, farmers adopted a pivot irrigation system, which was relatively inefficient at delivering water to the root systems of plants. By retrofitting the existing nozzles with low-pressure nozzles, more of the water reaches the plants. The second component is conservation tillage practices to increase soil moisture and reduce erosion during rain events. The third component is variable rate irrigation. The system uses soil moisture monitors and a wireless broadband network to collect information on irrigated acreage, which farmers can use to selectively irrigate the land that needs it, instead of applying water uniformly across the fields (Watson and Scarborough 2010).
These types of technological and behavioral innovations can help to reduce pressure on scarce resources and relieve tensions between different stakeholders to the water conflict. Whether they will be sufficient to address the water use issues in the Flint Basin is unclear, but pilot projects such as that conducted by the Flint River Soil and Water Conservation District, USDA and Nature Conservancy are essential for exploring the potential that these innovations may have. So far, the results look promising. Since the program began in 2003, farmers using variable rate irrigation have saved more than 10 billion gallons of water, and irrigation costs have fallen 15-30%. This example also demonstrates that non-traditional actors can play an important role in changing the incentives for stakeholders. Environmental groups helped pay for the costs of retrofitting equipment in order to reduce the water needed by farmers. This ended up being significantly cheaper than alternative plans to buy water (or the rights to water) from farmers during drought periods, and had the added benefit that farmers were able to increase production at lower costs with less time spent monitoring irrigation.
While technology can’t save us from unsustainable water use patterns or ensure that the impacts of climate change won’t be damaging to both ecosystems and economies, it is clear that solutions will require a combination of policy tools, including promotion of technological innovation and adoption by water users. Economic incentives, particularly large incentives such as agricultural subsidies, are also crucial to ensure that management decisions are implemented, but the wrong economic incentives can create additional problems by obscuring the market for water, as we observe with agricultural subsidies.
This case study suggests that agricultural policy and management, particularly in the Flint, offer a promising source of water efficiency and conservation in the ACF; while improved agricultural policy and management will not solve the ACF’s problems, they may allow for considerable water savings, which can help resolve existing conflict in the basin. The analysis suggests that altering government subsidies for certain crops could greatly impact water use in the Flint, potentially freeing up water for other uses. While altering agricultural subsidies will have considerable social and economic implications that need to be considered, greater attention should be paid to the potential of subsidies to provide a mechanism for reducing agricultural water demand in the Flint River Basin, the ACF, and elsewhere.
Two of the most important learnings from this case study and analysis are: 1) We need to look at water management in a basin or region as a whole, and seek to identify any potential levers that may help us achieve more sustainable water management. Agriculture has received far too little attention in the ACF, and greater focus needs to be directed at using agricultural policy to improve the basin’s water management. 2) Policies and decisions at all scales need to be considered in pursuing more sustainable water use. As this case demonstrates, decisions at the national level about agricultural subsidies heavily affect water use and management in the Flint River Basin, thereby impacting the entire ACF.
