Africa is teetering on the brink of a water rush, predicted Petra Hellegers in her inaugural lecture as extraordinary professor of the Economics of Water and Climate Change.
Hellegers believes that agricultural production will shift to countries with abundant water. Water - not land - is already the main driving force behind the land grabbing in Africa by companies from rich but water-scarce countries.
Water is becoming an increasingly valuable resource in the world, said Hellegers, because it is becoming more scarce while demand is rising. Globalization and liberalization of global markets mean that countries are becoming more dependent on each other for their food supplies. This means that agricultural and trade policies could have a bigger influence on the demand for water than policy on water itself, argued Hellegers.
Water, food production, energy and climate change all go together, Hellegers explained. More and more food is needed to feed the growing world population. Moreover, that population is becoming richer and more urban, and is eating more meat. This increases water consumption dramatically: the production of one kilo of grain requires 1,000 litres of water, while one kilo of meat takes 15,000 litres of water. Also, climate change is making some regions drier or hotter, so that irrigation water is needed. Higher prices for energy make hydro-electric power more interesting, as they do biofuels, which require crops that also require water. The same higher energy prices make it more expensive to pump, purify and transport fresh water.
Hellegers made an economic analysis in her lecture. The costs of supplying fresh water in Saudi Arabia, for example, are no longer outweighed by the profits raised by agricultural harvests. For this reason, the Saudi government decided in 2008 to grow 12 percent less grain on its own land and granted five billion dollars in soft loans to companies seeking to invest in large-scale agriculture in Africa. Although Africa is often associated with drought and famine, it also has many regions with high agricultural potential and adequate rainfall. Saudi companies are investing extensively in South Sudan, for example, said Hellegers. There is a lot of criticism of this land grabbing because it could work against local food security. Companies buy or lease land and often also sign contracts concerning water use. The food produced is exported to their own country.
According to Hellegers, this is a foretaste of a 'water rush' with many of the features of the gold rush in the wild west of America in the 19 th century. Finding a wise approach to this sort of issue, she said, demands a sound economic analysis which integrates all the factors. In this analysis, water should not be valued for its market value alone, but also for its value to society as a whole.
Petra Hellegers is extraordinary professor of the Economics of Water and Climate Change at Wageningen University, in the Environmental Economics and Natural Resources chair group.