Water Scarcity May Cause Inflated Prices of Agricultural Products

A former fund manager with a large-scale investment firm in Sydney, Australia, Tim Hornibrook has years of experience researching the Australian agricultural industry and monitoring the effects of agriculture on the global market. As both population and urbanization rates begin to rise, Tim Hornibrook surmises that the price of agricultural goods will rise with them, due in large part to a scarcity of fresh water.

Although more than 70 percent of Earth’s surface is covered by water, only 2.5 percent of it is drinkable, and of that small amount, only around 1 percent is easy for humans to access. Each year, the demand for this 1 percent of available water rises, and its usage continues to deplete the world’s existing resources.

Currently, the countries that experience the most water scarcity lag behind in economic development due to a lack of resources necessary to grow a sustainable agricultural industry. As water is a costly item to import, countries experiencing water scarcity begin to pay a higher price to bring it within their borders, which translates into high production costs and higher market prices.

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