–World Bank report says water demand won’t be sustainable, even by groundwater pumping
KARACHI: Water demand in Pakistan is projected to grow by at least 40 per cent over the next 30 years, with demographic and economic growth the biggest drivers.
In addition, climate change will see further increases in water demand, chiefly from agriculture, in the absence of attention to demand management. While agriculture continues to represent the bulk of demand, much of the demand increase will come from other sectors of the economy.
According to a new World Bank report, in the absence of effective demand management, growth in water demand will not be sustainable. Current withdrawal levels are already nearing 60 per cent of renewable water supply, making a large increase in water demand unsustainable. Future surges in demand are unlikely to be manageable even through further unsustainable increases in groundwater pumping.
The demand management strategy needs to focus on efficiency improvements that can increase consumption. Importantly, to accommodate growth in other sectors, food security, gains in value addition, and build resilience to ongoing climate change, it is critical for agriculture to improve water management, encourage water productivity and saving, and diversify crops toward higher value-added horticulture.
Agriculture, by far the largest user of water, uses it inefficiently. Agriculture accounts for more than 90 per cent of withdrawals and is heavily dependent on irrigation. More than 90 per cent of agricultural production is concentrated on irrigated land.
Though agriculture contributes around one-fifth of national GDP, less than half of this is from irrigated cropping and the four major crops (wheat, rice, sugarcane and cotton) that represent nearly 80 per cent of all water use generate less than 5 per cent of GDP.
Over the past 50 years, the agriculture sector’s growth rate has declined from an average of 4.5 per cent a year to 2.5 per cent a year, led by a decline in productivity. Agriculture productivity is characterized by little technical change and instead the intensification of input use.
Water use is wasteful, with governance issues that provide only weak incentives to save water. This results in overall low economic productivity (around US$1 per cubic meter, one of the lowest in the world) and concerns regarding environmental sustainability (for example, contamination and salinization of groundwater aquifers, which pose the greatest threat to long-term groundwater sustainability in Pakistan).
Irrigation water is underpriced and the system badly managed. There is significant potential to improve water productivity in the agriculture sector, achieving higher efficiency and orienting water toward higher value uses.
Pakistan has lower water productivity than peer countries. There are inadequacies in how areas are assessed for water tariffs and abiana collection is uneven, inefficient and inequitable. Irrigation service delivery by the public sector is generally poor, with concerns over the equity and reliability of water distribution.
Farmers at the tail end of the canals invariably do not receive their share of water due to the poor physical state of the canals, water theft by farmers upstream and rent-seeking by operators. Improved water management will need to be accompanied by improved agricultural policies. Despite reforms in the past, the state continues to intervene in agricultural markets, creating distortions that hold the sector back.
The public sector intervenes through administered prices and protective trade policies. The support is concentrated in wheat (through domestic procurement, temporary import/export control, and subsidized sales to select flour mills) and sugarcane (through import tariffs, as well as support prices and export subsidies), while some support remains for dairy products and vegetable oils.
In addition, input subsidies (on fertilizers, electricity for water pumping, or implicitly, on canal irrigation water) also influence farmers’ decisions. These interventions result in high fiscal costs, distorted cropping decisions and imbalanced input use, with implications for sustainability.
The support is highly regressive, with most subsidies and benefits captured by large farmers and firms. For continued economic growth, agriculture must produce more from less, and reforming distortions in the agriculture sector will help move water toward higher-value crops.