WEF is creating a new coalition of businesses to produce a multi-industry global plan of action on water: The world is running short of its key liquid asset (water)

Demand for water is set to spark an acute shortage that will leave key sectors, including agriculture, without sufficient supplies to meet global food requirements.

Business leaders meeting at the World Economic Forum (WEF) were told yesterday to prepare themselves for significant disputes and conflicts as a result of the world's growing water shortage problem.

Dominic Waughray, the director of Environmental Initiatives at the WEF, said: "Our water sources are under immense strain as our world economy continues to grow. A richer world is a thirstier world."

The growing world population is now placing water supplies under such stress that by 2020 between 75m and 250m people will be exposed to increased levels of "water stress", delegates to the WEF heard.

Yields from rain-fed agriculture could be reduced by up to 50pc in already struggling areas such as Africa.

Not only are populations growing but so too are their demands for ever higher quality food, especially protein-rich produce.

The global population will top 9bn by 2050 but as early as 2025 the amount of water available per capita per year will have halved compared with 1960, from 13,000 cubic meters to 6,000 cubic meters.

However, between 1961 and 2002 wheat consumption in Asia tripled while meat consumption grew by a factor of seven. Globally, food demand is expected to grow between 70pc-90pc by 2050.

But crops are also increasingly being used to supply energy through the use of biofuels and the amount of additional water needed for bio-energy production could be equivalent to the amount required to feed the world's population, the WEF was told.

Add to this situation the threat of climate change and the problem is becoming ever more acute.

Neville Isdell, chairman and chief executive of Coca-Cola, said: "When society faces global challenges like water scarcity we all need to come together to leverage our individual efforts. Business leaders have a critical role to play.

Supporting the communities we serve is not just enlightened self-interest, it is literally self-interest."

The WEF is creating a new coalition of businesses to produce a framework with commitments in place to produce a multi-industry global plan of action on water. This will see existing water management solutions increased in scale and replicated across industries.

It will also undertake a major new international forecast on water security and its economic and political implications.