Water is essential for all socio-economic development and for maintaining healthy ecosystems. As population increases and development calls for increased allocations of groundwater and surface water for the domestic, agriculture and industrial sectors, the pressure on water resources intensifies, leading to tensions, conflicts among users, and excessive pressure on the environment. The increasing stress on freshwater resources brought about by ever rising demand and profligate use, as well as by growing pollution worldwide, is of serious concern.

What is water scarcity? Imbalances between availability and demand, the degradation of groundwater and surface water quality, intersectoral competition, interregional and international conflicts, all contributes to water scarcity.

Scarcity often has its roots in water shortage, and it is in the arid and semiarid regions affected by droughts and wide climate variability, combined with population growth and economic development, that the problems of water scarcity are most acute.

It is probably in rural areas that water scarcity affects people most. In large parts of the developing world, irrigation remains the backbone of rural economies. However, smallholder farmers make up the majority of the world’s rural poor, and they often occupy marginal land and depend mainly on rainfall for production. They are highly sensitive to many changes – droughts, floods, but also shifts in market prices. However, rainwater is rarely integrated into water management strategies, which usually focus exclusively on surface water and groundwater. Countries need to better define their strategies to address food security and poverty reduction  rainwater fully into their strategies to cope with water scarcity. Addressing food security under water scarcity conditions requires actions at local, national and river basin levels. It requires an intersectoral and multidisciplinary approach to managing water resources in order to maximize economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems.

During the last decade, FAO Land and Water Division has developed a series of tools, methodologies and approaches to provide policy advice to the decision process in optimizing the use of water resources in agriculture and allocating them in the best manner, in view of addressing food security and poverty alleviation under growing water scarcity conditions.
The second part of the presentation illustrates one of the approaches that have been developed. The approach is diagnostic tool to conduct rapid country-level appraisals of the potential for agricultural water management investments in support of rural livelihoods under growing water scarcity and climate variability. The approach focuses primarily on people and development, matching demand with bio-physical resources. An expert-based, participatory appraisal, combined with a national-level GIS analysis, provides a straightforward and visual description of opportunities for investments. The use of scenarios allows users to assess the costs and impact of different investment options, prioritize areas for interventions and understand the poverty-reduction potential of different types of agricultural water management interventions. The results of the analysis allow decision-makers to prioritize areas for interventions and give them tools they can use to understand the potential for scaling-up different AWM interventions. Decision-makers are often requested to take investment decisions without any overall view of the country context and often with inconsistent information that hampers decision-making. They often seek recommendations and guidance in understanding key elements for taking investment decisions: i) Where to invest? ii) Who to benefit? iii) What approach to adopt? The approach can be a rapid and pragmatic route to provide basic recommendations and answer these questions.