Stimulating the flow of investment for enhanced water productivity in Jordan

Mar 19, 2014

EBRD and FAO bring together public and private sector to identify bottlenecks and opportunities.

Improving water efficiency and productivity and identifying key points of investment, was the focus of a high-level forum, “Investing in efficiency: Water along the food chain in Jordan”, held in Jordan’s capital, Amman, today.

Arranged by the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD), under the patronage of the Jordanian Ministry of Agriculture, the forum brought together policy-makers, international organisations and investors. Participants discussed ways to increase water efficiency and productivity for a more sustainable agriculture sector, noted areas of investment from the private sector, and considered ways to improve coordination between the public and private sectors.

Challenges

Water scarcity is an acute challenge worldwide. It is inextricably linked to the agriculture and food production sectors, the biggest users of water.

The EBRD carried out a targeted analysis in the agribusiness sector, prompted by concerns about rising food prices and food security, coupled with increasing water scarcity, climate change and the high proportion of water used in agriculture. The Bank analysed options for the private sector to contribute to water- and resource-efficient food production through enhanced technology. The aim is to improve water productivity, overall sector competitiveness and to promote sound water policies.

Water use by the Jordanian food sector, which accounts for around 60 percent of total use in the country, is in line with worldwide consumption levels. But Jordan ranks highest globally among water-deficit countries. The major user, agriculture, contributes heavily to the country’s chronic imbalance between resource availability and use. This imbalance is primarily attributable to the unsustainable overdrawing of highland groundwater.

The initial findings of an FAO report, “Water Along the Food Chain: The Jordan Case”, highlights that winter vegetables and fruits from the Jordan Valley, which are the country's main agricultural exports, are highly dependent on irrigation. The report also focuses on the processed meat value chain, in particular the poultry industry that has developed rapidly in recent years and retains potential for growth.

 “Both value chains have already achieved relatively high water efficiency, yet water productivity and overall competitiveness can be improved,” explained Turi Fileccia, Senior Agronomist in FAO’s Investment Centre and main author of the report, “Investment is required to further develop the most profitable segment of the domestic poultry meat industry and to expand the growing area of the Jordan Valley to produce fruits and vegetables that target high-end export markets” he added.

The key message of the analysis is that Jordan should move away from unsustainable agriculture, food processing activities and sub-sectors that are water-inefficient. Investments should mainly, if not exclusively, target profitable food chains that have made clear efforts to improve their water efficiency and that have the potential to further enhance the productivity of the water they consume.

Heike Harmgart, Head of the EBRD Office in Jordan, said: "It is important for the public and private sector to share their distinct points of view so we can identify the key bottlenecks, understand why there is not more investment in water productivity, and target EBRD investments accordingly."

Making a difference

Tackling this pressing issue brought together the Jordanian public and private sectors with the FAO and EBRD in search of ways to enhance investment in the sector.

Specific dimensions need to be addressed when tackling water scarcity in the agribusiness sector. These include developing appropriate pricing schemes, improving the efficiency of irrigation systems and increasing the availability of alternative sources such as treated waste water. It is also vital to develop water storage, and reduce wastage of agricultural water – both upstream and downstream – in food production.

The forum was organised with funding from the EBRD’s southern and eastern Mediterranean (SEMED) Multi-Donor Account (MDA). Donors to the SEMED MDA include Australia, Finland, France, Germany, Italy, the Netherlands, Norway, Sweden and the United Kingdom.

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