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Can virtual water 'trade' reduce water scarcity in semi-arid countries? The case of Spain

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  • Garrido, Alberto
  • Novo, Paula
  • Rodriguez Casado, Roberto
  • Varela-Ortega, Consuelo
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    Abstract

    Agricultural trade is by far the largest vehicle to ‘move’ water virtually around the world. Observing that most countries import and export water embedded in the exchanged products, the objective of this study is to assess the virtual water ‘trade’ in Spain for the period 1997-2006. We differentiate between the green and blue components of virtual water from a hydrological and economic perspective. The combination of spatial and time dimensions offers a unique empirical setting to determine whether virtual water ‘trade’ can contribute to reduce water scarcity. The study reveals that Spain is a net ‘importer’ of virtual water. By far the largest virtual water ‘imports’ are linked to cereals and animal feed products whilst the virtual water ‘exports’ are linked to exports of animal products, fruits and vegetables. Virtual water ‘trade’ is one way to reduce the vulnerability of the agri-food sector to climate instability. It reinforces the competitive advantages of its natural endowments capital investments in agriculture. The econometric analysis using provincial water exports water exports are invariable to cyclical water scarcity, and largely explained by fixed factors. Virtual water ‘trade’ does not exacerbate water scarcity, though it is certainly a source of pressure for resources management.

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    File URL: http://purl.umn.edu/51048
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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51048.

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    Date of creation: 2009
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    Handle: RePEc:ags:iaae09:51048

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    Web page: http://www.iaae-agecon.org/
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    Related research

    Keywords: Virtual water ‘trade’; farm trade; water scarcity; Agricultural and Food Policy; Crop Production/Industries; Environmental Economics and Policy; Land Economics/Use; Q15; Q17; Q25; Q27; Q56;

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    1. Iglesias, Eva & Garrido, Alberto & Gomez-Ramos, Almudena, 2003. "Evaluation of drought management in irrigated areas," Agricultural Economics, Blackwell, vol. 29(2), pages 211-229, October.
    2. Javier Calatrava & Alberto Garrido, 2005. "Spot water markets and risk in water supply," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 131-143, 09.
    3. Gomez-Limon, J. A. & Berbel, J., 2000. "Multicriteria analysis of derived water demand functions: a Spanish case study," Agricultural Systems, Elsevier, vol. 63(1), pages 49-72, January.
    4. Pulido-Velazquez, Manuel & Andreu, Joaqui­n & Sahuquillo, Andrés & Pulido-Velazquez, David, 2008. "Hydro-economic river basin modelling: The application of a holistic surface-groundwater model to assess opportunity costs of water use in Spain," Ecological Economics, Elsevier, vol. 66(1), pages 51-65, May.
    5. Wichelns, Dennis, 2004. "The policy relevance of virtual water can be enhanced by considering comparative advantages," Agricultural Water Management, Elsevier, vol. 66(1), pages 49-63, April.
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