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4. Risk management in agricultural water use

The nature of risk

Vulnerability to drought varies from country to country. It depends inter alia on the stage of development. Economies in the early stages of transition from subsistence farming to a more modern and productive farm economy are particularly vulnerable. This applies to much of rainfed agriculture. Rainfall patterns over Africa have not changed significantly in the past century. In particular, the Sahel, the Horn of Africa and the countries around the Kalahari Desert are characterized by high interannual and intraseasonal rainfall variability. Good and bad years do not occur at random but tend to be grouped. This has important implications for food security as food and water must be stored over a period of several poor years.

Risk is defined as the product of hazard and vulnerability. In other words, it relates to the probability of a damaging event, such as drought, and the foreseeable consequences of such an event. The risk of war and the resulting food insecurity are difficult to predict and this paper will not consider them further. In terms of agriculture, the most common risk is drought. On a global scale, this risk is much greater than that of cyclones, floods and storms. However, on a regional rather than global scale, there are areas where the risk of flooding exceeds that of drought. Drought represents one of the most important natural triggers for malnutrition and famine. Drought events can be addressed at the parcel level by several management decisions, at the watershed level and at the country level. The first decisions belong to farmers or farmers collectivities whereas decisions at watershed and country level must be taken by governments or state agencies.

According to Gommes (1999), risk is also defined more simply as a loss due to a damaging event. The advantage of this definition is that it can be materialized and measured easily (e.g. loss of agricultural production, loss of income). An acceptable risk is one that individuals, businesses or governments are willing to accept in return for perceived benefits. Local governments usually define the level of acceptable risk by considering information on drought hazards and combining it with economic, social and political factors specific to the area threatened.

Conflict is an ever-present risk and one of the most common causes of food insecurity. The displacement of people and the disruption of agricultural production and food distribution leaves tens of millions of people at risk of hunger and famine. Conversely, food insecurity may lead to or exacerbate conflict (FAO, 2002a).

According to FAO, conflict in sub-Saharan Africa resulted in losses of almost US$52 000 million in agricultural output between 1970 and 1997, a sum equivalent to 75 percent of all official development assistance received by the conflict-affected countries. Conflict combined with drought has triggered six of the seven major African famines since 1980. Early warning and response can prevent famine arising from drought and other natural disasters. In war zones, lack of security and disruption of transport and social networks impede delivery of relief aid. However, several other factors contribute to food insecurity. These include: lawlessness; lack of democracy; ethnic and religious divisions; degradation or depletion of natural resources; and population pressure (FAO, 2002a).

Risk management strategies for agriculture

Stemming from the definition of risk, there are two major ways of minimizing risk, either by reducing hazard or by reducing the vulnerability. Ways of minimizing hazards are few and can include: rainmaking; avoidance of hail; and watershed management to content floods. Ways of minimizing vulnerability can include: development of surface (including pumping water from streams) and underground irrigation facilities; integrated management of water resources; ecosystem development and diversification; education and training of farmers; early warning systems; seasonal climate forecasting; and crop insurance.

Early warning systems and seasonal weather forecasts are increasingly available to provide timely information so that governments and international aid agencies can take the necessary measures to reduce the impact of drought. However, seasonal forecasting skills are imperfect and the forecasts are not yet available to farmers (FAO, 2002d). If they were, those forecasts could help farmers in choosing less water-demanding crops, e.g. sorghum rather than maize, when a drought is predicted (Box 9).

Box 9 Application of climate information

Source: Sarachik, 1999;
Hansen, 2002; Ingram et al., 2002

An application of climate information is the use of that information to change or influence a decision regarding future actions. It is not possible to predict the future climate with absolute certainty. For this reason, predictions are expressed in terms of probability of occurrence. As with any probabilistic scheme, significant benefits can be realized only over a long sequence of trials. The need to think and act in terms of probabilistic strategy is one of the greatest obstacles to the applications of forecast information.

As public goals may have many aspects, it is often unclear what is being optimized by the application of climate information, and for which subset of the public. An example is the management of public water resources, where priorities of water quality, recreational use, the desirability of avoiding floods and the needs of the agriculture sector often come into conflict with one another. Interviews with water managers indicate that climate information is rarely used even where it is readily available. One reason for reluctance on the part of decision-makers may be the risk involved in taking novel actions that may not be successful. The penalties that might result from failure could seem to outweigh the potential gains.

While water managers may be interested in total seasonal rainfall, farmers have expressed more interest in receiving forecasts of the onset and end of the rains, and whether there would be dry spells during the rainy season. An issue of concern in disseminating climate forecasts to farmers is how to avoid potential disaster that could arise if the forecast is ‘incorrect’. Strictly speaking, a probability forecast is neither correct nor incorrect. Nonetheless, farmers might invest resources in response to a forecast that predicts a greater probability of higher than normal rainfall, and then lose their investment and more if rainfall is less than normal. These barriers to the adoption of climate information by water managers and farmers alike will only be surmounted as predictions are demonstrated to be successful.

In the absence of reliable information about expected seasonal rainfall, some farmers will tend to accept risk in anticipation of greater profit, while others will tend to avoid risk even if there is a potential for high profit. Such risk avoidance or acceptance is a personal and a cultural characteristic.

The historical evolution of irrigated agriculture was a response to reduce the risk of crop failure in lands that were subject to periodic droughts, such as the basins of the Euphrates and Tigris rivers. The preceding chapters mention many field-level cultural and agronomic practices that could alleviate the impact of drought and thus reduce the risk of crop failure and food insecurity.

Crop practices and field management provide several means for coping with soil water management (Gommes, 1999). Strategies in rainfed agriculture are based on producing more food per unit of rainfall in a durable manner by collecting the maximum amount of rainfall at community, farm and parcel levels, minimizing water loss at farm and parcel levels, and using water efficiently at parcel level. The collection of maximum rainfall may involve both state and farmer organizations (water harvesting, use of recycled water from other sectors) or farmers alone (water harvesting at the farm, runoff reduction at parcel level, early planting, fallow cropping system, etc.). Minimizing water loss involves farmers (evaporation reduction by mulching or rapid crop cover, windshields, minimum tillage, weeding, etc.). The efficient use of water requires farmers’ involvement (use of low water consuming crop species, adapted fertilization to available water, disease and pest control, optimal planting and seeding, selected varieties able to accomplish their cycle within the climate growing period, etc.).

Risk may be reduced substantially, while expected profit is reduced relatively less, by choosing combinations of alternatives rather than any single alternative. For example, a farmer in a rainfed area, such as Machakos in Kenya, where on average a crop of maize may yield well in one out of four years, could choose to seed one-quarter of a field with maize every year. The reality is more complicated as both the total seasonal rainfall and its distribution during the growing season have a large effect on crop yield.

The above strategies enable improved use of the available water at the parcel level. Moreover, traditional farming aims at a stable production rather than a maximum income. Farmers achieve this objective through diversification of production and low-input practices that provide that do not entail too much investment or cash. Association between farmers, for example at the village scale or within farmer groups, can further reduce the risk of low production.

Spreading risk

Crop insurance constitutes the most explicit risk-spreading mechanism that helps distribute the cost of weather-related events through financial institutions among other economic sectors and governments. Successful examples include crop insurance for the impact of cyclones and hailstorms. The impact of drought is greater in developing countries than in developed countries, but farmers in developing countries have at best only limited access to insurance. The cost of insurance for relatively low-value staple crops is usually unaffordable (FAO, 2002d).

However, spreading risk can also lead to water sharing. Water transfers within countries have occurred for some time. Some canals were constructed for navigational reasons, others to supply drinking-water to water-scarce cities, and others for agricultural purposes or various combinations of these causes. Well-known examples include the Snowy Mountain Scheme in Australia and various aqueducts in California, the United States of America. Internationally, an extensive system of link canals between the branches of the Indus River was constructed in order to ensure equity of water access between India and Pakistan following partition in 1947. China is developing extensive water transfer schemes linking the south of the country to the water-scarce and populous north. Funding and implementing such expensive schemes in the future may help to reduce the risk of international conflict over water. Where several countries share water resources, e.g. in the river basins of the Mekong, Nile, Euphrates and Tigris, there is a perceived risk that the combination of population growth, poverty, food insecurity and water scarcity might lead to conflicts over water. Current attempts at mediation through the establishment of river basin authorities aim to reduce these risks.

Plate 11 View of country side (Cambodia)


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