Water is the most critical resource for sustainable agricultural development worldwide. Approximately 70 percent of global freshwater consumption is used in the agricultural sector. Meanwhile, the Food and Agriculture Organization of the United Nations predicts that agriculture will require 50 percent more water by 2050 to meet the growing food demands of an expanding population.

At the same time, however, water resources are increasingly being diverted from agriculture for domestic and industrial use. Poor water efficiency also means that water scarcity poses a serious and growing risk to food security and environmental sustainability. Less than 65 percent of applied irrigated water is actually used by the crops for growth, according to recent research in Greece. Investment in water management must therefore be a priority for any responsible agri investor.

Improving water management is vital both in rain-fed and irrigated agriculture. Different techniques cover a wide range of different agricultural systems and climactic conditions across the world, drawing on varying water sources including surface water, groundwater, rainwater harvesting, recycled wastewater and desalinated water. Managing floods, droughts and drainage to conserve water and benefit ecosystems is another important aspect.

Climate change, inevitably, will have a significant impact on water resources. The timing of seasonal rainfall patterns will shift. In some regions, crop yields could even improve as a result of climate change, while in others climate change will lead to increased stress on already scarce water. Severe flooding and drought events will become more common, with associated costs for farming assets.

All of these impacts make improved management even more of a priority. There is an urgent need to produce more crop per drop of water, without negative impacts on downstream water quantity or quality. Approaches may include optimizing irrigation scheduling and more efficient irrigation systems, such as drip irrigation.

Soil fertility also needs to be improved to ensure that crop growth is not limited by nutrient or physical constraints and that every drop of water can be fully used for growth. Efficient water uptake by crops can be achieved, for example, through demand-based irrigation scheduling that takes account of the water needs of different crops at each stage of their growth, along with the prevailing environmental conditions. In addition, agricultural water use can be made more efficient by minimizing soil evaporation losses relative to plant transpiration in the field. “Responsible water management is critical in agricultural investing,” says Christopher Peacock, chief executive and founder of Aquaoso Technologies, a public benefit corporation with a mission to build a water resilient future.

“Understanding if there is enough water available for operations and using the right technologies to maximize water application while reducing excess nutrient or fertilizer runoff is especially important. Most investors should have water management plans in place to account for excessively wet and dry years.”