Water pricing policies and recent reforms in China: the conflict between conservation and other policy goals.

Abstract

This paper provides an overview and synthesis of China's irrigation water pricing policies. The history of China's agricultural water policies is reviewed in order to provide a context and background for discussions of current policy issues. The methods on how agricultural water prices are determined, applied and collected, are described. The paper concludes by discussing a series of issues that confound further reform and the effectiveness of pricing policies in promoting water conservation and farmers' capacity to adapt to higher water prices.

Water scarcity, prices and quotas: a review of evidence on irrigation volumetric pricing

“…Economic efficiency is raised by the possibility of internal trading. & Lessons from China are masked by the diversity of physical and institutional settings (Lohmar et al 2007;Mollinga et al 2005). Water reforms supported by the World Bank have focused on improving O&M and on higher financial user participation, as a means of reversing degradation of infrastructure and maintaining or expanding agriculture in a situation of declining overall supply.…”

“…Many of the reasons for inefficient water use lie beyond the scope of the farmers (Yang et al 2003). Yet, the Chinese experience is particularly interesting because of attempts to instill incentives at the level of the WUA or of the private manager who receives financial incentives to reduce water deliveries, part of which may be passed on to farmers in order to ensure their support (Lohmar et al 2007). Recent research by Liao et al (2005) showed that fees remain too low to cover full O&M costs, that elasticity is very small, and that significant price increases would "seriously impair" production in areas which could not be compensated with groundwater.…”

China's water security: Current status, emerging challenges and future prospects

“…The current household expenditure for municipal water supply only accounts for about 1.2% of household disposable income, lower than the 2% level that would stimulate water saving and much lower than the 4% in developed countries . Irrigation charges in many rural areas are not only insufficient to cover the full cost but also still tied to the acres irrigated rather than the actual amount of water used (Yang et al, 2003;Lohmar et al, 2007;MWR, 2014). As a result, maintenance of water supply infrastructure is poor with much leakage, and water users lack incentive to save water and improve use efficiency, all of which contribute to water use inefficiency in China Jiang, 2009;Cheng and Hu, 2012).…”

Different Asias, same problems: negotiating the state-user interface in surface irrigation in China and India

“…24 A variant of this proposal is where the irrigation bureaucracy runs the canals and private 'irrigation service providers' pump water from the canal, local surface storage filled up by the canal supply, or from the groundwater reservoir, and pipe or channelize this to individual users (Talati and Shah, 2009) . China has also experimented with privatization or contracting to private parties of both groundwater systems and of the management of laterals (Lohmar et al, 2007).…”