OECD Studies on Water

2224-5081 (online)
2224-5073 (print)
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Water is essential for economic growth, human health, and the environment. Yet governments around the world face significant challenges in managing their water resources effectively. The problems are multiple and complex: billions of people are still without access to safe water and adequate sanitation; competition for water is increasing among the different uses and users; and major investment is required to maintain and improve water infrastructure in OECD and non-OECD countries. This OECD series on water provides policy analysis and guidance on the economic, financial and governance aspects of water resources management. These aspects generally lie at the heart of the water problem and hold the key to unlocking the policy puzzle.

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Water Risk Hotspots for Agriculture

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25 Sep 2017
9789264279551 (PDF) ;9789264279544(print)

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Agriculture is expected to face increasing water risks that will impact production, markets, trade and food security - risks that can be mitigated with targeted policy actions on water hotspots. This report develops the hotspot approach, provides an application at the global scale, and presents a mitigation policy action plan. The People’s Republic of China, India and the United States are identified as countries facing the greatest water risks for agriculture production globally.

A global simulation shows that, in the absence of action, water risks in Northeast China, Northwest India and the Southwest United States in particular could have significant production, price and trade consequences. Agriculture water risks could also result in broader socio-economic and food security concerns. Farmers, agro food companies, and governments can all play a role in responding to water risks at hotspot locations. A three-tier policy action plan is proposed to confront water risk hotspots,  encompassing targeted responses, adapted national policies, strengthened market integration and international collaboration.

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  • Foreword and acknowledgements

    Increasing evidence suggests that water risks threaten future agriculture production in many regions. Factors, such as the multiplication of extreme water events, sea level rise—both projected to accelerate with climate change—water quality deterioration, groundwater depletion, and intensifying cross-sector competition for water supplies, combine to create “a perfect storm” for agriculture in many regions, which are often poorly prepared to respond. If these water risks are particularly intense in specific agricultural regions, their impacts can expand to national and international levels, with consequences on markets and food security.

  • Executive summary

    Agriculture is expected to face increasing risks that stem from water shortages, floods and the degradation of water quality, all of which will have an impact on production, markets, trade and food security. Available freshwater is projected to be constrained by a growing demand for water beyond the agricultural sector and increased variability of precipitation due to climate change. Extreme weather events may become more frequent. Water quality will likely deteriorate in many regions. These changes are expected to strongly impact agriculture, a highly water-dependent sector, and, in turn, affect the production and productivity of rainfed and irrigated crop and livestock activities.

  • Addressing water risks in agriculture

    Trends and projections suggest that agriculture will face increasing water risks in many regions which could affect agriculture production and markets as well as international trade and food security. This chapter presents evidence on future water risks for agriculture and introduces the hotspot approach as a means to assess and respond to these risks.

  • Defining and identifying water risks for agriculture

    This chapter defines the key characteristics of a hotspot approach to agriculture water risks. It then applies this approach at a global level, using data from the literature, to identify future water risk hotspot countries for agriculture production. The evidence points to the People’s Republic of China, India and the United States as the leading agricultural producing countries most likely to be impacted. Specific water risks within these countries, in the identified key agriculture production regions of Northeast China, Northwest India and Southwest United States, are reviewed.

  • Water risk hotspots and the impact on production, markets and food security

    This chapter analyses the impact of future water risk hotspots on agriculture. It reviews agriculture production impacts, considers the market and trade effects of such risks, and looks at the broader effects of these risks on food security. The discussion combines insights from the literature on water risks in agriculture, from case studies on Northeast China, Northwest India, and the Southwest United States, as well as results from a simulation of the global impact of projected agriculture water risks in these three regions.

  • Confronting future water risks

    This chapter discusses policy responses that seek to reduce water risks in hotspots. An economic model is used to assess the role of farmers, private companies, and governments in mitigating water risks. A policy action plan is proposed to address water risks for agriculture production in hotspot locations, mitigate the market impacts that may result, and alleviate broader socio-economic impacts.

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