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

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

No 51048, 2009 Conference, August 16-22, 2009, Beijing, China from International Association of Agricultural Economists

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.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Environmental Economics and Policy; Land Economics/Use (search for similar items in EconPapers)
Pages: 18
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae09:51048

DOI: 10.22004/ag.econ.51048

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