Agriculture, as the main user of water in OECD countries, can also help maintain ecosystems. But government policies to support farm production often discourage the efficient use of water and aggravate pollution. The problem is identified in a new OECD publication on Water and Agriculture: Sustainability, Markets and Policies, a collection of expert papers on how to improve water management in the farming sector.

Propping up market prices of farm goods encourages the expansion of agricultural production, according to OECD work. The new report adds that subsidising irrigation systems and lowering water charges paid by farmers also undermines the efficient use of water. Moreover, providin g lower pumping costs to agriculture accelerates the depletion of ground water aquifers and adds to the energy intensification of farming.

With demand for water increasing from agriculture, industry and from households, the papers stress that governments are increasingly giving a higher priority to water resource and environmental management. However, there is still a misalignment between this priority and the overall set of policies resulting in conflicting incentives to farmers. This exacerbates water overuse and pollution.

Several of the recommendations for policy-makers that emerge from the papers- originally presented at an international workshop in Adelaide, Australia - are set out below.

• Increase coordination and consistency of agricultural, environmental and water policies.
• Expand scientific research and data collection to improve knowledge of the impact of agriculture on water resources and to measure how efficiently water is being used.
• Identify the property rights allowing water withdrawal and discharge.
• Establish clear lines of responsibility in the management of water.
• Develop an institutional structure to allow for more market-based solutions to increase resource efficiency and reduce pollution. These solutions include water pricing and trading, while nutrient trading is an option for cutting the level of nutrient pollutants in water.
• Increase the participation of farmers, industry and community groups in designing and delivering integrated water management policies and actions.