Assessment of irrigators’ preferences for different water supply risk management tools: option contract and insurance.

Irrigators face the risk of not having enough water to meet their crops’ demand. There are different mechanisms to cope with this risk, including water markets (option contracts) or insurance. A farmer will purchase them when the expected utility change derived from the tool is positive. This paper presents a theoretical assessment of the farmer’s expected utility under two different option contracts, a drought insurance and a combination of an option contract and the insurance. We analyze the conditions that determine farmer’s reference for one instrument or the other and perform a numerical application that is relevant for a Spanish region

Option contracts for allocating water in inter-basin transfers: the case of the Tagus-Segura Basin in Spain

Users in the Mediterranean region face significant water supply risks. Water markets mechanisms can provide flexibility to water systems run in tight situations. The largest water infrastructure in the Iberian Peninsula connects the Segura and Tagus Basins. Stakeholders and politicians in the Tagus Basin have asked that water transfers between the two basins be eventually phased out. The need to increase the statutory minimum environmental flow in the middle Tagus and to meet new urban demands is going to result in a redefinition of the Transfer?s management rules, leading to a reduction in the transferable volumes. To minimise the consequences of such restrictions to irrigators in the Segura Basin who depend on the transferred volumes, we propose the establishment of water option contracts between both basins that represents an institutional innovation with respect to previous inter-basin spot market experiences. Based on the draft of the new Tagus Basin Plan, we propose both a modification of the Transfer?s management rule and an innovative inter-basin option contract. The main goal of the paper is to define this contract and evaluate it with respect to non-market scenarios. We also assess the resulting impact on environmental flows in the Tagus River and water availability for users in the Segura Basin, together with the economic impacts of such contract on both basins. Our results show that the proposed option contract would reduce the impact of a change in the transfer?s management rule, and reduce the supply risks of the recipient area

Synergies and trade-offs in drought resilience within a multi-level UK food supply chain

Weather extremes are the biggest challenge for supply chains worldwide, with food supply chains particularly exposed due to agriculture’s sensitivity to weather conditions. Whilst attention has been paid to farm-level impacts from, and adaptation to, weather extremes, there remains a need to better understand how different actors along the supply chain suffer, react and adapt to these natural hazards and how their resilience-building strategies affect other actors’ and the whole system’s resilience. Taking the UK potato supply chain as a case study, this paper analyses the synergies and trade-offs in drought resilience in a multi-level food supply chain. Data from an online survey (87) and interviews with key informants (27) representing potato supply-chain actors (growers, packers, processors, retailers) were used to analyse drought risk perceptions, impacts and coping strategies, long-term resilience measures and further actions to build system resilience. Results suggest that the potato supply chain has increased its resilience to weather extremes due to retailers and packers having a wider geographical spread of supply, an increasing reliance on forward contracts and favouring growers with water security. However, a conceptual framework of resilience-building strategies adopted by supply chain actors shows that these measures are largely designed to reduce their own risk without considering implications for other parts of the chain and the system as a whole. A more integrated approach to promote drought resilience in complex food supply chains that enables improved vertical collaboration and trust between actors is therefore needed

Towards the operationalization of water sharing for irrigation in England

INTRODUCTION: Many catchments in England are over-abstracted and/or over-licensed and have no spare summer water that can be allocated to support business expansion, meaning that access to water is increasingly becoming a constraint on economic growth. This situation is particularly acute in eastern England. The legislation for managing water abstraction was introduced in the 1960s and is currently under review. A key limitation is its inflexible approach which limits the capacity to cope with the changing environmental pressures of increasing demand for water, or to allow abstractors access to additional water when available (e.g. peak flows). To address these and other water regulatory limitations, the government is implementing a raft of reforms to the abstraction licensing regime in England. While water trading can support more efficient water allocation, high transaction costs and delays in approvals have often limited abstractor uptake. Water sharing is an alternative approach to formal water trading that is gaining more attention in the so-called Priority Catchments2, where the development and testing of innovative abstraction management approaches is underway. However, there remains a widespread lack of understanding of what water sharing means from hydrological and regulatory perspectives - what are the available sharing options along the spectrum from informal to formal arrangements? What are the different scales at which sharing might be feasible (neighbouring businesses to catchment scale) and how might the approval process for authorising and monitoring sharing be operationalized by the Environment Agency (EA)? The aim of this short study was to explore these unresolved issues through the development of a range of realistic water sharing ‘scenarios’ between agricultural abstractors coupled with a mock evaluation process led by the Environment Agency

A multi-level framework for adaptation to drought within temperate agriculture

Droughts affect a range of economically important sectors but their impacts are usually most evident within agriculture. Agricultural impacts are not confined to arid and semi-arid regions, but are increasingly experienced in more temperate and humid regions. A transferable drought management framework is needed to transition from coping to adapting to drought through supporting improved planning and policy decision-making through the supply chain from primary producers to consumers. A combination methodology using a Driver-Pressure-State-Impact-Response (DPSIR) approach, an analysis of weekly agricultural trade publications and semi-structured interviews were used to explore drought impacts and responses, using the 2018 UK drought as a case study. Whilst most reported responses were on-farm, a diverse range of measures were implemented across institutional scales and through the supply chain, reflecting complex interactions within the food system. However, drought responses were dominated by reactive and crisis-driven actions to cope with, or enhance the recovery from, drought; but which contributed little to increased resilience to future droughts. Our transferable drought management framework shows how improved collaboration and multi-sector engagement across spatial, governance and supply-chain scales to develop human and social capital can enable the transition from coping (short-term and reactive) to adapting (long-term and anticipatory) strategies to increase agricultural resilience to future drought

What is the evidence linking financial assistance for drought-affected agriculture and resilience in tropical Asia? a systematic review

Agriculture is sensitive to drought and associated social, environmental and economic impacts. Finance-based interventions aim to support farmers affected by drought; however, the extent to which such tools encourage resilience to this natural hazard is unclear. This paper systematically reviews evidence on links between financial interventions to mitigate drought-related impacts and adaptation towards longer-term resilience. We focus on tropical Asia where agriculture contributes significantly to national economies and is a primary source of livelihood in a region subject to high climate variability and episodic drought. Guided by Population, Intervention, Comparator and Outcome criteria, we identify and review 43 regionally specific articles that describe a range of financial interventions. Through thematic synthesis, we document the interventions’ associations with micro-level and macro-level outcomes. The results reveal how some interventions helped sustain household incomes and crop yield (e.g. through farm investments that increased productivity) through drought, whilst others encouraged adaptive behaviours. At a macro-level, there were challenges associated with government budgets and scheme administration, with the longevity of many schemes difficult to sustain. From fragmented evidence, this review reasons that there can be challenging policy trade-offs for institutions between supporting livelihoods and economic growth whilst also protecting the environment—highlighting the interdependence of systems’ resilience and variability in actors’ capacity to adapt. Low-regret interventions that integrate existing community adaptive practices, engage with farmers’ needs and prioritise extension support may encourage more desirable counteractions to drought; however, further research is needed to establish the role of such interventions.Natural Environment Research Council (NERC):NE/S003223/1. Global Challenges Research Fund QR 2020/2

The contribution of a catchment-scale advice network to successful agricultural drought adaptation in Northern Thailand

The intensification of drought affects agricultural production, leading to economic losses, environmental degradation and social impacts. To move toward more resilient system configurations requires understanding the processes that shape farmers' adaptation amidst complex institutional contexts. Social networks are an important part of collective action for supporting adaptive capacity and there are continuing calls to strengthen network connectivity for agricultural governance under the impacts of climate change. Through a survey of 176 farmers in northern Thailand, we explore the extent to which the characteristics of information shared in a catchment advice network are associated with adaptations. Statistical analyses reveal the perceived efficacy of communications as well as farmers’ relative closeness in the advice network to be positively associated with adaptation to drought. We identify a capacity for local actors to bridge information bottlenecks in the network and opportunities for institutions to enhance their dissemination of information to reach less networked farmers. We find that not all adaptations are perceived as effective against future drought and infer opportunities to support engagement with extension services, encourage the sharing of local knowledge and experience and devise policy and interventions to strengthen advice networks for more resilient agricultural systems

Indicator-to-impact links to help improve agricultural drought preparedness in Thailand

Droughts in Thailand are becoming more severe due to climate change. Developing a reliable Drought Monitoring and Early Warning System (DMEWS) is essential to strengthen a country&rsquo;s resilience to droughts. However, for a DMEWS to be valuable, the drought indicators it provides stakeholders must have relevance to tangible impacts on the ground. Here, we analyse drought indicator-to-impact relationships in Thailand, using a combination of correlation analysis and machine learning techniques (random forest). In the correlation analysis, we study the link between meteorological drought indicators and high-resolution remote sensing vegetation indices used as proxies for crop-yield and forest-growth impacts. Our analysis shows that this link varies depending on land use, season, and region. The random forest models built to estimate regional crop productivity allow a more in-depth analysis of the crop-/region-specific importance of different drought indicators. The results highlight seasonal patterns of drought vulnerability for individual crops, usually linked to their growing season, although the effects are somewhat attenuated in irrigated regions. Integration of the approaches provides new detailed knowledge of crop-/region-specific indicator-to-impact links, which can form the basis of targeted mitigation actions in an improved DMEWS in Thailand, and could be applied in other parts of Southeast Asia and beyond.</p

Water-related challenges in nexus governance for sustainable development: Insights from the city of Arequipa, Peru

Peru has one of the fastest-growing economies in Latin America, but there are concerns regarding how long this can be sustained. Negative environmental impacts are increasing due to the pressures of a growing urban population and competition for natural resources. This study explores stakeholder perceptions linked to nexus governance in the context of integrated management of natural resources, particularly water, and the environmental, socio-economic and governance challenges constraining the achievement of UN Sustainable Development Goals (SDGs). Our analysis focused on the urban and rural areas associated with the city of Arequipa, an economically dynamic region subject to extreme levels of water stress. Face-to-face interviews with key informants were conducted to identify mechanisms that have enhanced successful multi-sectoral collaboration, and to assess challenges in promoting sustainable economic development. A workshop prioritised the identified challenges and an online survey was then used to assess stakeholder interest in and influence over nexus governance of water with other natural resources. Stakeholder mapping revealed a complex network of actors involved in nexus governance, where successful collaboration could be promoted through formal and informal mechanisms, including exemplar policies and initiatives across sectors and actors. Shared visions between stakeholders were identified as well as contradictory priorities relating to the sustainable management of natural resources. A key finding that emerged was the need to promote adaptation in water and land management (SDG 6) due to perceived impacts of extreme climate events (SDG 13), urban population growth (SDG 11), and increased sectoral water demands. This situation in combination with poor governance and lack of planning has exposed the vulnerability of Arequipa water supply system to future shocks. Urgent action will be needed to raise stakeholder awareness, strengthen governance and enforcement, and agree on a collective vision for integrated land and water planning if the SDGs are to be achieve

A novel modelling toolkit for unpacking the Water-Energy-Food-Environment (WEFE) nexus of agricultural development

Increasing food demand has led to significant agricultural expansion globally with negative impacts on resources and the environment, a perfect manifestation of the Water-Energy-Food-Environment nexus. Whilst many tools have been developed to understand the complexity of the Water-Energy-Food-Environment nexus most have failed to explicitly consider biophysical and socio-economic aspects simultaneously. A novel Water-Energy-Food-Environment modelling toolkit is developed that integrates both these components by combining different modelling approaches including irrigation simulation, economic modelling and life cycle environmental assessment. The toolkit is demonstrated using two major agro-export crops (asparagus and table grapes) in the Ica Valley, Peru, a severely water-stressed region. The toolkit was able to provide novel insights into the implications of different farming practices on resource efficiency at the field level in relation to water and energy, under contrasting future scenarios reflecting socio-economic outcomes at the local to regional levels (e.g., food prices, employment, and income) as well as environmental impacts at local to global scales. This information enables different stakeholders to better understand the interlinkages and inter-dependences between the Water-Energy-Food-Environment nexus elements and the complex impacts of agricultural expansion beyond the immediate sector and its geographical extent, helping decision makers design more coordinated agricultural policies and support sustainable agricultural transformation.Natural Environment Research Council (NERC): NE/R015759/1. Chilean National Agency for Research and Development (ANID/CONICYT) - FONDE