Water reform gives farmers opportunity to review needs

Reform of the water regulatory system should be seen as an opportunity for growers to review their requirements – and assess the impact of any likely changes on cropping.

The government’s Water Bill, which received Royal Assent last month, aims to make the water sector more resilient to droughts and floods. But it also seeks to increase customer choice and support growth by encouraging investment and innovation.

What does this mean for agriculture? Well, reform should be a stimulus for an on-farm review of cropping and water resources – especially when it comes to the volumes needed and the timing of availability. Capital investment and a change in cropping may be prudent.

The regulatory system pre-licensing reform was established in a time of much lower demand for both land and water. But farmers today face the challenge of ramping up food production in the face of increasing demand on limited water resources.

Will farmers get their fair share of water in future? The Bill aims to make it easier for new businesses to provide new sources of water. Key objectives focus on promoting efficiency, increasing long-term resilience and protecting the environment.

In the coming years, farmers should be able to sell or lease excess water to other farmers within the same catchment. Yet the marginal pricing difference between suppliers is unlikely to make it worthwhile for smaller players to start trading water.

More immediately, irrigators should ensure they are well-placed to deal with reform by reviewing their existing abstraction licences against current and planned cropping intentions with a view to identifying what their water needs will be going forward.

They should then assess water usage and availability within their catchment, using the local Environment Agency Catchment Abstraction Management Strategy (CAMS), which shows the status of supply.

If it is an area where there is little surplus supply they should contemplate what to do next, for instance building a reservoir so that future abstraction is less likely to be affected by flow constraints, which will stop abstraction in times of low flow.

Where storage isn’t an option there is a risk that any new licence (or permit as it’s more likely to be) that may be granted will have a flow constraint on it and it may be that there is a real risk of not being able to irrigate in future and of consequent crop losses.

Many farms, together with food manufacturing and processing businesses, are dependent on a secure supply of affordable, wholesome mains water. Yet the Bill doesn’t offer any direct help to farmers who rely on abstracting their own water from rivers and boreholes.

But if you are seen to be making an effort to economise on water use, change cropping programmes or build resilience with a storage reservoir, you will be in a stronger position to negotiate with the Environment Agency when it comes to the inevitable review of licences later.

As well as maintaining yield and quality, many crops require irrigation for establishment and sustenance. Water sources used are diverse and driven by availability at each site, ranging from direct abstraction from surface waters to deep groundwater sources.

Reform could encourage the construction of storage facilities to mitigate the impact of flow-restricted abstraction. But there is no tax relief through capital allowances for on-farm reservoir construction and the threat of Section 57 drought restrictions brings added uncertainty.

The legislation also fails to recognise differences between owned and tenanted land. Capital investment in water storage is unattractive on land available only on a short lease or where there is uncertainty of tenure because recovering the investment may be impossible.

Crop rotation is also an important factor to consider, particularly where there is a significant rotational gap between irrigable crops such as potatoes and brassicas, which may be grown on tenanted land.

In this situation, the provision of water storage taken during periods of high flow for use in one year out of five may be unattractive to both landlord and tenant.

This is because the landlord would lose productive land to the development and have no assurance of rental. At the same time, the tenant would face having to pay a higher rent to provide a return on the landlord’s investment and compensate for the loss of that productive land.

It is worth remembering too, that under the EU Water Framework Directive, member states are required to balance the need to abstract with the recharging ability of the aquifer, to maintain good groundwater status.

Although the Bill promises growth for the water market through investment and change, agriculture’s primary focus should continue to be on its ability to react to changing weather patterns and water resources – something that requires both forward planning and innovation.

Case study – W Emmett & Son Ltd

The Emmett family farms more than 2,000ha in the Thames Valley on a mixture of owned and rented land. They are a major national producer of specialist herbs sold fresh through the major supermarkets and retail outlets in west London.

The business currently has a broad mix of right and time-limited abstraction licences, with and without flow restrictions and from ground and surface waters. In the past, transfers of rights within the Thames catchment to reduce risk of stoppage has been negotiated.

The Emmetts use a mixture of rain guns, spray booms and trickle irrigation to ensure efficacy of water applications. But drip and trickle are currently outside the licensing regime and their future is uncertain. A big question mark therefore exists over how they will be brought into the new system.

Much of the land is of high quality, particularly suited to demanding horticultural crops. In situations like this, it is reasonable to invest in water storage for high value crops, and the current focus is aimed towards providing winter storage on vulnerable sites.

Yet local authority planners are invariably unfamiliar with the need for this extra type of capital investment in water storage and development. At the same time, neighbours strongly resist works that might disrupt the status quo.

Any change in the water abstraction regime that introduces uncertainty threatens to lead to loss of production from valuable stretches of countryside within the metropolitan area. Balancing the needs of capital investment with forward planning is thus critical to their farming operation.