You may have already read about the contribution of drought in Australia to the global food crunch, but now the Australian government is taking it a step further: Canberra announced yesterday it plans to spend $2.9 billion to buy water rights from farmers in order to ensure that there are ample supplies for residential use. Australian farmers seem to be moderately receptive to the policy, mostly because it's a huge financial windfall for them. A similar process has begun in the American West, but it's likely to ramp up significantly in the coming decades, since agriculture still accounts for around 80 percent of water use in the region. Urban water users will grumble about paying higher rates in order to bribe farmers to give up water that's long been massively subsidized for them by the federal government, but there won't be any other option.
This often leads to the question, "Well, then where will our food come from?" And it's true, food supplies may well come under further stress as farming in dry regions is ratcheted down. But the economics of it are pretty clear: water in the West can be worth ten times more to residential users than to farms, and it's simply inconceivable that global food prices will rise high enough to alter that balance.