Increasing Agricultural Productivity:
Encouraging Foreign Direct Investments in the COMCEC Region
7
More specifically, the availability of permanent pasture in the COMCEC Member Countries is
notably higher as to world averages, and this translates into an opportunity for private investors
who want to invest in livestock. If a production factor (i.e. land, capital or labour) is abundantly
available, it results in a cost advantage. In economic literature, this situation is referred to as a
region’s comparative advantage and demonstrates its ability to produce a particular good or
service at a lower marginal and opportunity cost over another. In this case, there is an important
opportunity to develop livestock and other related activities in the COMCEC Region.
On the other hand, only one fifth of the total agricultural land is arable land and suitable for
seasonal crop production, whereas in the world this is closer to 30 percent. Especially Asian
countries provide for a large amount of arable land (i.e. rice fields). In absolute terms,
permanent crops play a less important role with 53.7 million hectares, yet citrus, olives, and
rubber, provide for a significant revenue streams in many of the COMCEC Member Countries. 11
1.3 Water Resources
According to the World Water Assessment Programme (WWAP), agriculture accounts for 70
percent of freshwater withdrawals from rivers, lakes and aquifers, up to more than 90 percent
in some developing countries. Steady economic development, particularly in emerging market
economies, has translated into demand for a more varied diet, which puts additional pressure on
water resources. In addition, climate change and the recent acceleration in bio-fuel production
bring new challenges to agriculture and put further strain on natural resources. Water statistics
show that the situation of the COMCEC Member Countries is fragile.
To assess water statistics, FAO introduced a number of suitable measures which are outlined
below:
 Average precipitation12
 Internal renewable water resources (IRWR)13
 External renewable water resources (ERWR) 14
 Total renewable water resources (TRWR) 15
Table 2 shows that the average precipitation in depth in the COMCEC Member Countries is 23.4
percent of the world average, which is lower than the COMCEC Region’s share of total
agricultural land (i.e. 28.9 percent).
11 SESRIC, 2013.
12 Measured in mm/yr, is the long-term average in depth (over space and time) of annual precipitation in the country. Precipitation is
defined as any kind of water that falls from clouds as a liquid or a solid.
13 measured in km3/year is equal to the long-term average annual flow of rivers and recharge of aquifers generated from
endogenous precipitation. Double counting of surface water and groundwater resources is avoided by deducting the overlap
from the sum of the surface water and groundwater resources.
14 measured in km3/year is that part of the country's annual renewable water resources which is not generated in the country.
It includes inflows from upstream countries (groundwater and surface water), and part of the water of border lakes or rivers.
Contrary to natural external renewable water resources (i.e. the situation without human influence), ERWR take into account
the quantity of flow reserved by upstream (incoming flow) and/or downstream (outflow) countries through formal or
informal agreements or treaties, and possible water abstraction occurring in the upstream countries. Therefore, it may vary
with time.
15 Measures in in km3/year and represents the sum of internal renewable water resources (IRWR) and external actual
renewable water resources (ERWR).