- A new report by IPES-Food shows how investors and agribusiness are taking control of water in Latin America by purchasing rights to land or water to secure access and grow water-intensive crops, such as avocados.
- The researchers say such deals take water away from local farmers and communities and puts it in the hands of agribusiness and investors, creating a crisis for local farmers who already face water shortages.
- In Chile’s Petorca province, a combination of climate change and water acquisitions by large agribusiness has put a strain on an already overwhelmed water system, forcing many residents to leave or buy water at high prices.
- The financial advantages large companies have over smallholders also mean they’re more likely to secure water over farmers when there’s little left.
A new report has found that investors and agribusiness in Latin America are increasingly buying up small parcels of land with abundant water access, thus securing control over the vital resource. They’re also exacerbating water scarcity by planting water-intensive crops and expanding irrigated cultivation, according to the report by the Belgium-based International Panel of Experts on Sustainable Food Systems (IPES-Food).
“It is becoming more and more difficult to produce food in rural communities through peasant farming because there is no water,” Viviana Catrileo Epul, director of Chile’s National Association of Rural and Indigenous Women (ANAMURI), told Mongabay. “The advance of monocultures and extractivism is so strong and ferocious that it is leaving us without water.”
The trend, which researchers have coined “water grabbing” — a form of land grabbing except it refers specifically to the control of water — is a problem for peasant communities and smallholder farmers, who often rely on the same surface or groundwater resources, amid a global freshwater crisis. In countries like Chile, Mexico and Peru, it has also put a greater strain on an already overwhelmed water supplies.
“In a context of climate change and global water scarcity, agribusiness and investors are seeing access to water as a major asset and are increasingly targeting land with freshwater and coastal access, as well as forests, aiming to rapidly extract value from these resources,” Sofía Monsalve Suárez, a co-author of the IPES-Food report and panel expert at the think tank, told Mongabay.
Because of a growth in consumer demand and an economic shift toward more resource-intensive commodities, global freshwater use has increased approximately sixfold since 1900. As a result, rich nations across the world, such as the U.K., U.S. and Japan, have become dependent on water from outside their borders to meet between 40% and 80% of their domestic water needs.
Latin America and the Caribbean are thus attractive to investors: the region has the greatest agricultural land and water availability per capita. Export-orientated agriculture has become a major source of the region’s income, and governments have responded by making huge investments in irrigation and infrastructure, as well as rolled out special tax breaks and trade deals to open new markets.
Water grabbing can take various forms, such as the purchase of lands that offer access to surface or groundwater, or, in some cases, the purchase of water rights directly, as is the case in Chile, where access to land doesn’t constitute access to its water.
In most cases, agribusiness and investors use land or resources to grow water-intensive crops, such as avocados, berries and other high-value crops for export. This intensive industrial agriculture is one of the major drivers of Latin America’s water crisis.
Water grabs are therefore a huge concern, Monsalve Suárez said, “as they take scarce resources away from local farmers and reinforce the intensive farming practices that are contributing to water scarcity and land degradation.”
Communities under greater pressure
In Petorca, a commune in the Chilean province of the same name, thousands of families depend on tanker trucks to deliver water once a week due to severe water shortages from other sources. Water has been hard to come by in Chile for a long time. But in recent years the shortages have been especially severe because of the explosive growth of large-scale avocado farming.
“The water situation in our communities is terrible,” Catrileo told Mongabay. “Many animals die due to lack of water, and the plants also die. Not everyone can use the water in the river because it is registered. All those waters are privatized.”
In 1981, Chile developed a new water code that radically changed the country’s previous water rights system. The legislation defined water as a private commodity, which meant water rights could be owned and traded as property. Today, much of Chile’s water is owned by large multinationals, including European-based utilities such as France’s Suez Group and Spain’s Aguas de Barcelona (AGBAR), and Japanese trading company Marubeni.
The privatization of Chile’s water resources has become a huge problem for small-scale campesino farmers like Catrileo, who say the water delivered by trucks is insufficient and often contaminated. The few liters she receives are meant to cover domestic use, crop irrigation and animal consumption.
“Nothing is like it was before all the extractivism existed and these companies came and bought all the water,” she said. “We could produce food all year round and now it is no longer possible.”
Valparaíso, the region that includes Petorca province, produces 65% of Chile’s avocados, according to the U.S. Department of Agriculture’s Foreign Agricultural Service. Data from the World Avocado Organization (WAO) found it takes 600 liters of water to produce 1 kilogram (72 gallons per pound) of the fruit. In Petorca, the big agricultural companies own more water rights than the volume available, and have previously been convicted for unauthorized water use and water misappropriation.
Catrileo said the commodification of water has resulted in high tariffs and water scarcity, and has forced many campesino farmers to leave the area. “It is becoming more and more difficult to produce food in rural communities through peasant family farming because there is no water,” she said. “National and transnational companies have benefited from all the natural wealth and that has led to a lot of rural migration. Many peasant communities are left desolate.”
Neither the Petorca mayor’s office nor Chile’s Ministry of Public Works responded to Mongabay’s request for comments by the time this story was published. Suez Group and AGBAR also didn’t respond.
According to Marubeni Corporation’s media relations spokesperson Sachiko Matsushita, the company is not involved in the water issues smallholders are struggling with, though they have a subsidiary that owns water rights. “The water business which Marubeni has in Chile is the water distribution and waste water treatment services for domestic and industry customers regulated by the government,” Matsushita told Mongabay.
In 2020, researchers at Chile’s University of the Americas published a study on inequality in the distribution of water in Chile. They concluded that 1% of water holders own 79.02% of the water. Chile’s water is owned by the productive sector, with more than 90% in the hands of agribusiness and mining.
The financial advantages large companies have over smallholders also mean they’re more likely to secure water over farmers when there’s little left. In Chile, an almost 14-year megadrought has placed additional pressure on the already strained water system. Rivers such as the Petorca have dried up, making it more difficult for low-income communities, such as campesino families, to purchase water rights.
Maria-Cristina Fragkou, an environmental scientist at the University of Chile, told Mongabay the cost of water has become very expensive because there’s so little, and this has led to an accumulation of water rights by the agricultural sector, which can afford to pay the higher price.
“Petorca is a region that is suffering from drought and unequal water distribution,” Fragkou said. “Many people don’t have access to water, and still Chile is exporting tons of fruits and vegetables that require a lot of water.”
Banner image: A coffee farmer in Colombia. Image by NeilPalmer/CIAT via Flickr (CC BY-SA 2.0).
See related coverage:
‘Water grab’: Big farm deals leave small farmers out to dry, study shows
Indigenous agroforestry dying of thirst amid a sea of avocados in Mexico
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Citations:
Correa-Parra, J., Vergara-Peruchich, J. F., & Aguirre-Nuñez, C. (2020). Water privatization and inequality: Gini coefficient for water resources in Chile. Water, 12(12), 3369. doi:10.3390/w12123369
Fragkou, M.-C., Monsalve-Tapia, T., Pereira-Roa, V., & Bolados-Arratia, M. (2022). Supply of drinking water by cistern trucks during the megadrought. A hydrosocial analysis of the province of Petorca, Chile. EURE, 48(145), 1-22. doi:10.7764/EURE.48.145.04
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Correction (June 24, 2024): A previous version of this article stated that Marubeni Corporation did not respond to our questions by the time of publication. However, they had, and we have added their response to the article. We regret the error.
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