This report aims to provide a conceptual framework to address food security under conditions of water scarcity in agriculture. It has been prepared by a team of FAO staff and consultants in the framework of the project `Coping with water scarcity: the role of agriculture?, and has been discussed at an Expert Consultation meeting organized in FAO, Rome in December 2009 on the same subject. It was subsequently edited and revised, taking account of discussions in the Expert Consultation and materia ls presented to the meeting.

During the last decade, the concept of water demand management has received increasing attention from both academics and development agencies and banks. In the face of rising costs for supply augmentation and concerns over the apparently inefficient use of water in agriculture, managing demand appears a priority means of mitigating water scarcity problems. Economists, in particular, have used theoretical frameworks to argue for the use of "economic instruments" to provide incentives that may lea d to water saving or enhancing economic efficiency.