Virtual water flows and economic water productivity of Italian fair-trade: the case of bananas, cocoa and coffee

In a globalized economic system, the role of agrifood production is to ensure at the same time both the population's livelihood and environmental resource conservation. The present study aims at expanding the debate on the potentials of the fair-trade in terms of environmental sustainability.

The research presents a methodology divided into three phases: (1) the identification of the water footprint values associated with the production of bananas, cocoa and coffee imported from developing countries to Italy; (2) the calculation of the virtual water volumes used to produce the crops imported from developing countries to Italy through fair-trade; (3) the analysis of the economic water productivity, obtained by the fair-trade premium, for bananas, cocoa and coffee.

The results of this study identified and measured the amount of virtual water flows and water savings or losses deriving from the fair-trade of bananas, cocoa and coffee. The average virtual water flow related to the fair-trade imports in Italy amounts to 7.27 million m³ for bananas, 22,275 m³ for cocoa and 14,334 m³ for coffee. The research findings also highlight that fair-trade and the related premium ensures at the same time the achievement of social and institutional purposes but also the remuneration of virtual water used within the life cycle of the imported crops.

Previous scientific literature showed that fair-trade premium has commonly been used to finance environmental protection. No study has evaluated the environmental impacts associated with fair-trade, nor the monetary value associated with the natural resources exploited to produce crops to be exported. This empirical paper fills a literature gap in terms of identification, measurement and evaluation of virtual water flows along the supply chain processes of some fair-traded crops, also providing, through the economic water productivity approach, a useful tool for decision-makers.