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Opening remarks by Anthony Cox, Deputy Director of the Environment Directorate, OECD

I am pleased to welcome you to the seventh meeting of the Roundtable on Financing Water. This is the first thematic Roundtable – focused on the key issue of financing the sustainable use of water for agriculture.  I would like to extend my appreciation to FAO for their excellent co-operation in co-convening this meeting. It is remarkable that this event has generated great interest with over 600 people registered with participants range from governments, development banks, commercial financiers and private corporates, research institutions to NGOs. This should provide for a lively and informative discussion.

Water is an essential driver of agricultural productivity, which supports rural livelihoods, food security and sustainable land use. The agriculture sector accounts for roughly 70% of the world’s water withdrawals and 85% of global freshwater consumption. Population growth and changing diets will increase agricultural water needs, which will compete with water demand of other users – cities, energy, industry and ecosystems.  Already today, about 1.2 billion people live in extremely water scarce irrigated or rainfed areas.

Climate change is exacerbating the water challenge: Increasing the intensity and frequency of extreme events – such as floods and droughts -- along with shifting precipitation patterns, entailing significant losses for agricultural production. One example was the extreme drought event in Europe in 2018, reducing cereal yields by up to 50% for certain crops. While agriculture is most vulnerable to water risks, it also contributes to them. The sector is a major contributor to water pollution, being the primary source of pollution in rivers and streams in the US, as well as water stress, leading to degradation and depletion of groundwater resources.

To meet the challenges of the coming decades, agriculture will need a transformation towards sustainability, resilience and adaptability. Significant investments will be needed for this transformation. In 2019, governments of 54 OECD members and emerging economies spent USD 41.6 billion on agricultural support related to water. Over two thirds focused on irrigation, while 18% were dedicated to hydrological infrastructure. Only a minor share supported water conservation and water risk management. These investments are not enough to finance the transition towards sustainable water management in agriculture.

It is essential to mobilise additional sources of finance, including private investments. Farmers already play a key role, investing in irrigation equipment - and credit and banking institutions can help them to access finance. Agro-food companies and other stakeholders also have a significant role to play in bridging investment gaps. In response to the COVID-19 crisis, large stimulus packages have been launched, which have the potential to ensure a resilient and sustainable recovery.

Over the next 2 days, the discussions will examine these key issues, with a focus on :

• Recent analysis on investment levels and financing needs for water in agriculture
• Key elements of the enabling environment that is conducive to investments that contribute to sustainable water management
• Opportunities to contribute to a green and resilient recovery
• Mobilising commercial finance for water-related investments in agriculture as a means to scale up investment.

I invite you to engage with us to broaden our collective efforts to scale up water-related investment in the agriculture sector and provide inspiration to tackle the challenges of the coming decades. Thank you.