Competition for water induced by transnational land acquisitions for agriculture

Water is a crucial resource for agriculture, and its control is a major target of agribusiness investments. Because water rights are often tied to land rights, land acquisitions are a common means of gaining control over water resources. The surge in transnational large-scale land acquisitions (LSLAs) for commercial farming since 2005, involving over 50 million hectares across numerous countries, raises concerns about water access for local farmers. While LSLAs are promoted for rural development, their impact on local water security remains uncertain. This study addresses this uncertainty by investigating whether foreign LSLAs target areas based on specific hydrological conditions and whether these investments compete with the water needs of existing local users. This is crucial because understanding the hydrological drivers and implications of LSLAs is essential for assessing their overall impact on development and sustainability. The study focuses on the competition for blue water (irrigation water extracted from surface or groundwater) and its potential to exacerbate existing water scarcity.

Existing research recognizes water as a key driver of land investments, and studies have quantified the water use of intended crops in LSLAs. However, a comprehensive analysis of the impact of these water appropriations on local water security and competition was lacking. Previous research has discussed the potential for LSLAs to negatively impact local food security and livelihoods by utilizing large volumes of water for export-bound cash crops. Concerns have also been raised about the potential for LSLAs to exacerbate existing conflicts and social and political instability in regions with limited water resources. The study aims to address this gap by providing a comprehensive assessment of the impact of LSLAs on local water security and competition.

The study uses a sample of 160 georeferenced foreign LSLAs encompassing 4.1 million hectares across 195 locations. The researchers used a combination of process-based crop and hydrological modeling, agricultural statistics, and georeferenced information on individual transnational LSLAs. Three scenarios were considered: (1) pre-existing water scarcity conditions before land acquisitions; (2) current water scarcity conditions considering the current cultivated land and irrigation practices; and (3) a hypothetical scenario where the entire acquired land is cultivated with the intended crops and irrigation needs are fully met. The WATNEEDS crop-water model was used to estimate crop-water requirements. Green water scarcity (inadequate rainfall) and blue water scarcity (inadequate surface and groundwater resources for irrigation) were assessed. Remote sensing data (GlobCover and GFSAD30) were utilized to estimate crop coverage and irrigation patterns. Visual analysis of Google Earth Pro imagery was employed to identify the presence of irrigation pivots. The study also assessed the preferential targeting of land with favorable water resources by comparing water table depth, distance to rivers, and green water scarcity at deal locations with average cropland characteristics within deal countries. Finally, two case studies in Ethiopia illustrate the hydrological dynamics and spillover effects of LSLAs on downstream areas. The study incorporates multiple data sources, including the Land Matrix database, which provides information on international land acquisitions, and utilizes a range of methods to ensure a robust assessment of the effects of LSLAs on water resources and local communities. The methodological rigor is aimed at providing a comprehensive analysis that accounts for the complexity of the interactions between land acquisitions, agricultural practices, and water resources.

The study revealed that while blue water scarcity existed before LSLAs, these deals significantly exacerbated it. Before acquisitions, only about 20% of the contracted land was harvested, and only 3.1% of that was irrigated. The study found that LSLAs preferentially target areas with shallower water tables and closer proximity to rivers, indicating a strategic selection of hydrologically advantageous locations. The analysis showed a fifteen-fold increase in irrigated areas affected by blue water scarcity after the LSLAs, with a substantial increase in total blue water consumption. The 100% cultivation scenario, where all acquired land is cultivated with intended crops and irrigation is maximized, revealed a dramatic increase in blue water scarcity, affecting 67% of the acquired area in 105 locations. This increase was attributed to both the expansion of cultivated areas and the shift towards more water-intensive crops. The study calculated that 8.1 km³ of water per year is needed for irrigation to fully meet the yield gap under the 100% cultivated scenario. Two case studies in Ethiopia illustrated how upstream irrigation from LSLAs reduced downstream water availability, emphasizing the spillover effects of water appropriation. The study highlights that LSLAs frequently lead to blue water appropriation and competition with local users and negatively impact the environment and rural communities, including those living within LSLAs boundaries. This impact underscores the ethical concerns surrounding LSLAs in water-scarce regions.

The findings demonstrate that LSLAs frequently exacerbate existing water scarcity and induce competition for water resources, primarily through the expansion of irrigation and the cultivation of water-intensive crops. The preferential targeting of hydrologically favorable lands by investors exacerbates the scarcity faced by local farmers. The observed transition towards water-intensive cash crops for export markets further contributes to the problem, diverting water resources away from local communities and potentially hindering local food security and livelihoods. The study's results highlight the urgent need for policy interventions that address the hydrological dimensions of LSLAs, promoting sustainable water management and ensuring equitable access to water resources for all stakeholders. The implications extend beyond the immediate impacts of water scarcity on local farmers; the potential for large-scale water appropriation has significant ethical and societal consequences.

This study reveals that transnational land acquisitions often lead to increased water scarcity and competition in already water-stressed regions. Investors strategically target areas with access to water resources, leading to the appropriation of blue water from local communities. The shift toward water-intensive crops exacerbates the situation. The findings call for robust policies that consider hydrological constraints, rural livelihoods, and water justice principles when regulating land investments, especially in water-scarce regions. Future research could focus on more detailed investigation of groundwater depletion, refinement of water scarcity indicators, and the development of more effective policy instruments to mitigate the adverse impacts of LSLAs.

The study acknowledges several limitations. Some deals might be speculative or used for purposes other than those reported. The actual extent of irrigation within each deal is uncertain, and the assumption that all cropped areas are fully irrigated may overestimate water use. Different crops than those reported might have been cultivated, potentially affecting water demand. Surface water storage infrastructure and groundwater depletion were not fully accounted for in the analysis. These limitations highlight the need for further research that addresses these gaps, and for improved data collection and monitoring of land deals and their impact on water resources.