Water Scarcity

What do the capitalist class really think about the future? This US government report provided by Wikileaks, gives a scary prediction about the future availability of water.

Nestle, the  Swiss food giant has 280,000  global employees (only about 8000 work in Switzerland), $90 billion in annual sales in 2008, and  $120 billion in market capitalization (more than three times  that of 2nd-ranked Kraft), Nestle is the largest food  processing company in the world.  In fact, its market value made it the biggest firm of any kind in Europe in March 2009. Herbert Oberhaensli, Nestle's chief economist and director of international relations, explained that Nestle’s business model operates on a long-term basis, neither expanding quickly in boom times nor shrinking in recessions. Despite its size and global presence, Nestle accounts for only about 1.7 percent of global food sales according to company estimates. Thus, it sees plenty of room for further growth.

Nestle worries more about the planet's growing fresh water shortage than the  current financial crisis, which it sees as only a bump in the  road in the firm's long-term development.  Nestle estimates the upper limit on sustainable global fresh-water withdrawals to be 12,500 cubic kilometers per year, with 2008 use running  at about 6000 cubic kilometers.  However, rising population, growing meat consumption, and new biofuel demands are predicted to absorb the surplus entirely by 2050.  On present  trends, Nestle thinks one-third of the world's population  will be affected by fresh-water scarcity by 2025, with the  situation only becoming more dire thereafter and potentially  catastrophic by 2050.  Problems will be severest in the Middle East, northern India, northern China, and the western  United States. Nestle sees the world, and global food production, largely in terms of the water economy.  Its management is convinced that growing shortages of fresh water, rather than land, will become the Achilles heel of global agricultural development. This -- and not the current financial crisis, oil depletion, or global warming -- is the most dangerous near-term threat to the planet's well-being.

Nestle estimates that the current US diet provides about 3600 calories per day with substantial meat consumption.  If the whole world were to move to this standard, global fresh water resources would be exhausted at a population level of 6 billion, which the world reached in the year 2000.  There is not nearly enough fresh water available to provide this standard to a global population expected to exceed 9 billion by mid-century. Nestle has studied water use in crop growing and concluded that the main reason crops are grown in many dry regions is subsidies and mis-pricing of water.  Growing a calorie of food crops in a hot dry climate such as California requires much more water than elsewhere.  Current water withdrawals in some areas of the world are already un-sustainable.  The water table is dropping precipitously in the Western US and in northern India. In both areas, users are withdrawing more water than can be replenished and rising salinity is reducing the productivity of plants.

Nestle is also concerned by the current political push to massively subsidize biofuel use and legislate compulsory blending.  The company says that in the best case, it takes 1000 liters of water to produce 1.5 liters of ethanol.  There is a real danger that biofuels will increase the price of food in poor nations.  Aside from providing drinking water to a few coastal cities, Nestle also dismisses desalination as a panacea for water shortages, due to its expense, pollution, and counter-productivity.  The company points out that it takes four liters of fuel to produce 1000 liters of water. It thus makes more sense to move agricultural demand for water to regions where it is in most plentiful supply.

Nestle with a lot of insights into the future of the world food industry made  clear that current developed country meat-based diets and patterns of water usage do not provide a blueprint for the planet's future. Based on present trends, Nestle believes that the world will face a cereals shortfall of as much as 30 percent by 2025.