Few people realise that we ‘eat’ between 2,000 and 5,000 litres of water per day, depending on our diet. To grow a kilogram of wheat takes between 500 and 4,000 litres of water; a kilogram of beef requires around 10,000 litres. With increasing global water shortages and growing awareness of the environmental impacts associated with irrigation, the concept of trading in ‘virtual’ water - the amount of water used to produce an agricultural commodity - is gaining attention.

Research from the International Water Management Institute and International Food Policy Research Institute, USA, examines how cereal trade can ease local and regional water scarcity. A growing number of researchers suggest that international food trade can and should be used as a policy instrument to mitigate local and regional water scarcity. Instead of striving for food self-sufficiently, water-scarce countries should import food from water-abundant countries. A food importer saves the amount of water it would have needed to produce the food on its own soil. This means the country is effectively purchasing water resources from exporting countries.

Virtual water trade potentially reduces water use at two levels: national and global. Nationally, a country reduces water use substantially by importing food instead of producing it on own soil.

• In 1995 Egypt - a highly water-stressed country - imported 8 million tons of grains from the USA, where most grain is grown under rain-fed conditions. By importing grain, Egypt saved 8.5 billion m³ of irrigation water - one sixth of the annual releases from the High Aswan Dam.
• Japan, the world’s biggest grain importer, would require an additional 30 billion m³ of water to grow annually imported cereals on its own soil.

Globally, water savings through trade occur if production in the exporting countries is more water efficient than in importing countries. Trade saves irrigation water when the exporting country practices rain-fed agriculture, while the importing country produces under irrigated conditions. The USA, European Union countries, Australia and Argentina export large quantities of virtual water through cereal trade, while Japan, Brazil, Indonesia, Iran and Saudi Arabia import large quantities. On average, the exporters used 1.23 m³ of crop water depletion per kilogram of grain, while importers used 2.05 m³ per kilogram. Because exporters were more water efficient than importers, the global cereal trade ‘saved’ water. Without cereal trade, irrigation water depletion would have been higher by 112 km³ (approximately 11 percent).

The research estimates that in 1995, around 25 percent of the cereal trade was water-related. With global shortages increasing, this may rise to 38 percent by the year 2025. However, the potential role of virtual water trade in reducing global water use should not be overestimated:

• It is not water scarcity alone which influences the global cereal trade. For example, Japan requires the virtual land that comes with cereal trade, rather than the virtual water.
• Most cereal trade currently takes place between water-abundant countries, and major importers are not water-scarce.
• Improvements in productivity in irrigated and rain-fed areas may play a more prominent role in water conservation than cereal trade.
• Reductions in water use are only beneficial if ‘saved’ water can be reallocated to other uses, such as the protection of ecosystems.

The idea of trade in virtual water as an answer to water shortages is appealing. However, political interests in agricultural trade are firmly established and it is unrealistic to expect countries to change their trade policies just because of emerging water scarcity issues.

Source(s):
‘Does International Cereal Trade Save Water?  The impact of virtual water trade on global water use’, Comprehensive Assessment of Water Management in Agriculture Research Report 4, Comprehensive Assessment Secretariat, Colombo, Sri Lanka Full document.

Funded by: Governments of the Netherlands and Switzerland in support of the Comprehensive Assessment of Water Management in Agriculture (www.iwmi.org/assessment).

id21 Research Highlight: 11 April 2005

Further Information:
Charlotte de Fraiture
International Water Management Institute,
127, Sunil Mawatha,
Pelawatta, Battaramulla
Sri Lanka

Contact the contributor: comp.assessment@cgiar.org

International Water Management Institute, Sri Lanka

International Food Policy Research Institute, USA

Other related links:
'Balancing the water demands of agriculture and conservation'

'Global warming and the water cycle – what can be done?'

World Water Council - virtual water

Water Footprint

WCA infoNET - A Knowledge and Information System on Water Conservation and Use in Agriculture

International Water Association