Graphics from Stratfor report
STRATFOR
Summary
Editor's Note:This is the sixth installment of an occasional series on water scarcity issues around the world that Stratfor will be building upon periodically. [See end of report for linked list of other reports]
Because of its massive river systems and variety of climates, India is not always the first country that comes to mind when considering water stress issues, but the emerging regional powerhouse is still an agrarian society at its core. This already inefficient sector relies on inconsistent monsoons and, in some locations, on groundwater to make up for years with deficits in rainfall. Increasing urbanization and population growth have compounded demands for municipal water and increased agricultural production. By 2030, India is projected to consume nearly 1.5 trillion cubic meters of groundwater annually — more than its estimated 1.1 trillion cubic meters of usable reserves. As New Delhi faces a major challenge in managing this essential resource, India's highly decentralized system will make it difficult for the central government to effectively manage the problem.
Analysis
The history of the Indian subcontinent has been shaped by water. To the southeast and southwest, India's coastlines front the Bay of Bengal and Arabian Sea, while to the north, the Himalayas separate the country from Eurasia. Inside this self-contained world, a multitude of rivers have produced a variety of powerful city centers as well as the internal divisions that have resulted in India's strong regional identities — identities that centralized powers have always struggled to balance.
Today, one of New Delhi's core geopolitical imperatives is to control the fertile Ganges River Basin, which is key to maintaining the country's agricultural sector. Agriculture accounted for 18 percent of India's gross domestic product in 2012 and employs about half of the country's population. It also accounted for more than 90 percent of total water withdrawals. While India does possess natural renewable water resources that total roughly 1.9 trillion cubic meters, rainfall distribution is naturally erratic and dependent on seasonal monsoons, leaving agricultural production highly susceptible to fluctuations.
The 2014 monsoon season officially concluded at the end of September with cumulative rainfall 12 percent below the long-term average. Increased rainfall near the end of the season meant that more dire predictions from earlier in the year did not come to pass, but many crop production estimates for 2014-2015 are still expected to fall year-on-year.
The history of the Indian subcontinent has been shaped by water. To the southeast and southwest, India's coastlines front the Bay of Bengal and Arabian Sea, while to the north, the Himalayas separate the country from Eurasia. Inside this self-contained world, a multitude of rivers have produced a variety of powerful city centers as well as the internal divisions that have resulted in India's strong regional identities — identities that centralized powers have always struggled to balance.
Today, one of New Delhi's core geopolitical imperatives is to control the fertile Ganges River Basin, which is key to maintaining the country's agricultural sector. Agriculture accounted for 18 percent of India's gross domestic product in 2012 and employs about half of the country's population. It also accounted for more than 90 percent of total water withdrawals. While India does possess natural renewable water resources that total roughly 1.9 trillion cubic meters, rainfall distribution is naturally erratic and dependent on seasonal monsoons, leaving agricultural production highly susceptible to fluctuations.
The 2014 monsoon season officially concluded at the end of September with cumulative rainfall 12 percent below the long-term average. Increased rainfall near the end of the season meant that more dire predictions from earlier in the year did not come to pass, but many crop production estimates for 2014-2015 are still expected to fall year-on-year.
Water Stress
The Indian agricultural sector's reliance on groundwater irrigation to maintain crop yields, especially in weak monsoon years, has been steadily increasing since the 1950s. Over the past 20 years, 84 percent of added irrigation has come from groundwater sources. Today, 50-70 percent of India’s crops rely on irrigation — an estimated 60-80 percent of which uses groundwater. India's use of these resources is also extremely inefficient. The amount of water it takes to produce one ton of grain in India is 24 percent higher than the global average for both wheat and rice.
Further exacerbating the water scarcity problem is the fact that not all of India’s water supplies are usable; much of the supply has been compromised by pollution or fertilizer use. Inadequate infrastructure prevents the use of some of the annual renewable water resources as well. India’s Ministry of Water Resources estimates that only 1.1 trillion cubic meters of the country's total 1.9 trillion cubic meters of natural renewable water resources are usable. Independent studies put this number at 650 billion to 750 billion cubic meters, less than half of India's total annual renewable amount.
The greatest evidence of groundwater depletion can be seen in India's north, an area that includes the fertile Indus and Ganges basins. New Delhi has made this worse by applying only limited regulation to groundwater extraction and by subsidizing electricity, which, among other things, helps makes pumping water more affordable. At the same time, the municipal sector has come to rely on groundwater to meet more than 80 percent of the urbanized population's growing demand.
India's current water withdrawals add up to between 630 billion and 760 billion cubic meters per year, and this is set to expand. India’s population is increasing at an average annual rate of roughly 1 percent, and urbanization rates are high, at 31 percent in 2010 and projected to rise to 43 percent by 2035. The government is also working to increase access to electricity and maintain food security, both of which will require steady water supplies.
Constraints on the Center
India's water constraints will continue to worsen, but the change will be long and gradual, stretching out over several decades. The situation could ease if the country shifts its water consumption patterns or if New Delhi changes its water management policies, perhaps by regulating well drilling, implementing new water-efficient irrigation technologies or making improvements to water infrastructure. Such programs, however, will face the barrier of India's regional political fractures, which make central management difficult.
Programs to increase efficiency or improve water management policies, such as the implementation of more efficient irrigation practices, would likely have to be implemented at the state level, resulting in regional (not national) solutions.
Indian Prime Minister Narendra Modi, despite hopes to the contrary, will likely be limited by these same geopolitical constraints. New Delhi might manage to make a slow push for higher efficiency by reducing subsidy schemes, as it has done for phosphate-based fertilizers. The phosphate fertilizer subsidy reduction showcases the difficulty of this approach: Other fertilizers are still subsidized, meaning that the problems of pollution and inefficient use or overuse of fertilizers remain.
Modi is still unwilling or unable to adjust the broader fertilizer subsidy framework that plays a large role in perpetuating poor agricultural practices.
The slow and fractious nature of the reform process means that over the next 20 years New Delhi will continue to cope with increasing water stress. At the present time, India is essentially self-sufficient in agriculture. However, over the next decade, it is likely to become a food importer. Inadequate supply chain infrastructure will impede efficient food distribution. To maintain social stability in the face of this challenge, New Delhi will likely have to sacrifice some economic growth and possibly take on additional debt as its import bills rise.
Other recent Stratfor reports on water (when last I checked, the other day, the Sao Paulo report is still open access at the website; the other, older reports require signing up for free access to reports.
• Part 1: Yemen's Looming Water Crisis
• Part 2: U.S. Agriculture Wilts During California's Drought
• Part 3: South Africa's Water Needs Will Be Costly
• Part 4: Indonesia's Disjointed Islands Make Water Scarcity a Problem
• Part 5: Mesopotamian Vitality Falls to Turkey
• Part 7: Sao Paulo Drought Could Benefit Brazil
• Part 8: Industrial Expansion Will Strain Mexico's Water Resources
The greatest evidence of groundwater depletion can be seen in India's north, an area that includes the fertile Indus and Ganges basins. New Delhi has made this worse by applying only limited regulation to groundwater extraction and by subsidizing electricity, which, among other things, helps makes pumping water more affordable. At the same time, the municipal sector has come to rely on groundwater to meet more than 80 percent of the urbanized population's growing demand.
India's current water withdrawals add up to between 630 billion and 760 billion cubic meters per year, and this is set to expand. India’s population is increasing at an average annual rate of roughly 1 percent, and urbanization rates are high, at 31 percent in 2010 and projected to rise to 43 percent by 2035. The government is also working to increase access to electricity and maintain food security, both of which will require steady water supplies.
All of this will contribute to a projected rise in annual water demand to nearly 1.5 trillion cubic meters by 2030 — a number higher than India's existing usable water resources (which the government generously estimates to be around 1.1 trillion cubic meters) can meet. By 2030, most of India’s many river basins could face gaps between supply and demand. At the same time, the nation's per capita annual water supply fell to around 1,500 cubic meters in 2011. This is projected to approach the water scarcity line of 1,000 cubic meters per person by 2050.
At the same time, these declines in groundwater levels could actually increase India's water demands by speeding up the rate of urbanization. As groundwater levels decline, wells become more expensive to drill and operate, meaning that more farmers will not be able to afford to water their crops using groundwater. This has already driven many subsistence farmers off the land and into cities. The urban population will increase pressure to supply municipal water and will strain the agricultural sector as India tries to maintain food security in the face of its growing population.
At the same time, these declines in groundwater levels could actually increase India's water demands by speeding up the rate of urbanization. As groundwater levels decline, wells become more expensive to drill and operate, meaning that more farmers will not be able to afford to water their crops using groundwater. This has already driven many subsistence farmers off the land and into cities. The urban population will increase pressure to supply municipal water and will strain the agricultural sector as India tries to maintain food security in the face of its growing population.
Constraints on the Center
India's water constraints will continue to worsen, but the change will be long and gradual, stretching out over several decades. The situation could ease if the country shifts its water consumption patterns or if New Delhi changes its water management policies, perhaps by regulating well drilling, implementing new water-efficient irrigation technologies or making improvements to water infrastructure. Such programs, however, will face the barrier of India's regional political fractures, which make central management difficult.
Programs to increase efficiency or improve water management policies, such as the implementation of more efficient irrigation practices, would likely have to be implemented at the state level, resulting in regional (not national) solutions.
Indian Prime Minister Narendra Modi, despite hopes to the contrary, will likely be limited by these same geopolitical constraints. New Delhi might manage to make a slow push for higher efficiency by reducing subsidy schemes, as it has done for phosphate-based fertilizers. The phosphate fertilizer subsidy reduction showcases the difficulty of this approach: Other fertilizers are still subsidized, meaning that the problems of pollution and inefficient use or overuse of fertilizers remain.
Modi is still unwilling or unable to adjust the broader fertilizer subsidy framework that plays a large role in perpetuating poor agricultural practices.
The slow and fractious nature of the reform process means that over the next 20 years New Delhi will continue to cope with increasing water stress. At the present time, India is essentially self-sufficient in agriculture. However, over the next decade, it is likely to become a food importer. Inadequate supply chain infrastructure will impede efficient food distribution. To maintain social stability in the face of this challenge, New Delhi will likely have to sacrifice some economic growth and possibly take on additional debt as its import bills rise.
Other recent Stratfor reports on water (when last I checked, the other day, the Sao Paulo report is still open access at the website; the other, older reports require signing up for free access to reports.
• Part 1: Yemen's Looming Water Crisis
• Part 2: U.S. Agriculture Wilts During California's Drought
• Part 3: South Africa's Water Needs Will Be Costly
• Part 4: Indonesia's Disjointed Islands Make Water Scarcity a Problem
• Part 5: Mesopotamian Vitality Falls to Turkey
• Part 7: Sao Paulo Drought Could Benefit Brazil
• Part 8: Industrial Expansion Will Strain Mexico's Water Resources
Regulating the drilling of irrigation wells, removal of fertilizer subsidies in India are much needed measures but also politically suicidal. As it is, farmers are dissatisfied with the central government as he has not raised minimum support prices enough last year.
ReplyDeleteModi is from a very arid state and managed to push strong agricultural growth by promoting efficient irrigation. IMHO, he is pursuing the right policy mix of slow subsidies removal, build-up of rural infrastructure and farmer education. Much better that he gets gets re-elected and things improve slowly than for the demagogues to come back in 2019.
Agreed, in principle. I've never discussed Modi on this blog but I've been a staunch admirer since the early days of his political career. The question is whether time is on his side regarding the water situation. But this is why I suggested a public effort in the warning I wrote a few weeks ago. The government can't do this alone.
ReplyDeleteThere is also the perception of the poorest in the urban areas that they're being submitted to a double standard.
I haven't been closely following Arvind Kejriwal's career since he turned overtly political. Maybe he thought it was the only way. Or maybe he grabbed for the brass ring when it swung his way. But this turn to the political vehicle strikes me as getting away from the self-reliance that he stressed in "Swaraj." Maybe I'm wrong but that's my worry.
Yet Kejriwal's not an idiot; if Modi reaches out -- if the BJP will let him -- to address issues that build more avenues for the worst-hit poor while actualizing his reforms, I venture it could work out well.
Modi himself is very much aware of India's looming water crisis. It would be a large feather in his cap if he could focus water reforms on Delhi to the point the poor noted a big improvement in their lives.
However, my biggest concern at this time, which prompted my warning, is that bringing in a lot of foreign companies at this time can backfire in terms of water usage while monitoring is still not good.
This isn't only a problem for India, of course, but with Modi at the helm now, he could be following a FDI playbook that didn't carry the penalities it does today in terms of water use.
Bottom line: all around the world, many regions are one weather cycle away from disaster. So while this is just me, my view, the country that quickly sets up a buffer zone against such disaster is far ahead. This doesn't require megaprojects. It's a matter of national will, national understanding of the crucial importance of water security.
Thanks for the reply.
ReplyDeleteFirst, a word about Kejriwal. From what I can tell, he has absolutely no ideology, merely a desire for power. That he wrote a book called Swaraj mainly reflects the circles he moved in during that part of his political/activism career, where such ideas tend to be fashionable. The current power struggle within his party should also been seen in this light I think: the (ultra left wing) ideologues trying to assert themselves now they are in power while the pragmatic ones (Kejriwal and co.) seek to take total control. Kejriwal will have no interest in long term water crises since it is not a political issue yet.
In fact, it is telling that the political issue in Delhi state elections was the *pricing* of water, and not better availability. This is pretty bizarre, but to the average person in Delhi, things have *always* been this bad and so the expectations are set.
Coming to the water intensive manufacturing question, I think it's a valid concern, but still quite hypothetical. We may see some manufacturing being established in India, but it will take years and will not even be close to the Chinese scale, simply because demand for manufactured goods is peaking and east Asia has too much spare capacity to let India compete effectively.
I very much share your concern about the water situation. The drop in water table in the Punjab and Doab regions is something I have witnessed first hand, and I fear that the day water levels become critical, we will see massive yield drops, hurting both income and food security. Not sure what the way out is but one politically-acceptable policy I do support is making meat production (specially for exports) more prohibitive. With the kind of water troubles we face, India should not be competing with the U.S. and Brazil to be the biggest meat exporter out there.
ReplyDeleteI am absolutely stunned to learn from you that India is in the meat export business. Do you think it's "pork barrel" as we say in the USA? Politicians paying back one group of contributors with deep pockets?
Re water intensive mfg.: Ever since Coca-Cola was caught overpumping a water supply for its bottling operations in one region of India, which was a yr. or two ago, this situation can't be called hypothetical.
There are also 'franken-seeds' being dumped on India and reportedly they are more water intensive than the local varieties -- although that's an issue I haven't looked at hard.
My point is industries that arise through Foreign Direct Investment aren't necessarily in the traditional factory model of production.
Once I started thinking in terms of "virtual" water, that was when I became alarmed. It's so self-evident that we don't think about it, but if it's something made by human hands, water is a component.
Where a lot of the water goes is into "development" -- infrastructures for cities, and so on. That's my concern about FDI and India right now. Not necessarily mfg. plants a la Shanghai, etc.
The big cities themselves are turning out to be the "hidden" threat in water terms. It takes huge amounts of water just to maintain those infrastructures.
The entire enterprise of clustering megapopulations in behemoth cityscapes is the very symbol of modernity but it's an obsolete model of organizing human society in a resource-stressed era. This is why I am interested in Arvind Kejirwal's Swaraj and King Bhumibol's Sufficiency philosophy, both as they apply to population distribution.
But as I pointed out in my recent post about Bhumibol's teachings, self sufficiency is foundational to self rule.
So I've come to realize that's the drawback to Kerjiwal's arguments in Swaraj. First the villagers need to be able to support themselves in the basics; if they can't do this, self rule goes out the window the first time a politician shows up in the village with a truckload of 'free' rice.
But self sufficiency doesn't translate well into politics, so that would cut out the Leftists. Where is my Kleenex box?
Re your remarks about Kejriwal: If he fell away from his own teachings, that's a shame. One day I will look into how his career has progressed since his politician, beyond Googling his name every six months and scanning the headlines.
But I did notice in one of the news reports about the recent Delhi election that he was demanding free water or more free water for Delhi's poor, or something like that.
Now from what you mentioned, this is some kind of price point debate. Without trying to defend him, it could be that given his accusations about land grabs, he's saying that if the BJP wants to in effect subsidize water use for water-hogging political supporters in agribusiness or whatever, then the poor also deserve a break with water prices.
But if indeed that is his argument, it's outdated. He needs to come into the 21st Century, from what you observed. Yes, better availability is top priority.
All of the posts I've put up on water are fungible, in the sense that the news reports about one region's water shortages can be applied to all such regions.
And if Arvind and his political party are not aware of the seriousness of ignoring the issues, well, what can I say? Beyond that it leaves a big opening for the BJP, if they take it. If they see it.
Re: Meat Exports. Even I found out about it only last year when it became an issue in the 2014 elections. Can't claim to have any special insights but perhaps a country with a huge cattle stock and low internal demand for beef would naturally have high export potential. Especially once the traditional ethical/religious concerns start fading.
ReplyDeleteOn the Delhi election, the free water issue was pure demagoguery from Kejriwal. I am from Delhi and quite simply, the water subsidy will not add significantly to the average family's disposable income. For the extreme poor, like I said, availability is the issue; they don't have water connections and don't get billed.
About cities and FDI, I am curious to know how you see the Singapore story re: water management. From what I have read, their success in this area is quite remarkable and perhaps shows the way to other large cities as well. It is perhaps worth noting in this respect that Singapore (like much of Asia) developed only after attracting significant amount of FDI.
So there was never a question about a water subsidy for Delhi's poor!
ReplyDeleteRe Singapore, yes, they've deployed so many hi-tech approaches to their water situation that a book has been written about it. The bottom line, however, is that half of Singapore's water comes from Malaysia.
The Financial Times reported last April ("Singapore seeks sustainable water supply"):
"A reminder of that dependency came only last month when reports surfaced in the Malaysian media that Kuala Lumpur might be considering charging its neighbour more for the water it supplies.
"That prompted Singapore’s foreign minister to remind the Singapore parliament that “neither party can unilaterally change any of the terms of the 1962 water agreement”. "
It's unlikely in the foreseeable future that Malaysia will cut or scale back its water supply to the city-state, but a country is always in a fragile position when it has to rely so much on another country for water.
There are other reasons why Singapore is a limited model for water security despite the value of its lessons in innovative water management. Its present population is around 5 million. There are probably that many people in a few city blocks in Delhi.
Same with its teeny land mass. How many times could Singapore fit into California?
Same when people look to Israel as a model for water management. If you blink you'll miss the country when flying over it.
And both Israel and Singapore are, behind the smiley faces, quite authoritarian. It's easier to manage that style of government with a small population and land mass, which allows for swift implementation of government-imposed blanket solutions.
In large democracies with huge and very diverse populations and highly independant states, such has India and the USA, implementing country-wide solutions is like herding cats.
Plus the many differences in climate and geography in such countries makes one-fit approaches to water issues counterproductive, whereas a country such as Singpore doesn't have that problem. Just the one state of California has so many climates that Wikipedia has an article about it!
So it's not all about innovation.
There's nothing like hindsight, but when I consider the huge land subsidence problems and other water-related problems found today in major Asian cities that were developed at breakneck pace, I would have wished for less FDI and more thinking ahead.
But those days were the infancy of water consciousness. Now every government and development bank is scrambling to play catch-up.
Fair enough.
ReplyDeleteI also think one area where Singapore is in a different situation than normal countries is that there is no groundwater based agriculture. Due to this, they are able to price their water resources at above the marginal cost or production and distribution.
I do feel that we are in for a 1970s like oil-shock moment, perhaps towards the end of this decade. The world won't end, but food prices will rise and a lot of painful re-adjustment will have to take place.
Thanks for your research and writing about this issue.
good point about Singapore; the country may be fairly unique in that regard
ReplyDelete