China's Water Pricing Reforms for Irrigation: Effectiveness and Impact

Abstract

"This project is based on the analysis of three case studies (Wudu, Jinghuiqu, and Shijin irrigation districts). Jinghuiqu is located in an arid region, Shijin is located in a semi-arid region and Wudu is located in the more humid Southwest. All the issues mentioned above, have been studied using econometric methods on the basis of the data gathered at the household, field canal, pump, and village level. The study reveals that the farmers ability to pay for irrigation water is still low and that the current water prices reflect the farmers willingness to pay, which implies that it is in fact very difficult to increase water prices further, let alone fully recover water supply cost. Farmers do not really participate in the irrigation management process, even at the field canal level, which limits the farmers willingness to pay. In areas confronted with severe water shortages, such as in the Jinghuiqu and Shijin irrigation districts, it is estimated that the volume of water use significantly affects wheat and maize yields, and the reduction of field water use will lead to the decline of grain production. In such cases, although increasing irrigation water price will encourage farmers to reduce water use, it may also force them to decrease their grain production. These measures affect the farmers revenues, which are largely dependent on crop production, thus increasing social inequities."