Water futures and groundwater trading was the central focus of the most recent meeting of the California State Board of Food and Agriculture. Several panelists and speakers weighed in on how a water trade system like that would impact farmers and ranchers. Leader of the RaboResearch Food and Agribusiness team in North America, Roland Fumasi said that that system is designed to reduce variability in water costs, which could be a good thing for industry members.
“Anything that potentially gives our clients – agricultural producers and supply chain members in food and ag – anything that potentially gives them the ability to hedge their price risk around water, whether they’re buying water or selling water, generally, theoretically that’s a positive thing,” Fumasi noted. “If hedging is done properly then it actually would reduce a market participants’ risk.”
Listen to the radio report below.