Opportunity costs of virtual water: a justification for green-water based agricultural capacity growthfor economic, social and environmental sustainability

Traditional development of water and agriculture based on irrigation tends to lead to over-extraction of environmentally-derived water as water use rises to an unsustainable peak. This behaviour is traditionally remedied by maintaining agricultural production while re-investing in efficiency and alternative water resources. Such behaviours effectively pay twice for the same production capacity. An alternative approach would adopt a different development pathway; a conjunctive use of both irrigation (blue) water and rainfed soil (green) water to provide a reliable production, meaning that ‘virtual water’ exported in crops contains less blue water. Blue water resources can then be directed at activities with a higher opportunity cost (industrial and municipal use), yielding greater value per drop to local populations, especially important when using non-renewable groundwater. Through sustainable optimisation of resource allocation, the new paradigm of agricultural water development avoids, an unsustainable over-development of water, and greater virtual water sustainability.