Understanding water economy of major crops

A lot of noise surrounds the water intensiveness of Pakistan's agriculture sector. Noted experts in water sector research - both from academic and public policy areas - have highlighted that the farming segment consumes over 90 percent of Pakistan's total available water resources.

Because Pakistan's major sources of export earnings are heavily skewed toward commodity-based rice and cotton-based textile, it has been argued that the country is engaging in virtual export of water.

This is because cultivation of major crops depends largely on irrigation water, which is both mispriced and fails to ensure even the recovery of operating and maintenance expenditure, let alone the true economic cost due to sub-optimal allocation of a finite resource.

Pakistan grows water-thirsty crops such as rice in desert conditions, yet it is considered an acceptable trade-off as it yields valuable foreign exchange. However, greater scrutiny exists for crops grown only to meet domestic consumption requirement. In this respect, Dr. Shahid Afghan of Punjab Sugarcane & Research Development Board in a conversation with BR Research noted that the annual water consumption by sugarcane crop is equivalent to storage of Mangla dam.

It is also correct that sugarcane has one of the highest deltas of water, calculated as a product of number of irrigations required (number of times water is applied from sowing to harvest) and volume of water applied per irrigation.

In fact, delta of water for sugarcane is equivalent to rice, universally accepted as the most water thirsty crop. Unlike sugarcane, however, rice and cotton crops are not protected by support price mechanism, in order to maintain their export competitiveness.

At a time when the country is facing extreme volatility in water availability due to changing weather patterns, should cultivation of water-thirsty crops with lower value-add be discouraged? Such views, while earnest, may be divorced from ground realities.

As Dr. Afghan argues, shifting cropping patterns are a result of better farm economics - a consequence of higher return on investment on sugarcane - and its greater resilience to extreme weather events such as floods, compared to highly sensitive crops such as cotton. It may also be inaccurate to single out mis/under-pricing of irrigation water as the only reason for excessive cultivation of water-thirsty crops such as sugarcane.

As water volatility increases, decisions regarding annual crop output target must be based on a holistic view of water-intensiveness of competing crops, domestic consumption requirements, export imperatives, but most importantly, farm-level incentives.

The policy questions to consider thus are as follows. How can the strategic objective of cotton acreage expansion be achieved when price distortions exist on competing crops such as sugarcane? As Fig - 02 shows, sugarcane yields highest revenue per acre for growers, and is only second to maize among kharif crops in value per volume of water consumed. But that may be a function of higher-than-market support price, and not of crop competitiveness.

More importantly, as Fig 04 and 05 illustrate Pakistan's crop acreage in both rabi and kharif season continues to be heavily dependent on water availability. Absence of high yielding and drought tolerant varieties - across all major crops - means that crop productivity suffers even with a five percent change in surface water availability. Yet drought years are only one manifestation of extreme weather patterns resulting from climate change. As preliminary reports of productivity losses during ongoing season has shown, domestic varieties - especially cotton - are equally susceptible to excess water availability.

When a sector contributing only 20 percent of GDP consumes 80 percent of its water resources, fair accounting and recovery of cost of inputs such as irrigation water cost must be ensured.

But more importantly, an inclusive approach needs to be adopted which does not view competing crop production as a zero-sum game, but instead focuses on maximizing productivity, such that finite availability of cultivable land and irrigation water are no longer the primary determinants of agricultural output.

Sources:

Fig 01 & 02 - A & F, and average Surface Water Availability (Fig 03) - Economic Survey, 2019 (hectares converted to acres)

B, C & D - based on data provided by Sugarcane Research & Development Board, Punjab

G - Wheat and sugarcane: support price of Rs1,300 per 40kg for wheat, and Rs180 per 40kg for cane used as proxy; Cotton: average of market prevailing seed cotton rates per 40kg used as reported by Business Recorder November 19, 2019; Maize: average of per 100kg rates as reported by AMIS;

Rice: highly crude estimate based on weighted average of prevailing market rates for various varieties ranging between Rs3,000 per 100kg for IRRI to Rs14,000 per 100kg for Super Basmati as reported by AMIS as at November 19, 2019, rice estimate is for comparison purposes only and should not be construed as actual market rate. E and I are BR Research estimates; 12acre-inches equals 1 acre-foot;

Fig 03 - Mangla and Tarbela dam storage capacity in million-acre feet as per WAPDA website. Optimal requirement of farming sector is as per discussions with leading voices in the sector: Dr Hassan Abbas, COMSATS and Ali T. Sheikh, ex-CEO LEAD Pakistan.

Fig 04 & 05 - Definition of rabi & kharif crops included is as per PBS crop calendar. Area under Rabi crops include - barley, gram, rapeseed, tobacco and wheat; Area under Kharif crops include - cotton, rice, sugarcane, maize, bajra, seasum, & jowar (used as proxy as per 'Area under important crops' section from Annual Economic Survey). Water availability as per Annual Agriculture Statistics of Pakistan.