The storm in the teacup
- From: Vol 11, Issue 2 (February 2010)
- Category: Opinion
- Region: Unspecified
- Country: China and India
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The storm in the teacup Charles Bodhi applies a little tasseomancy to the Asian water market.
Earlier this month, in a quiet part of California, a modest gathering of executives, engineers and technology specialists took place, all of whom were focused on topics concerning the future and technology of water in a variety of industries. While a whole smorgasbord of views was aired, one conclusion that was beyond debate was the extensive and unrelenting use of water in agriculture.
Although this is hardly news, it is striking how some important commercial and political corollaries of this fact seem to be glossed over (assuming they are noticed at all).
This month, I will attempt to explore and underscore the business opportunities inherent in meeting this demand in Asia – despite the ubiquity of certain trends throughout most of the continent, a large demand gap remains unplugged, even with rapid technological advancements. Next month, I will study the policy aspect of this trend – the pressing concept of virtual water and its political implications for trade relations in agriculture.
For all its rapid industrialisation, Asia is still predominantly agriculture- based, and to that extent, irrigation is paramount to meet the needs of its vast population. The Pacific Institute estimates that in 2008, of the three countries that withdrew the most fresh water – namely India, China and the USA – the first two used over 78% of their withdrawals for agriculture, their thirsty fields guzzling more than 920km3 of fresh water that year, ensuring that the Yellow and Ganges rivers hardly reach the sea any more. In comparison, industry – long considered a major engine of demand for water in the developing world – took up a mere 15% of the fresh water withdrawn.
The pedestrian fact that agriculture in Asia needs a lot of water is often a platitude to those who are also cognisant of the fact that Asia is rapidly industrialising. The less noted implication is that as industrialisation pollutes irrigation sources, there is also a clear need to treat the water used for irrigation, especially when climatic calamities are becoming increasingly commonplace and capricious. Just as rising levels of COD, heavy
Just as rising levels of COD, heavy metals and other pollutants make the water used for irrigation less and less suitable for crop cultivation, and just as heavy storms pelt down as frequently and sporadically as droughts hang over the continent, the need for predictably reliable water sources will be acute. And the required quality of such water is almost always going to be lower than that of the often expensive water quality required in the food and beverage, industrial chemicals and pharmaceutical industries, which means that the cost of producing such systems and meeting demand will also be much lower.
Excepting highly polluted water sources, the use of tight filtration media like RO membranes and the attendant high power costs of running such systems will likely be obviated because water of such high purity will be extraneous and in some cases even detrimental in the irrigation of crops in the long term (if nutrients are not replaced).
The obvious retort is that most Asian farmers will probably still not be able to afford such services, making this business proposal a chimerical one. But one thing is clear: food prices are unlikely to come down much – if at all – after the price hike a few years back, and even if the hike does not materially benefit the farmers directly because of unfair trade practices, these water system designs are easily standardised because of the relatively low quality of water required. The availability of development/NGO loans, micro-credit schemes, government funding and economies of scale from mass manufacture, combined with rapid industrialisation in Asia and the rampant pollution of the lakes, rivers and water bodies from which irrigated water is taken, means the market is pregnant with low-hanging fruit waiting to be picked.
Rarely is it a compliment for one to respond to a storm in a teacup. But the next time you look at the tea in it, it might do you some good to think also of the very resource that calls for the cultivation of those unassuming leaves, and the vast opportunities and implications there are in bringing in the dollars to grow the next tea leaf.