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Water has increasingly become scarce all over the world
. Water is also being traded in its virtual form across
nations. Trade policies can alter the magnitude and direction
of flow of virtual water between nations. Regulating the
virtual water flow is important as excess export of water
would mean a net loss of our resource which in turn may
put pressure on our already falling water table. Adoption
of trade policies should not only be guided by traditional
parameters like economic growth, but also by consideration
of sustainability of our precious resource, water. Though
a strongly outward-oriented policy may be conducive to high
growth, it is not desirable if we are losing our resource
at a fast rate. The paper explores the question, `Why we
really do need to rethink our trade policy once more?'
World is fast incurring water deficit. The crisis is hardly
visible (Brown, 2002) because water crisis takes the form
of aquifer depletion that is hardly visible till the wells
go dry. The per capita water availability is fast declining
all over the world and also in India. One of the most popular
and widely used indexes used to indicate the extent of water
scarcity is the `Falkenmark water stress indicator' (Falkenmark
et al., 1989). The index is based on minimum per capita
water required for basic household needs and to maintain
good health. Falkenmark et al. (1989) proposed 1,700 m3
of renewable water resource per capita per year, as the
threshold water limit. Countries, which cannot sustain this
threshold water limit are said to be suffering from water
stress. When the supply of water falls below 1,000 m3 the
country is said to experience water scarcity and below 500
m3 absolute scarcity. At levels below 500 m3 per person
per year it is a primary problem of sustenance (Seckler
et al., 1999). In India the total availability of water
would be 2300 bcm (Billion Cubic Meter), with per capita
availability of 1,400 m3 by 2050 (Water and Environment
India, 2000). Clearly, India is likely to face water stress
situation and needs to take urgent steps to reduce the decline
or even to reverse it.
Virtual Water: The water consumed in the production process
of an agricultural or an industrial product has been termed
as virtual water. Tony Allan first introduced the term `virtual
water' in the early 1990s (Allan, 1993). For producing 1
kg of grain we need approximately 1000-2000 kg of water.1
In Table 1 we give the figures of virtual water content
of few selected products. The virtual water content of a
product also varies according to geo-climatic conditions.
For example, producing 1 kg of grain in favorable humid
condition would require much less water than if the same
is produced in arid and dry conditions. However, virtual
water plays the most important role, as it is an integral
part of international trade. Exporting 1 kg of grain would
actually mean that we are in reality exporting about 1000
l of water. Water scarce countries can import those commodities
which are high in virtual water content instead of producing
themselves. However, excessive export of virtual water would
mean we are putting pressure on our groundwater. In India,
water tables are falling by 1-3 m per year and in some states
extraction is double the recharge. In Punjab, considered
to be India's breadbasket, water table is falling by 1 m
every year (Brown, 2002). It is because virtual water plays
an important role in international trade, we feel its role
should be studied with respect to trade policies.
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