Key Drivers of Water Grabbing

Further reading on water grabbing from the Transnational Institute website on Water Justice:


What are the key drivers of water grabbing?

Water grabbing is an expression of an economic model of development in which capital accumulation is linked to increasing control over abundant and cheap supplies of natural resources, including food, water and energy. The outbreak in 2008 of a global financial crisis accompanied by extraordinary commodity price spikes and growing financial speculation in food commodities provoked a new round of water, land and resource grabbing as governments and investors sought assurances which could not be provided by increasingly volatile and unreliable markets.4 It is worth examining this nexus between water, energy and food security in a little more detail.

Rising oil prices and growing concerns that a ‘peak oil’ period has been reached have rung alarm bells about the high dependence of modern economies on fossil fuel. The search for alternatives to non-renewable energy sources has focussed extensively on agrofuels: crops such as palm oil, jatropha, sugarcane and soya, grown as a source of liquid fuel for the transport sector and for industrial use. A veritable explosion in agrofuel production has occurred in Asia, Africa and Latin America bolstered by governmental directives, such as the EU’s Renewable Energy Directive (RED), and a broad range of subsidies and preferential loans.5 Claims that agrofuels constitute a clean and efficient energy source have however proven to be highly misleading, not least because of the vast amount of water required throughout the production cycle; from the irrigation of crops, to the washing of the harvest, to the cooling of boilers during processing. In the case of sugarcane cultivation for ethanol production, for example, 7,000 litres of water are needed to produce 12 kilograms of sugarcane, necessary to produce one litre of ethanol.6 This high water intensity of agrofuel production is sometimes overlooked, with disastrous consequences for other water users. (see Box 2)

Just as the growth in fuel crops reflects a search by states and investors for cheap and reliable energy supplies under conditions of competition and economic crisis, a similar logic underpins the appropriation of water resources for the cultivation of food crops. As food prices have spiked in recent years, an increasing number of countries and agribusiness corporations have sought to reduce their dependency on international markets by engaging directly in agricultural production. This has for instance figured prominently in the considera- tions of many Gulf states where their own water resources are stretched and the rising cost of food imports is estimated to account for up to one third of the inflation experienced in the region.7

Appropriating land and water for food production in other countries is therefore seen as a strategy for economic stabilisation and a way to hedge against future inflation. This also holds true for agri-business corporations who have shifted towards greater vertical integration in order to safeguard their profit margins and exercise greater control across the value chain.

Read more at Transnational Institute: Water Justice http://www.tni.org/primer/global-water-grab-primer#whatkey