Bulk water charges in the dairy industry: A case study of interstate basins in Minas Gerais, Brazil

Abstract

Water is an essential input for any agribusiness, used for various purposes such as hygiene procedures, heat exchangers and beverage formulation. Water charging, regulated in Brazil by the National Water Resources Policy (Federal Law 9.433/97), is an important issue for the food industry, since it may change the profile of food production costs. Thus, this article aimed to estimate the price increases in the dairy industry from the use of water charging and evaluate the potential benefit of this collection, comparing it to some planned investments in basins plans. We used a case study of a dairy that produced 1 t/d of mozzarella cheese in the state of Minas Gerais. Results indicated that water charging among the basins with current collection models may vary up to 131%. The increase in price related to water charging was low (0.04-0.09% of production costs), indicating that it can be absorbed by the industry. Conversely, values collected by the basins may be decisive for implementation of several actions aiming an average quantity and quality of water, which is good for the industry, itself. In the current charging collection models in the state of Minas Gerais, it is possible to recognize that collection is a promising initiative for the economical valuation of water. However, charging still seems to lack sufficiency in safety and a rationalization for its use.