004 Virtual Water Trade – What does it mean for food security?

In the previous blogs, we have discussed how environmental and geographical factors, such as drought, has threatened Africa’s agricultural activities, as well as approaches to mitigate the effects of these unfavorable conditions. In this blog post, I would like to introduce an innovative concept that can help enhance food security without being affected by these environmental limitations – Virtual Water Trade.

In fact, virtual water trade is not a new idea for the most of us. With globalisation, global trade of goods between countries have become the new phenomenon. Virtual World Trade emphasises the water embedded in the trade of goods and services (Oki & Kanae, 2004). So what does this imply for African nations that are facing water scarcity? 

With trade, water-deficit nations are able to import goods, including food, from their water-rich counterparts. As the growing of crops, processing and packaging require water, countries are therefore transferring the water footprint of production to countries with more water resources (producing countries) (Oki & Kanae, 2004). By importing water-intensive food commodities, burden on domestic freshwater within its national borders can be relieved, while at the same time meeting the needs of its people.

According to the World Bank, North Africa is one of the regions having the largest water deficit globally (World Bank, 2018). Due to rapid population growth, urbanisation and raising living standard, water demand in the region has increased significantly in the past few decades. Together with the adverse hydro-climatic conditions and climate change, the demand for water outpaces supply. Self-sufficiency in food security is compromised. Many North African nations therefore turn to virtual water trade in order to meet its internal demand for water consumption. Egypt and Algeria are among the countries with the largest net import of virtual water (Antonelli et al. 2017). Figures also show that North African nations import more basic food than high-valued agricultural products, when comparing to the global average. Most of the virtual water that they import are embedded in wheat and soybean from the US, maize from Argentina, cattle meat and sugar from Brazil, as well as wheat and barley from Australia (Antonelli et al. 2017).

It is undeniable that virtual water trade enables water-scare countries to lower the burden of water scarcity and enhance food security despite its environmental challenges. However, critics argue that as over-reliance on food imports may cause a country to be easily affected by the external environment, for instance recession or global price spikes (Puma et al. 2015). 

For instance, during the food price crisis in 2008, some of the world biggest wheat and rice export countries imposed export restriction. This resulted in panic and disturbance of the food system in trade-dependent countries. 

While virtual water trade can help prevent starving and undernourishment in some of the water-scarce African nations, it is still crucial for countries to improve agricultural productivity so as to achieve self-sufficiency in food production in the long run.