The Water-Energy-Food Nexus in the Arab World and Financial Challenges

Martin Keulertz and I have published a new article in the International Journal of Water Resources Development: “Financial Challenges of the Nexus: Pathways for investment in water, energy and agriculture in the Arab world.”

Abstract:

The Water–Energy–Food (WEF) nexus is a development challenge in the Arab world,
particularly in the ‘core nexus countries’ with low to mid-incomes in which limited
water endowments permit agricultural production, such as Egypt, Morocco, Tunisia,
Lebanon, Algeria, Sudan and Jordan. The WEF nexus is often conceptualized in mere
technocratic terms, yet politics matter in the implementation of projects that address it.
Internalizing hydrological externalities or leaving them as they are and financing them
as a public good requires states whose capacities have been reduced as a result of
neoliberal reform. The article explores five different pathways of how Arab countries
could finance green growth projects ranging from regional financial markets to
concessionary loans by funds from oil rich Gulf countries.

Tropical Agriculture and MENA Food Imports: Conference Summary

TROPICAL AGRICULTURE AS “LAST FRONTIER”?

Food Import Needs of the Middle East and North Africa, Ecological Risks and New Dimensions of South-South Cooperation with Africa, Latin America and South-East Asia

Barcelona, 29-30 January 2015

The Middle East and North Africa (MENA) is one of the most water-stressed regions in the world and its largest net-importer of cereals. Affordable food imports are crucial for its future food security. Countries with tropical agriculture like Brazil are playing an increasing role in MENA food supplies. Apart from policy options to sustainably intensify regional agricultural production, trade will play a crucial role for MENA economies to achieve food security.

‪Given the environmental value and sensitivity of tropical ecosystems sustainable intensification in countries like Brazil, Sub-Saharan Africa and South-East Asia is crucial. For this reason, King’s College London (KCL), the OCP Policy Center, the Barcelona Centre for International Affairs (CIDOB), the Getulyo Vargas Foundation and Wageningen University organized a conference on Tropical Agriculture as ‘Last Frontier’? Food Import Needs of the Middle East and North Africa, Ecological Risks and New Dimensions of South-South Cooperation with Africa, Latin America and South-East Asia”.

The conference was held on 29-30 January 2015 at the Barcelona Center for International Affairs (CIDOB). It provided an interdisciplinary perspective on how …. (for more)

Review of Oil for Food in Journal of Peasant Studies

The Journal of Peasant Studies has published a review of Oil for Food by Max Ajl of Cornell University who approaches the topic from a critical world system view.

Ajl likes the historic parts and the analysis of agro lobbies and profit motivations behind food security strategies, but he would have liked to see much more categorical conclusions, which I am afraid I cannot give. There is no either/ or: Clientelistic lobbying geo-strategic considerations and genuine food security concerns are all part of the mix that I have encountered.

“Indeed, he could and should have stated much more clearly that food security is a discourse which is mobilized in the region and elsewhere for ends having little to do with securing food: namely, the distribution of state rents to social elites in ways which would otherwise be difficult to publicly justify. Still, it is to Woertz’s credit that he has done such a skilled job of amassing and synthesizing a tremendous pile of historical and contemporary evidence – even if, upon surveying it, the reader comes to far less ambivalent conclusions about the real interests behind notions of ‘food security’ in the Gulf than the author does himself.”

Two Reviews of Oil for Food

The International Journal of Middle East Studies (IJMES) and the Journal of Natural Resources Policy Research (JNRPR) have published reviews of Oil for Food by Pete W. Moore and Erika Weinthal respectively.

Both reviews are positive, main suggestions relate to:

a) better clarification of the two main driving forces of Gulf agricultural policies: self-sufficiency concerns and patronage politics

b) more extensive discussion of resource curse theories and Dutch disease phenomena

c) richer analysis of agricultural policies in Syria against the backdrop of the drought of the 2000s, misguided water management and rural neglect in the decade before the civil war

Thanks for reading the book and these very helpful suggestions!

Syria is in fact one of my regrets and it would have deserved more discussion, indeed. Raymond Hinnebusch’s edited volume about Syrian agriculture in the 2000s escaped my attention while writing and Francesca de Châtel’s excellent article in Middle Eastern Studies was not yet published.

In later publications I have dealt with Syria more extensively while spending some time at the American University of Beirut. During the 1990s I studied in Syria and worked there as a tourguide, getting to know the country and its people. What’s happening there right now is truly saddening and one can only hope that Syria’s shameful tragedy will end soon. With a rural population share of 40 percent sustainable policies of rural development would need to be an important aspect of any reconstruction effort.

The Water Energy Food Nexus in Drylands

I have just returned from the conference about the Water Food Energy Nexus in Drylands that CIDOB has organized together with the OCP Policy Center in Rabat, King’s College London and Texas A&M University.

Approximately two billion people live in arid countries. One third of the global population will be most affected by water scarcity and climate change. Efficient management of water resources for food and energy production is a developmental challenge that requires holistic approaches. The water-food-energy nexus highlights that food, water and energy security are inextricably linked and that any decision in one of the three sectors has consequences for the other.

Nowhere else this nexus is as evident as in dry lands and in the MENA region in particular. Energy will be required to pump, treat and desalinate water for domestic and agricultural purposes. Water will be required to produce energy. About 1-2 percent of global energy consumption can be attributed to the production of nitrogen fertilizer alone. Such development challenges call for a nexus approach to broaden the analysis from a mere ‘blue water’ focus to the more efficient use of soil moisture (‘green water’) and sustainable policy options.

Tony Allan of King’s College pointed out that the nexus between water, energy, and food was first conceptualized at World Economic Forum 2011, which was then followed by a high profile conference organized by the German Ministry of Economic Cooperation (BMZ).

Since the 1980s there have been growing sustainability concerns about the various hydraulic missions that have been undertaken since the 1850s. The constant rise in irrigation since the 1960s coincided with declining food prices – until 2008. Further irrigation growth is unsustainable. There has been a peak of World Bank dam financing in 1980.

As a result the focus has shifted from blue water to green water since the 1990s and the latter’s major role in food and virtual water trade. About 70 percent of global crops are rainfed and rely on green water.

Sustainable intensification, protection of farm livelihoods, supply chain management, waste and consumption issues are crucial in Allan’s view. This was echoed by Brian Chatterton, a farmer and a former Minister of Agriculture of South Australia and Lynn Chatterton, an independent consultant. They complained that farmers have not been at the center of attention of the international agro research establishment, which has focused on higher yields instead of lower costs and ecological factors, which are crucial for farmers. They also deplored a relative neglect of pastoralists in extension services, symbolized in the FAO’s closure of its pasture department.

The Chattertons described the green revolution as an abject failure in dry lands because its application of nitrogen fertilizer relies on reliable rainfalls, yet they were optimistic that yields can be improved without more water and irrigation and pointed out that productivity in Australian drylands is 2-4 times higher than in the MENA region without more water and in similar climatic conditions. In the same vein Kris Dodge of ICARDA demonstrated how adapted seeds and plowing techniques, rain harvesting and supplemental irrigation can improve yields in the MENA.

Existing reporting and accounting rules do not account sufficiently for natural resources like water as inputs as Tony Allan, Martin Keulertz of Purdue University and myself pointed out. Rainfall frequency is often reflected in land prices, at least in developed markets, there are also varying pricing schemes for irrigation water in some countries, yet often water remains external to the economy. In case of damage there are only limited sanctions in place to internalize costs, while its provision as a public good is compromised by limited state capacities that have been weakened after decades of neo-liberal reform.

Thus there is a danger that the nexus is conceptualized in apolitical and technocratic terms, as Harry Verhoeven of Oxford University deplored. Often there is a focus on technical fixes, presumably neutral scientific policy choices and “governance”. Yet politics rather than governance matter in water, energy and food allocation and imply control over people. Such politics entail winners and losers as Verhoeven outlined in a depiction of the political economy of the nexus in the Nile Valley.

Other country examples included Jordan, Lebanon, Syria, Egypt, Yemen, Qatar, Darfur, USA, Ethiopia, Senegal, Tunisia and Morocco. Bassel Daher of Qatar Foundation demonstrated his nexus tool that shows trade offs between water, food and energy allocation in the case of Qatar and could be applied to other countries. Samer Talozi of the Jordan technology University in Irbid showed that 14 percent of Jordan’s electricity production is used for water treatment and pumping. Holger Hoff of the Stockholm Environment Institute and Potsdam Institute for Climate Research and Rabi Mohtar of Texas A&M outlined latest trends in nexus research and forthcoming conferences and research initiatives. Musa Mckee of SOAS, London showed interlinkages between culture and water, food and energy allocation.

Caroline King of the Ecosystems and Human Development Association (EHDA) made a case for improved green water management, particularly in Yemen and Talal Darwish of the National Center for Remote Sensing (CNRS) in Beirut  showed that the effects of climate change in Lebanon have been mainly in the form of irregular rainfall patterns. Decline of overall rainfalls was relatively benign in comparison.

Gabriele Cassetti of Milan Politecnic introduced the TriNex cooperation platform for nexus related projects between European and Egyptian universities that is funded by a Tempus grant of the European Union. Ansoumana Bodian of the Université Gaston Berger (UGB) showed a model how to investigate the effects of rainfall run-off on water resources in Senegal. Rachid Doukkali of Institut Agronomique et Vétérinaire Hassan II and Omar Aloui of Agroconcept demonstrated changes in water and land use in Morocco and related food security issues. Francis Ghilès of CIDOB discussed recent developments in the natural gas industry in North Africa.

Saqib Mukhtar of Texas A&M described problems of the Texan Ogallala aquifer that are similar to challenges in the MENA: Agriculture in Texas uses 80 percent of groundwater and 35 percent of surface water. 66 percent of all groundwater comes from the Ogallala aquifer that stretches all the ay up to South Dakota. Its current recharge rate only covers about 15 percent of withdrawals. Given the accumulated over-extraction it would require 300-1000 years of recharge to go back to the level of the 1940s when large scale irrigation took off.

Brendan Bromwich who worked for many years for UNEP in Darfur showed unintended consequences of water provision in refugee camps against the backdrop of a society that still relies on wood as primary fuel. The water supplies prompted a brick stone industry that required wood and considerably contributed to deforestation. Hence alternative building materials are needed to safeguard energy and soil resources.

Guy Jobbins of the Overseas Development Institute pointed out that Moroccan subsidies for drip irrigation rather benefit wealthier and literate farmers as ‘urfi land of the poor cannot be mortgaged. He also showed the limits of technical fixes: Drip irrigation improves efficiency, but it has not reduced water consumption in Morocco as it prompted farmers to increase the irrigated area and switch to more commercial but water intensive crops. Rural electrification in Morocco went up from 18 percent to 97 percent between 1995 and 2011 and caused a massive growth in installed pumps and irrigation.

As for climate change Mark Mulligan of KCL departed from the current consensus and argued that African dry lands will possibly receive more rather than less rainfall in the future, which could compensate for the negative effects of higher temperatures on agricultural productivity. Rabi Mohtar of Texas A&M pointed out another often forgotten nexus between energy and water: About 70 percent of the water that is used for unconventional oil and gas production via fracking remains underground and is withdrawn permanently from the hydrological cycle. This could diminish water availability in the long run.

Daniel Yeo of the Global Green Growth Institute in Addis Ababa outlined Ethiopia’s strategy of agricultural led development and the role of its dam program while pointing out cleavages between academic and political mindsets. The latter was also highlighted in the concluding key-note address by H.E. Miguel Moratinos, the former Spanish Minister of Foreign Affairs.

In sum water, food and energy are inextricably linked via various nexi and should not be regarded separately. However, a purely technocratic approach should be avoided given the importance of political economy issues in allocation procedures.

Reply to Thoughtful Review of Oil for Food in the Middle East Journal

Jane Harrigan has given a thoughtful critique of Oil for Food in the Middle East Journal, Vol. 68, Issue 1, 2014. She outlines the historical part with the critical supply situation during World War II, the food weapon, the modernization of agriculture in the postwar years and the political economy of food in the Gulf countries. While she deems these parts and the depiction of the failed Sudan breadbasket strategy “fascinating”, she objects to my  “sanguine” account of current Gulf agro-investments.

As I describe the Sudan breadbasket episode of the 1970s as an unmitigated disaster and use it as a cautionary tale for current Gulf endeavors this is not immediately obvious.

Harrigan acknowledges that I acknowledge important concerns in the land grab debate like the threat of disenfranchisement of customary land rights’ holders and limited employment benefits. However she would have liked to see a more extensive discussion of these aspects.

She objects in particular to my sub-chapter “A land grab that wasn’t“ in which I use field work in the Gulf countries and the Sudan to point out that there is a huge disconnect between media reports about land grabs and actual implementation on the ground. I further argue that such misconceptions have sometimes been amplified by well meaning reports of advocacy groups, among them the first version of the Land Matrix by the International Land Coalition (ILC) and a number of think tanks that has used such media reports as data source (p. 144f).

Harrigan does not discuss this criticism of mine or marshals evidence to the contrary. But she argues unperturbed that “ample evidence is now available, especially from the International Land Coalition’s work,” about the threat of foreign agro-investments.

I do not dispute this threat in qualitative terms and discuss it as far as it has materialized, like in Sudan in the 1970s, on some of the Sudanese projects today (e.g. the Merowe Dam) or on the Saudi Star project of Saudi billionaire Al-Amoudi in Ethiopia.

Yet in quantitative terms the threat has been exaggerated as I outline in said sub-chapter, certainly for the Gulf countries, but also for China as the works of Deborah Brautigam and Rural Modernity have shown.

So in a way Harrigan is blaming me for not parroting media reports. It would be better to either hold those accountable who have used them uncritically or show empirical evidence of Gulf agro-investments with said effects that I have failed to mention.

In fact, the ILC and its partners have revised the Land Matrix considerably in the meantime, have gotten rid of many paper projects and paint a more accurate picture now.

The problem of exaggerated quantitative claims and the need for more qualitative studies has recently also been highlighted  by Marc Edelman in a special issue of the Journal of Peasant Studies about methodological issues of land grab research.

In a way Harrigan seems to be uneasy about the “ample evidence” herself. At the end of her review she suggests that the implementation gap may well exist, but claims that negative effects would still occur in the form of preemptive displacements to empty land for investors.

In Ethiopia and on the earlier rainfed projects in Sudan this seems to have happened indeed as I write in Oil for Food; for the irrigation projects in the north of Sudan the situation is somewhat different. The land along the Nile is in private smallholder ownership and not targeted, while the land on the plateau above the river is formally state owned, barren and only usable for extensive pastoralism as long as no investments in irrigation infrastructure are undertaken.

To suggest a mere announcement or even a formal deal without actual investment would lead to an immediate displacement is rather unrealistic in such cases and tends to overrate coercive capacities and economic incentives on part of local governments. In fact in quite a few cases officials were unable to locate announced project sites and locals were not aware of them. In the cases where nothing is there, what am I supposed to write about?

Harrigan says that the US used the food weapon in retaliation to the formation of OPEC, which is not something that Oil for Food claims, as the height of the food weapon was in the 1970s not in 1960 and it was used or contemplated in retaliation to the Arab oil embargo, the Iranian hostage crisis, to rein in Nasser, to entice moderation in the Arab-Israeli conflict and push an already established OPEC to cooperate on global food issues during the World Food Conference 1974. But this is a minor thing.

To sum up, I fail to see how I portray an “unjustifiably rosy” picture of Gulf agro-investors as I discuss on multiple occasions their misguided belief in large scale project designs and their real estate centered mentality, which leads to an obsessive focus on formal land ownership and disinterest in joint equity projects with local stakeholders.

All I try to do is to give a differentiated picture and point out an implementation gap that has even grown since Oil for Food was written. Being “sanguine” is different. Land grabs in Africa seem to be bad business as the plummeting share price of Indian agro-investor Karuturi, the travails of Amoudi in Ethiopia or the Sudanese failures show.

Instead of claiming the counterfactual opposite, Oil for Food tries to find an explanation why so many projects have failed or have not been implemented in the first place. It also tries to consider the importance of local factors, domestic agro-investors and national development plans that outweigh the importance of foreign agro-investors and act in lockstep with them.

Coming back to Ethiopia, its government is equally frustrated, as it has hoped that foreign agro-investments would help kick off an agriculture led modernization. It now considers withdrawing concessions.

If any land investment were bad and threatened food security, these developments would mean an improvement. In the specific cases this might even be true, but overall there cannot be any doubt that more investments are needed given Africa’s declining food production per capita over the last decades.

Hence maybe the solution is somewhere in the middle. This might neither be in line with overtly romantic views of subsistence agriculture nor with hyperbolic profit expectations of 30 percent and more that are peddled by some investors, but a more realistic and sober approach in the land grab debate is needed.

Saudi 7-point plan for agriculture

An interesting article in Arab News, explains some facets of Saudi Arabia’s current agricultural policy.

The state-owned Agricultural Development Fund has launched a seven-point initiative that includes the establishment of an agricultural information center, water conservation in irrigation, the outsourcing of wheat and fodder production, marketing infrastructure for vegetables, fruits and  fish, cooperative insurance for livestock sector, especially poultry and a cattle breeding company.

Minister of Agriculture Balghunaim complains that expansion of vegetables and poultry production has lagged behind. While self-sufficiency in eggs has been achieved, the ratio for poultry is only 42 percent for vegetables 85 percent. The Syrian civil war has led to supply disruptions from a traditional supplier, but they can be sourced elsewhere, for example from Morocco in the case of tomatoes as the minister explained.

Alfalfa, Wheat and Water in Saudi Arabia

Courtesy of Robin Willoughby  of Chatham House in London I have come across this interesting study about the water consumption of different crops in Saudi Arabia.

It was conducted by researchers of King Saud University on a research farm of King Abdul-Aziz University in Hoda Al-Sham in the Makkah area.

Like this earlier article in Al-Eqtisadiyah that is referencing a study of King Saud University it finds that alfalfa cultivation needs about four times more water on any given piece of land than wheat.

The wheat phase-out of the government has thus led to increased water consumption if farmers switched to alfalfa. In off-the cuff estimates some farmers put the  water consumption of alfalfa even at five times higher and above in the hot summer months as I write in Oil for Food on pp. 87-88.

The increased water consumption is mainly due to all year round cultivation of alfalfa (which is essentially not uprooted, but only cut to let it grow again), while wheat is only cultivated 4 months in the winter. In addition, alfalfa plants also need about 20% more water than wheat:

The Evapotranspiration (ET) figures for wheat on p. 199 of the study and for alfalfa on p. 201 show this clearly:

Wheat: Period planted: 120 days, average ET per day: 3.87 mm, total ET over the year: 498,2 mm
Alfalfa: Period planted: 363 days, average ET per day 4.94mm, total ET over the year: 1922, 50 mm

Thus the increased water consumption of alfalfa according to this study is mainly due to all year long cultivation, but also due to an ET that is 20% higher than wheat. If Saudi Arabia really wants to save water, it will need to address alfalfa production and the continuous expansion of its dairy industry that requires it as feedstock.