Virtual Water

This blog post will explore the concept of ‘virtual water’ and how it can be used as water management to mitigate the effects of uneven distribution of water within Africa, overcome water and food insecurity.

What is meant by ‘virtual water’?:

Virtual water refers to the water that is used in the cultivation of crops such as cereals and grains, coined by Allan (Allan, 2003.) This is also known as embedded water or invisible water.  Trade in crop products contributes to 76% of the total volume of international virtual water flows compared to 12% trade in animal and 12% industrial products (Mekonnen and Hoekstra, 2011.)  

1000-2000kg of water is needed to produce a 1kg of grain

5000-6000kg of water is needed to produce cheese

15000kg of water is needed to produce beef 

(Hoekstra and Hung , 2002)

Figure 1 shows the virtual water balance per country, countries highlighted in green gradients are net virtual water exporters and those in red are net virtual water importers. Countries in the North Africa as shown below are large virtual water importers such as Egypt and Algeria (Mekonnen and Hoekstra, 2011; Yang el al, 2003.)

Figure 1: The Virtual Water Trade

The trade of virtual water involves countries with high water availability producing high value water intensive crops whilst countries with lower levels of water produce less intensive crops . Water poor countries then import water intensive crops without having to utilise domestic water supply. The importing country can overcome issues of water scarcity and increase low agricultural yields whilst the exporting country can generate profits and generate a comparative advantage in agricultural production (Antonelli, 2015; Hoekstra, 2003.) 

Cereal grains has been a dominant commodity in providing food security for importing countries with water scarcity. Yang, found that countries' below the threshold of 1500m3/per capita year, show an exponential increase of virtual water imports with decreasing water resources (Yang el al, 2003.) Virtual water balance can create a more harmonious relationship between water and food. 

A situated example - Egypt:

Egypt's climate is arid, 10% of all water is sourced from precipitation and groundwater. Transboundary issues with the River Nile will reduce water availability in the long term. Egypt's demographics have undergone rapid growth - an increase from 27.4 million in 1961 to 98.4 million in 2008 - has increased pressure on water supplies (World Bank, 2018.) The threat of climate change increasing aridity and generating extreme weather events heightens water scarcity (Conway, 2016). The combination of these factors  add to the reasoning of why Egypt has turned to virtual water trade (Antonelli and Tamea, 2015; Wahba et al, 2018.) 

Egypt has adopted the water management solution of virtual water, reliving water stress through food imports of water-intensive crops (Alaa El-Sadek, 2009.) An encouragement in the trade of water-intensive food can allow for a more managed distribution of water into other sectors of the economy and relieve pressure on domestic water resources.  A key example is substituting rice crops for maize crops (Lillywhite 2010.).

However, a dependency on imports due to virtual water has lead to a dependency on specific multinationals for food imports. In the case of Egypt, Cargill and Louis Drefus dominate the food market and these oligopolies control food prices. If food prices increase to a great extent, civil unrest can occur in Egypt. The likelihood of civil unrest is exacerbated by the inability to afford imports The social development of Egypt can be effected significantly.

Limitations of the Virtual Water Trade:

Although a fantastic theory, it is difficult when put into practice (Lillywhite, 2010.) Limitations include:

• Success of virtual water is dependent on the political ability of each country to partake in trade and international trade relations
• Trade in commodities incur high costs as trading include trading feeds, taxes, tariffs 
• Domestic agricultural industries, especially infant ones, will contract until made void.
• Exporter countries – exploiting a comparative advantage – could monopolise food production
• Virtual water trade is not environmentally sustainably

For the water trade to be successful, the government must implement cross-sectoral policies involving agriculture, ecology and environment, economy, trade, development with integrated water management and governance (Yang and Zehnder, 2008.) 

Virtual water can provide an excellent alternative to irrigation schemes to tackle issues of water distribution in particular in Africa. It aids food production and alleviates food insecurity and malnutrition. Investing in virtual water has its limitations especially for the poorest regions of Africa who lack the capital, therefore requiring other approaches of water management. These methods can include extraction of untapped water resources and providing other solutions for irrigation.