Thought leadership

  • Date 22 March 2024
  • Words by Dáire Brady
  • Reading time 3 mins

World Water Day 22 March 2024

On World Water Day, we celebrate the value of water in all its forms and functions, and we reaffirm our vision of a water-secure future for all. We invite you to join us in this journey and learn more about our work and impact.

Dáire Brady

As we mark UN World Water Day, we recognise the unique link that water provides between the environment, culture and biology.

Water usage, water requirements and water security both influence, and are influenced by, all facets of life – cultural, dietary, political and environmental. The services which water provides in our daily lives are often overlooked, not only in terms of the provision of water for drinking and irrigation as we know it, but also in the regulation of temperature, and provision of habitats and cultural resources.

Globally, the supply of freshwater is highly variable. Agriculture accounts for approximately 70% of total freshwater usage [1] and the development of irrigated agriculture has boosted yields and contributed to price stability, making it possible to feed the world’s growing population. In agriculture, water is supplied via a continuum extending from rainfed to fully irrigated systems, the latter of which accounts for over 40% of agricultural production[2].

As demand for water increases in step with a growing need for food and competing non-agricultural uses, new constraints are emerging for both rainfed and irrigated systems. Below, we discuss the importance of selecting water secure assets, and share a sample of the techniques being implemented on our latest asset located in Bundaberg, Queensland.

https://www.oecd.org/agriculture/topics/water-and-agriculture/

2 Rosegrant, M.W., Ringler, C. & Zhu, T. (2009)  ‘Water for Agriculture: Maintaining Food Security under Growing Scarcity ‘, Annual Review of Environment and Resources, 34, pp. 205-22

Agriculture accounts for approximately 70% of total freshwater usage”

Selecting Water Secure Investments

Selecting and investing in water secure assets is key to reducing stranded asset risk, where environmentally unsustainable assets suffer from unanticipated or premature write-offs, downward revaluations or are converted to liabilities.[3]

High Integrity Water Markets

Water markets exist to help facilitate and encourage efficient water usage as users buy and sell assets, allowing scarce resources to move to their highest and best use. As a successful example of water markets, Australian water markets are recognised globally as a water reform success story, and have been described as the most sophisticated and extensive water markets in the world.[4] The ‘cap-and-trade’ model has been in place for over 30 years, and continues to evolve through government reforms to maintain efficiency and effectiveness. Operating in high-integrity water markets with sufficient governance structures ensures a fair distribution of the total consumptive pool among all market participants.

Macro and Asset-Level Climatic Due Diligence

It is key to ensure that the opportunity is protected from water supply shocks at both a macro and asset-level when selecting a water-secure investment. Assessment of asset-level water sources and capacity, quality, rainfall patterns and historical and future regional water availability forecasts are examples of core due diligence exercises when screening assets.

Advanced Irrigation Techniques

Farming technologies developed from the Green Revolution largely treat a field as a homogenous unit, resulting in both over and under application of water and other treatments. New and emerging technologies are increasingly rendering previous methodologies obsolete. Precision agriculture technologies such as drip irrigation delivers water directly to the roots of the plant, minimising evaporation and runoff compared to traditional surface irrigation methods. Incorporating solar-powered pumping systems can significantly reduce the need for grid-supplied electricity. Overland flow modelling and catchment analysis enables more accurate prediction of long-term runoff recoverability.

Regenerative Agricultural Practices

As referred to in our earlier publication, improving water usage is core to scaling a successful regenerative agriculture strategy. Screening assets with a view to scaling up regenerative agriculture practices is also demonstrated to improve water security. Practices which contribute to water security by reducing run-off, enhancing water infiltration and improving water retention capacity, include multi-species inter-row cropping, creation of riparian buffer zones, cover cropping and mulching. Healthy soils with high organic matter content better retain moisture, requiring less irrigation water while mitigating chemical run-off and soil erosion.

[3] https://www.smithschool.ox.ac.uk/sites/default/files/2022-03/stranded-assets-agriculture-report-final.pdf

[4] Grafton, R.Q. & Wheeler, S.A. (2018) ‘Economics of Water Recovery in the Murray-Darling Basin, Australia’, Annual Review of Resource Economics, 10, pp. 487-510.

Precision agriculture technologies such as drip irrigation delivers water directly to the roots of the plant, minimising evaporation and runoff compared to traditional surface irrigation methods”

 

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Case Study

Thankfully, there are many examples of agricultural methods and practices that can be implemented to reduce and conserve precious water resources, while having the added benefit of improving soil health and biodiversity. The challenge remains to scale these practices up, one example being on our Queensland Macadamia asset below.

Our 1,800 hectare property, is the Natural Capital Fund’s first asset in Australia. The project aims to convert conventionally farmed sugarcane land into native macadamia orchards, and is located along the North East Coast of Queensland.

Examples of practices implemented on site include:

Soil Moisture Monitoring
Deploying best-in-class irrigation technology involves a strategic tailored approach to the specific needs of macadamia trees, which are sensitive to both over and under-watering. Deploying soil moisture sensors across the orchard enables real-time monitoring of root zone moisture levels, which allows for timely irrigation adjustments to meet the exact needs of the trees.

Climate-Based Irrigation Scheduling and Decision Support Systems 
The use of weather stations on-site, as well as regional climate data to integrate rainfall, temperature, humidity and evapotranspiration data optimises irrigation scheduling and enables further water conservation. Collating data points in a cloud-based decision support system assists in synchronising irrigation with actual weather conditions and plant needs thereby optimising root-available water.

Drone Transpiration Mapping 
Combining physical soil moisture assessments with drone-derived maps of tree transpiration assists in better refining irrigation decisions by providing a more comprehensive view of the orchard’s water requirements. Drone data enhances the accuracy of irrigation strategies by validating soil moisture data against observable tree transpiration, offering a more holistic understanding of orchard’s water status.

Education and Training 
Ongoing education and training for farm managers and staff on water stewardship and best practices in irrigation, as well as maintenance of irrigation technology ensures that management teams are equipped to proactively respond to insights provided.

The author (second from right) with Bundaberg reservoir in background

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On World Water Day, we celebrate the value of water in all its forms and functions, and we reaffirm our vision of a water-secure future for all. We invite you to join us in this journey and learn more about our work and impact. Visit our website or follow us on social media to find out more.

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