Virtual Water Trade

02 Apr Virtual Water Trade

“Third world war will be fought for water”

The concept of virtual water is more important now than ever since it helps realize the illusion of food security and water, despite sufficient evidence that there are inadequate water resources to sustain national economies.

Virtual water refers to the water contained in fiber, food (any agricultural product), and non-food commodities such as energy.

Let us understand what is virtual water with the help of a simple example:

Consider that to produce one tonne of wheat, close to 1,300 cubic meters of water is required. When a country imports this tonne of wheat grains, it can use the existing indigenous water it saves for other purposes instead. However, if the exporting country is water-scarce, the shipped virtual water will be no longer available for other purposes.  

What is Virtual Water Trade?

The concept was introduced by Tony Allan in 1993. Virtual water trade exactly means what the name implies – the import and export of ‘hidden’ water present in various products, such as textiles, machinery, livestock, and crops. All these require water inevitably for their production.

Virtual water trade is now a globally relevant topic, especially when nations are struggling with the consequences of climate change. China, historically, has been a net importer of virtual water. On the other hand, India’s exports are highly water-intensive due to its large variety of agricultural exports. As a result, it puts water sustainability at significant risk.

Virtual Water Trade and India:

❑ International:

▪ India is a net virtual water exporter, because of export of agricultural commodities.

▪ India exported 26 billion liters of VW every year between 2006-2016

❑ Inter-state:

▪ Punjab and Haryana are water stressed.

▪ Still, water-intensive crops like rice are grown there.

▪ These crops are sent to North-East India.

▪ But, NE states have better agro-climatic conditions to grow rice.

Benefits of framing a virtual water trade policy?

1. a) Awareness about water footprint will increase.
2. b) India can save precious fresh water for drinking purposes.
3. c) Reduce pressure on scarce water resources in water stressed areas.
4. d) Reduce the need for river interlinking (expensive financially and environmentally)

Challenges:

1. a) Estimating the quantity of virtual water is difficult.
2. b) Estimating movement of water-intensive products.
3. c) Convincing farmers to change cropping patterns permanently.

Way forward:

▪ Create awareness about water footprint.

▪ Review the MSP and FRP regime which encourages water-intensive rice and sugarcane production.

▪ Improve farming methods: micro-irrigation; mulching; direct seeding of rice.

✓ To grow 1 kg rice, India needs 3,000 liter water; USA only 1,200 liters.

✓ To grow 1 kg cotton, India needs 8,000 liters of water  ; China only 1,500 liters.

▪ Discourage export of water-intensive crops:

✓ Israel discourages export of water intensive crops like oranges. Israel has net virtual water import.

▪ Encourage import of water-intensive crops:

✓ China is conserving water by importing water intensive crops like Soya.

▪ Overseas contract farming to import water intensive crops:

✓ 1,300 Chinese companies have overseas investment in Agriculture. Five-fold increase between 2010-2016

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