SOURCE: Rabobank, N.A.

Rabobank, N.A.

February 09, 2016 12:00 ET

Water Management a Global Opportunity

Rabobank Report Examines the Water Situation in the World's Major Geographies

FRESNO, CA--(Marketwired - February 09, 2016) -  The world must increase its usable water supply and effectively manage water demand. These are the key findings in a new report from Rabobank. The report "Agricultural Water - Free Flowing Markets Sustain Growth" focuses significant attention on water markets as a tool that has been proven to be effective at delivering water where it's most valued. According to the research, markets are an important part of ensuring that the proper allocation of water can occur, and helping ensure that the agricultural industry has access to enough water to be economically viable and can feed a growing world population.

"We encourage food and agri suppliers and other leaders to be directly involved in the establishment of water markets to protect the long-run economic sustainability of the agriculture industry," says Vernon Crowder, analyst at Rabobank. "Globally, local governance and investment will be required in order to ensure stable water supplies but also to replenish current deficits caused by years of overuse in many countries. Water markets will increase the overall net benefit to society, increase the incentive for expanded investment, while decreasing risk for the agriculture sector as a whole."

The report goes on to examine the situation in some of the major agricultural regions of the globe. In North America the report focuses on California, the Colorado River Basin and the Ogallala Aquifer with the following:

California - As represented by tree rings, the last four years in California have marked the worst drought seen in the last millennium. This has forced Californians to create policies which will help manage and replenish basins in the future. In the meantime, water marketing has enabled most California ag producers to reduce the economic impacts of severe drought conditions, but improvements to its water trading system are needed to deal with ongoing increases in demand and tighter supplies.

Colorado River Basin - Over 80 percent of the water delivered from the Colorado River Basin is used for agricultural purposes. Increasing demand from agriculture, municipal and industrial users severely threatens the sustainability of the basin. The US Bureau of Reclamation predicts that a 20 percent decrease in runoff could lead to a 60 percent or 70 percent decrease in storage, along with a 15 percent increase in salinity.

Ogallala Aquifer - The Ogallala Aquifer is a name for thousands of smaller aquifers that stretch from South Dakota into Texas, reaching into Wyoming, Nebraska, Colorado, Kansas, New Mexico and Oklahoma. In a 2013 study published by Kansas State University, it was estimated that, between 1960 and 2010, nearly 30 percent of the total volume of the Ogallala Aquifer had been depleted. If the use of water continues at a similar rate, the projection is that, by 2060, nearly 70 percent of the aquifer's total available water will be tapped.

The report concludes by encouraging food and agri suppliers and other leaders to be directly involved in the establishment of water markets to protect the long-run economic sustainability of the agriculture industry. Globally, local governance and investment will be required in order to ensure stable water supplies but also to replenish current deficits caused by years of overuse in many countries. The research proposes that water markets will increase the overall net benefit to society, increase the incentive for expanded investment, while decreasing risk for the ag sector as a whole.

The full report is available exclusively to clients of Rabobank and to media upon request.

About Rabobank, N.A.

Rabobank, N.A. is a California community bank and a leading provider of agricultural financing and full-service banking products to California consumers, businesses and the agriculture industry. With more than 100 retail branches, we serve the needs of communities from Redding to the Imperial Valley through a regional structure that promotes local decision-making and active community involvement by our employees. 

Rabobank, N.A. is a division of the Rabobank Group, the premier lender to the global food and agricultural industry and a financial services leader providing commercial, retail and agricultural finance solutions in 48 countries around the world. From its century-old roots in the Netherlands, Rabobank has grown into one of the world's largest and safest banks. Rabobank, N.A. is a Member FDIC and Equal Housing Lender. www.rabobankamerica.com

About Rabo AgriFinance

As a leading financial services provider for agricultural producers and agribusinesses in the United States, Rabo AgriFinance adds value using industry expertise, client-focused solutions, and by creating long-term business relationships. Rabo AgriFinance offers a comprehensive portfolio of services that give producers the right products to prepare for, and take advantage of, market opportunities. Rabo AgriFinance representatives offer a wide array of financial services and knowledge to help customers realize their ambitions. This comprehensive suite of services includes loans, insurance, middle market agribusiness, input finance and sophisticated risk management products. Rabo AgriFinance is a division of Rabobank, the premier bank to the global agriculture industry and one of the world's largest and safest banks.

About Rabobank Food & Agribusiness Research and Advisory (FAR)

The Rabobank Food & Agribusiness Research and Advisory (FAR) group is a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to collect key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and examine the megatrends that ultimately influence clients' business strategy. These analysts are internationally respected experts in sectors from protein to produce, inputs to oilseeds, and their knowledge is shared with Rabobank customers. 

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