Combine flour, baking powder, sugar, and salt; stir well. Cut in lard until mixture resembles coarse meal. Sprinkle milk and water evenly over flour mixture, stirring until dry ingredients are moistened.
Turn dough out onto a lightly floured surface. Beat with a rolling pin or wooden mallet for 30 minutes or until blisters appear, folding dough over frequently.
Roll dough to 1/4-inch thickness; cut with a 1 3/4-inch biscuit cutter. Prick biscuits with the tines of a fork. Place biscuits on greased baking sheets. Bake at 350° for 45 minutes or until lightly browned.