Available online at www.sciencedirect.

com

Aquatic Procedia 1 (2013) 150 164

World Water
W Week
k, 26-31 Auugust 2012, Stockholm,, Sweden

The watereenergyffood secuurity nex xus: Chaallenges and

opportuunities fo
or food ssecurity in
i Southh Africa
M. Gulatiia, I. Jacobssb*, A. Jooostec, D. Naaidoob and S. Fakird
a
WWF South Afriica, Presidents Place,
P 1 Hood Aveenue, Rosebank 2196,
2 Johannesbu urg, South Africa
b
Water Researchh Commission, So outh Africa, Privaate Bag X03, Geziina, 0031, Pretorria, South Africa
c
National Agriicultural Marketiing Council, 536 Schoeman Streett ,Meintjiesplein Building,
B Arcadiaa, 0007, Pretoria,, South Africa
d
WWF Soouth Africa,s Bounndary Terraces, Bridge
B House, Ma
Mariendahl Lane, Newlands,
N 7700, Cape Town, Soutth Africa

Absttract

The interconnectednness of water, energy and foo od production ccycles translatees into the interrdependence off water, energy and
food pricing. This ppaper interrogattes the level of interconnecteddness between these
t systems inn South Africa and discusses how
energgy and water costs influencee food prices in the countryy and affect th he countrys level of food seecurity. The paper
emph hasizes that susstainable solutions to food seccurity necessitaate integrative thinking
t in the process of straategic planning
g for
thesee resources.

2013
20
013TheTheAuthors.
Authorrs. Published
Published byy Elsevier
by Elsevier B.V. B.V.
Open access under CC BY-NC-ND license.
Selection
Selecctionand
andpeer-review under
peer-rreview responsibility
under of theof
reesponsibility Stockholm International
f the Stockholm Water Institute
m International Water
W Institute.

Keyw
words: South Africca; food security;; waterenergyffood nexus; energgy price; water prricing strategy

1. In
ntroduction

Understanding
U the complexx relationship
p between w water, energy and food sy ystems has bbecome criticcally
impo ortant to the ddevelopment ofo a sustainab
ble and securee future for all nations and regions. Thiss relationship first
n 2011 Nexuss Conference held in prepaaration for the
attraacted internatiional attentionn at the Bonn he United Nattions

* Corresponding
C autthor.
E-mail
E address: inngaj@wrc.org.za

2214-241X 2013 The Authors. Published by Elsevier B.V. Open access under CC BY-NC-ND license.
Selection and peer-review under responsibility of the Stockholm International Water Institute
doi:10.1016/j.aqpro.2013.07.013
 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164 151

(UNN) Rio+20 Coonference. Thee conference, now n popularlyy known as th he Bonn confeerence, broughht to light the need
to address
a sustainnability issuess in the closely
y related sectoors of water, energy
e and foo
od security.

The
T relationshhip between these system ms goes beyoond simply water-footprin
w ting food pro roduction, carrbon-
foottprinting wateer supply chaains, or analy yzing new eneergy supply sources
s and climate
c adaptaation strategiees in
relaation to waterr consumptioon or its imp pact on land availability and a therefore food prices.. At heart off the
relaationship is thee interdependdence of resou
urces how deemand for onee resource can n drive demannd for another, and
sim
milarly, how thhe cost of onee resource can n determine thhe efficiency ofo production of the others.. To put it sim mply,
food d production demands enerrgy and waterr; energy is ann important in nput in fertilizzers, irrigationn, raising livesstock
andd accessing maarine food ressources as weell as throughoout the value chain in proccessing, packaaging, distribu uting,
storring, preparingg, serving andd disposing off food; water eextraction, conveyance, treatment, and ddistribution req quire
energy; and enerrgy productioon also requirres water. Ennvironmental pressures and d climatic chhanges, as weell as
econ nomic and poopulation grow wth accompan nied by increaasing urbanizzation, intensify the interacctions between n the
threee systems. Figg. 1 provides a conceptual framework
f off the waterennergyfood nex xus.

Figure 1: The waterenergyfoo

w od nexus. Source:: Authors (2013)

The
T policies rrelated to diffeerent sectors of o the econom my could inten nsify or attenu
uate these inteerdependenciees; or
worrse, ignore thee impact of onne on the oth her and adverssely impact th he overall nexxus. However,, the challenges to
mannaging the intterlinkages beecome more complicated
c aat a regional level, especiaally when ressources are shhared
betw
ween countriees. Indeed, ennvironmental and a human seecurity are anttecedents to regional econoomic developm ment
duee to the sharedd nature of booth water and energy, and tthe effect thatt both these reesources havee on food secu urity.
Whhere human ddevelopment needs n are mett through thee provision off adequate water and enerrgy resourcess, the
secuurity of the staate and the reggion are likely
y to be enhancced.
152 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164

The
T dominant natural resouurces managem ment challengge in the com ming decades will be how to secure nattural
resouurces to coveer the food deemands of a raapidly expandding world po opulation, whiile at the sam
me time sustain ning
otheer critical ecollogical functioons in the facce of a climatte that is chan
nging significaantly (Bhatt eet al., 2006). This
T
undeerstanding cann provide a goood starting point
p for desiggning more suustainable patthways for greeen developm ment.
Thiss applies espeecially to deveeloping counttries, where 995% of the worlds
w populaation growth ooccurs, and mostm
partiicularly to subb-Saharan Afrfrica, which ho osts the largesst proportion of water scarcity-prone areeas as well ass the
high
hest levels of mmalnutrition (R Rockstrom et al., 2003).

However,
H the ddegree to whicch the intercon gy and food prroduction cyccles translates into
nnectedness oof water, energ
the interdependen
i nce of water, energy
e and fo
ood pricing is a complex isssue that has not
n received suufficient atten ntion
in sccientific literatture or policy to date. With the prices of energy and fo
ood rising all over
o the worldd, economists and
lawm makers alike hhave predictedd that higher prices
p for commmodities will translate into higher pricess for all goods and
services. This papper interrogates this hypoth hesis and queestions how ennergy and waater costs influuence food co osts,
whetther energy innflation is the primary causee of food inflaation or wheth her there are other
o factors at work as welll. In
doinng so, it focusses on South Africa which y where only 13% of the laand is arable and
h is a water-sccarce country
enerrgy prices have been rising in parallel witth the rest of tthe world.

Given
G the imbaalance in the nexus,
n this pap
per also advoccates a rethink
k of the green economy devvelopment mo odel.
It highlights locall case studies in South Afriica that have eengaged in no on-traditional green econom my-oriented water
w
and energy solutioons that are readily implem mentable. It loooks at the rellevance of theese solutions tto South Afriicas
abiliity to cope with the growinng challenge of water, energgy and food seecurity and itss implicationss for an integrrated
man nagement apprroach to this challenge.

2. Fo
ood security:: A growing challenge
c in South
S Africa

The
T South Afr frican contextt mirrors the global trend of rising foo od costs. Alth hough the naational food self-
s
suffiiciency index illustrates thaat South Africa is food self--sufficient or nearly
n self-sufficient in alm
most all the major
food
d products, wiith the ability to import wheen necessary ((du Toit et al., 2011) but in n recent years,, the affordabiility
and availability off food have beecome a grow wing national cconcern.

Figure 2: Food innflation in South Africa. Source: N

NAMC (2010, 20
011 & 2012) and Stats SA (2011)
 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164 153

On
O the affordaability front, rising
r food prrices have beccome a subjecct of sharp focus in recent years, though
h the
rolee of food pricces in generatiing in ationarry episodes inn South Africca has been in
ncreasing signni cantly overr the
last two decades. Between 2000 2 and 200 08, the contrribution of foood products to headline in ation rosse to
appproximately 1..4 times its weight
w in the consumption
c bbasket (Rangaasamy, 2011). Specifically,, the year-on--year
inflation rate for all food item
ms rose from 1.2% in Septem mber 2010 to 10.3% in Jan nuary 2012 annd was well ab bove
the general inflattion level (Fig. 2).

T impact off rising food prices is com

The mplicated by th
the level of ho ousehold foodd insecurity. SStudies show that
60%% of local houuseholds in Soouth Africa arre food insecuure (Landman n, 2004 in du Toit,
T 2011; DDevelopment Bank
B
of Southern
S Africca, 2011). Addditionally, the impact that rising food prices
p have onn the poor is eenormous beccause
the South Africann poor spend a greater prop portion of theiir income on food
f than the South Africann rich. The co
ost of
a baasic food baskket expressed as a share of the average m monthly incom me of the poorest 30% of thehe population (Fig.
(
3) versus
v the wealthiest 30% of the populaation (Fig. 4) iillustrates thaat poorer South Africans sppend roughly 34%
morre of their incoome on food than
t wealthierr South Africaans (Jooste, 20
012).

Figure
F 3: Cost of a basic food baskket as a share of av
verage monthly inncome for the po
oorest 30% of the population in Soouth Africa. Sourcce:
Joostee (2012)

Fig
gure 4: Cost of a bbasic food baskett as a share of aveerage monthly inccome for the weaalthiest 30% of th
he population in SSouth Africa. Sou
urce:
Joostee (2012)

On
O the availabbility front, Soouth Africa im
mports agriculttural productss such as rice (721, 415t), ppoultry (117, 629t)
6
and
d sugar (both rraw and refined, 103, 454t)), which are ppart of its natiional food bassket. A review w of the countrys
154 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164

unprocessed and processed agriculture imports indicates that rice, poultry and sugar are among the top seven
products imported in terms of quantity (NAMC, 2010).

Given the realities of affordability and availability, South Africas growing economy is testing the limits of its
food constraints. Growing more food, as is often a common response, is not an ideal option because only 13% of
South Africas land is arable (i.e. land suitable for crop production), and most of this is only marginal for crop
production (i.e. it has low production potential) (Laker, 2005). Only 3% of the country is considered to be high-
potential arable (ibid). So the solutions lie in finding the reasons for food inflation and managing food availability.

3. Reasons for rising food costs and the implications

Several factors are responsible for increasing food prices. These can differ from country to country and can be
generic to the food value chain or specific to different food commodities. Further, the reasons can be found at
either the production level or through the different stages of the food value chain. In South Africa, current research
suggests that the factor common to all stages of the food value chain and across commodities is input costs (Jooste,
2012; Joubert, 2011). A deeper investigation into the role of input costs in driving up food prices in South Africa
emphasizes the role of energy and water prices. Added to this is the fact that energy and water are regulated in
South Africa in that they are administered by government policy.

3.1. The energyfood link

In South Africa, electricity prices have increased by over 24% since 2007-2008. The food sector has not been
immune to the impacts of these increases. For example, the primary agricultural sector consumes only 3% of total
electricity generated in the country and this consumption has risen at 3% per annum between 1999-2000 and 2010-
2011 (Fig. 5). But the annual electricity bill for the agriculture sector has increased by over 20% since 2009-2010
(Joubert, 2011).

7000 25%

6000 20%

15%
5000
10%
4000
GWh

5%
3000
0%
2000
5%

1000 10%

0 15%
19992000

200001

200102

200203

200304

200405

200506

200708

200809

200910

201011

201112

201213

Consumption Growthrateofconsumption

Figure 5: Electricity consumption by primary agriculture sector in South Africa (Note: Figures for 2007-2008 to 2012-2013 are estimates.)
 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164 155

An
A analysis off changes in thhe costs of foo od productionn and processin
ng confirms thhe above impaacts. For instaance,
a brreakdown of ccost increases for crops such as wheat annd maize, the latter
l a staple food in Southh Africa, indiccates
thatt the cost of electricity as a percentagee of other var ariable costs has
h been risin ng steadily ovver time (Fig g. 6).
Simmilarly, analysses of costs innvolved in thee production oof animal feed
d indicate thatt electricity coosts have receently
riseen exponentiallly (Fig. 7).

Figure 6: Sharee of electricity in variable

v costs forr maize and wheaat production in Northern
N Cape in South Africa. Souurce: Joubert (20
011)

Figure 7: Analysis of selecct costs involved in the productionn of a tonne of aniimal feed in South Africa. Source:: Jooste (2012)

Like
L electricitty, the price off crude oil hass also been rissing. Prices ro
ocketed from the early part oof 2007 to reaach a
peak of US$145 per barrel inn July 2008. The average price per barrrel in 2008 was w US$97.5 5 per barrel. The
average price deccreased by 37% to US$61.8 80 per barrel iin 2009. But this
t downward trend did noot continue du uring
2010 and the cruude oil price inncreased to US$117.79
U perr barrel. Risinng oil prices th
herefore impaact the food seector
in many
m ways. Thhis impact cann be illustratedd by taking thhe example of fertilizer pricees.

Trends
T in oil aand fertilizer prices indicatte that rising ooil prices in reecent years haave led to incrreases in fertiilizer
pricces (Fig. 8). T
The South Afrrican fertilizerr industry is fuully exposed to t world mark ket forces giveen the compleetely
dereegulated enviironment of thhis sector, wiith no importt tariffs or go overnment-spo onsored measuures. Being a net
impporter of potaassium and importing
i app
proximately 440% of its nitrogen
n requiirements meaans that domestic
fertilizer prices aare severely immpacted by in nternational oiil prices as weell as shipping g costs. The ddepreciation of the
randd against the UUS dollar has made matterss worse.
156 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164

Figure 8: Trends in intern

national oil pricess & fertilizer pricees. Source: Jooste
e (2010)

Rising
R energy costs have allso affected th
he manufactur uring sector asssociated with
h food, directlly and indirecctly.
The producer priice index (PP PI) for selecteed materials used in the food manufacturing proceess indicates that
ween March 20005 and Marcch 2012, prices of plastic prroducts increaased by 82%, of
betw o tinplate by 85%, kraft paaper
by 34%,
3 corrugateed cardboard boxes by 36% %, gas and waater by 96%, electricity by 177%,and peetroleum and coal c
prod
ducts by 122% % (Fig. 9). Cleearly, energy prices have thhe highest dirrect impact. Itt is also impoortant to note that
enerrgy is a key coomponent in thhe manufacturring of plasticc bottles, paper and cardboard boxes.

Figurre 9: Trends in inp

put costs at manuufacturing level. Source:
S Jooste (2012)
 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164 157

Finally,
F risingg energy prices have also led to the increaase of non-foood costs in thee food value cchain. An analysis
of the
t costs of bbaking bread (Fig.( 10) indiicate that elecctricity and gaas charges haave played a ssignificant rolle in
incrreasing the cost of bread.

Figure 10: Incrrease in selected costs

c to bake one loaf of bread (20
011-2012). Source: Jooste (2012)

The
T above exaamples show how h food and d energy have become increeasingly interlinked from a food affordab bility
persspective. At thhe global leveel too, studiess indicate thatt rising energy
y prices couldd be one of thhe main emerrging
facttors behind rissing food pricces (von Braun n, 2008; Foodd Price Watch h, 2011). It is therefore vitaally importantt that
we obtain a betteer understandinng of the food d value chain aand the role thhat energy andd water costs pplay in drivin
ng up
foodd prices in South Africa.

Another
A aspecct of energy thhat stands to affect
a food seccurity in Southh Africa is thee reliance on ccoal for electrricity
prod duction. Southh Africa, beinng abundant coal,
c has reliedd on a strateg
gy of exploitinng its coal resoources to meeet its
grow wing electriciity demand. Thhe fact that co
oal yields cheaaper electricityy than other production
p souurces has favoured
thiss strategy. Souuth Africa haas therefore developed
d a hheavy reliancee on cheap co oal-based elecctricity, with coal
acco ounting for 855% of total innstalled capaciity. The coal ddeposits coinccide with the countrys bestt agricultural land
andd the sources of its majorr inland rivers. Asset minne drainage (AMD) from m coal miningg has resulted in
devvastating impaacts on water resources,
r with acidificationn of rivers and d streams, and d elevated meetal levels in water
w
boddies (WWF-SA A 2011). The major reliancce on coal theerefore directtly impacts food productionn directly thro ough
polllution of agriccultural land and
a indirectly through polluution of water.

3.2. The waterfo

food link

The
T waterfoood link has maany facets. Th he first is that oof water pricin
ng. Water hass historically bbeen under priiced.
Sou
uth Africa is ap
approaching phhysical water scarcity (IWM MI, 2007), witth demand esttimated to outtstrip supply ata the
currrent consumpttion rates (du Plessis, 2010 0). Therefore, strategies to promote judiccious use of w water are focu
using
on cost-reflective
c e pricing. Connsequently, water prices in the past decaade in South AfricaA have bbegun to gradu ually
show a similar traajectory to eleectricity pricess.

n over the period 2001-20002 to 2006-2

I industry, pprices for waater generally rose faster tthan inflation
In 2007
(NEEDLAC, 20077). Additionally, municipal water prices to industry wentw up by rouughly 62% inn the period 2001-
20002 to 2005-20006, while dom mestic prices rose by 60%
% in the samee period. This is a stark coontrast to PPI and
connsumer price index (CPI) rises of 30% % and 32% reespectively ov ver the same period. Pricees for bulk water w
supp plied by the S
South Africann Department of Water Affafairs varied wiidely as the neew Water Priccing Strategy was
impplemented butt increased by an average of 21% over thhe period 2002 2-2003 to 20005-2006 comppared to a CPII rise
of 16%
1 over the ssame time (NEDLAC, 2007). These pricce hikes mean n that an increaase in water taariffs is begin
nning
to have
h an impact on food pricces.
158 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164

The South African Water Pricing Strategy is currently under review that includes the development of an
infrastructure funding model and the establishment and strengthening of an economic regulator for the water
sector. The revision of the pricing strategy for raw water will have extensive socio-economic impacts, affecting all
water users. The extent of the impact needs to be clearly understood, and both quantified in order to result in an
informed decision on a final pricing strategy that will ultimately have benefits across the water and energy sectors.
This could be achieved through several interventions. The first is by keeping tariffs artificially low to enhance food
security. This could be brought about at the cost of infrastructure deterioration or through subsidies from the
government and lead to some opportunity costs. The second is through infrastructure development and
maintenance as opposed to affordability for the poor. And the third is infrastructure development either as a
catalyst or constraint to economic growth and social development.

The second aspect of the waterfood link is water shortage. The increasing scarcity of water is going to have a
profound impact on food production. South Africa is water scarce, being the 29th driest of 193 countries and
having an estimated 1110 m of water per capita in 2005. Moreover, its rainfall varies dramatically from season to
season and is distributed unevenly across the country. This poses several challenges for food production and food
security. In future, this challenge may require that South Africa make crop choices in the context of water scarcity
and its effect on food security.

Water scarcity will also affect food production indirectly through competing with energy production, which will
lead to trade-offs with the energy and resources sectors. The latter is energy intensive. Moreover, with the
productivity of water use in agriculture being low compared to other sectors agriculture contributes 3% to GDP
but uses 60% of the water there may be significant pressures to reallocate water from agriculture to other more
productive uses (Pretorius, 2010). In the event that this happens, the immediate impacts on food security could be
through wine, fruit and vegetable production, 90% of which is produced under irrigation, and wheat cultivation,
30% of which is produced under irrigation.

The third aspect of the waterfood link is that of virtual water. The concept of virtual water describes a situation
in which countries import food from other countries and therefore have made use of the water used to grow those
imports. Virtual water can be seen as an additional water source, increasing an areas per capita water availability.
If water-intensive crops are imported instead of being produced domestically, less domestic water has to be used,
decreasing the level of exploitation. Thus, virtual water could decrease the pressure on domestic water resources in
a situation of water scarcity.

The fourth and final aspect of the waterfood link centres around water quality. It is well known that water
pollution affects the economic productivity of agriculture by destroying crops, reducing crop quality and
diminishing yields. Increasing water pollution in South Africa means that food producers will find it difficult to
meet regulatory requirements of food safety and quality norms. The problem will be bigger in cases of food
exports where continued trade depends on food safety and quality, as well as any voluntary standards.
Consequently, producers and processors have few alternatives but to make the necessary investments to comply
with standards. However, deteriorating water quality is pushing up mitigating costs (for example through costs of
water purification) and threatening food quality, and hence exports, making it a priority concern. Another threat
from water quality arises from the energy usage aspect: making water of acceptable quality available for food
production and processing carries a heavy energy bill.

3.3. The energywater link

Energy costs constitute a significant part of operational costs for the water sector. While information on this
front is not readily available for South Africa, the magnitude of influence that energy prices have on water tariffs
can be gauged by looking at global estimates. It is estimated that between 2% and 3% of the worlds energy
 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164 159

con
nsumption is uused to pump and treat water for residenntial, commerccial and industrial use (Segr grave et al., 20
007).
Aboout 60% of the distribution costs and 50% % of the operaational costs of
o wastewater treatment aree related to en nergy
con
nsumption. Ennergy used woorldwide for delivering
d wateter (including agricultural irrrigation) is ar
around 7% of total
worrld consumptiion (ibid). Theerefore, higheer energy pricees will most likely
l lead to increased watter prices, theereby
hav
ving a direct im
mpact on foodd security.

T energy neeeds for water will greatly in

The ncrease in Souuth Africa beccause (i) the in
ncrease in wat
ater demand duue to
pop
pulation growtth and econom mic developmment, (ii) the iincreasing neeed to pump deeper and deeeper groundw water,
and
d (iii) the explloitation of allternative wateer resources tthrough desaliination and reeuse, for exam
mple, to offset the
defiicit between w
water demand and the availaable supply.

Rising
R energyy prices will alter water allocation annd distribution n (Zilberman et al., 2008)). In the case of
agriiculture, risingg energy prices will have a most signifiicant impact ono irrigation systems
s that rrely on energyy for
pum
mping groundw water, diverting surface waater and irrigaation, as well as irrigation systems that are part of laarger
watter projects (iibid). At the same time, they will maake water exttraction, conv veyance and ppurification more
m
exp
pensive.

3.4. Future consiiderations

Understanding
U g and managiing the nexuss from a foodd security perrspective will be even morre pressing in n the
futu
ure. The pricees of energy annd water are expected to ccontinue to go o up in South Africa given the huge capaacity
add
dition planned to meet the growing
g electrricity and trannsport demands coupled with high and vvolatile oil prrices.
will be continuued input costt pressures in the food value chain, puttin
Theerefore there w ng increased ppressure on prrofits
and
d resulting in loower returns on
o investmentt.

Passing
P all of these costs too the consumer will have neegative impliccations for foo
od security. Inn fact, it is beccause
of thhis that farmeers, who are offten price-takeers and not pri
rice-makers, arre making eveer-lower profitits, while the retail
r
pricce for the vallue-added verrsions either remains
r consstant or increaases. In fact, retailers too are strugglin ng to
man nage input cossts. A study of a small retaiiler in the Souuthern Cape inn South Africaa indicated maassive increases in
its input
i costs beetween 2001 and a 2011 (Jooste, 2012). W What stands ouut for this retaiiler is that waater and electrricity
incrreased by nearrly 600% (Figg. 11).

Figgure 11: Trends inn input costs for a small retailer inn the Southern Caape in South Afric
ca. Source: Joostee (2012)
160 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164

Thus,
T increases in the pricees of energy and
a water, aloong with otheer costs of oth her inputs, staands to affect the
sustaainability of the sector since it directly and inndirectly influences the investment, pprofitability and
commpetitiveness oof the sector; the sectors ability to conntribute towarrds job creatioon; and the ssectors ability
y to
conttribute significcantly towards rural develoopment and allleviation of poverty.
p Theree is therefore aan urgent need to
rethiink current poolicies for wateer and energy within the am
mbit of the foo
od sector.

On
O another notte, a growing area of conceern is that of food waste. A considerable amount of eenergy and water w
are associated
a witth discarded food.
f Once ag gain, while esttimates are no
ot available fo or South Africca, the magnittude
of th
he problem caan be gauged from
f data avaailable from otther countriess. It is estimated that approxximately 2.5%
% of
the energy
e budgett and 25% off all fresh water consumed in in the United States (US S) is thrown aaway annuallyy in
discaarded food (HHall, Guo, Doore and Chow w 2009). Giveen the energy y- and water-- intensive naature of growing,
proccessing, packaaging, warehoousing, transporting and prreparing food,, it follows th hat wasted foood means wassted
wateer and energy as well as agrricultural resou
urces.

4. Governance
G im
mplications foor the nexus

Inn essence, whhat we see in many develo oping countriees including South
S Africa, are two distiinct categories of
factoors affecting the nexus in different way ys. On the onne hand, facto ors such as fuuel and oil prrices, commodity
exch hange, other innput costs andd the exchang ge rate, are all driven by thee market. On the other handd, developmental
statee economy facctors such as poverty allev viation, job crreation challeenges, social inequality,
i foood and access to
wateer and electriccity are key priorities, and government
g poolicies have beeen developed
d to ensure thaat these issuess are
addrressed. Sometiimes this resuults in heavily y regulated annd/or administered pricing structures
s thatt are at odds with
w
mark ket-driven facctors. This commbination tran nslates into ann imbalance in n the nexus because of the varying, indiirect
and unforeseen im mpacts that theese factors hav ve on each othher in the foodd value chain (Fig. 12).

Figuure 12. Factors afffecting the food

energywater neexus in developin
ng countries. Sourrce: Authors (20113)
 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164 161

5. Constructing a governance framework for the waterenergyfood nexus

If we look at how the nexus plays out in the policy landscape in South Africa, we see the same kind of
imbalance. South Africa is currently in the process of evaluating its energy options and developing policies that
apply appropriate carrots and sticks to various technologies to encourage sustainable energy production. While
the aspects of cost, carbon, and energy security have been given significant attention, water needs have not been
part of this process. Similarly, energy pricing has not formed part of the water pricing strategy for South Africa to
date.

However, solutions exist at the local and regional level. In particular, the lower the level, the more concrete the
nexus becomes in terms of project solutions: a series of readily implementable solutions exist to manage the nexus
and at the same time to enable sustainable rural development in the context of the green economy. The challenge
has always been scaling these solutions up to the departmental, national and regional level.

For example, several solutions exist at the local level to increase land, energy and water-use efficiency. One
such example is the Water Research Commission (WRC) funded project on the integration of irrigation and
nutrient (especially nitrogen) inputs. Today, farmers are under pressure to decrease their water and fertilizer usage,
while at the same time producing sufficient pasture for dairy farmers to meet the milk demands of a growing
population (Fessehazion et al., 2012). In South Africa, annual ryegrass (Lolium multiflorum) and kikuyu
(Pennisetum clandestinum) are the most widely grown pasture species under irrigation. However, shortages of
water and nitrogen can be limiting factors, but these can be managed by using appropriate irrigation and nitrogen
management tools (Fessehazion et al., 2012).

In essence, there is still a need for increased production, but in more cost-effective and innovative ways. One
WRC-funded innovation is the use of livestock manure to produce biogas, which is an environmentally friendly
energy source. Since energy is central to improved social and economic well-being, and is a key factor for
relieving poverty, improving human welfare and raising living standards (IAEA, 2005), biogas can play a central
role in the sustainable development of rural communities in South Africa. The aim of this project is to couple
biogas use (for energy and liquid fertilizer) with rainwater harvesting (for domestic use, fodder production and use
in the biogas digester). In South Africa, one of the factors responsible for low agricultural production is unreliable
rainfall and poor water resources. Since availability of water is critical for biogas generation, a sustainable water
supply is essential for the implementation of this technology. While biogas digester owners typically utilize waste
water in the biogas systems, this water is usually carried over long distances and is thus a barrier in the uptake of
the technology. In essence, studies such as this one emphasize the need to implement effective economic
development solutions based on the integration of fodder, food, energy and water security at the homestead and
farm scale.

Biogas production will result in reduced financial costs through low-cost energy and fertilizer as well as the
potential for increased income (e.g. through the sale of milk) and will result in considerable savings at the
household level, which could be used for other purposes such as food or school fees. This is likely to add
meaningfully to the household's welfare and the economy. Additionally, while biogas is not a commodity sold in
the marketplace, it has the potential to replace the measurable cost of heating, lighting and cooking requirements of
a small rural household. Biogas is able to replace these general costs to a household and hence its value as a cost-
avoidance substitute may be assessed financially. Another benefit of biogas is that it replaces the wood, dung and
other locally gathered fuels traditionally used for cooking and heating in rural households (Renwick et al., 2007).
Thus the use of biogas means that the use of non-renewable use wood fuel is fully avoided, chronic respiratory and
eye health impacts are halted, and the time saved enable other income-generation activities to be undertaken.

The environments examined in the case studies are typical of most of Southern Africa and indeed the
developing world primarily rural in nature, and dependent on subsistence agriculture. The added dimensions of
162 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164

no connection to either the water supply network or power grids in ecologically sensitive environments are also
typical in this region. A popular response to these circumstances is a mass migration to towns and cities, resulting
in the further expansion of informal neighbourhoods in the peri-urban fringes, bringing with it a suite of challenges
that is rapidly becoming the norm in the developing world.

In this context, the possibility of interventions that help rural communities to have the opportunity of sustainable
livelihoods in rural settings with a good quality of life is both attractive for the individuals concerned and an
important contributor to national sustainable development. The intervention models resulting from the case studies
provide a series of readily implementable solutions in the context of a green economy. The solutions/interventions
are both very portable and applicable in many Southern African settings. They are also easily implemented in the
right conditions. In addition, the lag phases are usually small, enabling communities to derive the benefits of the
interventions during the course of the first rainy season. It is also possible to extrapolate some elements of these
solutions to the urban environment, in particular the peri-urban slums that are outside any water, waste or energy
network.

Another solution locally would be to realize energy savings in the water supply sector. Currently, no estimates
are available for the energy intensity of the water cycle in South Africa, either at a national level or for cities. This
knowledge is key to understanding the unique energy intensities of the different elements of the water use cycle,
which can exhibit considerable variability in energy intensity. Energy efficiency improvements in the water use
cycle would alleviate shortages, waste and unsustainable patterns of use.

In the case of food waste, significant reductions can be achieved through simple changes in food purchasing,
storage and preparation. However, local solutions that combine radically reducing food waste at its source with
ensuring that what gets discarded becomes a resource to generate energy or create fertilizers can be considered
(Slade, 2012). These solutions include reconnecting the whole supply chain from farm to table to farm by
composting food waste and using it as fertilizer to grow crops.

At the regional level, virtual water trade may provide a potential solution. Investigations show high-potential
rain-fed cropping land in neighbouring countries such as Zambia (11.1 million ha), Mozambique (8.8 million ha),
Zimbabwe (6.3 million ha) and Malawi (0.4 million ha). Moreover, water sharing is already working between
South Africa and some of its neighbours, examples being the Lesotho Highlands Water Project and the Nkomati
Project. Whether or not relying on virtual water would be beneficial in a broader context depends on a number of
other factors such as resource endowments and production technologies in the countries engaging in trade, but it
would improve the situation in water-scarce South Africa.

6. Conclusion

Food inflation has become a phenomenon of our time, and has begun to pose a threat to food security in South
Africa, as in many other places in the world, as household food budgets take an increasing percentage of household
income. The knock-on effect on the economy will be substantive. This paper shows that the energy and water
systems play a significant role in driving the availability, quality and affordability of food, and that the pressures
on food prices will affect energy and water prices. Generally, passing these costs on to the consumer will have
negative implications for food security, with the most vulnerable being the first victims. In the absence of price
increases at the consumer level, there will be pressure on profits throughout the food chain and a return on
investments.

A deeper analysis is required for a more detailed understanding of the production cycle, food prices and food
security relationships. This will inform policy options and other interventions led by government and other
partners. These include developing the infrastructure for improved, cost-effective agricultural production and
processing; investing in research and development to improve production efficiencies; and re-channelling social
 M. Gulati et al. / Aquatic Procedia 1 (2013) 150 164 163

grants into food banks and work-for-food programmes. It is only through the understanding of the complexity of
how the many dimensions of the food, energy and water nexus are entangled, and how we can effectively address
the trade-offs in this nexus, that a long-term, concerted and sustained strategy can be developed and applied to
address the issue of food security.

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