Strategic importance of water governance and virtual water trade (case study of India and South Africa)

Introduction

Water, a scarce resource, is important for the production of agricultural and non-agricultural products consumed and traded worldwide. There is empirical evidence to show that managing the virtual water trade is a tool for reducing the risks to food production due to water scarcity in water-deficient regions globally [1] [2] [3]. As most water is consumed in agricultural production, most water-deficient countries depend on increased food imports to meet their needs. Within the food security context, there is an urgent need to assess how the growing food deficit can be met under water constraints and what role virtual water can play in maintaining food security. Alongside the challenges of water availability and the food production increment, there is also that of meeting increasing food demand for a growing world population. This paper aims to examine the virtual water trade flow and its importance in informing water governance strategies. The analysis shows that including virtual water as a policy option requires a thorough understanding of the impacts and interaction of virtual water trade within regions and across continents (case studies, India and South Africa). The study focused on discovering the volume and direction of virtual water embodied in the trade of agricultural commodities on those two countries and on examining how water governance does or could affect volumes and direction of virtual water trade between them.

Methodology

Secondary data were reviewed from various published sources such as the Ministry of Commerce, Government of India, Food and Agriculture Organisation (FAO), US Department of Agriculture (USDA), the World Development Indicators Database, and the World Bank. Data on agricultural production, total import of major agricultural products, and export of agricultural commodities of South Africa and India were collected from the databases of FAO and USDA. The estimation of virtual water was primarily carried out using the available literature on water content in agricultural and livestock production [4] [5] [6] [7]. The virtual water trade was calculated by multiplying the commodity trade volumes (tonne year) by their associated virtual water content (m³/ tonne). Virtual water trade is thus calculated as:

Results

The findings show that the water governance in South Africa has a more concrete platform than in India. During 2000–2011 South Africa was a net exporter of virtual water, but its contribution to India’s virtual water trade is less than 2%. India is also a virtual water exporter; its share in the global virtual water trade is accountable and shows an increasing trend since 2000–2011.

Conclusion

The study showed that where water has become an economic good and a major asset for human wellbeing, there is a need to focus upon water crisis areas where water is on the verge of depletion, specifically in countries with an existing water deficit. The trade in virtual water should become the subject of a policy tool for global water conservation. Improving water management should be developed and embedded within the water governance strategies of nations and globally.

Please note these Proceedings have received limited or no review from supervisors and IIASA program directors, and the views and results expressed therein do not necessarily represent IIASA, its National Member Organizations, or other organizations supporting the work.

Last edited: 18 March 2015