ECONOMIC ASPECTS OF WASTEWATER REUSE
STUDY CASE: THE ARAB NATION
Funded By
Economic Research Forum for Arab Countries, Turkey
and Iran (ERF)
Presented To
ERF 10th Annual Conference
16-18 December 2003
Raouf F. Khouzam, Ph.D.
P.O. Box 150
Gezira, Cairo 11568, Egypt
Cellular Phone: 010 526 0776
[email protected]
October 2003
Cairo, Egypt
ECONOMIC ASPECTS OF WASTEWATER REUSE
STUDY CASE: THE ARAB NATION
Raouf F. Khouzam, Ph.D.
[email protected]
Burgeoning population is raising demand for food and, subsequently, the demand for
irrigation water. Meanwhile, its demand for municipal and industrial uses are also
rising. Given fixed water supply, these regions face a zero-sum game. Satisfying
municipal and industrial demands have to come at the account of the quantity of water
availability for irrigation. This paper addresses the question of dealing with the
dilemma of population growth and water resources.
One path to counteract growing water shortage or unexpected drought is the
utilization of non-conventional resources. But, the cost of producing more water
grows tremendously at the account of resources available for development (GardnerOutlaw, Engleman 1997). This paper argues that the high cost of the utilization of
non-conventional water resources especially wastewater can be economically
justified. Beside the direct benefits of increasing water supply, saving the
environment from the damaging effect of dumping wastewater not only justify the
allocated resources but also supports sustainable development. The economics of the
option of treating and, then, reusing wastewater is then analyzed by the means of a
simulation model.
The paper demonstrates that the adverse effect of the pressure that population growth
exerts on natural resources can be alleviated by adopting suitable policy intervention
tools. Furthermore, the most effective policy tools are those based on economic
criteria.
The Arab region is selected as the study case. It possesses a set of characteristics that
makes it ideal for this purpose:
1. It is one of the highly arid regions in the world. Evaporation from free water
surfaces ranges from 150-1000 mm/year along the Mediterranean coast to 3000
mm/year in desert areas (ACSAD et al. 1997).
2. It suffers water deficit that expected to reach 128-377 bcm by 2025 depending on
the senarios’ degree of optimism or pessimism (ACSAD et al. 1997).
3. Its population is growing fast. Compared to world rate of population growth of
1.35% in 1995-2000, population growth in the eight Arab countries where more
than 80% of the population live ranges from 1.22% to as high as 3.52% (UN
2002). Such rate of growth puts heavy pressure on water resources.
3. Water resources are diversified. It comprises surface, aquifer, rain and nonconventional resources. Furthermore, surface water suffer several transboundary
problems.
4. The Arab economy has a large array of production activities. In the Arab
countries, agriculture share ranges from 2% in Jordan to 25% in Mauritania.
Industry share ranges from 25% in Jordan to 57% in UAE. Services range from
34% in Yemen to 71% in Jordan. This is compared to 2, 31, 63% in high income
countries and 28, 28, 43% in low income countries (WRI 2003).
For research purposes, the Arab nation is divided into four geographic regions. One
country out of each region is examined. The regions are:
1. The Arab West (Al-maghreb Al-arabi): Libya, Tunisia, Algeria,
Morocco, and Mauritania.
2. The Central region: Egypt, the Sudan, Djibouti, Eriteria, and Somalia.
3. The Arab East (Al-mashreq Al-arabi): Syria, Lebanon, Jordan, Iraq and
Gaza Strip and Jerrico.
4. The Arab Peninsula: Saudi Arabia, Emirates, Bahrain, Oman, Qattar,
Kuwait and Yemen.
Put simply, the research deals with three closely related issues: population growth, its
rising direct and indirect demands for water, and available water resources. The paper
comprises eight sections. Section 1 addresses population issues: Section 1.1 reviews
the models addressing the relationship between population growth and the
environment. Section 1.2 presents the medium UN projection of Arab population up
to the year 2050. The main link between population growth and water resources is the
rising demand for irrigation water to produce more food. The international and
regional food situations are addressed in Section 2. The optimistic and the pessimistic
expectations about the future situation of food are briefly introduced. The situation of
food in the Arab region is, then, introduced. Demand for municipal, industrial and
agriculture uses are presented in Sections 3.1-3.3; in order. Conventional water
resources in each of the four Arab regions are presented in Sections 4.1-4.4. Section 5
addresses non-conventional water resources: desalination (Section 5.1), and water
reuse (Section 5.2). Together, Sections 4 and 5 argue that while conventional
resources are fully utilized, non-conventional resources are under-utilized. The
theoretical framework is provided in Section 6. The model structure is laid out in
Section 7. Results, conclusion, and policy implication are given in Section 8.
1. POPULATION ISSUES
1.1.
Impact Of Population Growth On Environment
Before the environment revolution, economic development models were based on
sustaining a rate of capital formation and accumulation ahead of the rate of population
growth. In spite of Malthus’ early warning, those models failed to recognize the
importance of managing the consumption of the complex system of “nature” which
supplies raw material and absorbs wastes.
With the environment revolution, concerned groups are focusing on the size of the
economy relative to that the nature can support. Progress should not take a myopic
form of material growth only. Sustainability requires the stabilization of population
growth, and the choice of technologies that enhance, rather than destroy, the natural
base (Meadows 1994).
At present, three trends have contributed most directly to the excessive pressure on
the earth’s natural systems: the burgeoning world population, economic growth, and
the widening gap in the income distribution. Population growth has is considered a
2
key variable in boosting demand for water. Yet, emphasizing population size only
leaves out inequality in gaining access to resources (Sagoff 1994 and Repetto 1985).
Inequalities take several types. Income inequality results in a sharp differences in the
levels of consumption of resources including the environment assimilative capacity.
As a result, small fraction of the world or a region's population consumes more and
other lower income fractions gets a meager share.
Beside income inequality, gender equity in gaining access to resources and its
management is crucial for the sustenance of natural resources. Environmental
protection must also acknowledge the enormous wisdom and know-how of women,
for it is women who give continuity to life, dealing on daily basis with land, water,
food and garbage. They are the ones most interested in a healthy environment, since
they and their children are the first victims of pollution.
Ample evidence shows that people at either end of the income spectrum are far more
likely than those in the middle to damage the earth’s ecological health (Postel 1994
and Durning 1994).
Mal-distribution, population growth, and environment are all combined in one model:
the Poverty-Population-Environment Spiral Model. It finds that poverty, population
growth and environment degradation are enforcing each other in a spiral fashion.
Poverty contributes to population growth by maintaining the demand for high fertility.
Population growth, in turn, perpetuates poverty by impeding development.
Environmental stress is both a cause and effect of poverty and population growth
(Mazur 1994).
1.2.
Arab Population
The UN has developed three fertility variants: a low, a medium and a high variant.
They encompass the probable future changes in population by country. As their titles
indicate, the low variant reflects the success in population control schemes, the high
variant represents the opposite case, and the medium variant represents a middle
ground.1 The medium variant is exploited in this paper since it represents the average
case.
Over the fifty years (1950-2000), the Arab population grew by 376%: It was 76
million in the year 1950, reached 287 million in the year 2000 (Table 1). According
to the medium variant, it is expected to increase over the next 25 years by 165% to
reach 473 million. By 2050, it rises to 663 million (231%) (UN 2003).
Geographically, the Arab population is not evenly distributed. Generally, it is
concentrated in the Central Region; the richest Arab region in water and fertile soil.
However, this concentration declines over a century (1950-2050). In 1950, the
population of the Central Region accounted for 45% of the total Arab population (34
million). This percentage declined to 39% by the year 2000. The decline is expected
to continue to 37% and 35% in the years 2025 and 2050. Similarly, the concentration
1
Constant fertility has been calculated as a fourth scenario for comparative purposes, but not meant as
a probable course.
3
of the population in the Arab West also declines from 31% in 1950 (24 million) to
27% in the year 2000, and anticipated to drop to 20% by 2050.
Table 1: Projection of the Arab population - Medium Variant (millions)
1950
2000
2025
9.0
1.0
0.8
9.0
4.0
24
31%
30.0
5.0
3.0
30.0
9.0
77
27%
43.0
8.0
5.0
42.0
12.0
110
23%
51.0
10.0
8.0
50.0
14.0
133
20%
0.1
22.0
1.0
2.0
9.0
34
45%
0.6
68.0
4.0
9.0
31.0
113
39%
0.8
95.0
7.0
21.0
50.0
174
37%
1.0
114.0
10.0
41.0
64.0
230
35%
5.0
0.5
1.0
1.0
3.0
11
14%
23.0
5.0
3.0
3.0
16.0
50
17%
40.0
9.0
5.0
7.0
27.0
88
19%
54.0
12.0
5.0
12.0
36.0
119
18%
0.1
0.2
0.6
0.0
3.0
0.1
4.0
8
10%
76
0.6
2.0
3.0
0.6
20.0
3.0
18.0
47
16%
287
0.9
3.0
5.0
0.8
40.0
3.0
48.0
101
21%
473
1.0
4.0
9.0
0.8
60.0
4.0
102.0
181
27%
663
2050
Arab West
Algeria
Libya
Mauritania
Morocco
Tunisia
Total
Percent to the Arab population
Central Region
Djibouti
Egypt
Eritrea
Somalia
Sudan
Total
Percent to the Arab population
Arab East
Iraq
Jordan
Lebanon
Syria
Palestine
Total
Percent to the Arab population
Peninsula
Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
Yemen
Emirates
Total
Percent to the Arab population
Total Arab Population
Source: UN 2003.
Remark: The “Total” and the “Percent to the Arab Population”
are calculated by the author.
The drop in the geographic population concentration in the Central Region and the
Arab West comes in favor of the other two regions: the Arab East which is facing
heavy water problems, and the most arid region the Peninsula. In 1950, the
population of the Arab East was 14% reached 17% in the year 2000; it is expected to
reach 18% by 2050. The population in the Peninsula was 10% in 1950, 16% in the
year 2000; it is anticipated to reach 27% by 2050. The alteration in the geographic
relative distribution of the Arab population is attributed to the difference in the rates
of growth.
4
During the period 1950-2050, the rate of population growth in both the Arab East and
the Peninsula are, unlike the Central Region and the Arab West, greater than that of
the average growth in the Arab nation. In 1950, population growth in the Arab
Peninsula started at 2.1% and kept picking up to reach 5% which is the highest rate in
the Arab nation in 1975-80. Since then, the rate of population growth in these two
regions stayed the highest in the Arab nation although it has been tampering off to
3.2% in 1990-95 and expected to continue falling to 1.2%.
Compared to the world rate, the rate of growth of the Arab population was slightly
greater: in 1950 the world rate was 1.8% and that of the Arab nation was 2.3%. Both
rates had taken a rising trend. The world rate reached its peak (2%) in 1960-1970.
The rate of population growth in the Arab nation continued to increase until it reached
its maximum (3.1%) in 1980-85. In 1995, the gap between the world and the Arab
rates widened. That of the world rate dropped to 1.5%, that of the Arab nation was
fell to 2.4%. The situation between 1995 and 2050 depends on the growth scenario.
According to the low variant, the world population will be almost stable (declining at
a rate of 0.1%) and that of the Arab nation is growing slightly at a rate of 0.4%. Both
the medium and high variants suggest that the world will grow at 0.2% and 0.5% and
the Arab nation will grow at 0.9 and 1.3%; respectively.
Except for Mauritania (less than 1% of the total Arab population), the rate of
population growth in the Arab West is less than 2% and keeps diminishing to less
than 0.5 percent by the year 2045-2050 (UN 2002). Egypt is more successful in its
efforts to control its population growth. Starting with an average rate of growth of
1.9% during 1995-2000, it succeeds in bringing it to 0.58% by 2045-2050. Similar to
Egypt, the Sudan follows the same trend but a slower pace. Starting at 2.26% it ends
up with 0.67%. The efforts of Iraq and Syria to control their population succeed in
bringing their rates of population growth from 2.78% and 2.53% in 1995-2000 to less
than 1% by 2045-50.
The significance of this comparison is that while the population of the Arab nation is
growing faster than that of the world in general, the water endowment of different
world regions is almost constant. At the time the Arab region got less than 1% of the
world usable water, it accommodated more than 4% of the world’s population in 1995
(WRI et al. 1996). This situation will get worse over time.
Even within each of the above regions, population is still not evenly distributed. In
the Arab West, the population is concentrated in Algeria and Morocco (11-8% each),
Egypt (24-18%) and the Sudan (10%) in the Central region, Iraq and Syria in the Arab
East (8 and 6%; respectively), and Saudi Arabia in the Peninsula (8-9%).
2. FOOD ISSUES
The fact that today’s world is already suffering malnutrition and famines casts doubt
on future food security. The World Food Security report of the year 2002 estimates
the number of undernourished people in the world at 840 million and the number of
children under the age of five who die each year as a result of hunger at six million.
Those who survive hunger are looking for shorter life expectancy because of
5
undernourishment (FAO 2002-a). The FAO study concludes that the optimistic target
of the World Food Summit of 1996 set to halve the base 1990-92 number of
chronically undernourished people by 2015 is not likely to be met although
production will keep pace with effective market demand, but food insecurity will
persist. For, effective demand does not represent the total need for food and other
agricultural products. Hundreds of millions of people lack the money to buy what
they need or even the resources to produce it themselves (FAO 2002-b).
The gap between food demand and supply is a function of population growth and
increase in income --on the demand side—and resource availability, prevailing
institutions, and technological advances on the supply side. On the demand side, the
world population is continuously growing: It was 2.5 billion in 1950, exceeded 6
billion in 2000 and expected to reach 8, 9, or 11 billion by 2050 according to the low,
medium and high variant of the UN projection. Even more, rate of population growth
is likely to increase in the future. The 2000 revision of population projection
anticipates 413 million people greater than that of 1998 due to higher future fertility in
some developing countries (UN 2003).
Furthermore, per capita GDP is expected to grow at 2.3 and 2.9% per annum during
the periods 1997/99-2015 and 2015-2030; respectively. Together, population growth
and increase in income will raise demand for agriculture products at 1.6 and 1.4% per
annum, for food cereals at 1.2 and 0.9%, and for feed cereals at 1.9 and 1.5% during
the periods 1997/99-2015 and 2015-2030 with a surplus in cereals of 249 and 284
million tons; in order (FAO 2002-b). FAO projection implies a balanced demandsupply of agriculture products and a surplus in cereals. FAO’s expectation is
debatable.
A glimpse of hope emanates from the decline in the annual growth rate of the world
demand for cereals during the past three decades: from 2.5 percent in the 1970s and
1.9 percent in the 1980s to only 1 percent in the 1990s. The decline took place as a
result of shifts in human diet and animal feed.
Besides, several paths provide opportunities to increase food supply to meet rising
demand.
On the top of the list comes shifting the present diet towards relatively
abundant resources. While oceans, seas and various water surfaces provide
significantly under utilized protein resource, most of the population relies heavily on
animal protein. Vast areas of land and huge amounts of water are directed to the
production of green fodder. Per capita sea food consumption in the Arab nation is far
less than other areas. A person’s sea food consumption is 10 kg/year or less. This is
less than 15% of the consumed animal protein. For comparison, Asian communities
such as North Korea, Indonesia, Japan, Bangladesh get more than half its animal
protein from sea food (WRI 2003).
Boosting crop yield is another path. The Green Revolution resulted in growth in food
production that surpassed population growth. Increase in yield is accounted for about
87 percent of the increase in crop production in the mid of the 20th century (FAO
2002-b). Today, the world is now looking to genetic engineering though it has not
been globally accepted yet (Paarlberg 2001). Nonetheless, it is believed that with
proper biosafety precautions, genetic modification will not be risky.
6
Bringing new arable land into production is a third path which generated 15 per cent
of the increase in agriculture production (FAO 2002-b). The area of the world's
arable land that could be expanded is estimated at most by 1200 million acres (Kindall
and Pimentel 1994).
A fourth path is crop intensification through shortening fallow periods and improving
resource management. This path was responsible for 7% of the increase in agriculture
production. Other modern cultivation practices are expected to have a positive effect
on achieving food security: conservation agriculture, integrated pest control, and
nutrient management promise enhancement of agriculture production. Adverse forces
might impede the realization of optimistic expectations. Soil degradation affected 5
billion acres of agriculture (FAO 2002-b).
Ironically, the causes of slowing growth in agriculture production reveal the
dichotomy our world is witnessing. Whereas one of the reasons for slower growth is
that consumption rates in some areas of the developed world has reached its
maximum the other reason is that severe poverty in other areas conceals a large part
of the effective demand for food. The deficit in grain supplies in developing nations
is supporting evidence (estimated at 103 billion tons in 1997-1999 and expected to
reach 265 billion tons by 2030).
Arab policy makers are exerting their efforts to achieve tangible growth in food
production. Over the period 1982/84-1992/94, Algeria, Egypt, Morocco, Tunisia,
Jordan, Lebanon and Saudi Arabia have been able to accomplish rates of growth that
exceeds those of population. Saudi Arabia has been able to more than triple that ratio.
However, in Saudi Arabia, cereal production increased from 0.3 million tons in 1974
to 5.2 million tons in 1992. The Kingdom exported wheat. Later, Saudi Arabia
adjusted its cropping pattern to cut down on the production of high water-consuming
crops. As a result, cereal production dropped to 1.9 million tons in 1996. Wheat
exports stopped, consequently (El-Ghamam 1997).
Although the Arab agriculture has achieved fair progress, this progress is depressed
by a declining per-capita agriculture land (Figure 1). During the decade 1983-1993,
Saudi Arabia has been the only country that achieved a positive per capita agriculture
land. Egypt, Lebanon, Oman have been able to keep that share constant at its meager
level. Other countries have suffered a deteriorating share.
Figure 1
In spite of the efforts made to enhance food production, Arab countries are still
heavily dependent on food imports and aid. Over a decade (1981/1983 – 1991/1993)
oil imports increased by 80%, pulses by 30%, and cereals by 15%. During 1981-83,
average imports of the basic food needs (cereals, oils and pulses) were 1430 million
metric tons. Ten years later, this average went up to 2581 million metric tons. The
value of food imports reached $11.5 billion in 1995 (19% higher than that of 1994).
Cereal, and the strategic wheat imports in particular, represents 47% and 25% of food
imports; respectively (AOAD 1997).
Additionally, 108 million tons of food aid to few Arab countries. Hardly, aid
recipients have any degree of control over the process of aid policy formation.
Donated or cheap food creates dependency and diverts consumer preferences away
7
from local production (World Food Council 1984). Moreover, if a peasant finds the
local market is swamped with cheap grain, he will shift his production away from
basic food. Furthermore, it permits governments not to pay much attention to the
management of its natural production base (Hoeffel 1984). This not to mention the
influence of powerful lobbying on the distribution of the benefits of the aid (George
1985).
Further, there has also been a trend away from aid to the lower-income countries. In
Africa, two thirds of the aid goes to Egypt, and in the 48 sub-Saharan countries, half
has been going to Sudan, Somalia, Kenya and Liberia. In 1985, the U.S. was giving
around $.50 per person in aid to the low-income countries and $11.65 per person to
the high-income countries (Sewell 1985). The concentration of aid on only a few
countries shows that its objectives are strategic rather than humanitarian.
Overall, there is no indication that this trend of growth in food production will be
altered in the near future. Hence, Arab food security is fragile. At present it relies
heavily on food imports and foreign aid. Under the most optimistic assumptions,
indicators show that the gap in the main food products will expand significantly, and
the rates of self-sufficiency will fall. This view is supported by the following
projection of food situation made by one of the prominent regional institutions.
Table 2: Water deficit according to ACSAD scenarios.
Population
Scenario 1
Grow at the present rate
Scenario 2
Grow at the present rate
Scenario 3
Growth decline
Municipal Needs
Secured
Secured
Secured
Food
Secured
Secured
Secured
Improve
Improve
Yield
Water
1996 is assumed to
grow at the present rate
Saving irrigation water
More rain harvest
Saving irrigation water
More rain harvest
bcm
Municipal
Industry
Agriculture
Total
Available water
(1996)
Balance
2000
17
12
233
262
274
2010
22
17
314
353
274
2025
43
28
496
567
274
2000
17
12
186
215
274
2010
21
17
244
282
274
2025
43
28
369
440
274
2000
17
12
185
214
274
2010
21
15
236
272
274
2025
38
25
323
386
274
12
-79
-293
59
-8
-166
60
2
-112
Source: ACSAD et al. 1997, Tables 21-26; pp. 65, 68, 70
3. WATER DEMAND2
Demand for water is boosted by the high aridity of the Arab region. The harsh deserts
extend in the Arab region over a vast area from the Atlantic Ocean in the west to the
Arabian Gulf and the Arabian Sea in the east. Less harsh environment prevails in the
narrow strips near water surfaces, the Mediterranean and the Red Sea.
2
This section is confined to consumptive uses. Other types of demand include waste assimilation,
navigation, hydroelectric power, recreation and tourism and flushing sediments.
8
Increase in sheer population number is not the only variable placing pressure on water
resources. Actually, sharp inequality in access to water resources allows some to
consume, to pollute, and to appropriate profit from the exploitation of those resources
while others get destitution. The latter group is forced to “salvage the present by
savaging the future” merely to survive (Durning 1994, Sagoff 1994, Repetto 1985).
Using the number of household receiving treated water as an indicator of accessibility
to water resources, all urban dwellers in seven Arab countries have access to treated
water. In other countries, the lowest household percentage that get treated water is
50% (this occurs in only one country: Iraq). In rural areas, more people miss this
essential service. As low as 14% of the rural household in Morocco is connected to a
treated water resource and less than 50% in five countries (WRI et al. 1996).
It is difficult to estimate and forecast water demand. This is so because of the wide
variety of water uses (e.g. consumptive vs. non-consumptive use, off-stream vs. instream use, final vs. intermediate good, competitive vs. complementary use).
Furthermore, seepage and evaporation losses that occur during conveyance raises
difficulties with the measurement of withdrawals (Young et al. 1972).
Meeting the needs of the growing Arab population and improving their accessibility
to water resources require at least twice the needs of 1996. Total water demand in the
Arab world in 1990 is estimated at 160 bcm (AOAD 1997) and rose to 190 bcm in
1996; i.e. an average annual increase of 5.5 bcm. It is expected to reach 570 bcm by
2025 (ACSAD et al. 1997). The following sections review growth in water demand
by sector and region.
3.1. Municipal Use
Municipal demand is a direct function of the population size, the level of income and
its distribution, and the percentage of the served population. Demand for municipal
water in the years 1990, 2000, and 2025 is estimated at 8 (AOAD 1997), 17 and 43
bcm (ACSAD et al. 1997); in order. Corresponding population served by these
quantities are 228, 287 and 473 million (UN 2003). Implied average daily per-person
share is 96, 162 and 249 lpd (liter/person/day).3 From 1990 to 2025, the population
doubles and municipal demand increases by 5 folds. In that, demand for municipal
water is expected to increase at a rate greater than that of the population growth.
An increase in household income encourages the use of more water either through
better housing and/or improved hygiene habits. The growth of national income
provides a government with fund to build water treatment plants to serve wider sector
of its population. In that respect, the size of population connected to a treated water
source varies from a country to another and from an area to another within the same
country. In most of the Arab countries, urban areas are favored at the expense of rural
regions. The percentage of served urban population ranges from 50% (Iraq) to 100%
in six countries (Libya, Tunisia, Saudi Arabia, Emirates and Lebanon). In rural areas,
served population drops to as low as 14% (Morocco) up to 100% in Emirates (WRI et
al 1996). Serving new segments of rural and urban population will shift up the
demand for municipal water.
3
The average daily per capita share of municipal water is calculated by dividing total municipal water
by the population size. A reservation on that average is that not all the Arab population is served by
water.
9
Water allocation to the municipal sector is envisaged to occupy top priority.
Municipal water is vital to the survival and the quality of human resources.
3.2. Industrial Use
In terms of the priority of meeting sectoral water needs, the industrial sector comes
next to municipal use. In part, this is due to the relative economic importance of the
industrial sector. Industry is favoured because of its faster growth, greater job creation
and higher value added per unit of water (Allan 1996 and Young et al. 1972).
Industry and services can provide a thousand times more jobs and 20,000 times more
financial return than would a crop producing enterprise using the same volume of
water.
Indeed, the experience of developed world demonstrates that with economic growth
the water share of the agriculture sector declines. In the years 1996, 2000, and 2025,
industrial demand was estimated at 10 bcm (AOAD 1997), 12 and 28 bcm; in order
(ACSAD et al. 1997). It depends on the type of water use (processing, cooling… ),
prevailing technology, nature of product … etc. Subsequently, water demand differs
significantly from one industry to another. At any rate, industrial demand for water
will increase with economic growth. Nevertheless, advances in recycling and reusing
techniques may slow down its growth.
3.3. Agriculture Use
Irrigation is the largest demand component. Except in the Gulf countries, the
agriculture sector uses most of the water (up to 94%). It uses about 141 bcm (AOAD
1997) and is expected to reach 340 bcm by 2025 (ACSAD et al. 1997). The increase
in demand for irrigation is induced by horizontal expansion and crop intensification.
Meeting the surge in demand for irrigation water will be hindered by competing
demand by other sectors. Nonetheless, there is a room to reduce irrigation
requirement by enhancing irrigation efficiency (currently in the vicinity of 50% or
less), adopting water-conservation measures... etc. Jordan for example has succeeded
in adopting drip irrigation in 62% of its agriculture system (AOAD 1997).
Agriculture is the sector that usually absorbs the deficiency in water supply. This is
so because its demand for water is spanned out spatially and temporally. Given the
weak voice of farmers, shortage signals is too weak to alter decision-making. Worse
still, if shortage signals reach the decision-makers, it is too late to act in a way that
avoids damage. Furthermore, shortage in irrigation water is substituted for by
importing virtual water in the form of food.
Food surplus in humid latitude countries is the path to import virtual water. But, an
alerting issue in a free international trade world is that the huge volumes of water used
in agriculture in those areas are available at zero cost.
4. CONVENTIONAL WATER RESOURCES
Mother nature has distributed resources unevenly among world regions. The Arab
region accommodates 4% of the world population who live on 9% of the land yet
10
geting less than 1% of the water. This is the lowest share among world regions. The
Oceania, at the other extreme, accommodates 0.3% of the population on 6% of the
land using 3% of the world water. So, the Arab nation faces the arduous task of
managing its limited water resources.
Arab water resources are grouped into freshwater resources and reused water
resources. Freshwater resources consist of surface, aquifer, and desalinated water.
Reused water includes agriculture drainage and municipal and industrial effluent. The
two types add up to 274 bcm (excluding rainwater) of which fresh resources provide
97% (Table 2). Surface water alone supplies 225 bcm (85% of total freshwater), and
aquifer water provides 39 bcm (15%). The contribution of the desalinated water is
almost nill in spite of its imporance in the Peninsula area where it provides 12% of the
total freshwater there. Nevertheless, given the long water shores in the Arab world,
the reliance on water desalination is expected to increase especially for municipal use
in coastal areas. Similarly, the reuse of wastewater is anticipated to support
freshwater resources in the future. In 1996, only 7 bcm of wastewater is recaptured
and reused (ACSAD et al. 1997).4
Surface water resources comprise rivers, flood plains, springs. They provide 85% of
the total freshwater. The Central region gets 40% of the surface water. Close to it is
the Arab East which receives 37%. The international rivers in both regions face
transboundary problems. Contrarily, the Arab West depends on internal rivers and
collect 20% of the Arab surface water. The Peninsula receives a meager 4%.
Table 3: Water available in the Arab World in 1996 (mcm).
Fresh
Surface Aquifer Desal.
44407
12700
296
89930
8450
33
Total
57403
98413
Arab West
Central
Region
Arab East
82653
13205
14
95872
Peninsula
8353
4819
1760
14932
Total
225343
39174
2103
266620
Source: ACSAD et al. 1997; Table 7:30.
Remark: Percentage calculated by the author.
Drain.
3800
1270
5070
Grand
Reuse
Munic
934
600
Total
934
4400
Total
58337
102813
53
308
1895
1323
308
6965
97195
15240
273584
Rivers are the main source of surface water in the region. Generally, a river can either
be: an internal river starts and ends into the same country, or an international river is
defined as a drainage basin shared by two or more states (called a successive river) or
constitutes the boundary between them (called contiguous river)”. In this class, three
types of riparian countries are recognized: the country where the river originates,
another which a river goes through out, and the third where a river ends. The Nile
4
Another estimate of conventional resources is 340 bcm/year: 150 bcm internal
sources, 190 bcm from outside the Arab region. Given a loss to evaporation of 100
bcm, that leaves 240 bcm for use (AOAD 1997). The difference between the two
estimates is less than 10%.
11
and the Niger watersheds are shared by 10 countries; that of the Lake Chad is shared
by 8 countries. The rest (except Shaballe) is shared by 3-4 countries.
International watersheds where at least one Arab country is located. In terms of area,
the Nile’s is the largest (3.3 million km2) followed by the Niger’s and that of Lake
Chad (2.3 and 2.5 million km2; just for comparison, the area of the Amazon watershed
in South America is 6 million km2). The population density in the region’s
watersheds ranges from as low as 10-12 persons/km2 in Senegal, Shaballe, Oued
Draa, Jubba, Lake Chad to 32-60 persons/km2 in the watersheds of the Nile, the
Niger, the Tigris and the Euphrates, and Lake Turkana (population density reaches
400 and 310 in the Ganges watershed in Asia and the Rhine-Maas in Europe;
respectively).
The low population density in the region’s watersheds comes at no surprise. The
region is highly arid. The arid areas represent more than 90% of the watershed area in
the Oued Draa, the Tigris and the Euphrates and the Shaballe watersheds and more
than 65% in the rest. High aridity prohibit regular agriculture activities; a main
profession in the region. Instead, grass land prevails. Even the limited cropland areas
depend mainly on rainwater for irrigation which entails irregularity of quantity
produced (WRI et al. 1996).
Another source of freshwater is aquifers. They provide 39 bcm or 15% of the
freshwater in the Arab region. Aquifer water is of special importance for the
Peninsula where it supplies about one third of its freshwater. In the Arab West, it
secures 22% of the freshwater there. Its relative importance shrinks in the Arab East
(14%) and the Central region (9%). However, the geographic distribution does not
match its relative importance. While two thirds of the aquifer water are shared by the
Arab East and the Arab West, the share of the Peninsula is only 12% .
Main elements that pose serious threat to aquifers are over-mining and pollution.
Over-mining is a main threat to development schemes based on aquifer water. It is
threatening development schemes in the Azraq basin northeast of Jordan (Dottridge
and Gibbs 1996). In the Peninsula, Saudi Arabia, Bahrain and Qatar extraction far
exceeds the safe yield resulting in depletion and degradation where water salinity is
rising at 5-7% annually (Postel 1992). If this pattern of exploitation continues, the
economic life of the aquifer will not exceed 20 years. Hence, actions to protect well
fields are enacted in Saudi Arabia and in Oman (El-Ghamam 1997). Another
damaging effect of overmining is the reduction of the in-land water pressure giving
way to seawater intrusion as in some coastal areas of Oman, Bahrain, and Qatar.
Aquifer water may be contaminated because of leakage of underground storage tanks,
seepage of leachate from mine tailings and agriculture development utilizing
inorganic fertilizers and pesticides.
A third source is rainfall. It is a promising resource in the magnitude of 2600
bcm/year (ACSAD et al. 1997).5 This amount is unevenly distributed over the Arab
territories. Rainfall distribution is the main factor in determining the aridity of an
area: 68% of the area of the Arab region is arid where it receives 100 mm or 15% of
5
Another source estimates rainfall at 2282 bcm (AOAD et al. 1997).
ACSAD’s estimate is kept for consistency.
12
The difference is 12%.
the total annual rainfall. Semi-arid areas account for 13%, get 100-300mm or 19% of
the rain. Semi-humid areas are 18% get 66% of the rain at a rate of 300 mm or more
(AOAD 1997).
Rainfall in the range 200-500 mm (672 bcm; 26%) is especially useful for agriculture
and natural pastures. Actually, it is the most suitable for rainwater harvest. Three
quarters of this amount falls on the Horn of Africa. Even more, the quantity of
rainwater in this category is so large that its quantity is close to that of the total
surface water in the Arab countries.
The main advantage of rainwater is that it is contained within the boundaries of a
country. So, unlike other transboundary surface and aquifer sources, rainwater is
under the full control of the recipient country. Scores of rainwater harvest techniques
are in use in the region (described in detail in UNESCO 1995). Of those techniques
microcatchment and pond (hafeer) techniques are widely used for supplementary
irrigation, support of municipal needs of small rural communities and simple
agroindustries at a reasonable cost (Khouzam 1997).6
The next sections examine the conventional resources in the four Arab regions.
4.1. The Arab West (Al-maghreb Al-arabi)
It comprises Libya, Tunisia, Algeria, Morocco, and Mauritania: Morocco is the study
case for the region. The water resources are contained within the region. It comprises
Libya, Tunisia, Algeria, Morocco, and Mauritania: Morocco is the study case for the
region. Most of the Libyan water resources are aquifers. Their total annual recharge
is 4.7 bcm of which the withdrawals is 2.2 bcm. Additionally, there is springs that
produce 161 mcm/year. Surface water is negligible.
Unlike Libya, the northern part of Tunisia enjoys all-year round rivers. Besides, there
are aquifers in the south. The total water resources in Tunisia is 4.5 bcm. The total
water resources in Algeria is 17 bcm most of which rain water (80 per cent); aquifer
water is next in importance. In Morocco, total water resources is 28 bcm of which 75
per cent is surface water. Out of 5 bcm/year of aquifer water, only 50 per cent is
used (Mekheimer and Hegazy 1996).
4.2. The Central Region
Briefly, the Nile gets its water from two main sources: The Equatorial Lakes Plateau
and the Ethiopian highlands. The average annual inflow is 33 bcm at Mongalla: the
entrance to the vast Sud wetland in the Sudan where about half the water is lost.
Water from the Ethiopian highlands feeds three main rivers: Sobat (14 bcm), the Blue
Nile (50 bcm), and Atbara (11 bcm). Accounting for losses, the average amount of
water that reaches Aswan at the southern borders of Egypt is about 84 km3.
Natural variations in water revenue is a major source of disturbance to the region’s
development. They comprise inter-seasonal and inter-annual variations, and a
6
The cost of capturing a cubic meter of water using a microcatchment ranges from $0.18 to 0.23 while
that of a pond is less than three cents per cubic meter (Khouzam 1997). This cost is less than other
options: water desalination costs about $2/m3, 19 cents/m3 using secondary treatment and filtration, 25
cents/m3 using secondary treatment with activated carbon, and 75 cents/m3 using secondary treatment
plus desalination by inverse osmosis.
13
declining time trend of Nile water. Seasonal fluctuation is a characteristic of the
water coming from the Ethiopian highlands where its flow during the high rain season
(summer) is about 40 times that of the low season. Annual fluctuations is, on the
other hand, a feature of the water coming from both the Equatorial Lakes and
Ethiopia. During this century, the river flow varied from as high as 151 bcm in 1978/9
to as low as 42 bcm in 1913/14 and in 1984.
The risks associated with seasonal and annual variations get modest when compared
to the more serious question of the declining time trend of the river’s revenue. A drop
in average annual rainfall by more than 10% is observed in 8 measurement points in
the Sudan during the first eight decades of this century.
A set of structural works is upper Nile conservation projects. Nevertheless, a number
of reservations cast shades of doubt on their viability of those conservation projects.
Firstly, its implementation is very expensive; the average cost is in the magnitude of
LE 300 million/ 1 bcm. Secondly, its implementation takes long time. Hence, it
cannot provide quick solutions to urgent problems. Thirdly, the public debt burden,
and the lack of security and political stability make it difficult to gain access to
international agencies to finance such expensive projects. Forthly, conservation
projects in the upper Nile region are facing tough objections by the environmentalists
for they dry wetlands, alter the life of indigenous people, hurt biodiversity, and may
influence the rain fall regime.
Beside the physical difficulties, some institutional issues may open the door for
conflicts in the Nile basin. At the basin level, there is no official comprehensive
institutional guideline, framework or structure for riverbasin management as one unit.
4.3. The Arab East (Al-mashreq Al-arabi)
It includes Syria, Lebanon, Jordan, Iraq and Gaza Strip and Jerrico. Jordan is the
study case. This region suffers many wars: Iraq-Iran, Iraq-Kuwait, Iraq-USA-UK,
Israel-Palestine, Israel-Syria, Turkish development plans in conflict with Syrian-Iraqi
water interests.
In the Arab East, there are several international rivers: the Jordan river, the Euphrates,
the Tigri, El-Assy, the Great Southern river, and the Yarmouk and Banias. The
Jordan river is 252 km long; its total revenues is 2 bcm. The area of its watershed is
40 thousand km2 of which: more than 60% is in Jordan. Although only 5% of the
watershed is in Syria and Lebanon most of its water comes from these two countries.
The Jordan river can be dividied into (Khadam 2001):
(a) the upper reach includes the Syrian and the Lebanese sources, its course in ElHawala plain where it receives 130 mcm El-Hawala springs until it reaches
Tabria Lake. The most important attributes in this area are El-Hasbani in
Lebanon (provides 160 mcm), Banias rivers (160 mcm), the richest attribute: ElDan providing 255 mcm, El-Baragheit river (20 mcm). Banias river and El-Dan
emanate from El-Sheikh mountain.
(b) the middle reach includes Tabaria Lake and about 3 km of the river before it
meets with Yarmouk.
(c) the lower reach comprises 200 km of the river starting at the point where it
meets with the Yarmouk which lenght is 65 km of which 50 km in Syria. The
14
Yarmouk provides 490 mcm plus 290 and 250 mcm from the east and the west
banks; respectively.
The Euphrates is another important river in the Arab East. Its length is 2330 km until
it meets the Tigris near El-Basra: 442 km is inside Turkey, 675 in Syria and 1213 km
in Iraq. The Tigris is about 1700 km. It emenates from Turkey, moves only 44 km in
Syria, then into Iraq where most of its watershed is located and from where it gets
most of its water. Its annual revenue is 50-60 mcm. Other rivers that eminate from
Turkey and flow into Syria are: Qoweiq, El-Sagour, Afreen, Gongoch, Al-Garah, ElSaqal.
Other rivers come from Lebanon. El-Assy (500 mcm), and the Great Southern River
(200 mcm). to irrigate Akka plain. Beside the international rivers, there are internal
rivers in each country. In Syria: El-Khabour and Bleikh rivers with average flow of
1.6 mcm each, the Great Northern rive (210 mcm), El-Sen (345 mcm). In the Golan
Heights, there is a number of rivers fed by the rainfall there: Barada river (315 mcm)
and El-Awag (100 mcm).
Lebanon has 15 rivers of which 3 are international ones. All national rivers discharge
to the Mediterranean. The source of river water is rain and snow falling on the
mountains. Total water is 4.1 bcm of which 0.6 bcm goes to Syria and Palestine.
That leaves 3.5 bcm of which 2.6 bcm in water-rich season (December to May) and
0.8 bcm in water-low season (June to November) (Khadam 2001). In Palestine, the
most important rivers are El-Oga river which flow is 220 mcm, El-Naameen provides
45 mcm and El-Mekata supplies 10 mcm.
4.4. The Peninsula
The Peninsula is mostly harsh desert. Conventional water resources is 13 bcm (less
than 5% that of the Arab world). Surface water is 8 bcm and aquifer water is 5 bcm.
Non-conventional water is 2 bcm or 12% of that of the Arab nation. Except for
Yemen, most of the cultivable land is pastures. The area relies mainly on rainfall for
agriculture and pasture activities; Yemen and Saudi Arabia are leading in that area.
5. NON-CONVENTIONAL WATER SOURCES: THE WAY OUT
Conventional resources are naturally limited, stochastic, laden with transboundary
conflicts, and almost fully utilized; if not over-exploited. Under these circumstances,
non-conventional resources provide an invaluable escape out of the water
predicament.
Non-conventional waters need special processing in order to be suitable for use. Like
rainwater, the main advantage of this class is its containment within a country’s
borders. So, it is not subject to transboundary conflicts. They include two brands:
one brand relies on fresh water; specifically, desalination, cloud seeding, towing
icebergs and the like of novel ideas. The other depends on treating polluted
wastewater.
15
5.1. Desalination
Desalination of seawater gives access to a huge stock of an abundant resource. Most
of the water in the globe is in oceans and seas (World Bank 1995). In the Arab
region, desalination is heavily used especially in the Arab Peninsula which suffers
from a meager share of natural water resources and where energy is available at a
reasonable cost. While desalinated water represents less than 1% of total fresh water
in the Arab region, it represents 12% of that in the Arab Peninsula. Meanwhile,
surface water provides less than 5% of its total water.
The production of desalinated water in the Arab region increased from 1.6 bcm/year
in 1986 to 2.1 bcm in 1996. This is about 60% of the world production. In the Gulf,
24 treatment plants are built on the shores of the Arabian Gulf and the Red Sea with a
total capacity of 572 million gallons/day. The plan is to increase it to 800 million
gallons/day (El-Ghamam 1997). One desalination plant in the Gulf produces 7.6% of
the world’s production (1 mcm/day). Saudi Arabia alone produces 27% (14mcm/day)
of the world’s capacity (ACSAD et al. 1997).
5.2. Reuse
It is hypothesized that recovering and properly treating and suitably reusing
wastewater is economically justifiable in terms of the direct benefits of increasing the
quantity of water and the benefits of saving the environment from the damage that
could be caused if wastewater is dumped in one or more of its media (water or soil
media).
Demand for municipal, industrial and agriculture rise. They are expected to reach 37,
23, and 340 bcm; in order. Provided the low consumptive use of the municipal and
industrial sectors, most of the appropriated water can be recovered. As for the
agriculture sector, although it has a relatively high consumptive use, the large size of
its withdrawals encourage the collection and reuse of irrigation water.
Around the world wastewater is in use. In China, Chile and Mexico extensive
agriculture areas around urban centers are irrigated by wastewater (Sadik, and
Barghouti 1994; after Xie et al. 1992). The reuse of wastewater is being experienced
in the Arab region. About 7 bcm of wastewater was reused in 1996 out of 191 bcm
the total withdrawal that year; this implies less than 4% recovery. Reused agriculture
drainage was about 5 bcm out of 168 bcm withdrawn for that sector (less than 3%
recovery) and 2 bcm of municipal and industrial wastewater out of 23 bcm withdrawn
(about 9% recovery). In Saudi Arabia, 100 mcm/year of wastewater is being used to
irrigate trees, palm trees, fruits. A project for the reuse of agriculture drainage in ElEhsaa Valley is implemented in 1992. Currently, its saves 60 thousand m3/day that is
mixed with irrigation water obtained from springs (El-Ghamam 1997).
Wastewater is the product of legitimate economic activities. Countries either invest in
getting rid of it or suffer the environmental damage. Either practice has a pervasive
impact on public health and the sustainability of development. If wastewater is
properly treated and reused, then it solves two problems by one stroke: saving local
and, probably, regional environment and ameliorating water deficit. Damage includes
the high risk of shallow groundwater contamination from: sewerage, the disposal of
16
sullage waters, household chemicals, elevated nitrogen, chloride, sulfate, borate, and
bicarbonate concentrations, hydrocarbon fuel leakage from underground gasoline
storage tanks, other industrial effluents.
Collecting wastewater serves the public health by extending the sewer system to
unserved communities and improving land productivity by installing drainage
especially in lands suffering water logging. Properly treated wastewater irrigation is
an important form of water and nutrient reuse (Khouri, Kalbermatten, and Bartone
1994). The required treatment and, subsequently cost, depends on pollutants,
concentration and type of reuse.
6. THEORITICAL FRAMEWORK
The normative propositions of welfare economics underlie the analysis in this
research: (a) each individual is the best judge of his/her own welfare, (b) the welfare
of a society is based on the welfare of its individual citizens, (c) if the welfare of one
individual increases and the welfare of no other individual decreases, the welfare of
the society increases (Pareto improvement), and (d) when no increase in any
individual’s welfare is possible without diminishing satisfaction for some other
person, then a Pareto optimum is reached. The major critique of welfare economics is
that a potential Pareto improvement treats all affected individuals equally. Criteria
based on this principle accept an action that makes the poor poorer and the rich richer.
As such, efficient allocations are not necessarily fair and might be biased to the status
quo. The principle adopted in this paper is that when the scarcity of a strategic
resource like water is going to place severe constraint on economic development and
growth, then economic efficiency becomes also a social objective (Young 1996).
The very nature of water requires special way of analysis. Water is usually a liquid.
It tends to flow, evaporate, and seep as it moves through the hydrologic cycle
(fugitive resource). Furthermore, water is a nearly universal solvent which creates an
inexpensive capacity for absorbing, diluting and transporting wastes to less-adverse
locations (solvent property). Besides, water mobility makes it a high-exclusion-cost
resource: the exclusive property rights --which are the basis of a market or exchange
economy-- are relatively difficult and expensive to establish and enforce.
People obtain many types of benefits from water resources. Benefits are classified
into five groups: (1) commodity benefits, (2) waste assimilation benefits, (3) aesthetic
and recreational values, (4) ecosystem preservation, and (5) social and cultural values.
The first type of benefit raises demand for water as a commodity (for final
consumption or an input to production). The other types of benefits raise demand for
water as an amenity. In order to keep the scope of work manageable and due to the
difference between the methodologies dealing with the two types of demands, this
research pays attention to commodity benefits and demand for water as an
intermediate good. Other environmental issues will be addressed in future research.
17
Economic agents whose behavior affects the demand for water are households,
industrial firms and agriculture farms. Institutions governing water allocation and use
are the backbone of the system. Only agriculture farming is considered in this work.
Others are excluded by plausible assumptions. As such, this work is concerned with
the first category of benefits; specifically, benefits in the form of production of more
agriculture commodities via making more irrigation water available by reusing treated
wastewater (agriculture drainage, municipal effluent, and industrial discharge).
Economic analysis of water resources issues is multifaceted. It depends on a number
of dimensions. The available quantity is a main dimensions. Other dimensions
comprise quality, time, location, and institutions. This work focuses on the main
dimension: quantity. Other dimensions will be nested in research in future efforts.
The interest in quantity emanates from the fact that the greater the quantity demanded,
the greater the effluent that will be discharged. While greater water demand expands
water deficit, reusing wastewater partly offsets that effect. Favorable environmental
benefits will be associated with treating and reusing wastewater; yet estimating those
benefits are beyond the scope of this paper.
Analysis covers agriculture commodities and physical inputs, services such as
management, and resources of special nature; specifically, irrigation water. As for
commodities and physical inputs, prices are obtained from records of observed
markets prices. Keeping in mind the economic liberalization processes, it is assumed
that market prices reflect the appropriate value of the items of interest. Market exists
for agriculture managers, but unlike commodity markets, they are not competitive and
there is no record to provide proper reflection of underlying preferences or costs. So,
suitable adjustment has to be made (detailed below).
Approach is "positive" rather than "normative". This means that its assumptions and
projections reflect the most likely future but not necessarily the most desirable one.
7. MODEL STRUCTURE
7.1. Data Sources
The research draws upon readily available databases, published and unpublished
research, personal communication, specialized environmental agencies, and
wastewater treatment plants.
Population data is obtained from the UN population prospects prepared by the
Population Division, Department of Economic and Social Affairs. It provides four
scenarios of population growth: high, medium, low and status quo variants. The first
three are used in this study.
Most of the agriculture data is obtained through the internet from FAO. The Food
Balance Sheets, and Primary Crop Production tables are used extensively. The Food
Balance Sheets are available from 1961 to 1999. They provide three main sets of
18
data: domestic supply (which comprises local production, imports, change in stock
and exports), domestic utilization (feed, seed, processing, waste and food), and per
caput physical supply, calories, protein, and fat. Data are provided for each food
crop. Crops are grouped into categories such as cereals, starchy roots, sugar crops, oil
crops, vegetables, fruits, pulses and meat. The data base can provide food balances
for each year or average of a number of years. Research relied on average food
balance sheets for the periods 1997-99, 1992-94 and 1961-63. Rate of consumption
growth is obtained by comparing the food balance sheets of 1997-99 with 1961-63.
The initial consumption values for food crops are obtained from 1992-94 food balance
sheet.
Time series (1961-2000) of crop production are obtained from FAO Primary Crop
Production tables. The forty years series is used to estimate the change in yield. The
rate of change is applied to future yield in order to accommodate technical
development (according to model assumptions).
7.2. Model Assumptions
7.2.1.
Assumptions related to agriculture area
In this context, distinction is made between two terms “agriculture land” and “the
cultivated area”. Agriculture land is the physical cultivable area whether actually
cultivated or not. Cultivated area is equal to or less than the agriculture land. It is
determined by resource limitations (e.g. shortage in irrigation water) or policy
intervention.
The area of the agriculture land is a positive function of land reclamation program,
and a negative function of the level of urban encroachment, skimming top soil and
desertification. Urban encroachment will continue because of the construction
work associated with the implementation of rural development plans such as
building schools, hospitals, water treatment plants and the like.
Also, it is assumed that a ceiling on the area of land to be cultivated can be
successfully enforced as a policy intervention in response to water shortage (refer
to the section on Policy Intervention).
7.2.2.
Assumptions related to the cropping pattern
The cropping pattern is heavily influenced by national policies seeking food selfsufficiency. Sometimes, such cropping pattern has high water requirement. Cereal
crops, rice and sugarcane requires large quantities of irrigation water.
A number of representative crops constitute the cropping pattern understudy.
Selection of representative crops are based on the following factors:
(a) at least one crop is selected out of each food category as defined in FAO
Food Balance Sheets,
(b) crops capture most of the nutrient content of the population; altogether
selected crops occupy most of the agriculture land, and .
(c) they occupy most of the agriculture land.
19
ET0 varies from a region to another. The value of ET0 where a crop is mainly
grown is adopted.
The cropping pattern of 1995 is proportionately adjusted to occupy all the
agriculture land area. It is adjusted by raising the actual crop areas proportionately
so as to use up all the available agriculture land.
7.2.3.
Assumptions related to yield
Technology change is allowed by letting yield change over time. Change in yield
is a proxy of the effect of technological development on the productivity. Yield
growth is assumed to follow a natural growth pattern assumed to prevail over the
past forty years (1961-2000). The natural growth formula is derived in Box 1.
The recent history indicates that the Green Revolution has had a tremendous positive
effect on food security. Presently, technological advances pave the way for an
increase in yield: growing integration of the world food markets, less preoccupation of
decision makers by food self-sufficiency issues, and expanding removal of price
distortions (Pingali and Rajaram 1998).
Text Box 1: Derivation of the natural growth formula.
Y=Aert; where Y is yield at year n, A is yield at time n-1, r is the rate of growth, and t
is time which is 1 in this case. Taking the natural log of both sides (Chiang 1984),
ln Y = ln A + rt ln e
r = (ln Y - ln A)/t;
ln e = 1
Possible revolutionary achievements are not accommodated in this model. Example of
such achievements is the genetically modified crops which, though promising, are not
globally acceptable yet. While some countries like USA, Argentina and Canada have
been widely planting genetically modified cotton, maize, and soybeans with
favourable reduction in production costs, most of other countries do not permit the
cultivation of genetically modified crops because of deficient capacity to test
biosafety, media opposition, or anxiety regarding consumer acceptance of such
products (Paarlberg 2001). Nonetheless, it is believed that with proper biosafety
precautions, genetic modification will not be riskier than conventional breeding
methods. The initial yield is the values of the average of 1992-94. This assures the
consistency with the latest actual population size of 1995.
7.2.4.
Assumptions related to food consumption
For all developing countries combined per capita consumption of different animal
meat, poultry, eggs and milk increased by an average of 50% per person between
1973 and 1996 (Fritschel and Mohan 1999). Along the same trend, most of the
increase in world food demand will take place in developing countries; they will
account for about 85% of the increase in global demand for cereals and meat
(Pinstrup-Andersen et al. 1999).
ƒ Future changes in consumption are assumed to follow previous years (1961-2000)
pattern as traced by the natural growth model (Text Box 1 above).
20
ƒ
Tastes and preferences are held constant. The people continue using the same
consumption bundle to get their calorie and protein needs. Nonetheless,
consumption levels may increase or decease over time according to the trend
shown by the FAO Food Balance Sheets.
ƒ FAO definition of per caput consumption had to be modified. In FAO Food
Balance Sheets, per caput consumption is calculated by dividing the local
production by population size. This ignores exports, imports, and change in
commodity stock all of which are part of consumption at large. In fact, the
quantity available for consumption is local production less exports plus imports
and stock change; altogether are termed "domestic supply". It is found that for the
purposes of this work per caput domestic supply represents consumption better.
ƒ A reservation on consumption assumption is the misleading effect of food
subsidies. For instance, in Egypt the food subsidies was 5.6% of government
expenditures in 1996/97 or LE 3.7 billion. Subsidy is directed mainly to popular
("baladi") bread (57% of its price), wheat flour (43%), sugar (43-62%), and edible
oil (42-54%) (Ahmad et al. 2001). Food subsidy conceals the real demand for
food items were consumers facing actual market prices instead of subsidized
prices.
ƒ The initial consumption is the values of the average Food Balance Sheet of 199294. This assures the consistency with the latest actual population size 1995.
7.2.5.
Assumptions related to water
o Municipal demand takes top priority in water allocation. Needless to say, the
priority given to municipal use is due to its vital role in life sustenance and in
maintaining fair hygienic standards.
o Satisfying industrial water demand is second in priority to municipal demand.
The industrial sector yields faster growth, creates more jobs and generates
higher value added per unit of water than would a crop production enterprise
(Allan 1996, Young 1996 and Young et al. 1972). Besides, the agriculture
sector can substitute for water shortage by importing virtual water from
international markets (in the form of agriculture products). Industrial demand is
assumed independent of population growth; it is a function of economic growth.
o The only water demand type left to be considered in this work is demand for
water an intermediate good used in agriculture production.
o Irrigation efficiency is estimated at 60%. This is the value of the water use
multiplier. To simplify the modeling process, they cancel out each other.
7.3. System Structure
The population-water-food system is broken down to its key components. The
principal relationships among system components are identified. Then, the dynamics
of the whole complexity is simulated using STELLA™ software. The model logical
structure is sketched in Figure 1. It comprises 3 main parts:
(1) The system's relationships. They are grouped in the following submodels
(sectors in STELLA terminology):
‰ Population Submodel.
‰ Food Consumption Submodel.
‰ Food Production Submodel.
21
‰
‰
Water Supply-Demand Submodel.
Economics Submodel.
Population growth plays a central role in the model. It is the variable that triggers the
whole process of actions and interactions. Paradoxically, while population growth
requires more food consumption, it adversely affects the availability of water for
irrigation. For population growth is the principal variable behind the rise in municipal
water demand. Furthermore, in conjunction with economic growth, population is
behind the increase in industrial demand for water. Since available water tends to be
rather rigid; it is subject to a zero-sum game. The increase in municipal and industrial
needs comes at the account of the water available for irrigation and, subsequently, for
local food production, assuming no change in technology that would affect water
requirement (in quantity and quality). The drop in the quantity of water available for
irrigation will forces some cultivatable area out of production.
Comparing food consumption with production reveals the status of the food balance.
Food deficit is imported and food surplus is exported; this reflects on the system’s
economics. Furthermore, water balance is related to system economics through the
net return to water used in irrigation and the costs and benefits of treating and reusing
wastewater.
Figure 2: Logical model structure.
Water
Resources
Population
Indicators
Water Balance
System Components
Return to Water
Cultivated Area
Consumption
Food Bill
Food Production
Water-First
Simulation Mode
Land-First
Simulation Mode
Policy Tools
Adjust CP
Water Reuse
Adjust Area
(2) A set of policy intervention tools used to adjust the food production system in
response to water shortage. Intervention tools comprise:
ƒ Cultivable-Area intervention tool which forces an upper bound on the cultivable
area proportional to water deficit.
ƒ Cropping-Pattern intervention tool which confines the cropping pattern to crops
with greater return to water.
22
ƒ
Water-Reuse tool which allows the reuse of drainage water to alleviate water
shortage.
(3) A set of performance indicators are adopted to assess the system performance
under different simulation scenarios (Section 4.3.3 below):
o Quantity of water available for irrigation.
o Water balance.
o Irrigation demand.
o Cultivated area.
o Total return to water.
Return to a unit of water.
For the purposes of comparative analysis, policy tools are simulated under two
different modes: "Land-First" and "Water First" modes. Under the “Land-First”
mode, land is allocated to cropping activities first; water is allocated subsequently. It
simulates the real life situation of resource allocation where farmers decide on
distribution of their land resources (the resource under their full direct command),
then they allocate the irrigation water they succeed in appropriating among the
cultivated crops.
In the “Water-First” mode the quantity of water available for irrigation is determined
first, then land is allocated subsequently. In other words, farmers are partners with
the irrigation authorities in the decision making process. That way, not only farm
land is under the full direct control of the farmers, but they have a voice in the
allocation of irrigation water as well.
The principal model equations are explained below. They are shown in boxes. In
each box, equations are arranged according to the order of execution. Variables are
scalars, vectors or matrices. The dimensions of the vectors or matrices are written
within braces with CROPS=12 crops selected for the study and VARIANT=3
population variants. Additionally, all variables are dimensioned to the time duration
of the analysis: t=56 years from 1995 to 2050.
7.4. Model Indicators
Various simulation runs are assessed in the light of a set of indicators generated by the
model:
o The water balance is the difference between the available water and total water
needs. Deficit in the water balance has to be substituted for by importing virtual
water. Water needs comprise municipal and irrigation needs both of which are
direct functions of population growth. Hence, the water balance is sensitive to
population growth.
o The cultivable area shows the ability of local natural resource base to locally
produce food. It is used in this text in a way slightly different from its conventional
meaning. Conventionally, the term is used to mean the land area that possesses the
physical characteristics that qualify it for agriculture production regardless whether
it is used for that purpose or not. This definition is modified in some scenarios to
make it subject to the availability of water resources. As such, there may be some
areas that could be cultivated but are not because of the lack of irrigation water.
23
o
The total return to water provides an economic base to compare different policy
options.
o The net food bill is the difference between food exports and imports. It tells to
what extent a policy is capable of meeting food needs.
8. CONCLUSIONS AND POLICY IMPLICATIONS
For the Central Region (represented by Egypt), out of the eight scenarios, scenario
"H" where the water available for irrigation is determined first, then only crops with
positive economic return to water are cultivated. Hence, it is the most promising
intervention tool in dealing with water shortage.
Simulation scenarios did not have significant impact on overcoming water shortage in
the other three regions! In both the Arab East and the Arab West, most of the
agriculture land depend on rain for irrigation (more than 95%). Surface water has far
less role in agriculture than rainwater. So, attention should be directed to the
promotion of rainwater harvest techniques, enhancing the productivity of rain-fed
agriculture, and making supplementary irrigation available.
Similarly, the simulation scenarios were not viable when applied to the Peninsula but
for different reasons. For, in Saudi Arabia, less than 1% of the agriculture land is
irrigated and 0.1% is cultivated by permanent crops; about 98% is permanent
pastures. Aquifer and rain water are far more important than surface water. As such,
interest should be directed to aquifer management, rainwater harvest, and the
management of natural pastures.
This leads to the conclusion that wherever surface water is an important source,
although reusing wastewater ameliorates the water deficit problem, it is not the most
effective tool. Actually, intervention tools guided by economic criteria are the most
effective ones.
The model shows the conflict resulting from population growth with respect of
satisfying direct consumption (drinking and industrial use) and indirect consumption
(irrigation). The adverse effect of the pressure that population growth exerts on
natural resources can be alleviated by adopting suitable policy intervention tools.
Proper policy intervention succeeds in ameliorating the deteriorating situation.
Intervention tools based on economic criteria are the most effective in dealing with
water shortage. This is so because: (a) crops with better economic return can be
traded for others with lower return with some surplus made, and (b) in countries
suffering water stress, economic and social efficiency of water allocation becomes
one and the same.
Expanding shortage in irrigation water poses a threat to investments in irrigated
agriculture. Risk to investment in irrigated agriculture is of special importance given
the call made by the International Commission on Irrigation and Drainage (ICID) to
increase investment in irrigation during the next 25 years by 15-20%.
To guide the allocation of irrigation water by its economic return, water pricing has to
be enforced. However, this policy faces cultural, political, social, technical, and
24
economic strong reservations. Culturally, some religious interpretations prohibit
charging for water on the ground that it is a gift from God. Politically, decision
makers prefer to avoid the objections of the masses of farmers, conflicts, and the
political price of enforcing pricing and its collection. Socially, the public objects to a
policy that results in raising prices of all kinds of food, agriculture and any other
related products. As a matter of fact, such policy will feed inflation in the economy
raising, that way, all prices not only agriculture products. Technically, it is very
difficult to measure water withdrawals especially with tiny land holdings.
Economically, it raises questions about the ability of agriculture sectors in developing
economies to compete under free trade with agriculture products from humid regions.
A result that may kill the farming profession.
To conclude, arid and semi arid economies have to properly design intervention
policy tools so as to induce desired behavioral changes in the way water resources are
managed.
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26
Figure 1: Change in per capita land 1983-93
0.05
-0.05
Ha/caput
Y
em
Em en
ir a
te
s
Sa
S
ud yr
i A ia
ra
bi
a
O
m
Le an
ba
no
Jo n
rd
an
Ira
Tu q
ni
sia
Su
d
M an
or
oc
co
Li
by
a
Eg
y
A pt
lg
er
ia
0.00
-0.10
-0.15
-0.20
Source: calculated from WRI et al. 1996; Data Table 10.2