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The concept of virtual water links a large range of sectors and issues that revolve around relieving pressures on water resources, ensuring food security, developing global and regional water markets… Here are but a few facts, figures and issues feeding the debate around virtual water.
What is virtual water?The concept of virtual water emerged in the early 1990s and was first defined by Professor J.A. Allan as the water embedded in commodities. Producing goods and services requires water; the water used to produce agricultural or industrial products is called the virtual water of the product.
An indicator of water useVirtual water is an essential tool in calculating the real water use of a country, or its water footprint, which is equal to the total domestic use, plus the virtual water import, minus the virtual water export of a country. A nation’s water footprint is a useful indicator of the demand it places on global water resources.
At the individual level, the water footprint is equal to the total virtual water content of all products consumed. A meat diet implies a much larger water footprint than a vegetarian one, at an average of 4,000 litres of water per day versus 1,500. Being aware of our individual water footprint can help us use water more carefully.
The flow of virtual water throughout the worldTrends and products
Trade in virtual water has steadily increased over the last forty years: about 15% of the water used in the world is for export, in virtual form.
Since, at the global level, agriculture is the largest economic sector in terms of water use, trade in agricultural products is the main component of trade in virtual water.
According to A.Y. Hoekstra, an expert from the UNESCO-IHE Institute:
67% of the global virtual water trade is related to international trade of crops;
23% is related to trade of livestock and livestock products;
10% is related to trade of industrial products.
Wheat represented 30% of the total volume of crop-related virtual water trade between nations in the period 1995-1999, followed by soybean (17%) and rice (15%) (see table on the left). The trade of beef is also important to global virtual trade.
Water flows related to crops around the worldAs shown on the map below, regions with substantial net virtual water export are:
North America
South America
Oceania
South-East Asia.
North America (United States and Canada) is by far the biggest exporter of virtual water in the world. Net exports of virtual water from the United States amount to one third of the total water withdrawal in the country.
The regions with a significant net virtual water import are:
Central and South Asia;
Western Europe, North Africa;
Middle East.
Because they are the largest regions in terms of population, Central and South Asia have a high food demand, which explains why the region is the biggest virtual water importer.
As stated by A.Y. Hoekstra, ‘Countries that are relatively close to each other in terms of geography and development level can have rather different virtual water trade balance’. While European countries such as Belgium, Germany, Italy, the Netherlands and Spain import virtual water in the form of crops, France exports a large amount of virtual water. In the Middle East we see that Syria has net export of virtual water related to crop trade, but Jordan and Israel have net import.
Adopting a virtual water strategy: a solution for water-poor countries?
Some experts argue that the importing of virtual water (via food or industrial products) can be a valuable solution to water scarcity, especially for arid countries that depend on irrigation to grow low-value food with high water needs.
| Water requirement equivalent of main food products | | PRODUCT | UNIT | EQUIVALENT WATER (m3 per unit) | | cattle | head | 4,000 | | sheep and goats | head | 500 | | fresh beef | kg | 15 | | fresh poultry | kg | 6 | | cereals | kg | 1.5 | | citrus fruits | kg | 1 | | palm oil | kg | 2 | | pulses, roots and rubber | kg | 1 | | Source: FAO, 1997. Published in the UN World Water Development Report. |
For example, growing one tonne of grain or wheat requires about 1,000 m3 of water; growing the same amount of rice requires up to twice as much. The value of the water used for producing these food staples in water-poor countries turns out to be many times higher than the value of the product. Thus, instead of using their scarce water resources for water-intensive products, such countries can import cheap food, and relieve the pressure on their own water resources.
Already a number of countries, such as Israel and Jordan, have formulated policies to reduce export of water-intensive products. Currently, 60 to 90% of Jordan’s domestic water is imported through virtual water.
Still, some countries are afraid of becoming dependent on global trade – those with large populations, for example, such as China or India. What would happen if, for some reason, their food demands could not be met? This explains why they are trying, as far as possible, to fill their own food needs.
Virtual water import and food security: a vicious circle?The large export subsidies for agriculture of the European Union countries and the United States, make the price of their products very cheap, and very affordable to importing countries. But on the other hand, it creates a very destructive phenomenon: local products cannot compete with these imported products, which do not reflect the real cost of production.
According to J.A. Allan, ‘On the current agricultural market which is dominated by the United States and the European Union, wheat is traded at about half the production cost’ (UNESCO Courier, February 1999). In various African countries, the increasing export of European wheat has replaced the local yam. Local people have become dependent on a cereal they did not traditionally eat.
Local farmers cannot compete with such economic and productive forces; abandoning their own food production forces, some countries become more and more dependent on external food products… but what happens if the grain-producing countries cut subsidies to their farmers, potentially leading to significant price increases?
Highly debated on the international scene at the present time with the World Trade Organization (WTO) Summit in Cancun, Mexico, this very controversial issue emphasizes the complex links between water, agriculture and politics.
Alternatives exist – one of them is to support the production of alternative crops in countries with net virtual water imports. In arid countries, this means focusing on crops that uses little water, such as dates, or grapes. Daniel Renault, from the Food and Agriculture Organization (FAO), takes the example of Tunisia: ‘Olive oil is an excellent product that can be produced in arid climates… Tunisia is an example of a country that has successfully resorted to producing olive oil as a virtual water export.’ (extract from a speech made during the 3rd World Water Forum). At the global level, a fair and reliable trading system must be set up, including an increasing reciprocity in agricultural product trade.
Threatened water resources in countries with net water exportEven in water-abundant countries, the export of virtual water is not without environmental consequences. 1/15 of the water available in the United States is used for producing crops for export – in Thailand, this rate reaches one quarter! This contributes to the mining of aquifers, emptying of rivers, and increased evaporation. The case of the Ogallala aquifer, in the United States, is particularly striking: more than 90% of its water irrigates at least one fifth of all U.S. cropland, and the rate of withdrawal has now greatly surpassed the aquifer's rate of natural recharge.
Information based on:
A.Y. Hoekstra (ed.) Virtual water trade. Proceedings of the International Expert Meeting on Virtual Water. IHE delft, Sept. 2003
A.Y. Hoekstra; P.Q. Hung. Virtual water trade. A quantification of virtual water flows between nations in relation to international crop trade. IHE delft, Sept. 2002.
A.Y. Hoekstra. ‘Virtual water trade between nations: a global mechanism affecting regional water systems’, in Global Change Newsletter, International Geosphere–Biosphere Programme, June 2003.
Paul van Hofwegen; J.A. Allan; A. Hoekstra. Voices on virtual water. World Water Council, June 2003.
J.A. Allan; A. Otchet. ‘Now you see it, now you don't...’, in UNESCO Courier, Feb. 1999.
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 Virtual water
The water used in the production process of an agricultural or industrial product is called the 'virtual water' contained in the product. |
Virtual water trade balance
Calculated by adding all virtual water imports and substracting all virtual water exports. Countries with net virtual water exports have a negative balance; countries with net virtual water imports have a positive balance. |
Water footprint
The water footprint of a nation is equal to the use of domestic water resources, minus the virtual water export flows, plus the virtual water import flows. |
Water-intensive products
Products that require a lot of water in their production. |
| Food production and virtual water The production of 1 kg of meat requires roughly ten times as much water as the production of 1 kg of bread, rice or vegetables. |
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