OECD workshop on agriculture and water: sustainability, markets and policies

The OECD workshop on agriculture and water was hosted by the Australian and South Australian Governments in Adelaide on 14-18 November 2005. The workshop attracted 120 participants from 17 OECD Member countries, China and South Africa, plus a wide range of stakeholders representing agricultural, environmental, agro-food, banking, coal and water industries.

Objectives of the workshop

The focus of the workshop was to:

  • examine the sustainability – economic, social, environmental, institutional – dimensions of agriculture's use and impact on water resources
  • review current policy and market approaches used by countries to address agricultural water issues
  • explore possible policy and market approaches to ensure further progress in agriculture's sustainable use of water resources
  • identify issues that could be further examined by decision-makers, researchers and the OECD

Highlights from the workshop

Agriculture's use and impact on water resources involves complex trade-offs between economic, social and environmental demands under a wide range of institutional structures. Irrigated farming accounts for a major and growing share of farm production and rural employment in some OECD countries, but overuse of often scarce water resources is an increasing concern. Agriculture is a major source of water pollution but also contributes to ecosystem provision. Agricultural production and input subsidies, especially water, continue to misalign farmer incentives and aggravate overuse and pollution of water across most OECD countries.

The major challenge is to ensure that water resources used by agriculture are best allocated among competing demands to efficiently produce food and fibre, minimise pollution and support ecosystems, while meeting social aspirations under different property right arrangements and institutional systems and structures.

Policies and actions are contributing to sustainable agricultural water management in OECD countries as many countries are giving higher priority to water issues in agriculture and are using a mix of market-based, voluntary and regulatory approaches to address these issues. There is a widespread recognition of the need for greater use of market based instruments, such as better pricing structures and tradable permits, accompanied by government regulations. There is also widespread recognition of the need for cooperative efforts among water users, taking into account the negative and positive environmental externalities arising from agriculture's use of water. A growing concern is the impact of different policies on mitigating or adapting to climate change and climate variability.

Countries are at different stages in reforming water policies reflecting the varying importance of water related issues in agriculture across OECD countries and current systems of property rights and management structures in place. But all countries need to reinforce the monitoring and evaluation of current water policy reform initiatives to ensure that the reforms are moving toward sustainable agricultural water management.