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13 Nov 2020

Econ Digest

Be prepared...Tackling the new standard of water footprint

      In the world of agricultural production, products that require an efficient water footprint are becoming increasingly important and will play an ever more significant role in agriculture in the future. Products with a low water footprint will gain more attention from consumers who are aware of water sustainability than products with a high water footprint because of the water conservation in the production process. Awareness of water footprints has become a hot new trend in protecting the world, and many countries are becoming more conscious of the water footprint involved in their production processes.
      Thailand is one of the world’s major producers of agricultural products and foods, and its agricultural structure focuses on agricultural products for export rather than for domestic use. Of the water resources used in the production of all agricultural products and foods in Thailand, a high percentage is used in the production of agricultural products and food products for the Thai population and for export to foreign countries, coupled with the fact that Thailand’s climate generally has good rainfall, which allows plants to absorb water well. However, overall agricultural production is low due to soil degradation and the fact that most farmland is outside of irrigated areas. This, coupled with the low use of agricultural technology, means that the water footprint of Thai agricultural products such as rice, sugar, processed chicken, etc. is higher than the world average.
      KResearch believes that Thailand should balance water supply and demand to the maximum extent possible. However, since the management of water resources in Thailand is difficult to control and climate change tends to reduce the amount of water available, Thailand should focus on restructuring its agricultural production and on the need for greater water conservation. This will continue and ultimately influence environmentally conscious consumers to choose to purchase less water-intensive agricultural products, and will change consumer preferences of agricultural products to less water-intensive ones. This should be relatively easy to achieve and can be planned for in terms of future agricultural production, given the trend toward limited water resources.
       It is likely that in the future, environmentally conscious agricultural importing places such as the European Union and the United States will put pressure on water footprint values as being mandatory standards for producer countries, requiring that the standards cannot be exceeded and are possibly used as non-tariff barrier measures, because consumers are becoming aware and concerned about environmentally sustainable production. Although water footprint is not currently required as a standard for agricultural product exporters in Thailand, it would be beneficial if Thailand could be prepared to deal with such standards that may arise in the future.

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Econ Digest