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This chapter analyses the impact of future water risk hotspots on agriculture. It reviews agriculture production impacts, considers the market and trade effects of such risks, and looks at the broader effects of these risks on food security. The discussion combines insights from the literature on water risks in agriculture, from case studies on Northeast China, Northwest India, and the Southwest United States, as well as results from a simulation of the global impact of projected agriculture water risks in these three regions.

This chapter defines the key characteristics of a hotspot approach to agriculture water risks. It then applies this approach at a global level, using data from the literature, to identify future water risk hotspot countries for agriculture production. The evidence points to the People’s Republic of China, India and the United States as the leading agricultural producing countries most likely to be impacted. Specific water risks within these countries, in the identified key agriculture production regions of Northeast China, Northwest India and Southwest United States, are reviewed.

This chapter discusses policy responses that seek to reduce water risks in hotspots. An economic model is used to assess the role of farmers, private companies, and governments in mitigating water risks. A policy action plan is proposed to address water risks for agriculture production in hotspot locations, mitigate the market impacts that may result, and alleviate broader socio-economic impacts.

Agriculture is expected to face increasing risks that stem from water shortages, floods and the degradation of water quality, all of which will have an impact on production, markets, trade and food security. Available freshwater is projected to be constrained by a growing demand for water beyond the agricultural sector and increased variability of precipitation due to climate change. Extreme weather events may become more frequent. Water quality will likely deteriorate in many regions. These changes are expected to strongly impact agriculture, a highly water-dependent sector, and, in turn, affect the production and productivity of rainfed and irrigated crop and livestock activities.

Trends and projections suggest that agriculture will face increasing water risks in many regions which could affect agriculture production and markets as well as international trade and food security. This chapter presents evidence on future water risks for agriculture and introduces the hotspot approach as a means to assess and respond to these risks.

Increasing evidence suggests that water risks threaten future agriculture production in many regions. Factors, such as the multiplication of extreme water events, sea level rise—both projected to accelerate with climate change—water quality deterioration, groundwater depletion, and intensifying cross-sector competition for water supplies, combine to create “a perfect storm” for agriculture in many regions, which are often poorly prepared to respond. If these water risks are particularly intense in specific agricultural regions, their impacts can expand to national and international levels, with consequences on markets and food security.