Mercy Corps Ventures Insights on Tackling Water Scarcity in Mexico

Daniel Block, Partner at Mercy Corps Ventures will lead a panel discussion on tackling water scarcity with smart irrigation solutions and drought-resilient crops at the first ever World Agri-Tech Innovation Summit in Mexico City on Tuesday October 29.

In this article, Daniel reveals the biggest challenge facing agriculture in the country: Water Scarcity.

The drought plaguing Mexico this year has affected most of the country. From nearly exhausting potable water for Mexico City’s 20 million to over 100 wildfire breakouts burning more than 5 million hectares, to loss of agriculture output in key crops such as maize, wheat, and coffee. It is not the first but by some counts the most severe Mexican drought in recent memory. According to Conagua, over half the country was experiencing drought in June and 76% of the territory is facing the effects of water shortage.

At Mercy Corps Ventures (MCV), we invest in and pilot climate adaptation and resilience technologies for the underserved mass market in Latin America and Africa, with a portfolio of more than 50 companies. The issue of water scarcity and drought is one that we know intimately. Our portfolio includes solutions like:

• Stable Foods: makes irrigation accessible via a networked pay-as-you-go system for smallholder farmers in Kenya
• Satellites on Fire: monitors 35 million hectares of land in Latin America to provide real-time wildfire alerts to over 26,000 users in 15 countries
• Seabex: offers sensorless irrigation advisory to optimize water usage in agriculture
• Ignitia: provides hyperlocal weather forecasting with actionable recommendations for farmers in tropical regions of Africa and Latin America
• Floodbase: whose risk mapping aides response to extreme flooding events which are often present after droughts end.

Kenya had the worst drought in 40 years and this gave way to severe flooding this year). We recently published our research on precision agtech for smallholder agriculture with a specific focus on water management.

All to say that while drought in Mexico may feel new and unprecedented, the world has been dealing with severe drought for decades. At MCV, we see a constellation of solutions from our global footprint that may be relevant as Mexico adapts to this new reality:

The First Step

Amidst lack of water reliability, new and creative solutions to expand access to irrigated water is essential for the agricultural sector, especially in countries like Mexico with a large proportion of agriculture activity led by smallholder farmers.  Without irrigation, any efforts to improve water efficiency below are largely irrelevant. Yet, only 6.2% of agricultural land is irrigated in Mexico according to the World Bank.

While irrigation is an expensive infrastructure, India has been a leader in proving that financing energy-efficient irrigation for small farmers at scale can yield real dividends if prioritized nationally.  Creative solutions such as networked irrigation to reduce Capex costs per hectare are important, as are flexible financing schemes to help expand access to those with limited resources to pay for new infrastructure. Incentives must also be structured to prevent new water points (wells, river/lake sources, etc.) from falling victim to the tragedy of the commons and depleting water tables.

Velocity of Water

In finance, we talk about the velocity of money, how frequently each bill gets used in different transactions as it transits through the economy. The same can be thought of for making each drop of water go further. New “water-efficient” agriculture methodologies combined with precision water insights to optimize water usage and incentivize water savings can play a critical role here.

Converting from flood to drip irrigation practices is one example. With the drop in data costs and rise in data quality, sensorless drip technology such as that developed by Supplant in Israel can be used in place of more expensive soil meters. Israel, as a leader in water efficiency, uses desalination for 70% of potable water and recycles 90% of its wastewater. While desalination in Mexico’s interior may not be commercially viable, solutions to filter, recycle, and reuse water can be critical to improving the velocity of water in Mexico. For example, Microterra is using algae to filter toxic chemicals out of greenhouse wastewater, which is contaminating riverways in Mexico.

Biotech Leapfrogs

As climate change ‘heats up’, a new cohort of heat and water resilient crops are needed for equatorial regions. Biotech solutions can play a critical role in identifying and devising the right crops, and the right strains of those crops, to plant in different climactic regions based on evolving temperatures. Artificial intelligence is exponentially improving the speed and accuracy of this R&D process.

Additionally, we are seeing creative inputs being developed to help plants better cope with drought and heat waves, such as nanotechnology sprays to prevent heat penetration, applications to help plants better conserve water, and post-harvest solutions to prevent ripe produce from perishing before reaching the shelf.

Agility in Response

As volatility becomes the new normal, even the steps above will not prove resilient against edge cases, and this is where customized climate information systems, early warning systems, and climate risk transfer and insurance come in. To help identify risk before they arise, make customized recommendations of preventative actions, and provide a safety net via affordable and rapidly deployable insurance payouts to cover losses and finance investments in responses, as new threats present themselves.

Hear more from Daniel by joining a distinguished group of panelists from Netafim, Citrofrut and many more on the Tackling Water Scarcity panel on Tuesday October 29 at 11.10am CDMX. Book your summit pass or download the summit brochure to find out more.