Water Demand Prospects in Brazil: A Sectoral Evaluation Using an Inter-Regional CGE Model

This paper examined how regional expansion of irrigated agriculture affects the water demand in Brazil and used an inter-regional, bottom-up, dynamic model of general equilibrium calibrated for 2005 with projections for 2025. For the first time, a module able to integrate water use data prepared at the product level and calculated activity in million cubic meters (mm³ / year) was introduced. In the study, irrigated agriculture was separated from rainfed agriculture and had the productivity of irrigated agriculture distinguished from dryland activity regarding the main Brazilian crops. In Brazil, water availability represents about 12% of all the fresh water in the world, but the distribution of that water is not homogeneous across regions. The simulations aimed to expand the share of irrigated agricultural area in order to project demand of water use. The simulations were based on three different scenarios for the expansion of irrigated agriculture, as described in the National Water Resources Plan (PNRH) prepared in 2006 and intended for 2025. The water us in irrigated agriculture in Brazil represented about 90% of the total industrial us in the country. The results of the simulations suggest that the North would be more likely to expand the irrigated area, given the regional water availability, which provides a 0.021 ratio mm³ / hectare / year, unlike the Northeast region, identified as the most intensive area of water resources usage, with the ratio of 0.05 mm³/hectare/year for the three simulations. The results show that the use of water resources, especially in irrigated agriculture, is directly associated with water demands required in the cycle of the cultures and the way the irrigated area is distributed between cultures within the region. Such a distribution would promote the intensification in water resources us.