WATER GLOBAL PRACTICE Water Scarcity in Morocco ­ hallenges Analysis of Key Water C Farzad Taheripour, Wallace E. Tyner, Iman Haqiqi, and ­Ehsanreza  Sajedinia About the Water Global Practice Launched in 2014, the World Bank Group’s Water Global Practice brings together financing, knowledge, and implementation in one platform. By combining the Bank’s global knowledge with country investments, this model generates more firepower for transformational solutions to help countries grow sustainably. Please visit us at www.worldbank.org/water or follow us on Twitter at @WorldBankWater. About GWSP This publication received the support of the Global Water Security & Sanitation Partnership (GWSP). GWSP is a multidonor trust fund administered by the World Bank’s Water Global Practice and supported by Australia’s Department of Foreign Affairs and Trade, the Bill & Melinda Gates Foundation, the Netherlands’ Ministry of Foreign Affairs, the Rockefeller Foundation, the Swedish International Development Cooperation Agency, Switzerland’s State Secretariat for Economic Affairs, the Swiss Agency for Development and Cooperation, the U.K. Department for International Development, and the U.S. Agency for International Development. Please visit us at www.worldbank.org/gwsp or follow us on Twitter #gwsp. Water Scarcity in Morocco Analysis of Key Water Challenges Farzad Taheripour, Wallace E. Tyner, Iman Haqiqi, and Ehsanreza Sajedinia © 2020 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. 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Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@ worldbank.org. Cover design: Jean Franz, Franz & Co., Inc. Cover photo: pixabay.com. Contents Acknowledgments v Chapter 1  Introduction 1 Chapter 2  GTAP-BIO-W Model and Its Database 3 Notes 7 Chapter 3  Economy of Morocco: A Short Review 9 Agricultural Variables 9 Macroeconomic Variables 13 Note 13 Chapter 4  Climate Change, Crop Yield, and Water Scarcity 15 Chapter 5  Examined Scenarios 17 Note 19 Chapter 6  Simulation Results 21 Results when Water Supply Is Decreasing 21 Rebound Effect in Water Consumption 34 Flexibility in Water Use and More Substitution among Inputs 35 Chapter 7  Water and Businesses 37 Chapter 8  Conclusion 39 References 41 Appendix A  List of GTAP Sectors and Proposed Aggregation for Morocco 43 Figures 2.1 Structure of GTAP-BIO-W Static Model 4 2.2 Water Supply in New GTAP-BIO-W Model 5 3.1 Distribution of Harvested Area across AEZs, Morocco, 2016 10 3.2 Distribution of Land among AEZs, by Irrigation Type, Morocco, 2016 11 3.3 Distribution of Land Among AEZs, by Crop Categories, Morocco, 2016 11 3.4 Precipitation and Share of Agriculture in GDP, Morocco, 1980–2015 12 3.5 Distribution of GDP, by Economic Activities and Expenditures, Morocco 12 Water Scarcity in Morocco iii 4.1 Impacts of Climate Change, Variability on Agricultural Activities, and Economywide Consequences 15 6.1 Changes in GDP at Constant Prices with and without WUE 23 6.2 Share of Agriculture in GDP, S1 to S4 and SC1 to SC4 23 6.3 Impacts of a 25 Percent Reduction in Water Supply with Crop Yield Changes on Labor Demand, SC4 26 6.4 Impacts of 25 Percent Reduction in Water Supply with Crop Yield Changes on Capital Demand, SC1 to SC4 27 6.5 Changes in Irrigated and Rainfed Harvested Area, S1 to S4 28 6.6 Changes in Irrigated and Rainfed Harvested Area, SC1 to SC4 29 6.7 Changes in Irrigated Area, SC1 to SC4 and SC1-W20 to SC4-W20 29 6.8 Changes in Rainfed Area, SC1 to SC4 and SC1-W20 to SC4-W20 30 6.9 Crop Shares in Total Harvested Area, Base Data versus SC4 30 6.10 Changes in Incomes of Primary Factors of Production with 25 Percent Reduction in Water Supply and Crop Yield Changes 33 6.11 Impacts of Flexibility in Model Parameters on Simulation Results 35 Tables 3.1 Crop Shares in Harvested Area, Crop Production, and Crop Values, Morocco, 2016 9 6.1 Changes in Real GDP Due to Reductions in Water Supply with and without Crop Yield Changes because of Climate Change 21 6.2 Changes in Real GDP Due to Reductions in Water Supply with and without Crop Yield Changes and with Improvements in WUE 22 6.3 Changes in Demand for Unskilled Labor under Alternative Scenarios 24 6.4 Changes in Demand for Skilled Labor under Alternative Scenarios 25 6.5 Changes in Producer and Consumer Prices for Crops under Alternative Scenarios 31 6.6 Changes in Trade Balance of Food Items under Alternative Scenarios 32 6.7 Changes in Terms of Trade under Alternative Scenarios 33 6.8 Potential Rebound Effect in Water Consumption 34 iv Water Scarcity in Morocco Acknowledgments Farzad Taheripour is a research associate professor, Wallace E. Tyner is the James and Lois Ackerman Professor of Agricultural Economics, and Iman Haqiqi and Ehsanreza Sajedinia are Ph.D. students in the Department of Agricultural Economics at Purdue University. This report has benefited from comments and feedback from Richard Damania, Esha Zaveri, Francois Onimus, Dambudzo Muzenda, Marielena Octavio, and Amal Talbi. Water Scarcity in Morocco v Chapter 1 Introduction The Middle East and North Africa is one of the most water-scarce regions in the world (Rosegrant et al. 2013). In the future, like other countries of this region, Morocco is expected face a major water shortfall prompted by expansion in demand for water, reduction in precipitation induced by climate change, or both. Similar to other countries in the Middle East and North Africa region, water is mainly used for irrigation in Morocco. During the past two decades, the annual water withdrawal ranged between 11 billion and 15 billion cubic meters per year in Morocco. About 75 to 87 percent of total water withdrawal was used for irrigation (FAO 2018). Crop production in Morocco heavily relies on irrigation because of low productivity of rainfed cropping. Although the share of irrigated crops in the total harvested area of Morocco is ­ around  20  to  25  percent, nearly 65 percent of the monetary value of crops produced comes from irrigated crops. These figures simply indicate that major reduction in water supply could harm the level and  value of agricultural production in Morocco. Beside food security concerns, this could lead to more imports of grains such as wheat and barley and could generate major economic consequences. The share of agriculture in total gross domestic product (GDP) of Morocco usually fluctuates around 15  percent, because value added to this sector fluctuates frequently because of changes in annual rainfall (Ouraich and Tyner 2018). However, agricultural activities provide many job opportunities for ­ a large portion of the labor force. In general, about 40 percent of the labor force in Morocco works in agricultural activities, including forestry and fishery (Danish Trade Union 2015; Ghanem 2015; HCP 2016). This share was about 38 percent at the national level in 2016. The corresponding figures for urban and rural areas were 4.5 and 72.9 percent, respectively, in that year, according to the High Commission for Planning of Morocco (HCP) report (2016). Hence, reduction in water supply could directly and indirectly eliminate job opportunities in agricultural and nonagricultural activities. In addition, a major reduction in water supply could cause idled capacity across the country, which could intensify the adverse impacts of water scarcity on the job market and GDP. The main goal of this paper is to examine the extent to which water scarcity could affect the Moroccan economy. To accomplish this task, a well-known computable general equilibrium (CGE) model from the Global Trade Analysis Project (GTAP), dubbed GTAP-BIO-W, is used. This model traces demands for and sup- plies of all goods and services produced, consumed, and traded globally by country or region. It also takes into account resource constraints and models allocation of limited resources, including labor, cap- ital, natural resources, water, and land. This model divides crop production into rainfed and irrigated and traces water and land resources and their demands at the spatial resolution of the river basin (RB) and agroecological zone (AEZ) in each country or region; for details, see Liu, Hertel, and Taheripour (2013) and Taheripour et al. (2018). To concentrate on the economy of Morocco, the model and its database are geographically ­ aggregated into three regions: Morocco, European Union, and other (representing the rest of the  world). The GTAP-BIO-W model uses a benchmark database that represents the global Water Scarcity in Morocco 1 economy in 2011. To provide more up-to-date analyses, this database has been updated to represent the global economy in 2016 as described in Taheripour et al. (2018) and subsequent sections. To achieve the goals of our research, we developed a range of alternative simulations that portray the economy of Morocco under different water scarcity scenarios mixed with climate impacts on crop yields and alternative sets of economic parameters that jointly govern allocation of water across uses. We began with simulations that assess impacts of reductions in water supply at different rates. Then, we took into account impacts of climate change on crop yields. After that, we examined the extent to which improvements in water use efficiency (WUE) could mitigate the adverse impacts of water scarcity. Frequently, it is argued that an improvement in WUE (that is, producing more crops per drop of water) could lead to a rebound effect in consumption of water, which increases water withdrawal (Li and Zhao 2018; Pfeiffer and Lin 2014; Ward and Pulido-Velazquez 2008). Therefore, we developed a set of simulations to examine the extent to which WUE may generate a rebound effect in water consumption for irrigation in Morocco. Then, in a set of simulations, we showed that more flexibility in water allocation across uses may help to mitigate adverse impacts of water scarcity. In what follows, we first explain the GTAP-BIO-W model and its database. Then, we review some key characteristics of the economy of Morocco. After that, we introduce our simulation scenarios, followed by the numerical results and conclusions. ­ 2 Water Scarcity in Morocco Chapter 2 GTAP-BIO-W Model and Its Database al. (2018­ The latest version of the GTAP-BIO-W model and its database are explained in Taheripour et ­ ). water. It is It is a static CGE model that combines economic and biophysical information on land and ­ designed to examine the nexus between agricultural activities, industrial and energy sectors, and trade scale. The GTAP-BIO-W in the presence of climate change and water scarcity by country on a global ­ model carries the following major characteristics: •• It is the only global CGE model that explicitly traces water consumption by sector and country at the AEZs. A large RB could serve several ­ RB level by ­ AEZs. •• It incorporates water into the production function of all economic activities, including crops, live- services. Therefore, all economic activities compete for ­ stock, industries, and utility ­ water. •• Unlike other existing global CGE models, this model distinguishes between rainfed and irrigated ­ upply. crops to better capture the links between demands for irrigation and food s ­ odel.1 •• Nested constant elasticity of substitution (CES) production functions are used in this m Hence, it allows examination of alternative assumptions on substitution between water and other land. inputs, particularly for capital and ­ •• This model takes into account heterogeneity2 in the price of water and traces demand for and supply AEZ. This means that the marginal value of water could be dif- of water by country at the RB level by ­ uses. ferent at different places and across ­ •• It uses a nested constant elasticity of transformation (CET) functional form to model the supply side water. This approach allows us to take into account the real-world rigidities in water allocation of ­ across ­uses. Although some adjustment of water use across sectors is possible, it is by no means freely capital. This is a standard method to model a sluggish mobile like other mobile inputs such as labor or ­ ­ egions. input like water that cannot move freely across uses and across AEZs, RBs, and r •• The database used in this research matches existing data provided by trusted international ­­ organizations. The biophysical information includes crop production, harvested area, land cover items, and water used, which match national and international databases, including those of the (FAO). We updated World Bank and the Food and Agriculture Organization of the United Nations ­ this database to represent the world economy in 2016. Figure 2.1 represents the GTAP-BIO-W approach in allocating primary inputs, including labor, capital, water. In this model, competition for labor, capital, and resources takes place at resources, land, and ­ level. This means that companies compete for these primary inputs only at that ­ the  national ­ level. figure  2.1, the competition for these endowments occurs within the light yellow box, which rep- In  ­ RBs. Sectors take labor, capital, and resources from the resents a national economy, including several ­ pool. Labor and capital are usual mobile i national ­ ­nputs. This means that these resources move easily across ­uses. Following the standard GTAP model, natural resources are modeled as sluggish ­endowments. sectors. This means that they cannot move freely across ­ Water Scarcity in Morocco 3 FIGURE 2.1. Structure of GTAP-BIO-W Static Model National output by sector Crops industries Irrigated crops Rainfed crops Crop 1 Crop 1 All other Forest Livestock industries Crop k Crop k Last crop Last crop Irrigated land Rainfed land Forest Cropland Pasture Land AEZ 1 Last AEZ Water for irrigation in Water for non-irrigation river basin j uses in river basin j Water River basin 1 Last river basin River basin j: Competition for managed Capital Labor Resources National competition for labor, capital, and other resources Primary inputs al. 2018. Copyright 2018 from Routledge Handbook of Sustainable Development in Asia, edited by Sara Hsu. Reproduced by permission of Taylor Source: Taheripour et ­ and Francis, a division of Informa plc. This permission does not cover any third party copyrighted work which may appear in the material requested. Please check the acknowledgements section of the book. 4 Water Scarcity in Morocco ­evel. As shown in figure 2.1, an economy may However, competition for water takes place at the RB l RBs. In each RB, water has two main ­ have several ­ uses. A portion of water goes toward irrigation, and ­ ses. As shown in figure 2.1, each RB may serve several A the rest goes toward other u ­ EZs. Thus, AEZs of ­ ox). The GTAP-BIO-W model also represents available each RB compete for irrigation (see the blue b level. In each RB-AEZ, the area of available managed land is divided among managed land at the RB-AEZ ­ forest, pasture, and cropland, as shown in figure 2.1. Then, irrigated and rainfed crops compete for ­­ ­ B-AEZs. The irrigated crops compete for managed water in each cropland. Land cannot move across R level. This means that competition for water for irrigation also takes place at the spatial RB at the AEZ ­ ­ B-AEZ. Finally, irrigated crops compete for irrigated cropland and rained crops compete resolution of R cropland. In this model, water can move from one AEZ to another in an ­ for rainfed ­ RB. Water transfor- ­ ater. mation elasticity governs the movement of water across the AEZs of an RB, as explained l FIGURE 2.2. Water Supply in New GTAP-BIO-W Model Supply of water Supply of water to Supply of water to crop 1 crop i to crop 1 σc Supply of water Supply of water Supply of water to AEZ1 to AEZ z to AEZ18 σz Supply of water Supply of water Supply of water to industrial and to livestock to irrigated crops domestic uses industries σr Managed water at River Basin j Water Scarcity in Morocco 5 In the earlier version of this model, water was permitted to move freely with no restriction across the RB. However, water often cannot move freely within RBs because of water rights, quotas, AEZs of an ­ and other constraints, so we altered the model to restrict the movement of water across the AEZs of an RB. Figure 2.2 represents the nesting structure of the supply of water in the new GTAP-BIO-W used in ­ research. In this nesting structure, the three parameters of σr, σz, and σc control the supply side of this ­ RB. The first parameter, σr, which represents water transformation elasticity across main water in an ­ uses, governs the allocation of available water of an RB across three main uses: (1) water to irrigated crops, (2) water for livestock, and (3) water for industrial and domestic ­uses. When σr = 0, this means that ­ B. However, if σr < 0, then water can move across u water cannot move across the major uses in an R ­ ses. ­ ses. The second The larger the magnitude of | σr |, the easier it is for water to move across the main u parameter, σz, which represents water transformation elasticity across AEZs, manages allocation of ­ B. If water cannot move across the AEZs of an RB, then σz = 0. water for irrigation across the AEZs of an R RB. For The larger the absolute magnitude of σz, the easier it is to move water across the AEZs of an ­ example, if moving water from one AEZ to another AEZ is costly, then the size of σz should be close to zero. The third parameter, σc, which represents water transformation elasticity across crops, allocates ­ water across irrigated ­crops. If water cannot move across crops of an RB, then σc = 0. The larger the abso- crops. lute magnitude of σc, the easier it is to move water across ­ These water transformation elasticities can be used to impose any restriction on the movement of ­ rops. This setup provides a unique environment to examine all kinds of water across uses, AEZs, and c water. Because the true values of these elasticities are rigidities in the supply side of the market for ­ unknown, the sensitivity of the model results can be tested with respect to changes in these ­parameters. Similar to existing water CGE models, water is introduced into the production function of companies water. Three groups of users purchase managed water directly: irrigated crop to determine demand for ­ (Water-Util). The crop producers usually use a big por- sectors, livestock producers, and water utilities ­ tion of water withdrawal for irrigation in each ­ RB. The GTAP-BIO-W database represents distribution of water across the main uses in the base year data. Each irrigated crop sector (for example, irrigated fruits) can get water from any according to FAO ­ RB-AEZ. The database determines the initial distribution of water across the RB-AEZ according to actual ­ observations. Livestock sectors can get water from available R ­ ­ Bs. RBs. The database determines the The Water-Util sector also can purchase water from available ­ initial distributions of water demanded by the livestock and Water-Util ­ ­ sectors. The Water-Util sector ­ overnment. Again, the database sells processed water to all other industries, households, and the g ­ ector. determines the initial distribution of water sold by the Water-Util s The GTAP-BIO-W model, like any other CGE model, determines optimal allocation of all primary factors of production (including labor, land, water, capital, and resources) among their alternative uses ­ parameters. To concentrate on the economy of Morocco, the model given the existing data and model ­ and its database are geographically aggregated into three regions: Morocco, European Union, and other 6 Water Scarcity in Morocco world). This aggregation highlights the role of the European Union as the (representing the rest of the ­ Morocco. If needed, this aggregation allows us to study European Union and main trade partner of ­ relationships. Morocco trade ­ The standard GTAP database aggregates all goods and services produced or provided across the world ­ ategories. The sectoral aggregation used in this research is presented in appendix A into 52 c ­ . This aggre- gation divides crop sectors into 12 categories, represents 3 livestock sectors, includes forestry, and cov- sectors. ers all other economic activities aggregated into 29 ­ Notes 1. A nested CES production function divides production inputs into several subgroups and assigns different elasticity of substitution param- eters between the inputs of each nest and among the nests. 2. In a competitive market all users of a commodity pay the same price for that commodity. When there are rigidities in the market for an endowment (or a commodity), the users pay different prices for that endowment (or commodity). This represents heterogeneity in price paid by users. For example, when water cannot freely move from agricultural uses to non-agricultural uses due to the existing restrictions (e.g., quotas, water rights, or any other social restrictions), agricultural and non-agricultural users of water pay different prices for water. In this case water is not a homogenous commodity across its alternative uses. Water Scarcity in Morocco 7 Chapter 3 Economy of Morocco: A Short Review Agricultural Variables Table 3.1 shows the shares of each crop category in total harvested area, total crop production, and total ­ orocco. crop values of Morocco in 2016. Wheat had the largest share (39.4 percent) in harvested area of M After that, coarse grains and oilseeds had the largest shares in harvested area (29.2 and 12.2 percent, respectively). A tiny share of harvested area was allocated to sugar crops (0.8 p ­ ­ ercent). The shares of vegetables and fruits in the total area were about 10.0 and 8.3 percent, respectively, in 2016. Crop shares in total crop production (physical quantities) are different from area shares, because crops ­ ields.1 As shown in table 3.1, the shares of wheat, coarse grains, and oilseeds in total crop have different y production of Morocco were about 21.3, 9.4, and 5.3 percent, respectively, in 2016. The share of sugar ­ ercent). This is because crops was 13.5 percent, larger than the harvested area share of this crop (0.8 p crops. The shares of vegetables and fruits in yields of sugar crops are large compared with those of other ­ total crop production of Morocco were about 27.9 and 22.3 percent, respectively, in 2016, significantly area. larger than their shares in harvested ­ Finally, table 3.1 shows that vegetables and fruits have the largest share in total crop values produced Morocco. The value shares of these two crop categories were 36.7 and 30.6 percent, respectively, in in ­ 2016. The value shares for wheat, coarse grains, oilseeds, and sugar crops were about 11.7, 4.3, 14.3, ­ ear. These figures confirm that vegetables and fruits are the and  2.4 percent, respectively, in this y Morocco. most productive and valuable crops produced in ­ countries. The main In addition to domestic production, Morocco imports several crops from other ­ ­ rains. The joint share of these two crop categories in total imported crops are usually wheat and coarse g imports of crops of Morocco was around 75 percent in 2016. However, Morocco basically exports vegeta- ­ nion). bles and fruits to other countries (largely to the European U TABLE 3.1. Crop Shares in Harvested Area, Crop Production, and Crop Values, Morocco, 2016 Shares in value of production Crops Shares in harvested area (%) Shares in production (%) at producer prices (%) Wheat 39.4 21.3 11.7 Coarse grains 29.2 9.4 4.3 Oilseeds 12.2 5.3 14.3 Sugar crops 0.8 13.5 2.4 Vegetables 10.0 27.6 36.7 Fruits and others 8.3 22.9 30.6 All crops 100.0 100.0 100.0 Source: Food and Agriculture Organization Corporate Statistical Database; GTAP-BIO-W database. Water Scarcity in Morocco 9 FIGURE 3.1. Distribution of Harvested Area across AEZs, Morocco, 2016 45 40 35 30 25 Percent 20 15 10 5 0 Z1 Z2 Z3 Z4 Z5 Z6 Z7 Z8 Z9 0 1 2 3 4 5 6 7 8 Z1 Z1 Z1 Z1 Z1 Z1 Z1 Z1 Z1 AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE Zone Source: GTAP-BIO-W ­database. Over time, Morocco shifted its available agricultural resources to produce more valuable exportable ­ ruits. Instead, it imported more wheat and coarse grains from the world crops, such as vegetables and f market. Yields of wheat and coarse grains in Morocco are low compared with world ­ ­ averages. Morocco’s wheat yield was about 37 percent of the world average yield for 2016. The corresponding figure for percent. coarse grains was 23 ­ The available cropland in Morocco is scattered across AEZs, as shown in figure 3.1. However, croplands are basically located in AEZ8 (very dry), AEZ9 (moist and semiarid), and AEZ10 (warm, temperate, and ­ dry). The shares of these AEZs in the total area of cropland of Morocco are about 18, 42, and 28 percent, respectively. Morocco also has some cropland in AEZ1 to AEZ4, as shown in figure 3.1. These tropical ­ AEZs represent arid to subhumid moisture regimes and jointly cover 11 percent of the total area of crop- Morocco. land in ­ ). Usually, a In general, the total area of cropland of Morocco is about 9.6 million hectares (FAO 2016­ ­ orocco. portion of available cropland (about 15 to 20 percent) remains uncultivated each year in M ­ ectares. Only a small por- The area of irrigated cropland in Morocco is about 1.5 million to 1.7 million h tion of irrigated cropland is equipped with advanced irrigation systems (for example, sprinkler or drip irrigation ­ systems). The government of Morocco plans to support farmers to install advanced irrigation systems. The goal of the government is to install advanced irrigation systems on about 555,000 hectares ­ land. With this plan, the share of irrigated cropland equipped with advanced irrigation tech- of irrigated ­ nologies will reach 55 to 60 percent of the total area of irrigated land (African Development Bank 2016; Berrada 2009­). 10 Water Scarcity in Morocco Irrigation varies across AEZs in Morocco, as shown in figure 3.2. Around 44.0 percent of irrigated harvested area (9.0 percent of irrigated and rainfed harvested areas) is in AEZ9, followed by AEZ8 with ­ reas). AEZ4 has 24.0 percent of irrigated area cropland (4.8 percent of irrigated and rainfed harvested a a little more irrigated land compared with AEZ10. This AEZ has 18.0 percent of the irrigated harvested area (12 percent of irrigated and rainfed harvested ­ areas). FIGURE 3.2. Distribution of Land among AEZs, by Irrigation Type, Morocco, 2016 45 40 35 30 Percent 25 20 15 10 5 0 Z1 Z2 Z3 Z4 Z5 Z6 Z7 Z8 Z9 0 1 2 3 4 5 6 7 8 Z1 Z1 Z1 Z1 Z1 Z1 Z1 Z1 Z1 AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE Zone Irrigated Non-irrigated Source: GTAP-BIO-W ­database. FIGURE 3.3. Distribution of Land Among AEZs, by Crop Categories, Morocco, 2016 45 40 35 30 Percent 25 20 15 10 5 0 AEZ1 AEZ2 AEZ3 AEZ4 AEZ5 AEZ6 AEZ7 AEZ8 AEZ9 AEZ10 Zone Wheat Coarse Grains Oilseeds Vegetables and fruits Source: GTAP-BIO-W ­database. Water Scarcity in Morocco 11 FIGURE 3.4. Precipitation and Share of Agriculture in GDP, Morocco, 1980–2015 20 50 18 45 Share of Agriculture in GDP(%) 16 40 14 35 Precipitation (mm) 12 30 10 25 8 20 6 15 4 10 2 5 0 0 10 20 1 12 20 3 14 15 90 94 19 5 96 98 20 3 04 20 5 06 20 7 08 20 9 80 19 1 82 19 3 84 19 5 86 19 7 88 19 9 92 19 7 00 20 1 02 19 1 19 3 20 9 1 8 0 9 0 8 9 0 1 9 8 0 8 9 8 0 9 20 20 20 19 19 20 19 19 19 19 20 19 19 20 20 19 19 20 19 Year Annual average of precipitation Share of agriculture in GDP data. Source: World Bank ­ FIGURE 3.5. Distribution of GDP, by Economic Activities and Expenditures, Morocco a. Economic activities b. Expenditures 70 70 60 60 50 50 40 40 Percent Percent 30 30 20 10 20 0 10 -10 0 -20 re s itu nt rt y io l itu ld e at ita tr o tu nd me ic re nd ho us xp n re rm p rv ul fo s ca d pe rn pe se te Se ric In ex ve ex Hou Ne Ag os Go Gr Macrovariable Macrovariable World bank GTAP data. Sources: GTAP-BIO-W database and World Bank ­ 12 Water Scarcity in Morocco AEZ. As shown Figure 3.3 shows the distribution of harvested area of Morocco among crops by ­ figure 3.3, wheat and coarse grains have large shares across all ­ ­ AEZs. Then, oilseeds, vegetables, and fruits have large shares in AEZ8, AEZ9, and AEZ10. Beside the long-term reduction in water supply, annual changes in rainfall affect value added by the agricultural sector year by year, as shown in figure 3.4. When rainfall drops, the share of agricul- exceptions. Morocco produces low-yield rainfed grains ture in the GDP falls as well, with some ­ ­ rains). With proper rainfall, these crops perform well and (mainly wheat, barely, and other coarse g activities. When rainfall is insufficient or contribute more to the overall value added by agricultural ­ ­ rops. drought occurs, then the value added by the agricultural sector of Morocco d Macroeconomic Variables The GDP of Morocco was about $103,606 million in 2016. In this year, the share of agricultural value percent. The shares of industrial activities and services in added to the GDP of Morocco was around 13 ­ the GDP were around 29 and 58 percent, respectively, in 2016, as shown in figure 3.5. Figure 3.5, panel a, shows that the World Bank and GTAP data sets represent similar figures for the distribution of the GDP activities. Finally, consider the distribution of the GDP across uses: private across the main economic ­ consumption (62 percent), government expenditures (20 percent), investment (35 percent), and net percent). This means that Morocco had a trade deficit in 2016. trade (−17 ­ Note 1. Yields are measured in tonnes per hectare for all crops. Water Scarcity in Morocco 13 Chapter 4 Climate Change, Crop Yield, and Water Scarcity There is extensive literature that addresses the worldwide impacts of climate change and its variability on agricultural activities (a few important examples are Fischer et al. 2005; Nelson et al. 2010; Parry et al. 2004; Reilly et al. 2003; Rosegrant et al. 2013; Rosenzweig et al. 2002, 2014). This literature high- lights two different but related research topics. The first topic reflects the worldwide implications of the future changes in temperature, precipitation, and carbon dioxide (CO2) concentration for crop yields under alternative representative concentration pathway (RCP) scenarios. The research on this topic usually uses crop models to project future changes in crop yields under each RCP scenario (see the top boxes in figure 4.1). Rosenzweig et al. (2014) have highlighted the most recent projections in this area. Although these projections take into account future changes in precipitation and their impacts on crop yields, they do not take into account availability of water for irrigation. Climate change impacts on irrigation water requirements and changes in water availability for irriga- tion is the second research topic that examines the link between agriculture and climate change. This line of research examines the extent to which climate change, in combination with other factors, alters availability of water for irrigation. Climate change could alter demand for irrigation in two main ways. On one hand, it could increase the water requirement for each crop because of changes in temperature and other biophysical conditions. It also could encourage farmers to shift toward irrigation for mitiga- tion purposes. On the other hand, climate change could alter the supply of water across the world (Rosegrant et al. 2013). A permanent reduction in rainfall could occur because of climate change, which FIGURE 4.1. Impacts of Climate Change, Variability on Agricultural Activities, and Economywide Consequences Drivers of crop yields Temperature Medium - to long - run Crop projections for Precipitation models changes in crop yields Climate CO2concentration change Socioecon Economic omic models to Supply of water factors evaluate Water impacts of Demand for water changes in scarcity in agriculture and crop yields and nonagriculture water scarcity Determinants of water scarcity Water Scarcity in Morocco 15 would limit availability of water for irrigation. Available water for irrigation may also fall because of expansion in demand for water for nonagricultural uses. The second line of research highlights these implications (for example, see Fischer et al. 2005 and Rosegrant et al. 2013), as shown in the bottom boxes in figure 4.1. In what follows, we first examine the extent to which water scarcity and changes in crop yields because of climate change may individually and jointly affect the economy of Morocco in terms of a medium-run time horizon. 16 Water Scarcity in Morocco Chapter 5 Examined Scenarios The existing literature confirms that Morocco has shifted toward warmer and drier climates in the ­ l. 2008; Brahim et a twentieth century (Born et a ). Temperature is expected to increase and pre- ­ l. 2017­ cipitation is expected to drop in the future in Morocco (Born et ­al. 2008; Brahim et ­al. 2017; McSweeney, al. 2012­ New, and Lizcano 2009; Ouraich 2010; Rochdane et ­ ). The extent to which rainfall is expected to ­ orizons. Ouraich (2010) concluded decrease in the country varies across climate scenarios and time h that scenarios developed by the Intergovernmental Panel on Climate Change (IPCC) projected that rain- fall will drop by 20 percent until 2050 and then decrease by more than 40 ­ percent. In line with this conclusion, the United Nations Development Program projected that rainfall will drop by 15 to percent in the ­ 25 ­ future. Because the intensity of reduction in water supply and its time horizon are uncertain, we begin our analyses with four scenarios that show impacts of reductions in water supply increments. We refer to these simulations as S1 to S4. from 10 to 25 percent with 5 percent ­ The existing literature confirms that climate change will affect crop yields across the world mainly ­ emperature. However, the impacts of climate change on crop yields vary by region through changes in t crop. In a seminal work, Rosenzweig et a and ­ ­ l. (2014) have shown that some regions or crops will gain from climate change and some will ­suffer. These authors have evaluated the impacts of climate change on crop yields for a range of climate scenarios and several general circulation models (GCMs) and crop resolution. In a research project developed for the models on the global scale at 0.5 by 0.5 degree ­ World Bank, Ouraich (2010) used the same source of data and summarized the existing projections for Morocco. This author concluded that yields for rainfed crops produced in Morocco on average will ­ drop by 15 percent until 2050. However, yields will increase for irrigated crops by 5 percent on ­average. We use these results and imposed exogenous shocks in productivity of the corresponding crops to ­ orocco. We examined these experiments reflect changes in crop yields because of climate change for M in combination with water scarcity cases (that is, cases S1 to S4­ ). Hence, the second set of simulations change. We refer to these represent impacts of water scarcity plus yield changes induced by climate ­ simulations as SC1 to SC4. ­ UE. Using advanced irrigation technologies One option for dealing with water scarcity is to improve W (for example, sprinkler and drip irrigation) is a common approach to reduce water used in irrigation ). All other things being equal, an (Schoengold and Zilberman 2007; Zilberman, Zhao, and Heiman 2012­ improvement in WUE because of advanced irrigation technologies could save water on existing ­ land. The saved water could be used to expand irrigated area, allocate water to noncrop activities, or allocate water to conservation ­ goals. However, an improvement in WUE may generate some rebound effect in water consumption, which may lead to expansion in water consumption (Li and Zhao 2018; Pfeiffer and ). Lin 2014; Ward and Pulido-Velazquez 2008­ The National Irrigation Water Saving Program (known as PNEEI) implemented by the government of Morocco supports farmers to install advanced irrigation technologies in the country (African ). This program is expected to significantly improve WUE in Development Bank 2016; Berrada 2009­ Water Scarcity in Morocco 17 Morocco. The goal of this program is to reduce the share of flood irrigation in total irrigated irrigation in ­ land from 81 to 43 percent by installing advanced irrigation technologies (sprinkler and drip irrigation) ). This will improve water WUE of irrigation in on about 555,000 hectares of irrigated land (Berrada 2009­ ­ ercent. To examine the extent to which this program Morocco from 37 to 57 percent, an increase of 20 p can eliminate the adverse impacts of water scarcity and climate change we imposed a 20 percent ­ ectors. We added this shock onto the improvement in productivity of water used in irrigated crop s ­ hange. Henceforth, we refer to shocks for water scarcity and changes in crop yields because of climate c these cases as SC1-W20 to SC4-W20. Although the PNEEI program plans to achieve 20 percent improvement in WUE, it may only partially achieve this goal, because improvements in upstream irrigated areas may reduce available water for areas. In addition, although the program tends to improve WUE on the farm irrigation in downstream ­ level, water losses in transition lines and canals may drop over time, which may eliminate a portion of ­ arms. Therefore, we repeated the WUE simulations with a 10 percent i the saved water on f ­ mprovement. We refer to this simulation as SC1-W10 to SC4-W10. change. In all simulations introduced so far, we assumed water supply will drop because of climate ­ When the total supply of water is fixed or declining, at the national level, an expansion in WUE will not consumption. However, in the real world, although rainfall drops generate a rebound effect in water ­ over time, which limits available surface water, crop producers may shift toward underground water to reduce the severity of water scarcity in ­Morocco. If that happened on a large scale, then an improvement irrigation. To examine the in WUE may generate some rebound effect in consumption of water for ­ potential for a rebound effect in consumption of water in irrigation, we developed a set of simulations ­ UE. In these simulations, we first that allow water supply to change in response to improvements W ­ ncrements. We call examined improvements in WUE at different rates: from 5 to 20 percent by 5 percent i these cases R1 to R4. Then, we assumed that productivity of rainfed crops versus irrigated crops will drop by 5 percent to examine the potential impacts of changes in crop yields induced by climate change effect. We refer to these cases as RC1 to RC4. on demand for water and rebound ­ To reflect rigidities in allocation of water across uses, a tiny amount of water transformation elasticity (close to zero) is applied to limit movement of water between irrigation and other uses in all examined simulations. In addition, we applied tiny substitution elasticities among primary inputs in crop ­ sectors in this set of simulations to represent limited mitigation options and endogenous technological ­ run. In these simulations, we also assumed unemployment in progress in crop production in the short ­ markets for unskilled and skilled labor and capital to take into account that a major shortfall in water supply could lead to unemployment in markets for capital and labor, which generates idled capacities activities.1 in agricultural and nonagricultural ­ As mentioned previously, in all simulations introduced earlier, we used limited substitution elastici- ties among primary inputs in crop sectors and assumed no water movement between irrigation and activities. We changed this setup in a simulation that allows water to move between irrigation and other ­ inputs. We examine this other uses and makes it possible to substitute water-land with other primary ­ case with a 25 percent reduction in water supply combined with changes in crop yields, as explained for -Flexible. the case of SC4. We refer to the last simulation as SC4­ 18 Water Scarcity in Morocco Note 1. A major reduction in water supply simply idles a portion of infrastructure. With reduction in available water, dams may not operate at full capacity; water infrastructure (canals, pipelines, pumps) became idled or partially idled; agricultural equipment, facilities, and machinery became useless; households leave rural areas and rural houses and roads became fully or partially idled; and many more. One can consider all of these as unemployment in capital market. Water Scarcity in Morocco 19 Chapter 6 Simulation Results sections. The first section examines the cases with In what follows, we present the results in three ­ reduction in water supply in the absence or presence of changes in crop yields (that is, S1 to S2 and SC1 ). This section also covers the cases that examine improvements in WUE when water supply is to SC4­ ). The decreasing and crop yields are changing (that is, SC1-W20 to SC4-W20 and SC1-W10 to SC1-W10­ ­ ecreasing. The second section covers common theme among all of these cases is that water supply is d the cases that explore potentials for rebound effect in water consumption because of WUE (that is, ). In these cases, supply of water can respond to ­ cases R1 to R4 and RC1 to RC4­ WUE. Finally, the third section provides the results that allow movement of water between irrigation and non-irrigation uses and take into account substitution among primary inputs in crop production in the long r ­ un. Results when Water Supply Is Decreasing variables. In what follows, we only review The results of the examined cases provide changes in many ­ changes in the following: GDP, share of agriculture in the GDP, employment (skilled and unskilled labor), ­ rices. irrigated and rainfed harvested area, and indexes of consumer and producer p Impacts on the GDP Table 6.1 shows the impacts of water scarcity on the GDP for the water scarcity cases (that is, S1 to S4) and for the cases that take into account water scarcity combined with changes in crop yields induced ). As shown in table 6.1, a 10 percent reduction in water supply by climate change (that is, SC1 to SC4­ percent. This is equal to a reduction in the GDP by $1.994 reduces the GDP at constant prices by 1.9 ­ million at 2016 constant ­prices. In a comparative static framework, this change represents a permanent ­ aseline. All other things being equal, this means that a reduction in the GDP compared with the b reduction in water supply by 10 percent drops the GDP of Morocco to a lower level, with an annual ­ illion. After that, water scarcity reduces the GDP at a relatively constant opportunity cost of $1.994 m ­ ercent. With a 25 percent reduction rate as the rate of reduction in water supply grows from 10 to 25 p in water scarcity, GDP drops by 5.3 percent compared with the base, or about $5.504 million at constant year. prices of 2016 per ­ TABLE 6.1. Changes in Real GDP Due to Reductions in Water Supply with and without Crop Yield Changes because of Climate Change Reduction in water supply (%) Examined variable Examined case 10 15 20 25 Percent change in real GDP S1 to S4 −1.9 −3.0 −4.1 −5.3 SC1 to SC4 −4.3 −4.8 −5.5 −6.5 Change in real GDP (US$, millions) S1 to S4 −1.994 −3.095 −4.266 −5.504 SC1 to SC4 −4.438 −4.989 −5.746 −6.736 Water Scarcity in Morocco 21 TABLE 6.2. Changes in Real GDP Due to Reductions in Water Supply with and without Crop Yield Changes and with Improvements in WUE Reduction in water supply Examined variable Examined case 10% 15% 20% 25% Percent change in real SC1-W20 to SC4-W20 −3.8 −4.0 −4.3 −4.8 GDP SC1-W10 to SC4-W10 −3.9 −4.2 −4.7 −5.4 Change in real GDP SC1-W20 to SC4-W20 −3.911 −4.118 −4.448 −4.952 (US$, millions) SC1-W10 to SC4-W10 −4.045 −4.390 −4.902 −5.634 GDP. In a typical drought These results do not represent the temporary impacts of a drought on the ­ year, the economy loses a portion of its agricultural products temporally with a major shock in crop prices. After that, production returns to its usual condition and crop prices ­ ­ drop. However, a permanent reduction in water resources could harm the capacity of food production and reduce the national income frame. in a medium- to long-run time ­ When we bring the impacts of climate change on crop yields into the picture (in cases SC1 to SC4), GDP drops more compared with S1 to S4, as shown in table 6.1. In the presence of climate change, a 10 percent reduction in water supply drops the GDP by 4.3 ­percent. With a 25 percent reduction in water supply, the ­ ercent. This is an reduction in the GDP at constant prices in the presence of climate change is about 6.5 p ­ rices. approximately $6.736 million reduction in the GDP per year at 2016 constant p results. Table 6.2 shows the changes in the We now examine the extent to which WUE can affect the ­ GDP for the scenarios in which we impose 20 and 10 percent improvements in WUE on the top of the yields. The first two rows of table 6.2 show the percent changes in shocks to the water supply and crop ­ the GDP for the 20 and 10 percent improvements in ­WUE. These results can be compared with the results presented in the second row of table 6.1. This comparison reveals three important findings: (1) an improvement in WUE could eliminate a por- tion of the negative impacts of water scarcity and climate change on the GDP; (2) the higher the rate of improvement in WUE, the higher the benefits; and (3) the benefits of WUE increase at an increasing rate grows. The first two findings are ­ as the rate of water scarcity ­ straightforward. Figure 6.1 represents the third finding and compares the second row of table 6.1 (results for cases SC1 to SC4) with the first row of ). table 6.2 (results for cases SC1-W20 to SC2-W20­ Figure 6.1 shows that at higher rates of reduction in water supply, the improvement in WUE is more ­ DP. The monetary contributions of the 20 percent improve- effective in preserving the change in the G ment in WUE at 10 and 25 percent reductions in water supply are about $527 million and $1.758 million, ­ respectively. If the PNEEI program leads to a 10 percent improvement in WUE, then its annual benefits will drop to $393 million and $1.103 million for the 10 and 25 percent reductions in water supply, ­respectively. Impacts on the Share of Agriculture in the GDP Reduction in water supply and changes in crop yields negatively affect agricultural and nonagricultural ­activities. However, agricultural activities suffer more; therefore, their share in the GDP ­drops. Figure 6.2 represents the share of agricultural activities in the GDP for two sets of simulations: reduction in water 22 Water Scarcity in Morocco supply at different rates (cases S1 to S4, red bars in figure 6.2) and reduction in water supply combined with the changes in crop yields because of climate change (cases SC1 to SC4,: blue bars in ­ figure 6.2­). ­ ncreases. Figure 6.2 shows that the share of agriculture in the GDP drops as the level of water scarcity i The share of agriculture in the GDP drops from about 13 percent in the base to nearly 11 percent for the supply. However, when the reduction in water supply is combined case of 25 percent reduction in water ­ with the changes in crop yields, the share of the GDP drops to nearly 10.5 percent, regardless of the level FIGURE 6.1. Changes in GDP at Constant Prices with and without WUE 0 -1 -2 Percent change -3 -4 -5 -6 -7 10 15 20 25 Rate of reduction in water supply (%) Cases with water scarcity and yield change with no improvements in WUE Cases with water scarcity and yield change with 20% improvements in WUE FIGURE 6.2. Share of Agriculture in GDP, S1 to S4 and SC1 to SC4 13.0 12.5 12.0 Percent 11.5 11.0 10.5 10.0 Base 10 15 20 25 Rate of reduction in water supply Reduction in water supply only: Cases S1 to S4 Reduction in water supply plus changes in crop yields: Cases SC1 to SC4 Water Scarcity in Morocco 23 ­ carcity. A reduction in water supply negatively affects irrigated crops, but climate change of water s yields. Therefore, the overall negative impact of improves irrigated crop yields and reduces rainfed crop ­ alone. these two forces on the agricultural activities is stronger than the impacts of water scarcity ­ However, the combination of these two factors pushes water and land resources toward more produc- tive crops at higher rates of reduction in water supply, which smooths out the share of agriculture in the GDP as the economy moves from a 10 percent reduction in water supply toward a 25 percent r ­ eduction. Our test simulations (not included in this report) show that if the reduction in water supply goes beyond ­ ore. 25 percent, the share of agriculture in the GDP begins to drop m The bottom line is that agricultural activities in Morocco are faced with two forces: reduction in water change. At lower levels of water scarcity, supply and losing yield on rainfed land because of climate ­ moving water and land toward more valuable and productive crops with a lower rate of water require- ­ hange. However, as the economy moves ment can partially eliminate some adverse impacts of climate c ­ vailable. to higher rates of reduction in water supply, the mitigation options become less a Impacts on Demand for Labor Nearly 40 percent of the labor force of Morocco works in agriculture, and the unemployment rate is high ). Here, we examine for unskilled and skilled labor (Danish Trade Union 2015; Ghanem 2015; HCP 2016­ the changes in demand for unskilled and skilled labor for the examined cases in this section, as pre- sented in tables 6.3 and 6.4. In general, reductions in agricultural activities induced by water scarcity and climate change reduce demand for unskilled and skilled labor in agricultural and in nonagricultural ­activities. From the results provided in table 6.3, the following deductions can be made for unskilled labor: •• Reduction in water supply reduces demand for unskilled labor in agriculture, from −3.1 for a 10 per- ­ upply. cent reduction in water supply to −8.4 for a 25 percent reduction in water s TABLE 6.3. Changes in Demand for Unskilled Labor under Alternative Scenarios Reduction in water supply Examined variable Examined case 10% 15% 20% 25% Changes in demand for unskilled S1 to S4 −3.1 −4.8 −6.6 −8.4 labor in agricultural activities (%) SC1 to SC4 −7.3 −7.8 −8.6 −9.7 SC1-W20 to SC4-W20 −7.4 −7.3 −7.4 −7.7 SC1-W10 to SC4-W10 −7.2 −7.3 −7.7 −8.4 Changes in demand for unskilled S1 to S4 −1.9 −3.0 −4.1 −5.3 labor in nonagricultural activities SC1 to SC4 −4.0 −4.6 −5.3 −6.3 (%) SC1-W20 to SC4-W20 −3.5 −3.7 −4.0 −4.5 SC1-W10 to SC4-W10 −3.6 −4.0 −4.5 −5.2 Changes in demand for unskilled S1 to S4 −2.2 −3.4 −4.6 −6.0 labor in all economic activities (%) SC1 to SC4 −4.7 −5.2 −6.0 −7.0 SC1-W20 to SC4-W20 −4.3 −4.4 −4.7 −5.2 SC1-W10 to SC4-W10 −4.3 −4.6 −5.1 −5.9 24 Water Scarcity in Morocco •• Adding changes in crop yields extends the rate of reduction in demand for unskilled labor in agricul- activities. For example, in this case, the rate of reduction is about −9.7 percent for a 25 percent tural ­ supply. reduction in water ­ •• Improvements in WUE only partially eliminate some adverse impacts of the joint forces of water scar- city and changes in crop ­yields. This means that WUE alone may not effectively improve ­employment. •• Under alternative cases, the rates of reduction in demand for unskilled labor in nonagricultural activ- agriculture. ities are usually smaller than their rates for ­ •• Finally, water scarcity and climate change jointly drop demand for unskilled labor in Morocco at con- rates. For example, a 25 percent reduction in water supply and changes in crop yields jointly siderable ­ percent. drop Morocco’s demand for unskilled labor by −7 ­ From the results provided in table 6.4, the following deductions can be made for skilled labor: •• Reduction in water supply reduces demand for skilled labor in agriculture, from about −2.2 percent ­ upply. for a 10 percent reduction in water supply to −6.0 percent for a 25 percent reduction in water s ­ ne-third. These figures are smaller than those for unskilled labor by about o •• Adding changes in crop yields extends the rate of reduction in demand for skilled labor in agricultural activities. For example, in this case, the rate of reduction is about −6.4 percent for a 25 percent reduc- ­ supply. Again, this figure is smaller than its unskilled labor counterpart by o tion in water ­ ­ ne-third. •• Similar to the case of unskilled labor, improvements in WUE only partially eliminate some adverse ­abor. However, impacts of the joint forces of water scarcity and changes in crop yields on skilled l compared with the case of unskilled labor, improvements in WUE provide more job opportunities for activities. skilled labor in agricultural ­ TABLE 6.4. Changes in Demand for Skilled Labor under Alternative Scenarios Reduction in water supply Examined variable Examined case 10% 15% 20% 25% Changes in demand for skilled S1 to S4 −2.2 −3.4 −4.6 −6.0 labor in agricultural activities (%) SC1 to SC4 −4.5 −5.0 −5.8 −6.8 SC1-W20 to SC4-W20 −4.2 −4.3 −4.5 −5.0 SC1-W10 to SC4-W10 −4.2 −4.5 −4.9 −5.6 Changes in demand for skilled S1 to S4 −2.0 −3.0 −4.2 −5.4 labor in nonagricultural activities SC1 to SC4 −4.1 −4.7 −5.5 −6.4 (%) SC1-W20 to SC4-W20 −3.6 −3.8 −4.2 −4.7 SC1-W10 to SC4-W10 −3.7 −4.1 −4.6 −5.4 Changes in demand for skilled S1 to S4 −2.0 −3.0 −4.2 −5.4 labor in all economic activities (%) SC1 to SC4 −4.2 −4.7 −5.5 −6.5 SC1-W20 to SC4-W20 −3.6 −3.8 −4.2 −4.7 SC1-W10 to SC4-W10 −3.8 −4.1 −4.6 −5.4 Water Scarcity in Morocco 25 •• Similar to the case of unskilled labor, under alternative cases, the rates of reduction in demand for ­ griculture. However, skilled labor in nonagricultural activities are usually smaller than their rates for a the gap between the rates for agricultural and nonagricultural activities for skilled labor are smaller cases. under all examined ­ moderately. For •• Finally, water scarcity and climate change jointly drop demand for skilled labor ­ example, a 25 percent reduction in water supply in combination with changes in crop yields drops ­ ercent. This is smaller than the 7 percent rate for unskilled Morocco’s demand for skilled labor by −6.5 p ­labor. Figure 6.3 summarizes the joint impacts of a reduction in water supply by 25 percent and changes crop yields induced by climate change (case SC4) for skilled labor, unskilled labor, and their total for agricul- activities. Given that, currently, the economy of Morocco is suffering from a tural and nonagricultural ­ significant rate of unemployment, reduction in water supply and changes in crop yields because of cli- considerably. mate change are expected to worsen the rate of unemployment ­ In addition, the impacts of a temporary interruption in production of agricultural products on the labor market (for example, because of a drought) could be different from the impacts of permanent capacities. For a short-term interruption, an agricultural producer losses in agricultural production ­ may temporarily adjust demand for labor, which may lead to a higher unemployment rate in agriculture period. However, permanent reductions in water supply or crop yields because of climate for a short ­ variables will shrink job opportunities in agricultural activities and perhaps expand migration to urban ­areas. FIGURE 6.3. Impacts of a 25 Percent Reduction in Water Supply with Crop Yield Changes on Labor Demand, SC4 -5 -6 -7 Percent -8 -9 -10 Agriculture Non-Agriculture Total Activities Unskilled labor Skilled labor Total 26 Water Scarcity in Morocco Impact on Capital Permanent reductions in water supply could make a portion of exiting capital (representing private and public infrastructure, machinery, and durable equipment) idle in both agricultural and nonagri- activities. Permanent reductions may also shift investment from agricultural to nonagricul- cultural ­ activities. When water supply and crop yields drop, the existing capital in agriculture will not tural ­ c apacity. Then, with lower production of agricultural products, nonagricultural activi- operate at full ­ ties that have forward and backward linkages with agricultural activities will not operate at full c apacity. This creates idled capacity across the economy, at least in a medium-run time h ­ ­ orizon. Figure 6.4 represents impacts of water scarcity in combination with changes in crop yields induced by ­ xperiments. From the results shown in Figure 6.4, the following deduc- climate change for SC1 to SC4 e tions can be made: •• Demand for capital in agricultural activities decreases as the level of water scarcity increases in agri- cultural activities, from about −6.8 percent with a 10.0 percent reduction in water supply to −9.0 percent with a 25.0 percent reduction in water ­ supply. ­ griculture. •• Demand for capital in nonagricultural activities drops, but at a lower rate compared with a •• At the national level, demand for capital drops from −4.2 percent with a 10.0 percent reduction in supply. water supply to −6.4 percent for a 25.0 percent reduction in water ­ horizon. For example, Investment in WUE can partially restore idled capacities in a medium-run time ­ with a 25.0 percent reduction in water supply in the presence of yield changes because of climate change, a 20.0 percent improvement in WUE changes the rate of idled capacity from −9.0 to −7.9 percent in ­agricultural ­activities. FIGURE 6.4. Impacts of 25 Percent Reduction in Water Supply with Crop Yield Changes on Capital Demand, SC1 to SC4 0 Percent reduction in capital -2 -4 -6 -8 -10 10 15 20 25 Percent reduction in water supply (%) Agriculture Non-Agriculture Total Water Scarcity in Morocco 27 The long-run implications of climate change on idled capacity, and employment, could be different term. In the long run, climate conditions may ­ from those in the medium ­ worsen. However, economies may find more options to mitigate impacts of climate change, alter their production technology, and pattern. change their water use ­ Impacts on Harvested Area cases. First, The changes in irrigated and rainfed harvested areas vary significantly across examined ­ consider the obtained changes in irrigated and harvested areas when water supply drops in the absence of changes in crop yields induced by climate change (that is, cases C1 to C4) in figure 6.5. In these cases, the harvested area of irrigated crops decreases, whereas the harvested area of rainfed increases. All other things being equal, the lower the amount of water for irrigation, the smaller crops ­ ­ rea. In this case, a portion of irrigated area becomes r the irrigated a ­ ainfed. In addition, rainfed crops have lower yields compared with their irrigated counterparts, which could induce some deforestation in expanded. areas where rainfed cropping can be ­ The results change when we bring the changes in crop yields induced by climate change into the pic- ture (that is, cases SC1 to SC4), as presented in figure 6.2. In these cases, climate change promotes yields ­ rops. This alters the profitability of crop production of irrigated crops and diminishes yields of rainfed c in favor of irrigated crops and changes the mix of crops toward more valuable, more productive, and less crops. This alteration generates a rebound effect in the irrigated area and expands it, water-intensive ­ particularly at lower levels of reductions in water supply, as shown in figure 6.6. As the level of reduction in water supply increases, the rate of the rebound effect in the irrigated area and the total harvested area drop. per se ­ ­ nalysis. An improvement in WUE (pro- We now bring the impacts of improvements in WUE into our a ducing more crops per drop of water) allows an expansion in irrigated a ­ rea. Figure 6.7 compares changes in irrigated area for SC1 to SC4 cases with their corresponding simulations, including a 20 percent FIGURE 6.5. Changes in Irrigated and Rainfed Harvested Area, S1 to S4 850 650 Thousand hecatres 450 250 50 -150 -350 10 15 20 25 Rate of reduction in water supply (%) Irrigated area Rainfed area 28 Water Scarcity in Morocco FIGURE 6.6. Changes in Irrigated and Rainfed Harvested Area, SC1 to SC4 1,000 Thousand hecatres 500 0 -500 -1,000 10 15 20 25 Rate of reduction in water supply (%) Irrigated area Rainfed area FIGURE 6.7. Changes in Irrigated Area, SC1 to SC4 and SC1-W20 to SC4-W20 1,800 1,300 Thousand hecatres 800 300 -200 10 15 20 25 Rate of reduction in water supply (%) Irrigated area with no improvements in WUE Irrigated area with 20% improvements in WUE WUE. It shows that in both cases, the change in irrigated area declines as the rate of improvement in ­ grows. However, with a 20 percent improvement in WUE, the changes in irri- reduction in water supply ­ larger. gated area are ­ In contrast, with improvements in WUE, we expect more reduction in rainfed area, as demonstrated in figure 6.8. These results indicate that an improvement in WUE has the potential to expand irrigated ­ rea. However, the expansion and reduction vary by the rate of reduction in area and reduce rainfed a water ­supply. Water Scarcity in Morocco 29 Reduction in water supply and changes in crop yields because of climate change jointly alter the crop shares in the total harvested area, as indicated in figure 6.9. These joint drivers drop the share of wheat ­ ruits. in the total harvested area and elevate the shares of coarse grains, oilseeds, and vegetables and f change. The expan- The share of wheat drops because of lower productivity in the presence of climate ­ sion of the share of vegetables and fruits help the agricultural sector of Morocco to compensate for a portion of the losses in revenues from wheat production, because vegetables and fruits are usually ­ heat. This also helps Morocco to maintain its revenue stream higher-priced crops compared with w ­ eport. obtained from exports of vegetables and fruits, as discussed later in this r FIGURE 6.8. Changes in Rainfed Area, SC1 to SC4 and SC1-W20 to SC4-W20 200 -300 Thousand hecatres -800 -1,300 -1,800 10 15 20 25 Rate of reduction in water supply (%) Rainfed area with no improvements in WUE Rainfed area with 20% improvements in WUE FIGURE 6.9. Crop Shares in Total Harvested Area, Base Data versus SC4 45 40 35 30 25 Percent 20 15 10 5 0 Wheat Coarse grains Oil Seeds Vegetable and fruits Crop Base year 25% reduction in water supply with yield changes 30 Water Scarcity in Morocco Impacts on Crop Prices Changes in crop prices measured with producer and consumer price indexes for all examined cases are presented in table 6.5. From table 6.5, the following deductions can be made: •• Reduction in water supply increases crop prices; the greater the reduction in water supply, the higher prices. With a 25 percent reduction in water supply, the producer and consumer price indexes the crop ­ ­ rices. grow by 10.3 and 5.7 percent, respectively, when we ignore the impacts of climate change on crop p •• Climate change, which will penalize rainfed crops, extends the price impacts s ­ harply. Taking into account these impacts, with a 25 percent reduction in water supply, the producer and consumer price respectively. indexes grow by 15.9 and 8.7 percent, ­ •• Improvements in WUE partially eliminate a small portion of price ­ increases. This occurs because ­ rices. Reductions in crop yields because of water scarcity is not the only sources of increase in crop p contribute. climate change also ­ •• Compared with the producer price index, the consumer price index grows at a lower rate because consumers use imported products ­ too. Although water scarcity and yield changes jointly increase all crop prices, the price impacts vary crops. For instance, these factors jointly increase the producer prices of wheat, coarse grains, across ­ respectively. These figures indi- oilseeds, and vegetables and fruits by 11.5, 13.6, 20.1, and 15.9 percent, ­ cate that the price increases are expected to be smaller for wheat and coarse grains compared with the price increases for oilseeds and vegetables and f ­ ruits. This can be explained partially by the crop trade Morocco. The country basically imports wheat and coarse grains, exports vegetables and pattern of ­ oilseeds. Morocco is expected to import more wheat and coarse grains fruits, and has no major trade for ­ crops. This helps to miti- from the world market because of water scarcity and losses in yields of these ­ ­ rops. The price increases for oilseeds will be sharper, because oilseeds gate the price impacts for these c ­ attern. For vegetables (including tomatoes, will be produced domestically, continuing the existing p strawberries, and other berries) and fruits, the price impacts are expected to be strong as a portion of countries. these crops exported to other ­ TABLE 6.5. Changes in Producer and Consumer Prices for Crops under Alternative Scenarios Reduction in water supply Examined variable Examined case 10% 15% 20% 25% Changes in crops, producer price S1 to S4 3.5 5.6 7.8 10.3 index (%) SC1 to SC4 11.7 12.7 14.1 15.9 SC1-W20 to SC4-W20 10.3 10.6 11.1 12.0 SC1-W10 to SC4-W10 10.8 11.3 12.2 13.5 Changes in crops, consumer price S1 to S4 2.0 3.1 4.4 5.7 index (%) SC1 to SC4 6.5 7.0 7.7 8.7 SC1-W20 to SC4-W20 5.8 5.9 6.2 6.6 SC1-W10 to SC4-W10 6.0 6.3 6.8 7.4 Water Scarcity in Morocco 31 Impact on Trade Balance of Food Products Changes in the net trade of food products (including all crops, livestock, and processed food) for all examined cases are presented in table 6.6. From table 6.6, the following deductions can be made: •• Reduction in water supply reduces the net exports of food items; the greater the reduction in water exports. With a 25 percent reduction in water supply, net supply, the larger the reduction in net ­ exports drop by $611 million per year at 2016 prices when we ignore the impacts of climate change on net ­exports. exports. Taking into account •• Climate change, which will negatively affect rainfed crops, reduces net ­ these impacts, with a 25 percent reduction in water supply, the net exports are expected to drop by prices. $891 million per year at 2016 ­ •• Improvements in WUE partially eliminate a small portion of the reduction in net exports of food ­items. In short, as production of agriculture drops, Morocco is expected to export less and import more to and from other ­ countries. Although water scarcity and yield changes jointly decrease the net exports of all agricultural and food products of Morocco, a large portion of this reduction (more than 50 percent across the examined cases) fruits. This is because these crops are the main exporting crops of Morocco and falls on vegetables and ­ they jointly consume a large portion of water for irrigation, particularly underground ­water. These crops may gain yield because of CO2 ­concentration. Impacts on Terms of Trade As explained earlier in this paper, reduction in water supply and changes in crop yields because of cli- prices. In this section, we mate change could significantly increase Morocco’s agricultural and food ­ trade. As shown in table 6.7, examine the extent to which these price changes could affect the terms of ­ ­ lightly. For example, with a 25 under all examined cases, the terms of trade alter in favor of Morocco s percent reduction in water supply in the presence of changes in crop yields, the terms of trade increase by 1.5 percent in favor of ­Morocco. This slight increase indicates that Morocco could transfer a portion of horizon. This increases in its agricultural and food products to its trade partners in a medium-run time ­ observation could be explained by Morocco basically exporting high-quality vegetables and fruits and countries. The customers of these some food products to other countries, particularly European ­ TABLE 6.6. Changes in Trade Balance of Food Items under Alternative Scenarios Reduction in water supply Examined variable Examined case 10% 15% 20% 25% Changes in trade balance of food S1 to S4 −223 −345 −475 −611 (US$, millions) SC1 to SC4 −679 −728 −797 −891 SC1-W20 to SC4-W20 −612 −627 −651 −692 SC1-W10 to SC4-W10 −633 −661 −704 −768 food. Note: Food items include crops, livestock, and processed ­ 32 Water Scarcity in Morocco TABLE 6.7. Changes in Terms of Trade under Alternative Scenarios Reduction in water supply Examined variable Examined case 10% 15% 20% 25% Changes in terms of trade (%) S1 to S4 0.4 0.7 0.9 1.2 SC1 to SC4 0.9 1.1 1.2 1.5 SC1-W20 to SC4-W20 0.8 0.9 0.9 1.1 SC1-W10 to SC4-W10 0.8 0.9 1.0 1.2 FIGURE 6.10. Changes in Incomes of Primary Factors of Production with 25 Percent Reduction in Water Supply and Crop Yield Changes 600 400 200 0 200 Million US$ -400 -600 -800 -1,000 -1,200 -1,400 Land and Unskilled Skilled labor Capital water labor Primary factors products could pay higher prices for their imports from Morocco in a medium-run time ­frame. However, this setup could change in a long-run time frame if the importing countries shift to other producers of these ­products. Impacts on Incomes of Primary Sources As discussed previously, reduction in water supply and changes in crop yields jointly reduce demand for capital. However, these forces lead to reduction in water supply and unskilled labor, skilled labor, and ­ retirement. Here we examine the extent to which these changes affect the incomes of these pri- land ­ mary factors of production, as shown in figure 6.10. Figure 6.10 shows that a 25 percent reduction in water supply in combination with changes in crop yields improves the incomes of owners of land and ­ ear. This is because of increases in values water by about $514 million per year compared with the base y water. With a reduction in water supply, a portion of irrigated land may be retired of irrigated land and ­ Water Scarcity in Morocco 33 ­and. However, the value of the land that will remain under irrigation will or transferred to rainfed l increase. In addition, the value of water will ­ ­ increase. The overall changes constitute a net benefit for general. However, some owners of these resources will lose the owners of land and water resources in ­ win. and some will ­ Figure 6.10 shows that skilled and unskilled labor are the main losers, with reduction in incomes by ­ espectively. The owners of capital resources also lose, with $1.380 million and $1.136 million per year, r year. These figures indicate that labors are the main ­ reduction in income by $1.390 million per ­ losers. Given that a large portion of these losses will occur in rural areas where agricultural production take place, rural areas will suffer the most from reductions in water supply and changes in crop yields induced change. by climate ­ Rebound Effect in Water Consumption To examine the extent to which WUE generates a rebound effect in water consumption, here we assume water. As mentioned previously, we developed that supply of water responds to changes in demand for ­ four simulations for improvements in WUE, from 5 to 20 percent by 5 percent increments, in the absence ). If there is of changes in crop yields (cases R1 to R4) and with changes in crop yields (cases RC1 to RC4­ rate. For no rebound effect, an improvement in WUE should reduce water consumption at same the ­ ­ ercent. If demand for example, a 5 percent improvement in WUE should drop demand for water by 5 p ­ onsumption. water did not drop or increased, then that shows some rebound effect in water c cases. Table 6.8 indicates that in the absence of changes Table 6.8 shows the results for the examined ­ percent. This in rainfed crop yields, a 5 percent improvement in WUE reduces demand for water by 3.5 ­ ­ onsumption. This figure means a rebound effect of 1.5 percent (equal to 5.0 minus 3.5 percent) in water c WUE. Hence, in these cases an improvement increases to 7.5 percent with a 20 percent improvement in ­ ­ UE. in WUE generate some saving in water consumption but at a rate less than the change in W When we take into account that climate change will punish rainfed crops, which generates additional water. In this case, an demand for irrigation, an improvement in WUE does not lead to savings in ­ water. For example, as shown in table 6.8, a 5 improvement in WUE generates additional demand for ­ ­ ercent. This means a rebound effect percent improvement in WUE increases demand for water by 4.1 p ­ onsumption. The corresponding figure for a 20 of 9.1 percent (equal to 5.0 plus 4.1 percent) in water c percent. percent improvement in WUE is about 17.0 ­ TABLE 6.8. Potential Rebound Effect in Water Consumption Rate of improvement in WUE Examined case Examined variable 5% 10% 15% 20% Only WUE: R1 to R4 Change in demand for water (%) −3.5 −6.7 −9.7 −12.5 Rebound effect (%) 1.5 3.3 5.3 7.5 WUE and changes in crop Change in demand for water (%) 4.1 1.4 −0.9 −3.0 yields: RC1 to RC4 Rebound effect (%) 9.1 11.4 14.1 17.0 34 Water Scarcity in Morocco FIGURE 6.11. Impacts of Flexibility in Model Parameters on Simulation Results 16 Percent change 11 6 1 -4 -9 GDP Unskilled labor Producer price Case: SC4 Case: SC4- exible Hence, if water supply can increase, climate change that will drop yields for rainfed crops could extend demand for irrigation, which leads to more water withdrawal, at least in the short run, in the absence of ­ ater. regulation on water withdrawal from underground resources or even from surface w Flexibility in Water Use and More Substitution among Inputs Finally, consider a case in which we allow water to move between agricultural and nonagricultural uses and we take into account that in the long run, more substitutions occur among primary production ­ factors. In this case, we repeat the case of RC4 (25 percent reduction in water supply with changes in crop yields), we assume water can move between agricultural and nonagricultural uses at a transforma- tion rate of 0.5 (instead of nearly zero), and we use the GTAP long-run standard substitution elasticities among primary inputs in crop ­ production. As mentioned previously, we refer to this case as RC4­-Flexible. Here we compare the results of SC4 with SC4-Flexible for three variables: percent change in the GDP, ­ndex. percent change in the demand for unskilled labor, and percent change in the producer price i Figure 6.11 shows that the adverse impacts of water scarcity and climate decrease as we use a set of more process. This provides two important insights: flexible parameters in our simulation ­ ­ arameters. This calls for more sensitivity analy- •• As usual, the result is sensitive to the implemented p scenarios. ses to construct confidence intervals for the examined ­ •• In the long run, with technological progress in crop production (captured by larger substitutions), the Moroccan economy may be able to mitigate more efficiently some adverse impacts of climate change scarcity. and water ­ Water Scarcity in Morocco 35 Chapter 7 Water and Businesses Finally, we turn to new evidence that shows how, and how much, water affects job growth in cities using statistical techniques (not CGE simulations). In cities, the World Bank’s business enterprise surveys (BESs)—considered the most comprehensive database on company-level inputs and outputs—are used for the analysis. Although the BES mission is in the process of collecting the next round of business data, the 2013 BES data—comprising of 187 manufacturing companies—is used to provide a retrospective look at the impacts of rainfall shocks and water supply interruptions on employment and sales. First, it was found that dry rainfall episodes significantly affect water outages faced by manufacturing compa- nies in cities. In turn, increases in the number and duration of water outages lead to lower employment growth. Experiencing one additional water outage in a typical month decreases employment growth by 2.3 percentage points, and for each additional hour that a water outage lasts, employment growth is, on average, 2.3 percentage points lower. Furthermore, there is an overall dip in the productivity of compa- nies and in business sales for companies that use water for business activities. With looming water challenges, issues of water infrastructure quality can be expected to worsen, with important implica- tions for company productivity. Water Scarcity in Morocco 37 Chapter 8 Conclusion ­ griculture. Even though agriculture normally Morocco is a country that has historically depended on a represents only about 15 percent of the GDP, close to 40 percent of employment is in agriculture or related to agriculture, so changes in agricultural output because of changes in water availability and ­ DP. The purpose of this analysis has been to examine crop yields have a pronounced impact on the G and quantify to the extent possible future impacts of changes in water availability, changes in crop yields because of climate change, and impacts of investments in improved W ­ UE. We know the directions of all changes: ­ •• Reduced water supply leads to a lower ­ GDP. •• Impacts of climate change on crop yields result in a lower ­ GDP. •• Increased water efficiency results in an increase in the ­ GDP. Thus, the value added in this analysis quantifies the magnitudes of the impacts of some of these changes and explores how these key drivers interact when simulated t ­ ogether. Morocco is expected face a major water shortfall and reduction in rainfed crop yields prompted by change. Reduction in available water for irrigation and lower crop yields could negatively affect climate ­ agricultural and nonagricultural activities in Morocco, which could lead to adverse economywide impacts. This research uses a CGE model, GTAP-BIO-W, to examine these i ­ ­ mpacts. This CGE model has been frequently used to examine the economywide impacts of water scarcity and climate ­ change. In this research, we developed and examined a range of alternative scenarios that portray the economy of  Morocco under different water scarcity scenarios mixed with climate impacts on crop yields and alternative sets of economic parameters that jointly govern allocation of water across u ­ ­ ses. The results obtained from these scenarios indicate the following: •• Reduction in water supply and changes in crop yields induced by climate change can jointly reduce ­ ignificantly. For instance, a 25 percent reduction in water supply in combination the GDP of Morocco s with changes in crop yields could jointly reduce the GDP of Morocco by $6.736 million per year at 2016 constant ­prices. •• The share of agriculture in the GDP of Morocco is expected to fall from 13.0 percent in 2016 to about 10.5 percent in the presence of a 25 percent reduction in water supply combined with climate impacts yields. on crop ­ •• Demand for labor, particularly in the agricultural sector, is expected to fall in response to water scarcity and changes in crop ­ ­ yields. For instance, a 25 percent reduction in water supply in combina- tion with changes in crop yields could jointly reduce the demand for unskilled labor in agricultural percent. For this case, the overall reduction in demand for labor is expected to be activities by 8.8 ­ percent. about 6.1 ­ Water Scarcity in Morocco 39 area. However, changes in crop yields •• Reduction in supply of water is expected to reduce irrigated ­ induced by climate change will encourage farmers to move toward more productive and less water-­ crops. This could prevent reduction in irrigated area to some ­ intensive ­ extent. •• Climate change would reduce yields of rainfed crops and increase yields of some irrigated crops because of CO2 ­fertilization. Thus, rainfed crops, which include staple crops such as wheat and barley, affected. Morocco would become more dependent on imports for these ­ would be more ­ commodities. •• Crop prices are expected to increase for both crop producers and ­consumers. However, crop prices are ­ onsumers. This is because Morocco will import more and expected to increase at a lower rate for c products. export less of its crop ­ ­ carcity. Additional mitigation policies are •• Improvements in WUE could eliminate impacts of water s ­ ields. needed to deal with the adverse impacts of climate change on rainfed crop y Morocco. The experiments examined in this paper indicate that in •• Improving WUE is important for ­ the presence of water scarcity and change in crop yields because of climate change, a 20 percent improvement in WUE could lead to an increase in irrigated area by 708,000 hectares, with an increase in the GDP at constant prices by $1.8 billion per year, which translates to an annual increase ­ ear. These gains are large enough to in value added of $2.602 per hectare of new irrigated land per y ­ eriod. cover the costs of investment in irrigation technologies in a short p •• In the long run, with technological progress in crop production, the Moroccan economy may be able ­ carcity. to mitigate more efficiently some adverse impacts of climate change and water s ­ olicies. The examined experiments in this paper assume no changes in agricultural and trade p ­ esults. It is important to develop experiments to examine Changes in these policies could alter the r ­ olicies. interplay among climate change, water scarcity, and changes in agricultural and trade p Currently, Morocco’s trade policies protect domestic production of several water-intensive c ­ rops. ­ rices. Removing these Morocco produces these crops at higher costs compared with world market p trade restrictions could help the agricultural sector of Morocco to move toward less water-intensive ­ roduce. and exporting crops (vegetables and fruits) that Morocco has relative advantages to p Morocco has made substantial progress over the years in moving its economy toward a market orientation. As in many countries, agriculture and food lag behind other sectors in these ­ ­ reforms. 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Heiman. 2012. “Adoption versus Adaptation, with Emphasis on Climate Change.” Annual Review of Resource Economics 4: 27–53. 42 Water Scarcity in Morocco Appendix A List of GTAP Sectors and Proposed Aggregation for Morocco Number Code Description Aggregation for Morocco 1 pdr Paddy rice Two sectors of pdr irrigated and pdr rainfed 2 wht Wheat Two sectors of wht irrigated and wht rainfed 3 gro Other grains: maize (corn), barley, rye, oats, Two sectors of gro irrigated and other cereals gro rainfed 4 osd Oilseeds: oilseeds and oleaginous fruit, Two sectors of osd irrigated and soybeans, copra osd rainfed 5 c_b Cane and beet: sugarcane, sugar beet Two sectors of c_b irrigated and c_b rainfed 6 v_f Vegetables and fruits: vegetables, fruits, nuts, Two sectors of irrigated and potatoes, cassava, truffles rainfed vegetables and two sectors of irrigated and rainfed 7 pfb Plant fibers: cotton, flax, hemp, sisal, other fruits and others raw vegetable materials used in textiles 8 ocr Other crops: live plants; cut flowers and flower buds; flower seeds and fruit seeds; vegetable seeds; beverage and spice crops; unmanufactured tobacco; cereal straw and husks, unprepared, whether chopped, ground, pressed, or in the form of pellets; swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether in the form of pellets, plants, and parts of plants used primarily in perfumery, in pharmacy, or for insecticidal, fungicidal, or similar purposes; sugar beet seed and seeds of forage plants; other raw vegetable materials 9 ctl Cattle: cattle, sheep, goats, horses, asses, Ruminant mules, hinnies, and semen thereof 10 oap Other animal products: swine, poultry, and Nonruminant other live animals; eggs in shell (fresh or cooked); natural honey; snails (fresh or preserved), except sea snails; frogs’ legs; edible products of animal origin n.e.c., hides, skins, and fur skins, raw; insect waxes and spermaceti, whether refined or colored 11 rmk Raw milk Dairy farm 12 wol Wool: wool, silk, other raw animal materials Nonruminant used in textile 13 frs Forestry: forestry, logging, related service Forestry activities table continues next page Water Scarcity in Morocco 43 Number Code Description Aggregation for Morocco 14 fsh Fishing: hunting, trapping, and game Food propagation, including related service activities; fishing; fish farms; service activities incidental to fishing 15 coa Coal: mining and agglomeration of hard coal, Coal lignite, and peat 16 oil Oil: extraction of crude petroleum and natural Oil gas (part); service activities incidental to oil and gas extraction, excluding surveying (part) 17 gas Gas: extraction of crude petroleum and natural Gas gas (part); service activities incidental to oil and gas extraction, excluding surveying (part) 18 omn Other mining: mining of metal ores, uranium, Industry and gems; other mining and quarrying 19 cmt Cattle meat: fresh or chilled meat and edible Possessed ruminant offal of cattle, sheep, goats, horses, asses, mules, and hinnies; raw fats or grease from any animal or bird 20 omt Other meat: pig meat and offal; preserves and Possessed nonruminant preparations of meat, meat offal, or blood; flours, meals, and pellets of meat or inedible meat offal; greaves 21 vol Vegetable oils: crude and refined oils of Vegetable oils soybean, maize (corn), olive, sesame, groundnut, olive, sunflower seed, safflower, cottonseed, rape, colza and canola, mustard, coconut palm, palm kernel, castor, tung jojoba, babassu, and linseed, perhaps partly or wholly hydrogenated, interesterified, reesterified, or elaidinized; margarine and similar preparations; animal or vegetable waxes; fats and oils and their fractions; cotton linters; oil cake and other solid residues resulting from the extraction of vegetable fats or oils; flours and meals of oilseeds or oleaginous fruits, except those of mustard; degras and other residues resulting from the treatment of fatty substances or animal or vegetable waxes 22 mil Milk: dairy products Possessed dairy 23 pcr Processed rice: rice, semi- or wholly milled Food 24 sgr Sugar Sugar and beverage table continues next page 44 Water Scarcity in Morocco Number Code Description Aggregation for Morocco 25 ofd Other food: prepared and preserved fish or Food vegetables; fruit juices and vegetable juices; prepared and preserved fruit and nuts; all cereal flours, groats, meal and pellets of wheat, cereal groats, and meal and pellets n.e.c.; other cereal grain products (including cornflakes); other vegetable flours and meals; mixes and doughs for the preparation of bakers’ wares, starches and starch products; sugars and sugar syrups n.e.c.; preparations used in animal feeding, bakery products, cocoa, chocolate and sugar confectionery, macaroni, noodles, couscous and similar farinaceous products, food products n.e.c. 26 b_t Beverages and tobacco products Sugar and beverage 27 tex Textiles: textiles and manmade fibers Industry 28 wap Wearing apparel: clothing, dressing, dyeing of fur 29 lea Leather: tanning and dressing of leather, luggage, handbags, saddlery, harness, footwear 30 lum Lumber: wood and products of wood and cork, except furniture; articles of straw and plaiting materials 31 ppp Paper and paper products: includes publishing, printing, and reproduction of recorded media 32 p_c Petroleum and coke: coke-oven products, refined petroleum products, processing of nuclear fuel 33 crp Chemical rubber products: basic chemicals, other chemical products, rubber and plastic products 34 nmm Nonmetallic minerals: cement, plaster, lime, gravel, concrete 35 i_s Iron and steel: basic production and casting 36 nfm Nonferrous metals: production and casting of copper, aluminum, zinc, lead, gold, and silver 37 fmp Fabricated metal products: sheet metal products, but not machinery and equipment 38 mvh Motor vehicles and parts: cars, lorries, trailers, semitrailers 39 otn Other transport equipment: manufacture of other transport equipment table continues next page Water Scarcity in Morocco 45 Number Code Description Aggregation for Morocco 40 ele Electronic equipment: office, accounting, and computing machinery; radio, television, and communication equipment and apparatus 41 ome Other machinery and equipment: electrical machinery and apparatus n.e.c.; medical, precision, and optical instruments; watches and clocks 42 omf Other manufacturing: includes recycling 43 ely Electricity: production, collection, distribution Two sectors of hydroelectricity and nonhydroelectricity 44 gdt Gas distribution: distribution of gaseous fuels Gas through mains, steam and hot water supply 45 wtr Water: collection, purification, distribution Managed water 46 cns Construction: building houses, factories, Construction offices, and roads 47 trd Trade: all retail sales; wholesale trade and Service commission trade; hotels and restaurants; repairs of motor vehicles and personal and household goods; retail sale of automotive fuel 48 otp Other transport: road, rail, pipelines, auxiliary Transportation transport activities,; travel agencies 49 wtp Water transport 50 atp Air transport 51 cmn Communications: postal communications, Service telecommunications 52 ofi Other financial intermediation: includes auxiliary activities but not insurance and pension funding (see next) 53 isr Insurance: includes pension funding, except compulsory social security 54 obs Other business services: real estate, renting, business activities 55 ros Recreation and other services: recreational, cultural, and sporting activities; other service activities; private households with employed people (servants) 56 osg Other services (government): public administration and defense; compulsory social security, education, health and social work, sewage and refuse disposal, sanitation, and similar activities; activities of membership organizations n.e.c.; extraterritorial organizations and bodies 57 dwe Dwellings: ownership of dwellings (imputed rents of houses occupied by owners) Note: n.e.c. = not elsewhere classified. 46 Water Scarcity in Morocco SKU W19073