Nothing holds quite as much value as water when it comes to agriculture. Access to sustainable irrigation sources is critical to ag production.
According to Farmland LP Founder, Craig Wichner, “We’ll continue to go through periods where there’s longer-term droughts and longer-term wet periods. That’s kind of what the weather patterns are projected to be heading, and so what that means, like right now, water rights are undervalued because it rained after a multi-year drought. We think that that’ll be cyclical.”
With that in mind, many are considering a new approach to water rights, including one similar to the water market in Australia.
“We also think that eventually, you’ll get to the standpoint that Australia go to which is actually creating a water market where maybe water going off to alfalfa isn’t as profitable as water going to a city, but maybe we do want water going to blueberries and strawberries,” Wichner states. “You know, those crops should get more valuable because people not only want water from their tap, but they also want wonderful fruits and food in their refrigerators as well, and we think that the pricing of water over time will adjust to reflect higher values that will be reflected in the crops as well.”
He says that water is a key part of their farmland investment strategy, in case the water prices based on crop value system makes its way to the states.
