Water: Cooperation Versus Scarcity

Remarks by Bruce I. Knight, Chief, Natural Resources Conservation Service,
at the Sparks Strategic Forum
Memphis, TN
September 23, 2003


Thank you, Bruce (Scherr), for inviting me to be a part of the Sparks Strategic Forum. Good afternoon, everyone. It is a pleasure to be here today to talk about water. Water is one of the most important issues facing agriculture – and society – today, an issue that points to a clear choice between cooperation and scarcity.

It is significant that under this Administration, the Department of Agriculture has published a document on Food and Agriculture policy that makes, for the first time that I know of, a direct statement about the importance of water to agriculture policy. This document lists several principles for conservation that are important for addressing water issues. I will talk about three of these principles this afternoon.

First, the document lists conflicts over scarce water supplies as one of the major emerging issues to be addressed in the coming years. Second, it stresses the need to use a variety of technical assistance, incentive, compensation, and even set-aside programs as tools in a portfolio approach to agricultural policy. And third, it stresses the need for market-oriented solutions that stretch the Federal dollar, encourage private sector investment in conservation, and establish markets for the environmental goods and services produced by America’s farmers and ranchers.


Water Scarcity

So, how important is water to agriculture, and how scarce is it? Let’s look at the numbers. Although only 16 percent of America’s cropland is irrigated, that land accounts for nearly half of the value of all crops sold. In the West, three quarters of the cropland is irrigated. Nearly 80 percent of orchard sales come from irrigated land, as do two thirds of the sales of vegetables and potatoes.

Private lands are important to the future of water, because 70 percent of this country’s land is private, and 88 percent of our nation’s water falls as rain or snow on private lands. Altogether, agriculture accounts for nearly 80 percent of all water consumption nationally, a fact that means that agriculture must be part of the solution to shortage problems.

The Department is looking at increased incentives and technical support for improved on-farm water management. Conservation programs will also play an important role in helping to solve water management issues. We may also see more programs to encourage development of on-farm water storage facilities to alleviate local supply challenges.

Agricultural demand for water is in direct proportion to demand for food, forage, and fiber. But, unfortunately, agriculture isn’t the only reason we need lots of water in this country.

As a nation, we have more people, with some areas growing faster than others. More people means a greater demand for water. But the people don’t always decide to live where the water is. Portions of the West and the Southeast, including Georgia and Florida, for example, are among the fastest growing areas in the United States.

People are engaging in a wider range of activities. People everywhere want more golf courses, more water-based recreation, more agriculture, more of everything. Recreationists want large amounts of stored water for their use. One example is conflicts over Missouri River water in my home state of South Dakota.

Urban and suburban communities like Denver, San Antonio, and San Diego need more water. Wildlife areas are using more water. And agriculture always needs water. One example is the Klamath Basin.

More groups are asserting water rights. For example, until recently, Tribal governments have not always claimed the maximum amount of water to which they are entitled by law and treaty. Increasingly, Tribes claim all the water they are entitled to. Here again, the Klamath Basin is an example.

The demand for water is growing faster than the supply, and that means growing conflicts over water allocations. This is true even in parts of the country that many of us think of as being blessed with abundant water.

In Arkansas, for example, abundant supplies of ground water have supported the rice industry for years. There seemed to be unlimited water available in the aquifers. But, with increasing population and industrial use, the water table is dropping, and Arkansas farmers are looking at alternatives, such as pumping water out of the Mississippi River. This conversion is expensive for the rice farmers, but it is necessary if everyone in Arkansas is to have the water they need.

Yes, the water debate is moving from the arid West to the humid East. In other parts of the country, the issue is water quality (which really is indistinguishable from water quality). For example, half of our nation’s commercial fishing industry is dependent on the quality of water reaching the sea from land-based agriculture, industry, and municipal use.

In short, there is a lot of change in many parts of the country with regard to water use. A changing world demands flexibility. Flexibility in water management, nutrient and pest management, and new products – agricultural and nonagricultural


The Portfolio Approach

Fortunately, our portfolio of tools at USDA includes several programs to help farmers and ranchers cope with drought – and modify their operations so the repercussions are less when drought occurs.

Secretary Veneman has repeatedly authorized emergency haying of Conservation Reserve Program acreage in drought-effected States to provide forage for livestock. We can use Emergency Conservation Program funds in States that suffer severe drought. When a watershed suffers a sudden impairment, we can also use Emergency Watershed Program funds for actions that will help landowners retard runoff and prevent soil-erosion. USDA can also provide supplemental feed in drought areas, as well as emergency farm loans to cover losses. And, of course, there are Federal crop insurance and noninsured crop disaster assistance.

NRCS has programs to help farmers combat the long-term effects of drought. We have provided incentives for farmers and ranchers in drought States to help minimize the erosion of drought-stricken rangelands. We can also use funds from the Environmental Quality Incentives Program (EQIP) to help landowners plant cover crops, use farming techniques that don’t disturb the soil, and graze cattle in ways that will preserve forage. And, we can use Wildlife Habitat Incentives Program (WHIP) funds for emergency habitat needs associated with the drought.

These programs help farmers and ranchers meet the threat of drought, but only rain can end the drought. We hope that conditions will improve, but right now many farmers and ranchers are in serious trouble.

An important part of the NRCS mission is to help farmers and ranchers and rural communities manage their water. I also know that most of you want to see programs that encourage the continued use of land for agricultural purposes. Programs that take land out of production do not meet your needs.

NRCS helps farmers and ranchers manage and use water effectively, so they can stay in the agriculture business. We help them manage water on-farm to increase production, increase irrigation efficiency, maintain water quality, and avoid falling water tables. Through snow surveys, we can predict supply, help plan storage to meet water needs, and give them the data they need to plant appropriately.

Through our Soil Climate Analysis Network, we can forecast growing conditions for cropland and pastureland. We have successfully tested this system in the field. What we need now, is enough partners to take the system nationwide with two to three thousand monitoring stations.
In addition, we can help communities capture a wider a range of benefits from the land, including wildlife, open spaces, and quality of life.

These efforts will not be enough to solve the water shortage in the long run, because the forces of change in our nation are strong and long lasting. So we need a larger portfolio of tools – one equipped to help solve the long-term issues of water scarcity and water quality, as well as help mitigate the effects of drought. We also need more partners who are willing to help out. The more tools we have and the more partners, the more NRCS will come to be a catalyst for conservation.


Water in the West

The West is ahead of the rest of the nation in developing tools and partnerships to address water shortages. People in the West were among the first to recognize that water is scarce. Partly because there is less water in the West. But also because the United States expanded into a West where some formal water rights already existed.

In the West, we have been involved in a partnership called “Bridging the Headgate.” The partners include NRCS, the Bureau of Reclamation, the Western States Water Council, the National Water Resources Association, the National Association of State Conservation Agencies and the National Association of Conservation Districts. Together, we are making great progress on the water issues in the West. We work under a combination of agreements and Memorandums of Understanding that have been signed over the years.

Bridging the Headgate, is a regional example of how various interests can work together to help end the turf wars of water.

In addition, the Department of Interior has started a Water 2025 Initiative to raise public awareness of future water issues facing the western United States. Secretary Veneman has endorsed this effort to develop locally driven, practical solutions.

The initiative identifies watersheds facing the greatest potential risk in the next 25 years, and proposes to evaluate the most effective ways of addressing water supply challenges. The goal is to identify tools that have the most likelihood of success.

Water 2025 proposes to spur research and to concentrate investment in critically needed areas. But we still need more tools, both in the West and all around the country.

We can’t do much about the availability of water, population growth, or other factors beyond our control. But we can improve the management of our water resources. Future success will depend on adapting to change, blending conservation and production, and working together.


Market Approaches

One way of adapting is to make market approaches such as mitigation banking and conservation trading a part of our portfolio approach to helping resolve the problems of water scarcity, water quality, and other environmental concerns.

The American Public, the Congress, the Administration, and even the peoples and governments of the world are becoming more and more interested in the environment and in conservation. Everyone expects industries of all sorts, including agriculture, to do more to maintain and improve water supplies and other natural resources.

A world mindset is developing that sees value in environmental goods and services. But seeing value in something is not the same thing as placing a value on it. And, until we can do a better job of calculating the value of environmental goods and services, we will see society demanding that industries, including agriculture, produce these goods and services at their own expense. So to keep agriculture strong, we must find ways for landowners to recoup the costs of their conservation efforts.

And that is what I see as the future environmental agenda for agriculture: creating a market place for trading environmental goods and services that will enable producers to do more for the environment, including conserving water and improving water quality.

Whatever we do to encourage our farmers and ranchers to address environmental issues, we must do it in ways that strengthen our agricultural economy. That means that the technologies and systems we use to reach environmental goals must be compatible with production systems.

Cost-share programs have traditionally helped landowners recover some of their costs for conservation practices. I believe that trading in environmental credits will provide the next generation of incentives for conservation.

Trading credits can only happen when we find ways to place a value on the environmental benefits our farmers and ranchers produce and create a market for those benefits. We are not there yet, but we are beginning to see forces building that will take us in that direction. In the direction of creating a market for the environmental benefits created by agriculture. In the direction of creating incentives that will enable producers to do much more for the environment, in a profit-making context.

However, providing the information for those markets to work is a substantial challenge for those interested in conservation. We need good science to point out, and keep track of, all of the benefits of various conservation practices, no matter what goal they are designed to reach. The challenge is to move beyond the concept of having a market for environmental goods and services, and develop a system of credits that gives businesses the confidence to act.

Producers already are doing the most important – and most natural thing – and that is responding to incentives. Voluntary conservation is working in this country. The Administration, the Congress, and the public all support conservation on America’s private lands. The $18 billion increase in farm bill funding for conservation is proof of this support.

But all of us, from farmers and ranchers to conservation agencies, to mitigation bankers and conservation traders need to be flexible and open to innovation if we are to receive the benefits of credit trading.

We must be open to new concepts. The whole concept of trading in environmental credits is an emerging concept but it opens a whole new world of economic opportunities.

We must be open to new conservation practices. Present practices are designed to accomplish agricultural goals. The future may bring additional practices designed primarily to reach environmental goals. Credits may be available for these new conservation practices and systems.

The market for credits will be in a new marketplace, with new partners. There also will be opportunities to partner with the scientists who will be doing the research that needs to be done to develop the marketplace for environmental goods and services.

We simply have to move out quickly on these issues, and create an environmental agenda based on voluntary conservation.


Conclusion

At the end of the day – and we are almost there – the fundamental problem remains: water is scarce in the arid West and the humid East.

It was written long ago, “You never miss the water till the well runs dry”. We need to all work together to conserve this precious resource. We need accurate prediction and measurement of water supplies. We need efficient storage and delivery systems. We need to conserve and re-use water as much as possible, both on the farm and off. And we need all the negotiation and conflict resolution skills we can muster.

The issue of scarce water will not go away, but we must continue to work together to deal with it the best we can. We can either cooperate on water issues or suffer terribly from scarcity. Failure is not an option.

NRCS stands ready to act as a catalyst in solving problems of water scarcity and water quality.

Thank you.