India accounts for 18% of the world’s population but only 4% of water resources. 

Major water sources for agriculture in India comes from surface water (rivers, lakes, and canals) and groundwater that are the primary sources of water for agriculture in India. It uses an estimated 230 cubic km of groundwater per year or over a quarter of the global total. 

With 60% of irrigation and 85% of drinking water supplies dependent on groundwater, water plays a crucial role in agriculture, serving as a vital resource for crop irrigation, livestock production, and maintaining the overall health of agricultural ecosystems. Despite this, traditional flood irrigation methods, which are prevalent in India, lead to significant water losses through evaporation and runoff.

There is a need for sustainable water management strategies in agriculture and adoption of water-efficient irrigation technologies. For instance, drip irrigation and sprinkler systems can significantly reduce water consumption while maintaining crop yields. Techniques such as mulching, conservation tillage, and crop rotation can help conserve soil moisture and reduce water requirements.

The hidden price tag of agricultural water 

Water’s role in agriculture has traditionally been undervalued, treated as an abundant resource rather than a finite economic good. According to the World Bank’s 2021 report, global water scarcity could cost some regions up to 6% of their GDP by 2050. The true cost of agricultural water encompasses not only its extraction and distribution but also the environmental externalities associated with its use. Irrigation infrastructure, energy costs, and water quality degradation all contribute to the complex economic equation of agricultural water use.

Moreover, the inefficient use of water in agriculture represents a significant economic loss. The World Resources Institute estimates that 60% of irrigation water is wasted through evaporation or inefficient application methods, translating to billions of dollars in lost productivity annually.

In addition to this, the impact of climate change on agricultural water resources presents a sobering economic challenge. The Intergovernmental Panel on Climate Change (IPCC) projects that for every 1°C rise in global temperature, 7% of the global population will face a 20% decrease in renewable water resources. This climate-induced water scarcity creates a multiplier effect on agricultural economics. Reduced water availability leads to lower crop yields, higher food prices, and increased competition for water resources between sectors. The World Economic Forum estimates that by 2030, there could be a 40% gap between global water supply and demand if current consumption patterns continue.

The innovation imperative

The agricultural sector is witnessing a technological revolution in water management. Precision irrigation systems, coupled with artificial intelligence and IoT sensors, are transforming how we value and utilise water resources. Studies by the International Water Management Institute (IWMI) indicate that smart irrigation technologies can reduce water consumption by up to 30% while maintaining or improving crop yields.

These innovations come with significant upfront costs but offer compelling returns on investment. For instance, drip irrigation systems, despite their initial expense, can achieve water use efficiency rates of 95%, compared to 40-50% for conventional flood irrigation methods. The economic benefits extend beyond water savings to include increased crop quality, reduced labour costs, and improved fertilizer efficiency. 

As we observe World Water Day, it’s crucial to recognise that investing in efficient water management is not just an economic necessity but an environmental imperative. The agricultural sector must embrace water-efficient technologies, support policy reforms, and adopt sustainable practices. Only through collective action can we ensure the economic viability of agricultural water use for future generations.