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March 18, 2023
Thai agricultural sector series is a special article by ListenField board of director, Dr. Supavud Saicheua.
This series will provide macro view of agricultural sector in Thailand and how ListenField technology can help to solve the problem at the end of the series.
The World Bank said that water is a critical input for agricultural production and plays an important role in food security. In particular, it stated that irrigated agriculture is 20% of the total cultivated land and contributes 40% of total food produced worldwide. Accordingly, irrigated agriculture is, on average, at least twice as productive per unit of land as rainfed agriculture; allowing for more production intensification and crop diversification.
It is, therefore, obvious that availability of water for agriculture, at the right time, will significantly improve productivity.
But water resources are valuable and will become even more so, likely at the expense of agriculture. Population growth, urbanization, and climate change will increasingly deplete scarce water resources. The growing manufacturing sector (especially semiconductors) will also place heavy demands on water resources. Focusing on developing new water resources to meet competing needs over the next 20-30 years is a “no brainer”.
The world’s population will rise from 7bn to 10bn by 2050. This population will need water to meet basic needs. At the same time, more people will consume more calories and more complex foods, especially for populations with growing incomes in developing countries. To meet these demands, the World Bank estimates that agricultural production will need to rise by 70% by 2050.
As a consequence, the World Bank stated that future demand on water by all sectors will require 25-40% of water to be re-allocated from lower (i.e. agriculture) to higher productivity and employment activities, particularly in water stressed regions. Such reallocation is expected to come from agriculture due to its high share of water use. Agriculture on average is 70% of all freshwater withdrawals globally (higher share of “consumptive water use” due to the evapotranspiration of crops).
Thailand’s agricultural sector is, therefore, not in a good place: years of complacency has kept yield languishing since the beginning of the century; an aging population will mean about 6-7mn fewer workers in the next 20 years; energy prices are unlikely to fall (especially given that Thailand is running out of natural gas reserves); and there will likely be intense competition for scarce water resources even if Thailand can rapidly develop new water resources and improve its water management.
Constructing new dams are highly capital-intensive, long-term investments likely to meet with stiff resistance from NGOs and those concerned with environmental impacts and reduce bio-diversity (even if lack of water could lead to accelerated deforestation, making things worse environmentally).
In a nutshell, the challenge boils down to this: how to produce more food but use less of everything -- especially labor, water, energy, and the environment (in terms minimizing adverse impacts on the environment).
In the next series, we will discuss about precision agriculture.
Previous article in the series: thai-agricultural-sector-series-raising-productivity-agricultural-land-and-production
More information about the author
He is currently an Advisor of Kiatnakin Phatra Financial Group.
He was the MD of Phatra Capital Public Company Limited (2011-2017) and was also the MD and Head of Research of Phatra Securities Public Company Limited.