Food Security and Water Scarcity: A Theoretical Framework

We characterize the domestic production and imports of food by a country under two scenarios, namely: food security and welfare maximization, in a model with an exogenously given probability of occurrence of an embargo or other sources of supply disruption on the international grain market, e.g., a natural catastrophe. In our framework, food security means relying on domestic production and considering imports only if available water is not enough to ensure enough food to citizens. We compare the volume of expected water used in domestic production, expected level of imports, as well as the expected welfare under these different scenarios. By doing so, we provide a measure to the cost of a food security policy.