This innovative model links corporations with farmers to improve water security in Latin America

The United Nations Sustainable Development Goal 6 (SDG 6), which aims to achieve global water security, has been the focus of global events this year, including the World Economic Forum's Annual Meeting in Davos and the UN Water Conference. This is because we are perilously close to 2030, when it is predicted that half of the world’s population will not have reliable access to clean water.

Some cities in Latin America, including Monterrey, Mexico, implemented the first water rationing programme for citizens and industrial companies in 2022. Other cities, including Santiago, Chile, planned the first rationing programme for a dry winter.

The economic losses and social confrontations experienced in this context have pushed companies to pledge to become water-positive organizations by 2030. This means they will be investing money in replenishing more water than they use for the specific watershed within which they operate. Over 240 companies and rising have communicated their commitments to the CEO Water Mandate and the trend continues.

To solve any global challenge, we must begin with water security. Making agricultural water usage more efficient is the first step towards addressing the water security challenge.

We should start with agriculture because it consumes approximately 80% of the freshwater in developing countries. Furthermore, several studies have demonstrated that farmers can achieve 20% greater efficiencies by making data-driven decisions using existing technologies. Technology adoption in this industry has been very slow, however, and to date, only 12% of farmers use any data tool to decide when and how much to irrigate.

In response to these challenges, Kilimo, a climate technology or climatech company, developed a model that connects farmers willing to use technology to make water use more efficient with private companies who have made water-positive commitments and are willing to pay for those savings. In doing so, Kilimo became the first company in Latin America to economically compensate farmers for using technology and saving water, generating long-term changes in their irrigation practices and contributing to water security in Latin American watersheds.

Let's look at this project that involves two active compensation projects in the Maipo Basin in Santiago de Chile, funded by internationally reputable technology companies. Below are some of the results achieved:

As a result of financial rewards for compliance with good practices, technology acquisition has been encouraged. The graph below shows the number of hectares monitored by Kilimo's technology in 2021, before the compensation project, and their exponential growth after the kick-off of the compensation projects in 2022. The possibility of optimising resources, mainly water but also energy and fertilisers and receiving an economic incentive for them significantly accelerates the willingness of farmers to try new technology.

The economic compensation for the farmers is tied to their compliance with good practices, causing higher levels of engagement with the technology to achieve those compromises. The graphic below compares Kilimo's farmers in two adjacent basins, the Maipo and the O'Higgins regions. It shows that those who belong to the compensation projects (Maipo) have a 10% greater engagement with the technology and service than those who do not participate in one (O'higgins).

In 2022, Kilimo saved 72 billion litres of water through its big data and artificial intelligence-based recommendations, equivalent to two months of water consumption for the entire population of Santiago de Chile. Furthermore, as the active projects are still being executed, Kilimo has already achieved 35% of water savings after five months of work.

The presented case demonstrates that economic incentives can radically improve farmers' technology adoption to make more efficient irrigation decisions. However, it is essential to emphasise that incentives on their own are not enough. Providing technical assistance and customised support, adapted to the farmer's local needs is crucial for the project's success.

Bold strategies and disruptive models, such as the one presented, are needed to direct human and economic resources towards sectors that can impact their communities as soon as possible. Therefore, accelerating the path to protect watersheds through agriculture with accurate incentives provides a global opportunity to achieve water security in Latin American watersheds by 2030.