Beyond deforestation: water use in global agricultural commodity supply chains

Interest is increasing within the European Union (EU) policy space to understand the link between tropical deforestation and imports of agricultural commodities. In 2017, the EU27’sa consumption of agricultural commodities was associated with close to 20% of global tropical deforestation (or 240,000 hectares), according to the newly released Commodity Footprints data (Croft et al., 2021) (see Box 1). Total tropical deforestation associated with the consumption of agricultural commodities in the EU and UK were only second to China, and ahead of India, the US and Japan in 2017 (Pendrill et al., 2020). Addressing this issue at the EU level can encourage other countries to follow, accelerating reductions in greenhouse gas emissions and preventing further loss of biodiversity and ecosystem services. Since 2018, several initiatives have been proposed acknowledging deforestation in supply chains (European Commission, Directorate General for the Environment., 2018; GRI Taskforce, 2020; MTES, 2018) and, in November 2021, the European Commission drafted a policy proposal to regulate forest-risk commodities (European Commission, 2021). Belgium and Spain joined the seven countries of the Amsterdam Declarations Partnership in 2021, and together with Denmark, France, Germany, Italy, the Netherlands, Norway and the UK, aspire to “achieve sustainable and deforestation-free agricultural commodity supplies” (ADP, 2021). At COP26, countries accounting for 90% of the world’s forests affirmed their commitment to “halt and reverse forest loss and land degradation by 2030” (UK COP26, 2021, p. 26), despite similar commitments in the New York Declaration on Forests (UN, 2014) having failed to meet their 2020 objectives. Efforts to move towards zero deforestation in the supply chains of agricultural commodities such as soy, maize, palm oil, cocoa, rubber and beef imply a rapid decrease of agricultural expansion in tropical frontiers and a transition towards more intensive production. Further agricultural intensification – increasing production by increasing yields – requires additional resources such as water and fertilizer, but to be more sustainable, also needs to observe other environmental and socio-economic aspects, such as soil, water and forest stewardship, while supporting livelihoods and promoting animal welfare. Water plays a key role in qualifying whether agricultural intensification can be considered environmentally sustainable. Since 2012, “water crises” have been consistently part of the top five global risks of concern, according to the World Economic Forum (WEF, 2021).b The overexploitation or contamination of water resources can present a significant risk to countries, communities and industries, but also to ecosystems. About 40% of the water used by the EU economy is sourced from river basins located outside its borders, which experience varying levels of water scarcity throughout the year (Ercin et al., 2019). Droughts can considerably affect agricultural yields, particularly in regions where production is vulnerable to precipitation variability, as recently experienced in South America (Laje et al., 2021). The current push for greater scrutiny and due diligence on deforestation in supply chains, presents an opportunity to expand beyond a single deforestation metric and adopt a more comprehensive definition of environmentally sustainable supply chains for the EU. Overlooking water use for agricultural commodities may shift environmental burdens from regions with high deforestation rates to regions with high water scarcity. In this discussion brief, we explore tropical deforestation and water use in supply chains to highlight the connections between land and water use in agricultural commodity production and describe potential blind spots with respect to water use in supply chains.