Brief: The Economics of Water for Transitioning Food Systems 

Author/s

Sarah Dankens and Marie-Charlotte Buisson

Abstract

The global water cycle is the lifeblood of our planet and underpins all economic activities, from medical goods and services to food production and energy generation. It includes blue water, the water in lakes, rivers and aquifers that is readily extractable by humans, and green water, the moisture held in soil and plants that evaporates or transpires into the air. Green water produces over half of the rainfall over land and is therefore a key source of freshwater, also known as blue water.  

Green and blue water are both essential to planetary and human well-being. Human-related activities have significantly disrupted the hydrological cycle. Without urgent, coordinated efforts to restore its balance, communities and economies worldwide will face increasingly severe consequences.  

Food systems, defined by the World Food Programme as the “networks needed to produce and transform food, and ensure it reaches consumers,” encompass everything from production to consumption — growing, harvesting, processing, packaging, transporting, selling, eating and disposing of food. They include both land-based and aquatic or marine sources of food and are shaped by social, economic and environmental factors.  

Food systems are deeply interconnected with the hydrological cycle. Agriculture alone accounts for approximately 70% of global freshwater withdrawals, with irrigated farming consuming about 85% of that amount to produce 40% of the world’s food. Less visible but equally important, rain-fed agriculture depends on rainfall as well as soil and atmospheric moisture. The production of animal and aquatic foods is also highly reliant on water availability.  

Water is fundamental to food security. Today, nearly 40% of the world’s croplands face water scarcity, which poses a significant threat to global food supplies. In addition to quantity, water quality is critical for the health of crops, livestock, fisheries and, ultimately, the safety of our food. Polluted water can have a severe impact on soils, ecosystems and human health. Strengthening the performance and resilience of global food systems in relation to water will therefore be essential to achieving Sustainable Development Goal 6 (clean water and sanitation for all). 

Citation

Dankens, S.; Buisson, M.-C. 2025. Brief: the economics of water for transitioning food systems. Colombo, Sri Lanka: International Water Management Institute (IWMI). 12p. doi: https://doi.org/10.5337/2025.233

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