COLLABORATING FOR A WIN-WIN SITUATION

RESPONDING TO THE CHALLENGE OF FOOD

SECURITY

Wall Street Journal, July 26, 2000

By Amy Dockser Marcus,

All countries in sub-Saharan Africa share one or more river basins, with at least 54 rivers or water bodies that across form international boundaries. But few are effectively managed in joint manner.

Better cooperation and greater investment in shared water basins is needed, but so too is water policy reform at the national level. The first step in the process, say the experts, is to acknowledge water as a scarce resource and its centrality to poverty reduction, economic growth, food security and environmental protection.

One of the challenges and unresponsiveness of the leaders of the Nile Basin countries in the past was one of not coming to terms with the problem of dwindling or at least declining levels of water resources with courage and realism and of not making the issue a public one. Yet, given the demographic upswing, which is inevitable with the passage of time and factors like climate change over which they have little or no control they could have spoken and could still speak out with little or no compunction or sense of qualm about the matter. By doing so they would have not only demonstrated their integrity and honesty, but also conveyed the message that water is a finite resource. The public could then be expected to draw the sobering lesson that water is a vital resource to be conserved and not squandered.

Despite the value of generating such awareness, the leaders have instead chosen the option of harping on the same tune as their predecessors projecting the message that military muscle will keep the water levels high. The other option they have opted for is that of offsetting the water deficiency by importing food crops. There has been some positive change in recent years, but the challenge which remains daunting and verile to this day, should also put in its proper context. Professor J.A Alan of the school of African and Oriental Studies of the University of London has captured the essence of this problem succinctly below. He writes:

It would require inhuman level of courage for a political leader of a country that has enjoyed water security for 5,000 years to announce that supplies are no longer adequate. Instead, leaders insist that supplies are "sufficient". But this is deceptive. Supplies are "sufficient" for the small amounts needed for drinking: one cubic meter per year per person. They may also cover current domestic and industrial needs, although both of these are on the rise. But there isn't enough fresh water to cover these demands in addition to the tremendous amounts needed for food production. It takes at least 1,000 cubic meters of low quality water to raise the amount of food an individual needs in a year.

Professor Alan then goes on to compare the value of water with value of virtual water:

Instead of paying the political costs of publicly recognizing this deficit, leaders rely on the convenient solution of "virtual water". To raise a tone of wheat, you need 1,000 tones of water. Importing a million tones of wheat is equivalent to importing a billion tones (cubic meters) of water. Since the end of the 1980s, the MENA region has been importing 40 million tones of cereals and flour annually. More virtual water "flows" into the region each year than flows down the Nile into Egypt for agriculture.

The hitch about this is, however, that the 'Mena' region (North Africa and Middle East) has been importing its virtual water at a subsidized price. He adds emphasizing the importance of creating a basin-wide food security zones and regrets the fact that

a great amount of investment is being diverted to ensure this in a number of Middle Eastern and North African countries including Egypt.

Up until 1991, Saudi Arabia used significant amounts of fossil water--which is extraordinarily pure but non-renewable--to grow corn. "The Great man-made River Project" is Libya's solution to achieving greater food self-sufficiently. The plan is to

pump water from deep wells in the north of the country and then send it through underground pipes to irrigate about 200,000 hectares along the Mediterranean coast at an estimated capital cost of $25 billion. These are extreme examples. But consider

the case of Egypt, where about 90 per cent of the national water budget goes to agriculture and yet another 7.5 million tones of grain, equivalent to 7.5 billion cubic meters of virtual water, were still imported last year to feed the population of about

63 million.

Indeed, the Mena region is currently benefiting by buying wheat at half the price because of the agriculture subsidy being provided to the European and American farmers. However, depending on the importation of wheat to conserve the precious commodity (water) is not tenable in the long term. The pressure put on removing subsidies to European farmers being put by the American Government in the context of the WTO talks, more recently in the December 1999 Seattle Round, is a case in

point.

Dependence on international trade for the importation of wheat at subsidized prices is Professor Alan also agrees not likely to be socially acceptable "nor strategically sensible" as a policy which will be continued. Hence, in such a fluid context countries like Egypt will be well-advised to think of ways and means of ensuring basin-wide sustainable food security through collaboration with their Nile water partners. This may, inter alia, include:

a) Start with a needs based allocation of the water so that each country would consciously conserve and economically utilize its own share.

b) Consider the competitive advantage of producing food where the consumption of water per units of output is lowest, after agreed principles are in place governing its marketing.

c) Look at the economies of scale of producing more food in some areas vis-a-vis others, taking into account the benefits of stake-holders rationally.

d) Allow free movement of capital, say from Egypt to Ethiopia on an enhanced scale. This way the Ethiopians would benefit from the employment and economic activity generated by the investment and Egyptians will benefit from the profits and dividend, of their invested capital.

e) Similarly, all riparian countries would reap a bonanza from the availability of and easy access to food and from the regeneration of the environment. This would lead to a basin-wide win-win development which benefits all and hurts none.

f) The above division of labour and of production based on comparative advantage could then be extended to other economic sectors.

One should, however, add that this vision of 'reciprocal altruism' should be free from the fetters of parochialism, provincialism, nationalism and from that of cultural biases (including religion).

Indeed, the notion of division of labour and of selecting zones of food production is naturally linked with and in consonance with the trend of globalization. This means 'virtual imports' are counterbalanced by 'virtual exports' depending on the comparative advantages which derive from them.

The concept of virtual water also comes under attack from an economic perspective. Jad Isaac, director-general of the Applied Research Institute of Jerusalem, a non-profit organization for sustainable development in Palestinian territories, for instance, observes, "If we are going to talk about virtual imports,"..."we should also consider our virtual exports (of fruits and vegetables) to Europe and the United States."

For Isaac, the question is not whether countries should abandon their agricultural sectors, but rather, which types of agriculture should be given priority: wheat for food security, or high value cash crops like vegetables and fruits? "It's all about economics and following market forces," Isaacs says. "With globalization, there is not a country in the world that can declare itself self-sufficient."

Given the above, attaching a price tag not to water for domestic consumption, but for use in agriculture or industries which are profit making is inevitable:

Whether we like it or not, says Issac, "water is a finite resource. It would be totally wrong to use it uneconomically." According to Isaac, government has the responsibility to provide free water for domestic needs. But agriculture is an economic activity and so farmers should pay for irrigation. "It has to happen, but slowly because such a large part of the labour force depends on agriculture. You cannot suddenly transform developing countries into industrialized ones," he says.

THE IMPERTANCE OF SPECIALISATION

Indeed, the importance of specialization among the Nile basin countries is underscored by suggestions being made about the consideration of comparative advantages in the Middle East. The case of Israel and Palestine is revealing:

Even highly developed nations like Israel, which receives tremendous financial and other forms of assistance from the United States and other Western governments, have failed to adopt an economically efficient agricultural policy. "Many think there

has been a change in Israeli policy, but the government is still subsidizing water," says Isaac. He notes that Israel has one of the region's highest percentages of irrigated agriculture –about 50 per cent of its arable land – but that agriculture contributes less than two per cent to the economy. On the other hand, Isaac notes that the Palestinian agricultural sector represents about 20 per cent of the economy, even though only six per cent of its arable land is irrigated.

The economic argument for specialization is indeed powerful as Isaac farther suggests:

"The Israeli policy doesn't make sense," says Isaac. "They should give the water they took by force back to the Palestinians who can do more in their development with it." With a gross national product (GNP) of about $17,000 per capita, Isaac maintains that Israel can afford to orient its economy towards high technology sectors and depend less on farming. In contrast, Palestinian per capita GNP is about $ 1,000 and dependent on agriculture, says Isaac. That is why Palestinians should continue to develop farming in the short term, while gradually building an industrial base. Says Isaac: "It's like a baby. First he crawls, then he walks and then he learns to run."

The same argument can be extended to Egypt in the context of the Nile basin. Indeed Egypt's per capita income of USD 1000 (the same as that of Palestine) is not comparable to that of Israel (Approx. USD16,100) which is much higher, but the

disparity in income among most Nile basin countries which ranges between USD 120-300 excluding Egypt.

Add to the above fact that the yield of agriculture in relation to the volume of water that is used is Egypt is much lower than in most riparians. This, again, bolsters the cooperation and specialization argument for food security in the Nile basin area.

IRRIGATION AND FOOD SECURITY

Egypt's food security imperative is underlined by the fact that much of its land is unsuited and costly for agricultural development. Indeed, this is underlined by the size of habitable area of Egypt which represents a small fraction of the total land area of the country. This point is amply illustrated below:

IMAGINE squeezing all the French into Switzerland. Such, roughly, is Egypt, a country that shoehorns 62m people into 49,000 square kilometers (19,000 square miles) of land, leaving 95% of its territory empty. To break out of this squash, the

government is preparing to turn huge swathes of desert into farmland. If it succeeds (and if the Nile can deliver enough water(the next generation of Egyptians could be living in 25%, rather than 5%, of their country's 1m square kilometers.26

Indeed Egypt also has a lot to learn from history and lessons of past failures, despite the recent costly changes because:

Settling the desert has long been an Egyptian dream, not entirely unfulfilled. Nasser went in for huge, largely unsuccessful, projects in the 1960s. Since 1982, Egypt has expanded its cultivated area by nearly a quarter, cutting its dependence on imported wheat from the three-quarters of demand to less than half. Twenty years ago, the 200Km (125-mile) road from Cairo to Alexandria ran through desert. Now, it is bordered by factories and drip-irrigated fields.

There is also a demographic imperative which makes cooperation necessary and pressing:

If population goes on growing at its current rate of 2.1% a year, Egypt's population will reach 85m by 2010. Urban sprawl devours the richest land in the Nile Delta at nearly 1% a year, despite stringent rules against building. Already, every farm hectare (2 acres) supports nearly 28 Egyptians. So people listen when President Hosni Mubarak tells them that greening the desert is less dream than necessity.

Indeed Egypt's concern and preoccupation with the issue of food security is abundantly made clear by the huge investments it has made on the Salam canal which has been completed and the New delta project which is due to start, but experts caution that Egypt is over stretching its resources.

Egypt already uses every drop of the 55.5 billion cubic meters a year allotted to it under its 1959 agreement with Sudan on sharing the Nile. This amounts to about 950 cubic meters a head (less than the 1,200 cubic meters minimum recommended by the World Health Organization. The Al-Salam canal will siphon off 2 billion cubic meters (a further 2 billion will come from reused drainage water); the New Delta is projected to take up to 5 billion cubic meters. When it is completed, could it lead to Egyptian taps running dry?

Egypt is also being advised to consider a more efficient utilization given the fact that it already recycles its water several times. One way of reducing the burden on the land is by shifting the production to other countries in the basin where food production demands less water. It is noteworthy that at present "a combination of thirsty crops, primitive irrigation methods and lead pipes waste a third of the water. All that is needed to save it, claims the Ministry of Irrigation, is efficient management. Simply halving the acreage devoted to rice would liberate 3.5 billion cubic meters a year."

Experts, including Egyptian ones, have also began to question the wisdom of excessive dependence on the Nile valley, and obliquely suggesting that there are alternatives.

Critics agree that Egypt needs to break out of the Nile valley (and that better management could do wonders. They accept that the Al-Salam canal makes sense: it uses waste water and is a natural extension of the existing infrastructure. But they

are not at all certain about the New Delta scheme.

There are also other options to consider. One approach is to use the existing reservoirs rather than building new ones.

Greening the hottest, remotest part of Egypt is possible, they say. But why do it when there are other options? By drawing on Lake Nasser (the country's sole replenishable reservoir (the New Delta will take a tenth of Egypt's Nile water quota out of circulation. The remainder could be dangerously concentrated with pollutants, says Habib Ayeb, a French geographer working in Cairo. "The Nile is like a glass of pasties," he says. "If you stop adding enough fresh water it gets too strong to drink."

Besides, if the Egyptian government is bent on reclaiming land for agriculture it should do it at selected locations:

If Egypt must reclaim land, Mr. Ayeb recommends that it does so as far downstream as possible, so that the reuse of water can be maximized. In Roman times, wheat was widely grown to the west of the old Delta. Duplicating the Al-Salam project there, close to markets and villages, would be far cheaper than building the New Delta canal, out in the desert, in the middle of nowhere.

There is indeed also the option of charging fees for water but this, according to some Egyptian expert who decode the Egyptian psyche is not feasible at all at present.

A more radical solution is proposed by some. Throughout their 5,000 years of recorded history, Egyptian farmers have never paid for water. By charging as little as ten piasters (three American cents) per cubic meter, the government could finance its water plans and drastically reduce consumption. It is unlikely to do so. Quite rightly, believes Mr. Ayeb: "The Egyptian peasant is born with a right to water like his right to his mother's milk. To challenge that right would be political suicide."

Given some of the difficulties raised above, a good option is a basin-wide collaboration. For instance, irrigated agriculture in Ethiopia can increase food production. This is important for Ethiopia because of its growing population, frequent droughts and famines which its suffers from Irrigated agriculture will help stabilize food supply, especially during dry seasons. It will also create rural employment for its large rural people. Farmers will also be induced to invest in high-yield seeds, fertilizer and additional labor because they will not fear loss of crops due to the failure of rain. Increased food production in Ethiopia will also benefit other Nile basin countries like Egypt which will have easy access to cheaper food in the region.

COLLABORATING VIA SPECIALIZATION IN VIRTUAL WATER

While food insecurity is acute, urgent and pressing, the reliance on food imports can have several attendant problems on the decision of governments to explore innovative forays of cooperating with their neighbours to enhance food production and mitigate the risks of conflicts in the future. For instance, downplaying the importance of 'virtual water' can lead to downplaying the value of actual water and to postponing innovative and painful decision that need to be made today. This may mean ignoring the diversification of production and not shifting from agriculture to other sectors before countries run out of water. This also implies not attaching value to water as explained below:

Irrigation water is almost free in Egypt, which makes for a very expensive policy. The same water could bring a hundred times more in returns in the industrial or service sectors. However, there are major political costs involved in such a transition. Almost 40 per cent of the labour force works in agriculture, while most farmers have less than two hectares each. These people cannot suddenly be expected to pay for water or abandon their livelihoods. Time is required to change people's perceptions of water and to develop a diverse economy capable of creating new jobs in other sectors.

Indeed, making the transition is not problem-free, but a gradual and staggered way of doing it must be found. There are encouraging examples of countries where this has been attempted with good success. Professor Alan notes:

Israel is an interesting case in point. This was a country committed to making the desert bloom. Its farmers have the means to employ the most efficient irrigation systems. And yet, during the past ten years, the government has shown that it is possible to reduce water allocations to agriculture. It is one of the few countries in the world to charge a high proportion of the delivery cost (40 per cent) for irrigation water. The trade in virtual water could offer more time and ease the political tensions in making this difficult transition. Or it could be used to avoid dealing with a very real problem.

The example of Israel is also being emulated by other Middle East and North African (Mena) countries like Jordan, Tunisia, and Morocco. Indeed, the availability of "virtual water" can assist countries like Egypt to make the transition. However, the

current situation is one of not wanting to address the problem of food imports publicly for fear of being dubbed as "food importers". But, professor Alan has succinctly summed up that the dire consequences of silence on the matter need not

be stressed:

It's like trying to get water out of a stone. Across the Middle East, government officials refuse to discuss the issue of virtual water publicly. Even academics are reluctant to express their views on the topic. Why such silence? After all, publicly-available statistics clearly indicate the region's wheat imports are rising, and there is reason to believe that this trade will continue as countries seek seemingly inexpensive and readily available sources to compensate for dwindling water supplies. Technological solutions seem unlikely to tackle the scarcity problem. With falling oil prices devastating government revenues, even wealthy countries like Saudi Arabia are finding desalinization increasingly unaffor-dable.

But, there are also other reasons for the reluctance to confront the issue:

In part, the silence stems from the political climate. "There are a lot of negotiations going on various security issues, including water-sharing agreements. Any information linked to water scarcity is sensitive," explains Mamdouh Shahin, a Netherlands-based Egyptian professor of civil engineering widely respected in the Middle East for his hydrological assessments of the region.

The other obvious and unstated reason is that: "Virtual water also has a dirty name among the region's hydrologists and policy-makers who balk at the notion that governments should import food crops instead of growing them. Yes, the region is faced with a water crisis. Yes, importing wheat is an effective means for dealing with the problem. But does this mean that countries should abandon their agricultural sectors, or make their farmers pay prices reflecting the real costs of irrigation?"

Right now a number of solutions are being proposed to minimize dependence on virtual water. These include reusing drainage water from irrigation and urban use. But, even with such measures, coming to grips with the issue of food security in North Africa and the Middle East is a pipe-dream. However this does not mean that governments should abandon the long-term goal of developing their agriculture and of conserving water.

Nevertheless, even while improving their domestic agriculture rather than importing virtual water from Europe and North American, Nile countries like Egypt would greatly benefit from developing food security zones' in the basin like Ethiopia. There are many good reasons for this.

First, virtual food cannot be available at the current subsidized levels and from the same sources in the future.

Second, water is strategically very sensitive, even more sensitive than energy because one can live without oil, but not water or food.

Nevertheless, while some of the leaders of the Mena counties are shy to be called importers of food, countries like Ethiopia are even more embarrassed about not being able to buy their own food. One should, therefore, be aware of the fact that here is a significant difference between being shy about importing food and being stigmatized as dependent on food aid.

THE HISTORICAL PATTERNS OF FAMINE AND DROUHGT

The necessity for seeking durable long-term remedies to the problems of drought and famine is underlinned by the wealth of historical evidence on the frequent recurrence of the problem. Drought in Ethiopia has, for instance, led to large-scale starvations, death and dislocation of people from 1836 to the present.

In 1836 the northern provinces and the Lasta regions of Wello were hit by drought. From 1886-89, 1899-90, 1921-22 and 1932-34, Ethiopia as a whole was hit. The focus of the drought then shifted to Wello, which suffered a succession of drought-included famines in 1953, 1958 as well as from 1964-65, 1965066, 1973-76, 1984-85 and 1987-90. The drought-caused famine of 1973-74 was one of the immediate causes for the collapse of the Haile Selassie regime and the demise of the 3,000 year-old Ethiopian Empire.

The 1984/85 drought-induced famine should have served all concerned as an omen of the disasters to come if nothing was done to utilize the abundant water resources of the nation for achieving food security. In a span of fifteen years the ugly spectre of drought is yet again haunting Ethiopia.

In the climate of growing scientism and reluctance to intervene in the fact of the mounting drought-induced famine, by the International aid community as evidenced in the drought 1998-2000, Ethiopia is left with only one choice; utilize the Nile waters for irrigation to produce food and ash crops to cater for its needs. In this regard the importance of an agreement for the equitable sharing of the Nile waters cannot be over emphasized.

While Ethiopia is ready to discharge its responsibility in this respect, reciprocal moves on the part of the international community is eagerly sought. Also bilateral partnerships and private sector investment is being solicited to exploit the Nile

waters for Ethiopia's dire needs of food security and hydropower generation.

A brief look at the famines of 1973/74, 1984/85 and 1998, 1999 and 2000 further highlights the point. One should bear in mind that dependence on food aid, apart from the stigma, has many associated drawbacks. These, inter alia, include:

a) The use of food as a political weapon.

b) A negative image which repels investors and tourists from the country.

c) The negative effect of scaring away of tourist from the country.

d) The loss of self-confidence and morale which has a negative impact on the drive for self-sufficiency and will for development.

e) The entrenchment of a culture of dependency resulting from dependence on aid and the platitudes of donors.

Yet, against the above backdrop, one need not overemphasize that most of the above problems can be overcome via cooperative endeavors in the Nile basin based on specialization in production which ensures a more efficient utilization of the water and important savings for the future. In this context one need not overemphasize the importance of Ethiopia's development for Egypt.