Food inflation is back in the headlines and, as usual, the source is water.
In 2007, the Australian wheat and rice crop was almost wiped out by drought, coinciding with low rainfall across Canada and Europe. Global wheat prices doubled and Sam’s Club in the USA began to ration rice.
In 2010, Russia is set to lose a quarter of its wheat yield to drought. The floods in Pakistan will cause the loss of $1bn of crops.
While world grain stocks are higher this time, cereal prices have been lurching upwards again. We shouldn’t see spikes that compare with 2008, but this is another reminder of our shared dependence on the world’s most precious resource.
With the supply of water fixed, population rising steadily and extreme weather more frequent, the risk of a 'water crunch' - worse than anything seen so far - is very real. We simply can’t allow this to happen.
The food industry is a major player in many of the big global issues. We are, after all, the world’s most important industry employing a third of the population. When it comes to water though, we’re more than an important player; we’re the linchpin industry.
Agriculture uses 70% of the world’s freshwater. According to the International Water Management Institute, it takes 70 times more water to produce the food we eat than it does to fulfill our domestic needs.
As the inflationary wave is telling us, this isn’t just farming’s concern. We all share in the consequences.
Neither is it just a remote problem. London is designated a “seriously water-stressed” region and other parts of the UK have been subject to a hosepipe ban.
According to Walter Todd, PepsiCo's vice president of sustainability for Europe: "In 15-20 years, companies in the UK that don’t act will only be able to take so much water to run their operations. They may have their hours shortened or could be shut down."
Our industry must take the lead and, indeed, many companies have. IGD has established a working group comprising representative organisations from the whole supply chain. The group is producing a Guide to Understanding, Assessing and Managing Water in Grocery Supply Chains, designed to share and increase knowledge of the issue.
Coca Cola has established community water partnerships in 70 countries. They’re also one of several food and drink companies signed up to the UN’s Water Mandate. Others have joined the Water Footprint Network or the Water Disclosure Project.
We’re also seeing the benefits of past activities.
Nestlé is using solar-powered sensors to help its Italian tomato suppliers. Yields have nearly doubled despite using 45% less water.
Australian growers are using a technique called “partial rootzone drying” to produce grapes and other fruit with up to 50% less water. The flavour is also often enhanced.
In processing, Unilever has achieved a 63% reduction in water use per tonne of production since 1995 and Walkers a 42% reduction over six years.
In retailing, Marks and Spencer cut water use by 11% per sq.m. in 2009, Sainsbury's is working to halve its water consumption by 2012, and Tesco is measuring its direct and indirect water footprint and developing a water strategy.
I’m convinced we can avert a devastating water crunch, but only if we deploy enough resource where it’s most needed.
ICRISAT promotes science and best practice for arid area agriculture in Africa and Asia. William Dar, its Director General, is confident that African farming could adapt to as much as 3°C of warming, provided enough is invested in science, research and the transfer of knowledge. This has to be a top priority.
We’ve made a good start, but there’s much more to do. We need to use water more efficiently and work together to protect against the twin dangers of interrupted supply and declining quality.
Let’s heed the current warnings and move water even higher up our industry’s agenda.