Exploring China’s Farmer-Level Water-Saving Mechanisms: Analysis of an Experiment Conducted in Taocheng District, Hebei Province

Abstract

Two types of farmer-level mechanisms have been traditionally adopted to increase agricultural water use efficiency in northern China: pricing mechanisms and tradable water rights systems. However, the reluctance of policymakers to exacerbate farmers' burdens has rendered pricing mechanisms politically infeasible, while tradable water rights systems involve prohibitively high transaction costs in rural China. An experiment conducted in 2005 in the Taocheng District of Hebei Province created a new kind of water-saving mechanism that involves a number of institutional innovations, including "flexible total management", "collect then refund" and "collect and subsidize, then refund". This paper evaluates the district's water-saving mechanisms based on efficiency, equity and operability criteria. The results of the analysis demonstrate that the "collect then refund" mechanism can more effectively enhance water use efficiency and reduce farmers' burdens than water pricing instruments, tradable water rights systems and flexible total management. Adequate infrastructure and trusted institutions are identified as necessary prerequisites for the successful implementation of the new water-saving mechanism. We believe the new mechanism has great potential to be scaled up.

How could we realize a win–win strategy on irrigation price policy? Evaluation of a pilot reform project in Hebei Province, China

“…Its total land area is 592 km 2 , with a population of 430,000. The endowment of water resources in Taocheng is extremely limited: the water available per capita is only 1/18 of the national average (2100 m 3 ), which is lower than the average for Hebei Province (1/7 of the national average) (Chen et al, 2014;MWR, 2014). In this region, nearly 90% of water use (mainly for irrigation) depends on groundwater resources, and more than 70% of the region's tubewells draw groundwater from deep aquifers (WRBHC, 2012).…”

“…In this region, nearly 90% of water use (mainly for irrigation) depends on groundwater resources, and more than 70% of the region's tubewells draw groundwater from deep aquifers (WRBHC, 2012). Due to the increased water demand, groundwater is being overexploited, and as a result the water table is declining by more than 2 m annually (Chen et al, 2014). Due to the serious water shortage and related environmental problems, the Water Resources Bureau in Hebei selected Taocheng as one of the pilot regions for implementing irrigation price reform in 2005.…”

“…Despite attracting a great deal of attention from policymakers and the media, the reform has still not been extended to other regions (WRBTD, 2012). In addition, although local leaders and a few scholars have analyzed the reform, most research has been based on either case studies (e.g., Chang and Liu, 2010;Li, 2009) or theoretical analyses (Chen et al, 2014); few empirical studies have been conducted to assess the reform itself. Due to the limited understanding of the reform, it is difficult to resolve the policymakers' confusion.…”

Will the energy industry drain the water used for agricultural irrigation in the Yellow River basin?

“…However, in reality, there are several barriers that may limit the role of agricultural water-saving mechanisms. For instance, pricing mechanisms, which aim to provide the 'right' signal of the value or cost of the water supply, remain limited because increasing the water price may put additional burdens on farmers as it runs counter to raising rural incomes (Chen, Wang, & Zhu, 2014). Other measures, such as to reallocate water from agriculture to the energy industry through tradable water rights systems, are likely to deal with the problem of water resources competition among different sectors.…”

China’s Water-Saving Irrigation Management System: Policy, Implementation, and Challenge

“…Hence, it is impossible for the policy-makers to increase water prices without hurting rural incomes [47] while maintaining food security [5]. Even with subsidy strategies to compensate famers' lost income because of increasing water prices, as in a pilot area of Taocheng District [72,73], there is still a significant shift in plantation structure from the traditional grain crops to the water-saving and high-value crops [74,75].…”