Water scarcity in Europe: Economic consequences in agriculture

Escasez de agua en Europa: consecuencias económicas en la agricultura

Water scarcity occurs when water resources are insufficient to meet long-term average needs. It refers to long-term water imbalances, combining low water availability with a level of water demand that exceeds the supply capacity of the natural system. Water availability issues often arise in areas with low rainfall but also in regions with high population density, intensive irrigation, and/or industrial activity. Significant spatial and temporal differences in water availability are observed throughout Europe.

Significant parts of the world are already grappling with water scarcity. According to the European Environment Agency (EEA), it’s estimated that around 30% of Europeans and 20% of European territory are affected by water stress in an average year2. The JRC3 estimated in a report published in 2020 that current annual drought losses amount to around 9 billion euros for the EU, with the highest losses in Spain (1.5 billion euros/year). Furthermore, as per the same report, between 39-60% of these water losses are related to agriculture. The EC4 foresees further deterioration of the water situation due to climate change (e.g., temperature increase and changes in precipitation patterns), with some parts of Europe expected to have more or less freshwater available in the future5 (e.g., wetter climate in Northern Europe and drier climate in Southern Europe6).

Therefore, water scarcity is no longer solely a problem for a few regions in Southern Europe. With climate change, water stress is becoming a real issue across Europe, including countries with higher annual precipitation, such as Belgium, Germany, or Sweden.

In this context, agriculture is a significant water user in the EU. Overall, it accounts for around 22.5% of total freshwater extraction, with significant variations in water uptake among member states: ranging from 60% in Southern Europe (or even up to 80% in certain river basins) to 30% in some areas of Northern Europe. In arid or semi-arid conditions (typical of Southern EU), almost 80% of water used in agriculture is allocated for irrigation, while in humid climates, irrigation is used to mitigate the effects of the dry season on crops.

This is particularly crucial for drier regions of Southern Europe, where climate change will exacerbate water scarcity situations, and for highly productive greenhouse systems in Northwestern European countries, where crops may require more irrigation water per square meter than what is provided by rainfall. Faced with growing water demand and climate change, many farmers will struggle to meet their water needs. Therefore, sustainable water management is essential, as well as supportive policy solutions. An initiative for this sustainable water management has been undertaken by the European Water Association (EWP8). The EWP has recently developed a water resources management program containing strategies for management, primarily targeted at farmers. The program includes standards/guidelines and checklists to help farmers adjust their current practices towards sustainable consumption.

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