1. Economics of Food Markets 17 October 2007 Food Security in an Age of Falling Water Tables The Food Security Challenge in an Age of Falling Water Tables Tutorial Maarten Willemen

2. Economics of Food Markets 17 October 2007 Food Security in an Age of Falling Water Tables The Food Security Challenge Detailed analysis shows that, globally, there is enough land, soil and water to make the necessary production feasible – FAO (2002) As the economy grows, its demands are outgrowing the earth, exceeding many of the planets natural capacities – Brown (2004)

3. Economics of Food Markets 17 October 2007 Food Security in an Age of Falling Water Tables Falling water tables (1)Widening gap between the growing use and the sustainable supply of water. (2)Food security is closely tied to water security: -Food production is water intensive; -100 tons of water produce 1 ton of grain; -70% of world water use to irrigation. (3) Depletion of natural resources reduces grain harvest: -Example: Saudi Arabia.

4. Economics of Food Markets 17 October 2007 Food Security in an Age of Falling Water Tables

5. Economics of Food Markets 17 October 2007 Food Security in an Age of Falling Water Tables Competition in water markets Farmers are faced with not only a shrinking water supply but also a shrinking share of that shrinking supply – Brown (2004) (1) Introduction of Water Markets -Cities and towns buy irrigation rights -Turning highly productive land to wasteland (2) Opportunity Costs -1,000 tons of water yield $200,- of wheat -1,000 tons of water expands industrial output by $14,000

6. Economics of Food Markets 17 October 2007 Food Security in an Age of Falling Water Tables Implications In reality, the wars over water are taking place in world grain markets – Brown (2004) (1)Divert irrigation water from agriculture. (2)Import grain to offset the loss of farm output. (3)Water scarcity crossing national boundaries.

7. Economics of Food Markets 17 October 2007 Food Security in an Age of Falling Water Tables Solutions How to raise water productivity: Raising the price of water; Water efficient technology and crops; Recycling urban water supplies; Restructuring the energy sector; Reduction in the excessive consumption of livestock products; Managing the process.