Bahrain Food and Water Security

11 August 2015 FDI Team


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Sinéad Lehane
Research Manager
Global Food and Water Crises Research Programme

 

Key Points

  • Bahrain currently experiences a comfortable level of trade-based food security; however, it is vulnerable to supply disruptions and price risk.
  • A section of the population is vulnerable to food price rises due in part to widespread income and social inequality.
  • Bahrain is one of the most water stressed countries in the world; up to 30 per cent of the population could face water shortages by 2025.
  • If Bahrain were to experience a food security crisis, this could exacerbate ongoing civil unrest causing domestic and regional instability.
  • The objective of Bahrain’s food security strategy is to increase food self-sufficiency to 60 per cent of demand within the next four years. Given existing resource constraints, this is unlikely to be a feasible long-term goal.

 

Summary

Bahrain currently experiences a comfortable level of trade-based food security. Relying on food imports does, however, expose the country to a high degree of price and supply risk. To counter this, the government has created strategies to increase domestic food self-sufficiency. Scarce natural resources will limit any significant expansion of the agriculture sector. As population growth continues and consumption patterns shift toward more processed, westernised products, Bahrain will become increasingly dependent on food imports. Consistent growth in foreign currency revenue is required to support trade-based food security and reduce the risks associated with a globalised food system. This growth is threatened by ongoing political instability linked to endemic inequality between the ruling Sunnis and majority Shia population.

 

Analysis

Demand for Food and Water

Population Growth

Bahrain has experienced rapid population growth over the past two decades, linked to the discovery of the country’s oil reserves and rising income levels. In 2014 Bahrain had an estimated population of 1.344 million people; with a total land area of 710 km2, the country has one of the highest population density rates in the world. Eighty-nine per cent of the population lives in urban areas and it is likely that Bahrain will be close to completely urbanised by 2025. Population growth and urbanisation trends have placed considerable pressure on the country’s natural resource base. Water consumption is much higher than available natural water resources and food demand far exceeds the production capacity of domestic agriculture. Projected population and income growth will exacerbate the mismatch between demand and supply and require the country to secure alternative sources of food and water.

Wealth Distribution and Inequality

Bahrain is a middle income country with a Gross National Income (GNI) per capita of approximately US$36,000 in 2012. The socio-economic disadvantages faced by the Shia population, however, have led to inequality in wealth and resource distribution. The economy is dominated by a small ruling establishment whose influence has been a barrier to much needed economic and social reforms. According to the United Nations Development Programme 12.2 per cent of Bahrain’s population lives on less than US$5 per day; the richest 20 per cent of the population accounts for over 40 per cent of the total income earned. An over-dependence on cheap foreign labour has led to high unemployment among the local population and has also contributed to ongoing social unrest. The World Bank estimates that 25.4 per cent of males and 32.3 per cent of females aged 15-24 are currently unemployed. Without significant growth in employment opportunities, unemployment is predicted to rise as more young people reach working age.

Current Food and Water Demand

A high rate of water consumption has led to over extraction from Bahrain’s aquifers; taking into account losses in the public distribution network, Bahrain’s per capita water consumption was between 273-318 litres per day in 2012. Municipal water demand represents approximately 47 per cent of Bahrain’s total water demand. The agriculture sector closely follows; demanding 44.5 per cent, and industry and the commercial sector requires roughly eight per cent.

Despite population growth, political instability and wealth inequality, the majority of Bahrain’s population are currently food secure; the more serious nutritional issue facing the nation is the obesity epidemic. Globalisation and the rapid rise in living standards have led to a shift in dietary patterns towards western foods, which have a higher carbohydrate and fat composition. Lifestyles have also become increasingly sedentary. Approximately 70 per cent of adults in Bahrain are either overweight or obese. The nutritional transition will put pressure on the country’s healthcare system in coming years as the incidence of related non-communicable disease rises.

Food and Water Supply

Bahrain is one of the world’s most water stressed nations and its groundwater abstraction is unsustainable in the mid to long-term. The country will need to expand non-conventional water sources significantly to meet demand to 2025 and beyond. Food supply is derived from both domestic and external sources; approximately 92 per cent of Bahrain’s food products are imported. Trade-based food security is intrinsically linked to the country’s economic stability and wealth. In order to finance food imports a stable, diversified economy is paramount. Limited natural resources will constrain any significant expansion of domestic food production and Bahrain’s dependence on food imports is likely to increase by 2025, exposing the country to a high degree of price and supply risk.

Water Supply

Limited, erratic rainfall and high evapotranspiration rates characterise this arid country. The total annual surface run off is approximately four million cubic meters and there are no rivers, perennial streams or lakes. The three key water sources in Bahrain are groundwater, desalinated water and treated wastewater. The expansion of the latter two will be crucial in reducing groundwater abstraction and meeting long-term water demand.

An estimated 54 per cent of Bahrain’s water is sourced from groundwater resources with a further 35.6% from desalination and 9.7% from treated wastewater. Research by Mohammed Saleh Al Ansari on Bahrain’s water demand management found that while abstraction of the Dammam Aquifer has gradually decreased as alternative sources are made available, water withdrawals from the Rus Umm Eradhuma Aquifer have significantly increased in recent years. In the latter, the agriculture sector accounts for approximately 70 per cent of water withdrawals.

The over-abstraction of aquifers has caused deterioration in groundwater quality in some parts of the country. Salinisation, increased water pollution and the drying of freshwater springs in the north are all the consequence of unsustainable groundwater withdrawal. There is an urgent need to curb abstraction and protect groundwater resources. In order to achieve this Bahrain will need to expand the production of alternative water sources, particularly the reuse of treated wastewater.

Agricultural and Food Production

Approximately 10 per cent of Bahrain’s total land is arable, two thirds of which is currently cultivated. The sector is a mix of traditional agriculture, protected agriculture and hydroponic production. The main crops produced in Bahrain are dates, alfalfa feed stock and a wide range of vegetables. There is no cereal production. In 2013 agricultural production represented approximately 0.3% of Bahrain’s Gross Domestic Product (GDP). In order to increase the level of food self-sufficiency, the Bahraini government provides subsidies and economic incentives to improve crop productivity. Along with government loans, the main form of support is input subsidies. Farmers receive an 84 per cent subsidy on the cost of machinery services, 40 per cent on modern irrigation equipment and 50 per cent on the price of pesticides.

The agricultural sector in Bahrain is plagued by a number of structural problems. Urban expansion in recent years has caused a significant loss of traditional agricultural areas. Problems with water-logging and soil salinisation have further reduced the availability of arable land. Issues also exist with insecure land tenure practices, the small size of farm holdings, which average 2.5 ha, labour shortages, an inability to compete with imports and a lack of financial incentives. These factors restrict investment in the sector.

Food Imports

Bahrain is heavily reliant on imports to meet the food needs of its population. According to the Bahrain Economic Development Board’s White Paper, Bahrain on the Food Security Index 2013, 84 per cent of Bahrain’s imported food products are supplied by 18 key trade partners. Saudi Arabia and Australia lead this group, supplying approximately 15 per cent of Bahrain’s total non-oil import value each. Bahrain’s reliance on trade as the primary basis for ensuring food security exposes it to significant price and supply risk. It is notable that many of the country’s key trade partners are politically stable with sound land rights.

Economy

To sustain a system of trade-based food security, economic growth and consistent export revenues are required. Bahrain is one of only two countries bordering the Persian Gulf that is not a member of OPEC. Sixty per cent of its national income is generated from oil exports. While it is less dependent on oil than its Gulf neighbours, limited oil reserves have necessitated an economic policy focused on diversification. The government, through its Economic Vision 2030 plan, aims to create sustained growth and increase employment opportunities by expanding the petrochemical and aluminium industries and developing a knowledge-based service sector. Economic diversification is imperative to ensure continued growth and to maintain food security.

Internal Political and Social Stability

The Kingdom of Bahrain is nominally a constitutional monarchy; however the Sunni royal family, the al Khalifas, lead an authoritarian regime with no accountability to the public. In 2011, the Arab Spring, which originated in Tunisia and Egypt, spread to Bahrain as demonstrations and an ongoing civil resistance campaign began in Manama. Mass public gatherings and disruptive civil disobedience spread as protestors sought redress for popular grievances, including inequality of opportunity, subsequent unemployment, and widespread poverty and rising food insecurity.

The regime has failed to address the underlying issues that led to the 2011 protests and now faces criticism over its repressive handling of the events. A national dialogue launched in February 2013 to bring together segments of the divided society and reach consensus on disparate views ended in a stalemate and was put on hold in early 2014. Since then the Bahraini government has taken an increasingly hard line approach to any form of dissent.

The current state of political instability is closely entwined with social inequity and could potentially affect access to food and its affordability for some segments of the population. If distributional inequality is not addressed, disadvantaged sectors of the population could become vulnerable to food insecurity. While all sections of the population are currently food secure, those experiencing relative poverty could find that their access to affordable food is reduced in the case of a food price crisis.

Strategies to Improve Food and Water Security

Following the global food price spikes of 2008 and 2011 and the continued volatility in price levels, the Bahraini government has undertaken a number of short and long-term measures aimed at improving future food and water security.

The National Initiative for the Development of Agriculture outlines a number of key objectives related to food security, including a strategy to increase domestic food production from 20 to 60 per cent of total demand. This will focus on the self-sufficiency of high quality fresh vegetables, an area in which Bahrain already performs relatively strongly. The government is encouraging agricultural development in both the public and private sectors, providing facilities, and strengthening research and extension activities. In addition to fostering co-operation with the private sector, the policy to diversify the economic base and extend food production has focussed on providing economic incentives to improve crop productivity through a broad system of subsidies for farming inputs.

Bahrain plans to intensify its farming practices and exploit the potential gains available in modernising traditional agricultural sectors. A shift will be encouraged towards crops that have a comparative advantage, high value uses or that are low water consumers. In addition to intensified cropping, the strategy will aim to improve food processing facilities and develop the poultry, aquaculture and fisheries sectors. Expanding agricultural production will, however, place further pressure on overburdened water resources.

It may be possible to sustain this increase if desalination capacity is rapidly expanded to supply all non-agricultural consumption demands, and if increases in output are driven by the expansion of hydroponic production, which uses water efficiently. Both technologies have high costs and would require considerable government support and trade protection for output to remain competitive with imports. Thus while these measures entail more sustainable resource use, it would be difficult for Bahrain to meet their fiscal demands beyond 2025. Natural and fiscal resource constraints mean that it is unlikely that any more than a short term increase in domestic food production can be sustainably achieved. Therefore, as food consumption levels rise, Bahrain will become more reliant on imports.

Bahrain has faced on ongoing challenge in financing the development of its water and waste-water projects. Funding from neighbouring Gulf countries has driven much of the recent development in the sector but the capacity of treatment and supply facilities and infrastructure remain inadequate. The Muhrraq Sewage Treatment Plant was completed in 2014 and an expansion of the Tubli treatment facilities from a capacity of 200,000m³ per day to 400,000m³ per day has been planned. Increasing the supply of treated wastewater will allow for greater diversification of Bahrain’s water supply, increasing the country’s overall water security outlook to 2025.

The cost of water for municipal users is set at a block-rate tariff that fails to recover the cost of service and delivery. A report from Chatham House in 2014 highlights the financial burden of water supply delivery and expansion and the need to address water pricing to ensure the sustainability of the water industry. In late 2013 the government introduced a three year plan to restructure the water tariff for non-domestic consumers using more than 1,000m³ per month to bring the price of water up to the cost price – US$1.86 per cubic metre – by 2016. To address high water consumption, recover costs of supply, treatment and reuse and support long-term water security, Bahrain should review water pricing for all users. Increasing tariffs to reflect more closely the value of water will both encourage water conservation and provide the finances required to maintain and expand supply in line with population growth.

According to the International Monetary Fund, government debt was 44 per cent of GDP in 2013. Reducing this will require austerity measures and subsidy cuts across not just water, but also fuel, electricity and the price of meat. Doing so within Bahrain’s current political climate, however, will risk further instability; as a result it is unlikely that any significant reform of Bahrain’s subsidies will occur in the short to mid-term. Not addressing the fiscal burden of the country’s subsidy system creates significant risk to the long-term economic sustainability and the ability of the government to meet future resource demands.

Conclusion

As a small island nation, Bahrain lacks the capacity to make meaningful improvements in food self-sufficiency. The government’s current strategy of increasing domestic food production to meet 60 per cent of total consumption will place a further drain on already limited resources. The country experiences an extreme level of water stress; consumption levels exceed renewable supplies and as the population continues to grow, rising demand will lead to the degradation of available resources.

Even if considerable increases in output could be achieved, it is unlikely that they could keep pace with or exceed population growth rates. As consumption patterns change and total demand for food and water grows to 2025, Bahrain will increasingly depend on food imports and alternative sources of water to fill the gap between supply and demand and achieve food and water security.

If Bahrain were to experience a food security crisis in the years to 2025, the likely causes would be a major supply disruption or imported inflation resulting from a significant global price spike. Disruptions to supply relating to extreme weather events, trade embargoes or geo-political events could limit food availability and cause domestic food prices to rise. Given the country’s high degree of income inequality and the vulnerability of sectors of the population experiencing poverty to food insecurity, a protracted rise in food prices could cause significant social unrest.

Similar to its neighbours, Bahrain has focused on the supply-side management of its water resources. The country requires greater investment in demand-side management if it is to sustainably meet the water requirements of its population to 2025 and beyond. The expansion of desalinated water will continue to meet water demand in the Kingdom; the financial investment required for expansion, however, will place a significant strain on the government’s finances. Addressing water tariffs and aligning prices more closely with the value of water will assist reduce the high per capita water consumption rates and generate finances for the maintenance and expansion of supply.

Bahrain is likely to maintain a state of food and water security to 2025. Diverse trade partners and the expansion of desalination facilities will meet medium-term food and water demand. Meeting long-term demand however, will require significant economic reforms, focused on reducing subsidies and the diversification of the economy, trade partners for food products and water sources. Given the current political climate it is unlikely the necessary reforms will be implemented in the near future, creating long-term risks to the country’s food and water security.

 

 

 

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