It’s the economy stupid!

What do we mean when we say that we want a more water secure future? What do we mean when we say that the demand supply “water gap” in India is going to double by 2030? Who decides how much the demand for water will be in the future and how?

The traditional way of thinking about this is to figure out how much people need and multiplying by the population. This is the “demand” for water and water agencies view their job as procuring supply to satisfy it.

Now humans need water for their domestic needs — to cook, drink, wash and bathe. If there are more people, they will need more water for these purposes. But domestic water accounts for merely 100–150 litres per capita per day or 40 cu m per person per year. And most of it returns as wastewater, which in theory at least can be recovered and reused.

In fact, the vast majority of water is not consumed directly by people for their domestic needs, but to produce the goods and services that we consume — food, clothing, shelter, electricity etc. In fact, domestic water use is only a small fraction of India’s total water footprint, which averages about 1000 cu m per year for India. And water used to produce food is consumed, very little returns back as wastewater. Not surprisingly, therefore, water security is often linked to food and energy security. We read in the newspapers that we need water to feed and clothe our growing population. If we don’t have water, we are told, we would starve.

In an article in the inaugural issue of Water Security journal, we (I along with M. Konar and M. Sivapalan) argue that local demand for water is driven by jobs and not consumption. In other words, it’s the economy stupid!

The argument is a subtle one, but it is key to rebut the case for physical water transfers underpinning mega-projects like interlinking of rivers. The interlinking of rivers idea is based on the fact that there are parts of India which have “surplus” water and parts that are “deficit” and so water must be transferred from surplus to deficit regions so every region has the amount of water needed to support its population.

But what does surplus and deficit mean? In an increasingly connected world, we are no longer dependent on food produced locally. In Indian cities, we consume wheat from Punjab, rice from the Cauvery delta, sugarcane grown in Maharashtra, oranges from Nasik and so on. Even the urban poor rely largely on the cash economy, though they may supplement a bit by foraging for food and fish locally. In fact, in today’s world, most of our calories are met from food grown elsewhere. If all food is grown in a few “agricultural breadbaskets”, does a urban region, which uses water mostly for domestic purposes, need the same amount of water as a rice growing belt that feeds the whole nation? Clearly not! One region feeds the other and justifiably uses a lot more water.

Clearly, regions where people earn their living making computer software or ecotourism consume less water than regions, where people earn their living growing rice, wheat or sugarcane. City states like Singapore don’t grow any food at all; all of their water footprint is imported “virtual water” embedded in goods and services imported. Ironically, India, despite being water scarce is a big exporter of “virtual water” because we export water intensive products like cotton and rice. In other words, our water abstraction far exceeds what we consume locally. Much of our water use is unsustainable groundwater extraction, not because we need to feed and clothe our population, but because a majority of voters are farmers and they need to earn a living; so our macro-economic policy incentivizes them to over abstract.

Demand for water is thus governed by the nature of our economy and the livelihoods it supports. There is no such thing as the demand for water that scientists can “objectively” compute. Demand for water is shaped by economic policy; i.e. what we, as a country, choose to produce rather than what we choose to consume (I am not letting consumers off the hook — that’s just a different story); yet much of our national water policy is built on this idea of a fixed demand-supply gap.

The problem of water is, thus, not that of demand and supply at all. Rather it is the trickier problem of figuring out how people can earn a decent living in the drier parts of the country. What can people do with increasingly small parcels of land but still earn a decent wage?

The solution is not to transfer water physically, so farmers begin to grow crops in the desert. Eventually, this will just become a white elephant — once sugar factories are set up in the desert, they spur demand for more sugarcane cultivation that needs to be fed with more water in places where there was none to begin with. This is pretty much the story of what has occurred in much of semi-arid Maharashtra and Karnataka, which has resulted in severe groundwater depletion and a cycle of farmer debt and suicides.

A more sensible solution is to conserve fertile cropland where water is abundant and invest heavily in agriculture and water infrastructure there (borewells, groundwater management and even dams if needed). Many of the most water abundant states are also the poorest with the weakest infrastructure. Instead, of moving the water to where water is scarce, move the water intensive jobs to the water abundant areas and direct investments and subsidies in dry regions towards transitioning to a low-water economy. This does not mean driving farmers out of agriculture overnight, but rather gradually transitioning out of water intensive crops and industries to livelihoods that match the resource base.

This is not a radical idea, traditional societies and cultures did precisely this. Technology allowed humans to create a Las Vegas in the desert and a sugar belt in semi-arid Karnataka. The question is can we gradually move back to cultures and economies more in line with the available resource base. This just means growing rice where there is water to grow rice and growing millets where its best to grow millets, and moving out of irrigated agriculture altogether where there is no water; but still ensuring through policy that small-holders and the landless can survive the transition. This is no small task, but surely more sensible than moving the water around the country for centuries to come.

The challenge of water is not that of closing the supply-demand gap (which is a myth). Rather than viewing water demand as a fixed number, the goal should be to rather to adjust demand to available supply.