Trading with virtual water - a solution for Kenya?

While virtual water is a term that everyone has heard of before, the trade that is done with that virtual water is unknown to many.

First of all a few figures:

According to Hoekstra and Mekonnen, who also estimated the global annual average water footprint of humanity, 92 percent of global water consumption is used for agricultural production. Industry accounts for about 4.4 percent and household water consumption about 3.6 percent. The international virtual water flows that are related to trade in agricultural and industrial products were 2,320 billion m³ a year. To compare this number: about 1300 tons (cubic meters) of water are used to produce a ton of wheat.

But how can trading with virtual water help water-poor countries? And how does this trade work?

Net virtual water import (Source)

The map above shows the net water import all over the world and the main flows between different parts of the world. The US, Argentina, Brazil, India and Australia are the biggest water exporters, while many European and North African countries import virtual water by importing food that needs a lot of water to be produced.

By importing water-intensive products and exporting products that are less water intensive many nations can save their domestic water resources. It is seen as a chance for water-scarce countries to reduce their use of water resources. Even if this sounds like the perfect solution, one must not lose sight of the difficulties of this concept. After some research I found an article that deals with virtual water and its trade in Kenya.

The total water footprint related to crop production in Kenya for 1996–2005 was 18.1 km³/y, mainly due to the production of maize and water scarcity is becoming a more and more important problem in the country. Renewable blue-water resources will drop towards 316 m³ per capita in 2050, therefore, to avoid problems in food production, policy makers have to use the limited water resources wisely. There are three levels to increase the water-use efficiency: the water user, the place of the water allocation and the international level where trade with virtual water takes place. In the case of Kenya that means they should focus on reaching a positive net virtual water import balance. This could be achieved by only producing crops for export that generate a high value per drop of water used and finding a balance between production for export and domestic use. For now, Kenya exports mainly high-value crops, crops with a high return per unit of water consumed. It is mainly importing cereal products that are low-value but water-intensive. In the end the net effect of Kenya’s virtual water exports and imports related to agricultural trade is almost neutral.

Developing new policies and deciding to change the outcome of trade, for example by producing and exporting crops where Kenya has an economic advantage compared to other countries, is always a difficult process and requires a strong and diverse economy as a foundation. If the agricultural sector is not competitive enough, the import of cheaper products from the outside will damage it. Just as important is the fact that most of the rural population in Kenya depends on their agricultural production. Expanding the trade in virtual water by importing more agricultural products will threaten their jobs and livelihoods. 

In summary, virtual water trading could be a good solution for countries facing water scarcity, but not without an analysis of all water management options and possible negative consequences of trading. For Kenya, virtual water trading will not be the final solution. In view of the population growth, other measures must be considered in the future, as otherwise conflicts will arise over the use of water for export products or for domestic consumption.