Category Archives: Water Economics

China’s Massive Water Problem


Water scarcity has always been a problem for northern China, but shortages have reached crisis levels as a result of rapid economic development. (NYT)

China is one of the most water-rich countries in the world. But as Mao observed, its water resources are unevenly distributed and overwhelmingly concentrated in the south and far west. Water scarcity has always been a problem for northern China, but shortages have reached crisis levels as a result of rapid economic development.

For most of the 1990s, northern China’s major river, the Yellow, failed to reach the sea, and the water tables around Beijing and other major northern cities have dropped so low that existing wells cannot tap them. In response, the government has tried to promote water conservation and limit water use. But these measures have had little impact, and there simply isn’t enough water to satisfy growing demands for drinking water, irrigation, energy production and other uses.

Rather than face the political challenge of allocating water resources among these competing interests, Beijing has placed its faith in monumental feats of engineering to slake the north’s growing thirst. The South-North Water Transfer eventually aims to pipe 45 cubic kilometers of water annually northward along three routes in eastern, central and western China. All three pose enormous technical challenges: The eastern and central routes will be channeled under the Yellow River, while the western route entails pumping water over part of the Himalayan mountain range.

The estimated cost of $65 billion is almost certainly too low, and doesn’t include social and ecological impacts. Construction has already displaced hundreds of thousands, and issues the like possible increases in transmission of water-borne diseases have not been properly studied. But Beijing’s calculus is political: It is easier to increase the quantity of water resources, at whatever cost, rather than allocate a limited supply between competing interests.

For an authoritarian regime with weak institutions of governance, this reluctance is understandable. But it also puts China’s economic and ecological future at risk, because Beijing cannot keep increasing supplies of water indefinitely. Already, the southern regions slated to pump water northward are facing water shortages themselves. In the long run, warming in the Himalayas is likely to reduce the flow of China’s major rivers, increasing water scarcity throughout the country.

Further feats of engineering can help China manage some of these impacts, but will not solve the underlying problem of water scarcity. Doing so requires contentious reallocations of water, including by dramatically increasing the cost of water for farmers — something the Communist Party is loath to do.

Ultimately, China needs significant political reform to meet the challenge of water scarcity. In order to make difficult decisions about who gets how much water, the country needs robust, transparent and participatory decision-making mechanisms. Moreover, in order to make policy ideas like water-rights reform work, the legal system and the rule of law must be strengthened. Finally, Beijing needs to stop relying on technology to avoid making hard choices about scarce resources. The United States and the rest of the world need to push the Chinese government to make its development more sustainable through political reform, lest China’s economy and social stability be endangered.

The architects of the Panama Canal overcame the inconvenient separation of two oceans by a narrow strip of land with a gigantic feat of engineering. But solving the problem of water scarcity in China is not so simple. Beijing will find that simply adjusting the supply of water, or of any other critical resource, is not enough: At some point it has to decide who gets how much. And that is a process that, without dramatic reform, is likely to leave the party high and dry.


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Issue Brief: Water Resource Issues, Policy and Politics in China


This Issue Brief describes the root causes of China’s water resource challenge, assesses the Chinese government’s policy response to date, and finally offers recommendations to increase the effectiveness of these policies. (Brookings Institution)

Among the many challenges to China’s current economic development trajectory, water resource constraints are among the most worrisome. According to Barry Naughton, one of the foremost experts on the Chinese economy, “China’s greatest development challenges…are in the areas where a dense population pushes up against the limits of water and what the land can provide.” The water resource challenge to China’s development is exceptionally complex, encompassing a blend of geographical, political, economic, and social dimensions. This Issue Brief describes the root causes of China’s water resource challenge, assesses the Chinese government’s policy response to date, and finally offers recommendations to increase the effectiveness of these policies.

In short, China’s water resource challenge consists of both water quantity and quality issues, each of which present distinctive challenges for Chinese policy. Although the Chinese government is implementing perhaps the world’s most ambitious water resource management strategy, its efforts risk being undermined by inter-governmental rivalries, corruption, and incentives that favor economic development over sustainable resource use. In particular, inter-jurisdictional conflicts over water resources threaten to undermine policies to address water scarcity, while mis-matched incentives between pollution control and economic development at local levels of government threaten to undermine water quality control objectives.

Plenty of water, in all the wrong places

The Chinese government has adopted two basic policy responses to the water scarcity problem. First, it has continued to finance the gigantic South-North Water Transfer Project, or SNWTP (Nanshui beidiao gongcheng 南水北调工程). The SNWTP eventually aims to transfer some 45 billion cubic meters of water per year from central and southwest China to augment the flow of the Yellow River and meet urban water demand in the Beijing-Tianjin region. The Project envisions eastern, central, and western routes, of which the first is under construction and the second in a stage of advanced planning. All three routes pose enormous technical challenges: the eastern and central routes will be channeled under the Yellow River, while the western route entails pumping water at elevations of 10-16,000 feet above sea level over part of the Himalayan mountain range.

In 2010, China’s Communist Party Central Committee and State Council promulgated a “three red lines” (santiao hongxian 三条红线) policy intended to establish clear and binding limits on water quantity usage, efficiency, and quality. In early 2012, the State Council announced that the “three red lines” policy would limit total national water consumption to less than 700 billion cubic meters per year, amounting to approximately three-quarters of China’s total annual exploitable freshwater resources. In addition, the policy attempts to increase irrigation use efficiency to 60% by 2030. These headline policies are augmented by increased investment, including 1.8 trillion RMB in 2011-2015, primarily for irrigation infrastructure improvements, rural clean water delivery, and reservoir enhancements.

In combination, these policies seek to redress China’s regional imbalance in water availability, while making overall water use sustainable. However, they are likely to be undermined by conflict between regions which are asked to bear the costs of storing and transferring water, and those which benefit as a result. The dynamics of these conflicts is illustrated by the case of a dam, first proposed in 1954, intended to be built on the upper reaches of the Yellow River in order to provide water to poor farmers in Ningxia. Gansu Province, claiming that the dam would inundate some of its best farmland, has managed to prevent construction of the dam by lobbying different elements of the central government than those which had supported the dam. The dispute remains unresolved; in 2010, Ningxia’s representatives to the China People’s Political Consultative Conference (zhengzhi xie shanghuiyi 政治协商会议) took the unusual step of presenting a petition to the full Conference to build the dam.

A crisis of water quality

Water quality is arguably an even more serious problem than is water shortage. In rural areas, where less than half the population has access to purified water, agricultural run-off is the dominant pollution source, while in urban areas human and industrial waste are left largely untreated, contaminating both surface and underground water supplies. Recent reports from China’s environmental protection authorities indicate that in the country as a whole, less than half of China’s water can be treated to the point where it is safe for drinking, and a quarter of surface waters are so polluted that they are unfit even for industrial use. Independent estimates are even more pessimistic.

This crisis of water quality has contributed to a serious environmental health crisis. Arsenic poisoning from contaminated groundwater is thought to be widespread, and in some areas high incidences of particular cancers have been linked to organic water pollution. The ecological impact of high pollution levels is also acute, dramatically reducing freshwater wild fish populations as well as driving larger animals like the baiji (白鱀豚), or Yangtze dolphin, to the very brink of extinction. Water pollution issues have, moreover, proved to be particularly politically contentious. In 2005, the accidental release of some 100 tons of carcinogenic chemicals into a river near China’s northeastern border with Russia produced a diplomatic crisis, and in 2001 pollution from dye factories in Suzhou provoked residents of downstream Jiaxing, Zhejiang Province to pool funds to buy old boats and sink them in the waterway, forming a dam that blocked up the polluted water into neighboring Jiangsu Province.

The Chinese government’s policy responses to water quality issues rely largely on strengthening monitoring capabilities and enforcement mechanisms. The 2008 Water Pollution Law attempted to strengthen earlier legislation by providing for increased penalties, including stiff fines for the executives of polluting enterprises. As part of a broader push to expand monitoring of pollution, Regional Supervision Centers were established throughout China to keep an eye on local enterprises, and water quality bureaus were set up within the MWR’s river basin commissions. This institutional expansion has been complemented by continuing regulatory reform. The “three red lines” policy introduced a new requirement that 95% of tested water must meet national water quality guidelines, which have recently been expanded and updated to cover a wide range of organic and microbial pollutants as well as concentrations of heavy metals. To help meet these standards, the government announced in late 2011 a five-year, 380 billion RMB investment plan to improve urban wastewater treatment facilities, as well as the establishment of some 14,000 monitoring stations throughout the country to continuously monitor water quality.

Water Scarcity and Pollution: Constraints on China’s future?

…Fully addressing water quantity and quality issues therefore entails some basic and systematic institutional and political reforms, all of which will require substantial political will. Nonetheless, if this can be mustered, five reforms would greatly aid China in addressing water resource quantity and quality issues.

  • First, the Party’s cadre evaluation system should be overhauled to emphasize environmental and water resource management metrics. Some reforms have already been undertaken, but economic and stability criteria remain of paramount importance. Although environmental outcomes are more difficult to measure than GDP growth, technologies like those employed in the Digital Yellow River system make it easier to hold cadres responsible for water quality and quantity issues within their jurisdictions.
  • Second, formalized mechanisms for inter-provincial consultation should be established at regional scales. In particular, provincial governments should be given formal representation on the Water Conservancy Commissions which manage China’s major river basins on behalf of MWR. Although the Commissions maintain extensive links with local governments, formalizing representation would improve stakeholder involvement and enhance policy buy-in.
  • Third, high-level encouragement should be given to inter-governmental cooperation on water resource issues, which are by nature inter-departmental. As part of this initiative, a high-level working group should be established under the State Council to coordinate policy implementation between MWR, MEP, and other relevant entities, and provide advice to decision-makers. This effort should be led by a senior leader, preferably at the Presidential or Prime Ministerial level, in order to ensure active participation by ministerial units.
  • Fourth, the central government should aim to strengthen the legal system to enable more effective water rights trading. Title and trading procedures should be clarified, special courts for dispute resolution created, and markets brought to a larger scale. Ideally this effort should be undertaken as part of a broader set of legal reforms which might aim to strengthen judicial independence and the rule of law more generally.
  • Fifth, both MEP and MWR should encourage the involvement of civil society groups in water pollution monitoring. Although the government is wary of such involvement, it can channel growing concern over water issues for constructive purposes by making civil society groups an adjunct to water pollution monitoring efforts.

The gravity of China’s water resource challenges cannot be overstated—in order to chart a sustainable development pathway in future decades China must use substantially less water much more efficiently, while also improving water quality. The government has built the foundations of a credible policy response, but these must be strengthened, expanded and built upon if China is to avoid a water resource constraint to its future growth and development.


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Reflections—Shaping Water Policy: What Does Economics Have to Offer?

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Article advises policymakers that they can use economics to support the case for those investments and policy initiatives that are likely to yield substantial net benefits in solving the global water crisis.

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The Real Threat to Our Future is Peak Water by Lester Brown

Kansas Drought 2012

As population rises, overpumping means some nations have reached peak water, which threatens food supply, and causing more trouble than the threat of oil depletion.

Peak oil has generated headlines in recent years, but the real threat to our future is peak water. There are substitutes for oil, but not for water. We can produce food without oil, but not without water.

We drink on average four quarts (4.5 litres) of water per day, in one form or another, but the food we eat each day requires 2,000 quarts of water to produce, or 500 times as much. Getting enough water to drink is relatively easy, but finding enough to produce the ever-growing quantities of grain the world consumes is another matter.

Grain consumed directly supplies nearly half of our calories. That consumed indirectly as meat, milk, and eggs supplies a large part of the remainder. Today roughly 40% of the world grain harvest comes from irrigated land. It thus comes as no surprise that irrigation expansion has played a central role in tripling the world grain harvest over the last six decades.

During the last half of the 20th century, the world’s irrigated area expanded from 232m acres (93m hectares) in 1950 to 706m in 2000. This tripling of world irrigation within 50 years was historically unique. But since then the growth in irrigation has come to a near standstill, expanding only 9% between 2000 and 2010.

Farmers get their irrigation water either from rivers or from underground aquifers. Historically, beginning with the Sumerians some 6,000 years ago, irrigation water came from building dams across rivers, creating reservoirs that then enabled them to divert the water onto the land through a network of gravity-fed canals. This method of irrigation prevailed until the mid 20th century, but with few remaining sites for building dams the prospects for expanding surface irrigation faded. Farmers then turned to drilling wells to tap underground water resources.

In doing so, they learned that there are two types of aquifers: those that are replenishable through rainfall, which are in the majority, and those that consist of water laid down eons ago, and thus do not recharge. The latter, known as fossil aquifers, include two strategically important ones, the deep aquifer under the North China Plain and the Ogallala aquifer under the US Western Great Plains.

In looking at water and our future, we face many questions and few answers. Could the world be facing peak water? Or has it already peaked?

Tapping underground water resources, which got seriously underway in the mid-20th century, helped expand world food production, but as the demand for grain continued climbing the amount of water pumped continued to grow. Eventually the extraction of water began to exceed the recharge rate of aquifers from precipitation, and water tables began to fall. In effect, overpumping creates a water-based food bubble, one that will burst when the aquifer is depleted and the rate of pumping is necessarily reduced to the rate of recharge from precipitation.

Today some 18 countries, containing half the world’s people, are overpumping their aquifers. Among these are the big three grain producers – China, India, and the United States – and several other populous countries, including Iran, Pakistan and Mexico.

During the last two decades, several of these countries have overpumped to the point that their aquifers are being depleted and their wells are going dry. They have passed not only peak water, but also peak grain production. Their aquifers are being depleted, their wells are going dry, and their grain harvests are shrinking. Among the countries whose use of water has peaked and begun to decline are Saudi Arabia, Syria, Iraq and Yemen. In these countries peak grain has followed peak water.

Nowhere are falling water tables and the shrinkage of irrigated agriculture more dramatic than in Saudi Arabia, a country as water-poor as it is oil-rich. After the Arab oil export embargo in 1975, the Saudis realised they were vulnerable to a counter-embargo on grain. To become self-sufficient in wheat, they developed a heavily subsidised irrigated agriculture based largely on pumping water from fossil aquifers.

After being self-sufficient in wheat for over 20 years, the Saudis announced in early 2008 that, with their aquifers largely depleted, they would reduce wheat planting by one-eighth each year until 2016, when production would end. By then Saudi Arabia projects it will be importing some 15m tons of wheat, rice, corn and barley to feed its Canada-sized population of 30 million. It is the first country to publicly project how aquifer depletion will shrink its grain harvest.

Syria, a country of 22 million people riddled by civil war, is also overpumping its underground water. Its grain production peaked in 2002 and during the decade since then has dropped 30%. It, too, is becoming heavily dependent on imported grain.

Grain production in neighbouring Iraq peaked in 2004. By 2012 it had dropped 33%, forcing the government to turn to the world market to feed its people. In addition to aquifer depletion, both Syria and Iraq are also suffering to a lesser degree from a reduced flow in the Tigris and Euphrates rivers, as upstream Turkey claims more water for its own use.

In Yemen, a nation of 23 million people that shares a long border with Saudi Arabia, the water table is falling by roughly 4ft a year as water use outstrips aquifer recharge. With one of the world’s fastest-growing populations and with water tables falling everywhere, Yemen is fast becoming a hydrological basketcase. Grain production has fallen by half over the last 35 years. By 2015 irrigated fields will be a rarity and the country will be importing virtually all of its grain. Living on borrowed water and borrowed time, Yemen could disintegrate into an area of tribes warring over water.

Thus in the Arab Middle East the world is seeing the collision between population growth and water supply at the regional level. For the first time in history, grain production is dropping in a geographic region with nothing in sight to arrest the decline. Because of the failure of governments in the region to mesh population and water policies, each day now brings 10,000 more people to feed and less irrigation water with which to feed them.

Other countries with much larger populations, such as Iran, Pakistan and Mexico, are also near or beyond peak water. In Iran, a country with 81 million people, grain production dropped 10% between 2007 and 2012 as its irrigation wells started to go dry. One quarter of its current grain harvest is based on overpumping. With its population growing by over a million per year, it too faces a day of reckoning.

Pakistan, with a population of 177 million that is growing by 4 million per year, is also mining its underground water. Most of its irrigation water comes from the Indus river system, but in the Pakistani part of the fertile Punjab plain the drop in water tables appears to be similar to the well-known fall that is occurring in India.

Observation wells near the twin cities of Islamabad and Rawalpindi showed a fall in the water table between 1982 and 2000 that ranged from 3ft to 6ft a year. In the Pakistani province of Balochistan, which borders Afghanistan, water tables around the capital, Quetta, are falling by 3.5m per year – pointing to the day when the city will run out of water. Sardar Riaz A. Khan, former director of Pakistan’s Arid Zone Research Institute in Quetta, reports that six of Balochistan’s seven basins have exhausted their groundwater supplies, leaving their irrigated lands barren.

In a World Bank study, water expert John Briscoe says: “Pakistan is already one of the most water-stressed countries in the world, a situation which is going to degrade into outright water scarcity due to high population growth.” He then notes that “the survival of a modern and growing Pakistan is threatened by water”.

In Mexico – home to a population of 109 million that is projected to reach 129 million by 2050 – the demand for water is outstripping supply. Mexico City’s water problems are well known. Rural areas are also suffering. In the agricultural state of Guanajuato, the water table is falling by 2m or more a year. In the northwestern state of Sonora, farmers once pumped water from the Hermosillo aquifer at a depth of 35ft. Today they pump from 400ft. Mexico’s water supply appears to have peaked. Peak grain may be imminent.

Thus far only smaller countries have suffered a water-driven decline in grain harvests. Some midsize countries, such as Iran, Pakistan and Mexico, appear to be on the verge of doing so. But now aquifer depletion also threatens harvests in the big three grain producers – China, India and the United States – that together produce half of the world’s grain. The question is not whether water shortages will affect future harvests in these countries, but rather when they will do so.

Among the big three, dependence on irrigation varies widely. Some four-fifths of China’s grain harvest comes from irrigated land, most of it drawing on surface water. For India, three-fifths of its grain is irrigated, mostly with groundwater. For the United States, only one-fifth of the harvest is from irrigated land. The bulk of the grain crop is rain-fed, produced in the highly productive midwestern corn belt, where there is little or no irrigation.

Falling water tables are already adversely affecting harvest prospects in China, which rivals the United States as the wor1d’s largest grain producer. A groundwater survey released in Beijing in 2001 indicated that the water table under the North China Plain, an area that produces over half of the country’s wheat and a third of its corn, was falling fast. Overpumping has largely depleted the shallow aquifer, forcing well-drillers to turn to the region’s deep aquifer, which is not replenishable.

The survey reported that under Hebei province in the heart of the North China Plain, the average level of the deep aquifer was dropping nearly 10ft per year. Around some cities in the province, it was falling twice as fast. He Qingcheng, head of the groundwater monitoring team, notes that as the deep aquifer is depleted the region is losing its last water reserve – its only safety cushion.

In 2010, He Qingcheng reported that Beijing was drilling down 1,000ft to reach an aquifer, five times deeper than 20 years ago. His concerns are mirrored in the unusually strong language of a World Bank report on China’s water situation that foresees “catastrophic consequences for future generations” unless water use and supply can quickly be brought back into balance.

As serious as water shortages are in China, they are even more alarming in India, where the margin between food consumption and survival is so precarious. In India, whose population is growing by 18 million per year, irrigation depends almost entirely on underground water. And since there are no restrictions on well drilling, farmers have drilled some 21m irrigation wells and are pumping vast amounts of underground water.

In this global epicentre of well drilling, pumps powered by heavily subsidised electricity are dropping water tables at an accelerating rate. Among the states most affected are Punjab, Haryana, Rajasthan and Gujarat in the north and Tamil Nadu in the south. In north Gujarat, the water tables are falling by 20ft per year.

In Tamil Nadu, a state of 72 million people, falling water tables are drying up wells everywhere. Kuponlari Palanisamy of Tamil Nadu Agricultural University reports that falling water tables have dried up 95% of the wells owned by small farmers, reducing the irrigated area in the state by half over the last decade.

India’s grain harvest has been expanding rapidly in recent years, but in part for the wrong reason, namely massive overpumping. A 2005 World Bank study reports that 15% of India’s food supply is produced by mining groundwater. Stated otherwise, 175 million Indians are now fed with grain produced with the unsustainable use of water. As early as 2004, Fred Pearce reported in New Scientist that “half of India’s traditional hand-dug wells and millions of shallower tube wells have already dried up, bringing a spate of suicides among those who rely on them. Electricity blackouts are reaching epidemic proportions in states where half of the electricity is used to pump water from depths of up to a kilometre.”

As India’s water table falls, well drillers are using modified oil-drilling technology to reach water, going down a half mile or more in some locations. In communities where underground water sources have dried up entirely, all agriculture is now rainfed and drinking water must be trucked in. Tushaar Shah, who heads the International Water Management Institute’s groundwater station in Gujarat, says of India’s water situation: “When the balloon bursts, untold anarchy will be the lot of rural India.”

In the United States, farmers are over-pumping in the Western Great Plains, including in several leading grain-producing states such as Texas, Oklahoma, Kansas and Nebraska. In these states, irrigation has not only raised wheat yields but it has also enabled a shift from wheat to corn, a much higher-yielding crop. Kansas, for example, long known as the leading wheat state, now produces more corn than wheat.

Irrigated agriculture has thrived in these states, but the water is drawn from the Ogallala aquifer, a huge underground water body that stretches from Nebraska southwards to the Texas Panhandle. It is, unfortunately, a fossil aquifer, one that does not recharge. Once it is depleted, the wells go dry and farmers either go back to dryland farming or abandon farming altogether, depending on local conditions.

In the states that draw their irrigation water from the Ogallala aquifer, wells are starting to go dry. In Texas, a large grain and cattle state, which is located on the shallow end of the aquifer, irrigated area peaked in 1975 and has dropped 37% since then. In Oklahoma, irrigation peaked in 1982 and has dropped by 25%. In Kansas the peak did not come until 2009, but during the three years since then it has dropped precipitously, falling nearly 30%. Nebraska, now also a leading corn-producing state, saw its irrigated area peak in 2007. Since then its grain harvest has shrunk by 15%. Even though aquifer depletion is reducing grain output in several key states, it is not yet sufficient to reduce the overall US grain harvest, the bulk of which is produced in the rain-fed midwestern corn belt.

At the international level, water conflicts, such as the one in the Nile river basin between Egypt and the upstream countries, dominate the headlines. But within countries it is the competition for water between cities and farms that preoccupies political leaders. Indeed, in many countries farmers now face not only a shrinking water supply as aquifers are pumped dry, but also a shrinking share of that shrinking supply. In large areas of the United States, such as the southern great plains and the southwest, virtually all water is now spoken for. The growing water needs of major cities and thousands of small towns often can be satisfied only by taking water from agriculture. As the value of water rises, more farmers are selling their irrigation rights to cities, letting their land dry up.

In the western United States, hardly a day goes by without the announcement of a new sale. Half or more of all sales are by individual farmers or their irrigation districts to cities and municipalities. Felicity Barringer, writing in the New York Times from California’s Imperial Valley, notes that many fear that “a century after Colorado river water allowed this land to be a Cornucopia, unfettered urban water transfers could turn it back into a desert”.

In June, 2013, the Los Angeles Times reported that the farmers in California’s highly productive Imperial Valley had agreed to sell a massive quantity of irrigation water to San Diego county. This sale of water, enough to meet the household needs of nearly one million people, is the largest farm-to-city transfer of water in US history. It will dramatically reduce food production in the Imperial Valley, a huge vegetable garden not only for California, but for countless other markets as well.

Colorado, with a fast-growing population, has one of the wor1d’s most active water markets. Cities and towns of all sizes are buying irrigation water rights from farmers and ranchers. In the Arkansas river basin, which occupies the southeastern quarter of the state, Colorado Springs and Aurora (a suburb of Denver) have already bought water rights to one-third of the basin’s farmland. Aurora has purchased rights to water that was once used to irrigate 19,000 acres of cropland in the Arkansas valley. The US Geological Survey estimates that 400,000 acres of farmland dried up statewide between 2000 and 2005.

Colorado is not alone in losing irrigation water. Farmers in India are also losing their irrigation water to cities. This is strikingly evident in Chennai [formerly Madras], a city of 9 million on the east coast. As a result of the city government’s inability to supply water to many of its residents, a thriving tank-truck industry has emerged that buys water from nearby farmers and hauls it to the city’s thirsty residents.

For farmers near cities, the market price of water typically far exceeds the value of the crops they can produce with it. Unfortunately the 13,000 privately owned tank trucks hauling water to Chennai are mining the region’s underground water resources. As water tables fall, eventually even the deeper wells will go dry, depriving rural communities of both their food supply and their livelihood.

In the competition for water between farmers on the one hand and cities and industries on the other, farmers always lose. The economics do not favour agriculture. In countries such as China, where industrial development and the jobs associated with it are an overriding national economic goal, agriculture is becoming the residual claimant on the water supply.

In countries where virtually all water has been claimed, cities can typically get more water only by taking it from irrigation. Countries then import grain to offset the loss of irrigated grain production. Since it takes 1,000 tons of water to produce one ton of grain, importing grain is the most efficient way to import water. Thus trading in grain futures is, in a sense, trading in water futures. To the extent that there is a world water market, it is embodied in the world grain market. We can now see how overpumping, whether in the Arab Middle East or the US great plains, can lead to aquifer depletion and shrinking grain harvests. In short, peak water can lead to peak grain. For some countries this is no longer merely a theoretical possibility. It is a reality.

Thus far, aquifer depletion has translated into shrinking harvests only in smaller countries in the Middle East. When we look at middle-sized countries such as Iran, Mexico and Pakistan, with tightening water supplies, we see that Iran is already in deep trouble. It is feeling the effects of shrinking water supplies from overpumping. Pakistan may also have reached peak water. If so, peak grain may not be far behind. In Mexico the water supply may have already peaked. With less water for irrigation, Mexico may be on the verge of a downturn in its grain harvest.

In summarising prospects for the three big grain producers – the US, China and India – we see sharp contrasts. In the US, the irrigated area is starting to shrink largely as a result of depletion of the Ogallala aquifer , making it more difficult to continue increasing grain production.

China, with four-fifths of its grain harvest coming from irrigated land, relies heavily on irrigation, but it is largely river water. A notable exception to this is the all-important North China Plain which relies heavily on underground water. With tight water supplies in northern China and with cities claiming more irrigation water, the shrinking water supply will likely reduce the harvest in some local situations. And before long it could more than offset production gains leading to an absolute decline in China’s grtain harvest.

Of the big three countries, the one most vulnerable to overpumping is India. Three-fifths of its grain harvest comes from irrigated land. And since only a small portion of its irrigation water comes from rivers, India is overwhelmingly dependent on underground water. Its 21m wells, each powered with a diesel engine or electric motor, are dropping the water table at an alarming rate.

The Indian government, recognising the political significance of its falling water tables, has classified data on aquifer depletion, refusing to make it public. India may have already passed peak water. The question is, will peak water be followed by peak grain or is there enough unrealised technological potential remaining to raise yields enough to offset any imminent losses from wells going dry?

The world has quietly transitioned into a situation where water, not land, has emerged as the principal constraint on expanding food supplies. There is a large area of land that could produce food if water were available. Water scarcity is not our only challenge. Two huge new dustbowls are forming , one in northwest China and the other in the Sahelian region of Africa. These giant dustbowls dwarf the US dustbowl of the 1930s.

Just as harvests are shrinking in some countries because of aquifer depletion, they are shrinking in other countries because of soil erosion. Among the more dramatic examples are Mongolia and Lesotho, which have both seen their grain harvests shrink by half in recent decades as a result of soil erosion.

The bottom line is that water constraints augmented by soil erosion, the loss of cropland, a shrinking backlog of unused agricultural technology, and climate change are making it more difficult to expand world food production. Is it possible that the negative influences on future food production could offset the positive ones during this second decade of the century?

Lester Brown is president of the Earth Policy Institute and author of Full Planet, Empty Plates: The New Geopolitics of Food Scarcity (WW Norton 2012)


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Less Push, More Pull by David Zetland

“For thousands of years, we have had very good water managers who are “pushing” (supplying) us the water services that they think we need without much consideration for customer feedbacks and the limited water resources. This has worked very well for a long time because there was always enough water for everyone. But now we don’t have water for everyone anymore. It’s the end of the abundance era.” (TedxTalks)

David Zetland is a senior water economist in the Department of Environmental Economics and Natural Resources at Wageningen University in the Netherlands where he is working on an EU-funded project, “Evaluating Economic Policy Instruments for Sustainable Water Management in Europe.” He blogs on water, economics and politics at and is the author of The End of Abundance: economic solutions to water scarcity (2011).


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