Strategic importance of green water in international crop trade

Abstract

Virtual water is the volume of water used to produce a commodity or service. By importing agricultural commodities and the virtual water embedded in them, a country saves the water it would have required to produce those commodities domestically. Virtual-water ‘trade’, thus, has the potential to relieve water stress and improve water security. The present research critically evaluates the strategic importance and implications of green water (soil water) in relation to international crop trade. Even if, traditionally, emphasis has been given to irrigation systems, today most global crop production is rain-fed. Besides having a lower opportunity cost, green water use for the production of crops is considered more sustainable than the use of blue water (irrigation). Although green water represents the largest share of virtual water in the international trade of agricultural commodities, with exports going from highly productive rain-fed rich countries towards generally blue water based ones, green water volumes have rarely been estimated. The present study corroborates that green water is by far the largest share of virtual water embodied in maize, soybean and wheat exports from the USA, Canada, Australia and Argentina during the period 2000-2004. Accordingly, green virtual-water flows can play a major role in ensuring water security and saving water in water-deficit economies. The potential of international green virtual-water ‘trade’ for saving water and improving water security, however, is constrained by factors such as technology, the potential for further increases in the productivity, the level of socio-economic development, national food policies and international trade agreements