sustainable irrigation water management in the lower yellow ......101 from: willett, i.r. and zhanyi...

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From: Willett, I.R. and Zhanyi Gao, ed., 2006. Agricultural water management in China. Proceedings of a workshop held in Beijing, China, 14 September 2005. Canberra, ACIAR Proceedings No. 123.

Sustainable irrigation water management in the lower Yellow River Basin: a system dynamics approach

Yufeng Luo1, Shahbaz Khan2, Yuanlai Cui1, Zhichuan Zhang3 and Xiuzhen Zhu1

Abstract

This paper describes a system dynamics study to investigate sustainable water management of irrigationsystems in China. Water resources scarcity and irrigation-induced soil salinisation threaten the sustainabilityof irrigated agriculture in arid and semi-arid areas. The study focused on the Liuyuankou Irrigation System(LIS) in the lower Yellow River Basin. In the lower Yellow River Basin irrigation systems, crops in the uplandare usually irrigated with surface water from the river and crops in the lowland are mainly irrigated withpumped groundwater. Seepage from irrigated fields in the upland is an important source of recharge to lowlandgroundwater. On the other hand, too much seepage and lateral recharge reduces irrigation water-use efficiencyand results in shallow groundwater tables that cause secondary soil salinisation. If there is not enough rechargeto lowland groundwater, deep groundwater tables increase the cost of groundwater abstraction, and may evenresult in overdraft conditions. Control of the groundwater table is therefore the key issue in sustainableirrigation management.

In this paper, a conceptual model of the LIS hydrologic system is developed. The dynamic complexity of thesystem arises because: 1. the components of the system interact with one another; 2. it is governed by feedback;3. it is non linear and counterintuitive (cause and effect are distant in time and space). The analytical solutionof the model is complex. The conceptual model is implemented using the system dynamic tool, Vensim. Themodel is validated with indirect structure tests. The validated model is used to simulate the responses of thegroundwater table. The model provides a comprehensive and general description of the long-term process ofgroundwater table fluctuations under continuous irrigation practice. Analysis of the model and simulationresults reveals under what conditions the groundwater table reaches alarming levels and with what strategiesit can be controlled. Strategies for sustainable water-resources development were investigated. The approachpresented is also applicable to other similar regions.

1 School of Water Resources and Hydropower, WuhanUniversity, Wuhan 430072, People’s Republic ofChina; email: <[email protected]>.

2 CSIRO Land and Water and Charles Sturt University,School of Science and Technology, Locked Bag 588,Wagga Wagga, NSW 2678, Australia.

3 Henan Provincial Water Conservancy ResearchInstitute, Zhengzhou 450003, People’s Republic ofChina.

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Introduction

The lower Yellow River Basin is one of the importantfood-production areas of China. In the 1950s, dozensof irrigation systems were developed and they put anew complexion on water-resources utilisation inthis area. However, except for the RenmingshengliquIrrigation System (RIS), in all of these systems diver-sion of water from the river was stopped in 1962, dueto severe secondary salinisation caused by shallowgroundwater tables. In the 1970s, according to theexperience from RIS, conjunctive use of surface andgroundwater was adapted in these irrigation systems.Yang (2002) reported that conjunctive use of surfacewater and groundwater has four advantages, for it isthe way: (a) to increase water-use efficiency, (b) toprevent secondary soil salinisation, (c) to mitigatewaterlogging, and (d) to reduce sedimentation.

Surface water from the Yellow River and localgroundwater are two key sources of irrigation water inthe irrigation systems in this area. Because the riverbed is higher than the ground surface beside it, it iseasy to divert water from the river. However, due tomuch seepage loss from the sandy canals to under-lying permeable aquifers, surface water is not sup-plied to whole systems. In the lowlands, crops aregenerally irrigated with abstracted groundwater. Theirrigation tradition and the topography result in differ-ences in the depths of groundwater tables in the sys-tems, which causes recharge from upland to lowland.Seepage from irrigated fields in uplands is an impor-tant source of recharge to lowland groundwater. Onthe other hand, too much seepage and lateral recharge

decreases use efficiency of irrigation water andincreases groundwater tables, which results in sec-ondary soil salinisation. If there is not enoughrecharge to lowland groundwater, deep groundwatertables increase the cost of groundwater abstraction,and may even result in overdraft conditions.

Groundwater table control is an important issue ofwater resources use and sustainable development ofthese irrigation systems. In this paper, strategies toimprove water-use efficiency and maintain propergroundwater tables to prevent salinisation in uplandareas and to reduce the cost of groundwater abstrac-tion in the lowlands are investigated by simulatingthe responses to different irrigation management sce-narios.

After a general description of the study area —Liuyuankou Irrigation System (LIS) — the hydro-logic conceptual model is developed. Because of thedynamic complexity of the system, the analyticalsolution of the model is complicated and hard tounderstand; therefore, the conceptual model is imple-mented using the system dynamics tool, Vensim(Ventana Systems, Inc. 2003). The model is validatedwith indirect structure tests. The validated model isused to simulate the responses of groundwater tableand salt accumulation under different managementscenarios. The model provides a comprehensive andgeneral description of the long-term process ofgroundwater table fluctuations and soil salt accumu-lation under continuous irrigation practice. Analysisof the model and simulation results reveals underwhat conditions groundwater tables reach alarminglevels and with what strategies this can be controlled.

Figure 1. Location of the Liuyuankou Irrigation System in northeastern China


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Finally, strategies for sustainable irrigation watermanagement are investigated.

Description of study area

The LIS is typical of the irrigation systems in thelower Yellow River Basin. The study area is locatedto the south of the Yellow River in suburban Kaifengand encompasses an area of about 40,724 ha,including most of Kaifeng County and a part ofKaifeng City and Qixian County (Figure 1).

The LIS has a temperate continental monsoonalclimate with cool, dry winters and warm, wet sum-mers. The average annual precipitation for the studyarea is approximately 627 mm, with ranges from293.6 mm in 1984 to 991.5 mm in 1997. Most of theannual precipitation occurs during the summer(June–September). The average annual evaporationfor the study area is approximately 1316 mm.

Principal sources of recharge to the groundwaterbasin are rainfall, irrigation (including seepage fromcanals) and seepage from the Yellow River. The areais divided into northern and southern parts by theLonghai railway line, with a narrow middle areasandwiched between the two. The rainfall in all threeparts is approximately the same. There is morerecharge (seepage from the Yellow River and canalsand more irrigation to rice) in the northern part, andthe topography of the area gently slopes downwardsfrom northwest to southeast. The groundwater tablein the upper part is higher than that in the lower part,which results in lateral flow of groundwater fromnorth to south.

The northern boundary of LIS is the Yellow River,and there is much seepage loss from the river. Thesouthwestern boundary is Huibei Ditch and HuijiRiver and, in the east, the Quanzhang and Yunirivers. The ditch and rivers discharge surface flowand soil water, and they can be regarded as symmet-rical; therefore southwestern and eastern boundariescan be taken as no-flow boundaries.

Figure 2 shows a general falling trend in ground-water levels during 1996–2002, which was caused bythe increasing scarcity of water from the YellowRiver. Groundwater level in the upper part (KC 24)fell by only 0.78 m (from 65.33 m in 1996 to 64.47 min 2002), while in the lower part, groundwater level(KC 22) fell by 2.78 m (from 61.77 m in 1996 to58.99 m in 2002).

In LIS, when the top of the groundwater table isdeeper than 2 m, evapotranspiration is not significant

and salinisation rarely occurs (Zhu et al. 2002). Thelifts of the most commonly used pumps in LIS arearound 10 m. If groundwater depth is less than 10 m,the cost of groundwater abstraction is acceptable andgroundwater is available for sustainable use. There-fore, the key of sustainable irrigation water manage-ment in LIS is to maintain the groundwater depthbetween about 2 and 10 m.

Model description

A dynamic simulation model of surface–ground-water interaction was developed. The systemdynamics (SD) approach is an appropriate techniquefor integrated water resources analysis. The inherentflexibility and transparency is particularly helpful forthe development of simulation models for complexwater-resource systems with subjective variables andparameters. The flexibility allows the application ofhierarchical decomposition in the model develop-ment and the transparency raises the possibility ofpractitioners’ involvement in the model develop-ment, increasing their confidence in model operationand its outputs (Simonovic 2000). Compared with theconventional simulation or optimisation models, thesystem dynamics approach is better able to indicatehow different changes to basic elements affect thedynamics of the system in the future. It is thereforeparticularly useful for representing complex systemswith strong influences from social or economic ele-ments (Xu et al. 2002). Recent applications of the SDapproach in the field of water resources include long-

Figure 2. Groundwater table fluctuations in theLiuyuankou Irrigation System innortheastern China


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term water resource planning and policy analysis(Simonovic and Fahmy 1999), reservoir operation(Ahmad and Simonovic 2000), salinisation on irri-gated lands (Saysel and Barlas 2001), and simulationof the hydraulic dynamics in a hydropower plantssystem (Caballero et al. 2004).

Concept of the model

The LIS is conceptualised into a two-box model toestimate the overall behaviour of the system in timeand space. The first box covers the upper part of theLIS, and the second the lower part (Figure 3).

Mathematically, the change of height of thegroundwater level in the upper part is described by:

where h1 is the groundwater level in the upper part(m); t is time (years); Syr is seepage from the YellowRiver (m3/year); Sc1 is seepage from channels in theupper part (m3/year); Pf1 is field percolation in theupper part (m3/year); R1 is rainfall in the upper part(mm/year); ET1 is evapotranspiration in the upperpart (m3/year); GA1 is groundwater abstraction in theupper part (m3/year); LF is lateral flow from theupper part to the lower part (m3/year); A1 is the totalarea of the upper part (m2); por1 is the aquiferporosity of the upper part.

Similarly, we have:

where h2 is the groundwater level in the lower part(m); t is time (years); Sc2 is seepage from channels inthe lower part (m3/year); Pf2 is field percolation in thelower part (m3/year); R2 is rainfall in the lower part(mm/year); ET2 is evapotranspiration in the lowerpart (m3/year); GA2 is groundwater abstraction in thelower part (m3/year); LO is lateral outflow from theupper part to the lower part (m3/year); A2 is the totalarea of the upper part (m2); por2 is the aquiferporosity of the upper part.

In the above two equations, the evapotranspirationis determined by:

where Ai is the irrigated area (m2 ); ET0i is the watersurface evaporation rate (m/year); hci is the criticalelevation below which evapotranspiration is zero(m); hsi is the elevation of ET surface (Chiang andKinzelbach 1998).

Similarly, Syr, LF and LO are also functions of hi.Because the interactions between (a) surface andgroundwater and (b) upper part and lower part (see

Figure 3. Conceptualisation of the system dynamics model of the Liuyuankou Irrigation System innortheastern China


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the section below ‘The causal loop diagram’), theanalytical solutions of the differential equations (1)and (2) are extremely complicated.

Model structure

The conceptual model is implemented using thesystem dynamics tool, Vensim (Ventana Systems,Inc. 2003). The model is constructed by buildingblocks (variables) categorised as stocks, flows andarrows (Figure 4).

The causal loop diagram

Causal loop diagrams are so called because eachlink has a causal interpretation. In system dynamicsmodelling, causal loop diagrams represent the majorfeedback mechanisms, which reinforce (positivefeedback loop represent by ‘+’) or counteract (nega-tive feedback loop represented by ‘–’) a given changein a system variable (Sterman 2000). In this model,the feedback loops are all negative. The groundwaterstorage in the upper part aquifer is controlled by threenegative feedback loops representing seepage fromthe Yellow River, evapotranspiration, and lateralflow from the upper part to the lower part. The firstnegative feedback loop in Figure 5 representsseepage from the Yellow River: the greater theseepage from the Yellow River, the larger thegroundwater storage in the upper part of the aquifer,and then the higher the groundwater level, which inturn reduces the seepage from the Yellow River,

completing the negative or balancing loop. Thesecond negative feedback loop represents evapotran-spiration: the larger the evapotranspiration, the lesswill be the groundwater storage in the upper part ofthe aquifer, and then the lower the groundwater level,which in turn reduces evapotranspiration, completingthe negative or balancing loop. The third negativefeedback loop represents lateral flow between thetwo parts: the larger the lateral flow, the less thegroundwater storage in the upper part of the aquifer,and then the lower the groundwater level, which inturn reduces lateral flow, completing the negative orbalancing loop. Similarly, the groundwater storage inthe lower part of the aquifer is also controlled bythree negative feedback loops representing lateralflow, evapotranspiration and lateral outflow.

Validation and analysis of the model

The purpose of a system dynamics study is to eval-uate policy alternatives in order to improve systembehaviour; therefore, the main criterion of modelvalidity becomes ‘structure’ validity — the validityof the set of the relations used in the model, as com-pared with the real processes. Otherwise, the entirestudy becomes a useless exercise. The validity of the‘behaviour’ is also important, but it is different in twoways: first, behaviour validity is meaningful onlyafter the structure validity is established (the ‘rightbehaviour for the right reasons’). Second, a point-by-

Figure 4. The stocks and flow structure of the dynamic groundwater modelfor the Liuyuankou Irrigation System in northeastern China


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point match between the model behaviour and thereal behaviour is not as important as it is in fore-casting modelling. What is more important in thesystem dynamics method is that the model producesthe major ‘dynamic patterns’ of concern (such asexponential growth, collapse, asymptotic growth, S-shaped growth, damping or expanding oscillationsetc.). Indirect structure testing is a commonly usedway of testing the validity of the model structure, andthe two most powerful and practical indirect structuretests are extreme-condition and behaviour sensitivitytests (Barlas 1996; Sterman 2000). In this section, theapplication of some indirect structure tests to thegroundwater model is illustrated.

Figure 6 illustrates the ‘extreme’ behaviour of thesystem when no irrigation water is diverted from theYellow River. It compares the results of the extremecondition run with those of the base run. Accordingto this ‘extreme condition’ run, because rechargefrom diverted water decreases, the discharge simul-taneously decreases and seepage from the YellowRiver increases, groundwater depths in the upper partof the LIS are slightly lower. In the lower part, lateralflow is the main recharge source and, when itchanges, the others stay almost the same; the ground-water depth therefore significantly increases. Thisextreme condition test states that if no water is

diverted from the Yellow River and groundwaterabstraction stays the same, the groundwater depthwill increase. It also states that the groundwater depthin the lower part of LIS will increase significantlymore — a finding consistent with those of Yang(2001).

Figure 7 shows the ‘extreme’ behaviour of thesystem when no groundwater water is abstracted in thelower part of the LIS. According to this ‘extreme con-dition’ run, when there is no groundwater abstractionin the lower part, groundwater depth fluctuates withthe groundwater recharge; the amount of groundwaterabstraction in the lower part has little impact on thegroundwater depth in the upper part. This is becausethe impacts can be counteracted (the increase in h2causes decrease in lateral flow, which keeps h1 andthen it increases ET1 and decreases seepage from theYellow River). This extreme condition test shows thegroundwater level recovery under the no-abstractioncondition, which is also consistent with the findings ofYang (2001).

In Figure 8, an example of ‘behaviour sensitivity’tests is illustrated. The sensitivity of groundwaterdepth to the percentage of diverted water supplied tothe lower part is demonstrated. The model runs cor-respond to increases in the water supply of 10%, 20%and 30%. It is observed that h2 is quite sensitive to the

Figure 5. Causal loop diagram for the dynamic groundwater model theLiuyuankou Irrigation System in northeastern China


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amount of water supplied to the lower part. This sen-sitivity shows that the model portrays a logicallymeaningful relation between groundwater depth andirrigated water.

The indirect structure tests demonstrated that themodel formulations have no logical errors or incon-sistencies and that the model structure yields mean-ingful behaviour under extreme parameter values andthat the model behaviour exhibits meaningful sensi-tivity to the parameters.

Results and discussion

The purpose of the presented groundwater model isnot to predict what the groundwater levels will be inthe future. The purpose is to reveal under what con-ditions and policies the groundwater heads would

continue to rise or fall, if and when they will reachharmful levels, and if and how they can be controlled.

Possible future development options

In recent years, due to decreases in surface waterfrom the Yellow River, some water-saving irrigationtechniques have been introduced into the upland ricefields. As a result, the amount of recharge to ground-water has fallen. To achieve sustainable managementof irrigation water in LIS, it is important to managegroundwater and surface water and keep the ground-water tables at appropriate levels.

Some of the surface–groundwater managementalternatives being proposed to achieve sustainableand economic management of irrigation water in LISinclude artificial groundwater recharge to the lowerarea of LIS using water from the Yellow River (Yang

Figure 6. System behaviour in the LiuyuankouIrrigation System, northeastern China,when no irrigation water is diverted fromYellow River: h1, upper part of LIS; h2,lower part of LIS

Figure 7. System behaviour in the LiuyuankouIrrigation System in northeastern Chinawhen there is no groundwater abstractionin the lower part of the system: h1, upperpart of LIS; h2, lower part of LIS

Figure 8. Sensitivity of groundwater level (h2) topercentage of diverted water supplied tothe lower part of the LiuyuankouIrrigation System in northeastern China

Figure 9. Predicted groundwater depths for scenario1 in application of a dynamic systemmodel to the Liuyuankou IrrigationSystem in northeastern China


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2001), adopting water-saving techniques for rice inthe upper area and allocating surface water to thelower area.

Considering the existing groundwater conditions(December 2002) as ‘initial conditions’, a number offuture scenarios were evaluated by simulating theresponse of groundwater levels under changed watermanagement conditions over the next 20 years. Allthe parameters and assumptions used for the hydro-geological characteristics of the system remain thesame. Average recharge rates from rainfall and ET0for the period 1996–2002 are used for the 2002–2023simulation as no significant increase or decrease inthe hydro-climatic conditions or flows of the YellowRiver is envisaged under predicted climate changescenarios.

The following future scenarios are studied up tothe time of 2023:• scenario 1: No changes in irrigation strategies. The

rates of recharge from irrigation and seepage andgroundwater abstraction for 1996–2002 areapplicable for 2003–2023.

• scenario 2: Water-saving techniques for rice areadopted in the upper area and more surface water isintroduced to the lower area (Khan et al. 2004).

• scenario 3: Groundwater abstraction is reduced,either by reducing the cultivated area or improvingwater-use efficiency.

• scenario 4: Water-saving techniques for rice areadopted in the upper area, surface water isallocated to the lower part and less groundwater isabstracted in the lower area, which is acombination of scenarios 2 and 3.

Results of simulation of future scenarios and discussion

If no changes in irrigation strategies occur in thenear future (scenario 1), the groundwater depths inthe upper part (h1) will increase slightly, while in thelower area (h2), they will continue to increase signif-icantly. After about 15 years, the groundwater depthin the lower area will reach to 10 m, which is the crit-ical value for economic groundwater use (Figure 9).

The simulation results of scenario 2 (Figure 10)show that introducing more water to the lower area isan effective way to stop increasing groundwaterdepth in the lower area. It is only when more than70% of the diverted water from Yellow River is con-veyed to the lower area (S2 – 70%), that groundwaterdepth does not increase significantly.

The simulation results of scenario 3 (Figure 11)show that reducing groundwater abstraction is alsoan effective way to stop increases in groundwater

Figure 10. Modelled results for scenario 2 inapplication of a dynamic system model tothe Liuyuankou Irrigation System innortheastern China

Figure 11. Modelled groundwater depth for scenario3 in application of a dynamic system to theLiuyuankou Irrigation System innortheastern China

Figure 12. Modelled groundwater depth for scenario4 in application of a dynamic systemmodel to the Liuyuankou IrrigationSystem in northeastern China


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depth in the lower area. When the groundwaterabstraction is reduced by about 65% (S3 – 65%),groundwater depth does not increase.

In fact, both scenarios 2 and 3 are not feasible, as itis not possible to reduce water consumption by toomuch. The simulation results of scenario 4 (Figure12) show that moderately reducing water consump-tion at the same time in the two areas is an effectiveand feasible way to stop the fall in groundwater depthin the lower area of LIS. When 35% of surface waterdiverted from the Yellow River is conveyed to thelower area and groundwater abstraction is reduced byabout 30%, groundwater depth will not increase. InFigure 12, the percentages of surface water conveyedto the lower area and the reductions in groundwaterabstraction are, respectively, as follows: S4 – 1: 30%,15%; S4 – 2: 30%, 30%; S4 – 3: 35%, 15%; S4 – 4:35%, 30%.

Conclusions

The current challenge of irrigation in LIS is to main-tain the groundwater depth when the amount of wateravailable from the Yellow River is falling. Scenarioanalysis has shown that, if the present irrigation man-agement strategy continues, the groundwater depth inthe lower part of LIS will reach 10 m in about 15years. It is not feasible to stop the increase in ground-water depth in the lower area by reducing water con-sumption in only one of the areas, whereasmoderately reducing water consumption at the sametime in the two areas is an effective and feasible wayto stop decrease of groundwater head in the lowerarea.

The system dynamics technique has proved to bean efficient approach for the simulation of a complexwater resource system. Its merits include theincreased speed of model development, ease ofmodel improvement, and the ability to perform sen-sitivity analysis. Scenarios other than those investi-gated in this study can be evaluated using the existingframework. It should be pointed out that some of thecurrent parameters in the model presented wereassumed. With more effort on refining the parame-ters, the model could become a more practical toolfor managing irrigation water resources of the lowerYellow River Basin.

Acknowledgments

The financial support received from the AustralianCentre for International Agricultural Research(ACIAR, project number LWR1/2000/030) andChinese Ministry of Education (Project NumberNCET-04-0664) is acknowledged.

References

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Barlas, Y. 1996. Formal aspects of model validity andvalidation in system dynamics. System DynamicsReview, 12, 183–210.

Caballero, Y., Chevallier, P., Gallaiire, R. and Pillco, R.2004. Flow modeling in a high mountain valley equippedwith hydropower plants: Rio Zongo Valley, CordilleraReal, Bolivia. Hydrological Processes, 18, 939–957.

Chiang, W.H., Kinzelbach, W. 1998. ProcessingMODFLOW: a simulation system for modelinggroundwater flow and pollution. Hamburg, Zürich.

Khan, S., Rana, T., Cui, Y.L. and Blackwell, J. 2004. CanAustralian and Asian irrigation areas be environmentallysustainable and retain economic viability? In: Irrigationin a total catchment context, sharing the river. ICID 2ndAsian Regional Conference, Moama–Echuca, Australia,14–17 March 2004. (CD-ROM).

Saysel, A.K. and Barlas, Y. 2001. A dynamic model ofsalinization on irrigated lands. Ecological Modeling, 139,177–199.

Simonovic, S.P. 2000. Tools for water management: oneview of the future. Water International, 25, 76–88.

Simonovic, S.P. and Fahmy, H. 1999. A new modelingapproach for water resources policy analysis. WaterResources Research, 35, 295–304.

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Improving quality and sustainability of irrigation delivery services in China: the case of the Zhanghe

Irrigation System

B.A. George1, Jiesheng Huang2 and H.M. Malano1

Abstract

The Zhanghe Irrigation System (ZIS) is located in Hubei Province in central China and receives water from theZhanghe reservoir to irrigate an area of about 160,000 ha. The ZIS is operated under an arranged demandschedule in which farmers or farmer groups request water deliveries from the supply agency when needed. Atwo-year research and demonstration project was undertaken in the fourth main canal of ZIS during July 2002–October 2004. Australian and Chinese researchers collaborated to develop an integrated computer and systemoperation framework to assist in the management of the irrigation system and to estimate the system operationcost, to ensure the sustainability of the scheme in longer term. The process involved a global positioningsystem based rapid survey of irrigation and drainage structures, implementation of the computer modelirrigation main system operation (IMSOP) to simulate the operation, monitoring existing operation,retrospective analysis of the system and water order modelling. The comparison of IMSOP model-simulateddemands with monitoring data showed large deviations and consistent undersupply. An additional softwareutility, Order Manager©, was developed to schedule the water orders. Also developed was generic geographicinformation system-based asset management software, Asset Manager©, which can be used to manageinfrastructure in any irrigation scheme. Asset Manager was used to analyse the long-term investmentprovisions, and full and partial renewals costs were estimated as 235 Yuan/ha and 140 Yuan/ha at 3% inflationand 5% interest rates. The analysis of the financial performance shows that current pricing of the irrigationservice is well below the level needed to ensure sustainability of the infrastructure and water service. Thisresearch has provided a useful and practical methodology to diagnose deficiencies in the irrigation systeminfrastructure and its operation, and to establish the basis of a management system to provide defined levelsof service to users. The results of the project are both useful and applicable to millions of hectares of irrigatedareas in China.

1 IDTC, Department of Civil and EnvironmentalEngineering, University of Melbourne, Melbourne,Victoria 3010, Australia.

2 College of Water Resources and Hydropower, WuhanUniversity, Wuhan 430072, People’s Republic ofChina.

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Introduction

China is one of the largest irrigation countries in theworld and irrigation plays a pivotal role in the abilityof the country to meet its future food demand. Due toits large population, China has one of the lowestavailabilities of land per capita worldwide — 0.1 ha.Most of the irrigated agriculture area in China is sup-plied by either large- (>30,000 ha) or medium-scaleirrigation districts (670–30,000 ha). Competition forwater between agriculture and other uses, includingurban and industrial, has become severe in large partsof China. In several regions, water has been identi-fied as the most critical constraint to the future sus-tainability of economic development, especially onthe North China Plain. Increasing competition forwater between different users across China willreduce the amount of water available for irrigation.Growing water scarcity and the misuse and misma-nagement of available resources are the major threatsto the sustainable development of the various usersectors (Hamdy et al. 2003). It is therefore an imper-ative to strive for better management and utilisationof water to meet the increasing competition for thisresource.

The ability to meet the aforementioned challengewill depend largely on the performance of irrigationsystems (Small and Svendsen 1992). In order toimprove the performance of medium- to large-scalesurface irrigation systems, irrigation agencies havetraditionally sought to upgrade infrastructure throughrehabilitation and modernisation programs, and havepaid little attention to improve operational manage-ment. In the last decade, irrigation researchers havedeveloped and applied computer tools to plan,schedule and monitor the operation of irrigationsystems to improve their performance. Simple canaloperation models are useful in generating irrigationdemand based on evapotranspiration estimates and arealistic description of the delivery system and itscharacteristics (Turral et al. 2002).

The existing infrastructure at Zhanghe and otherirrigation districts in China shows severe signs ofdecay as a result of age and deficient maintenancepractices. The lack of sustainability of the irrigationinfrastructure due to the inability to invest in suffi-cient expenditure in operation and maintenance is ofgreat concern. At present, there are no provisions forlinking the cost of operating the irrigation anddrainage infrastructure to the actual price charged forthose services. This, coupled with the inability of

government to subsidise these services at an appro-priate level, places severe constraints in the ability ofirrigation management companies to sustain theiroperation.

A two-year research and demonstration projectwas undertaken in the fourth main canal of ZhangheIrrigation Scheme (ZIS) between July 2002 andOctober 2004. In the project, Australian and Chineseresearchers collaborated to investigate and improvethe operational performance of the system. Thispaper is intended to demonstrate the process fol-lowed in assessing operational performance of thesystem and the development of a service costing forthe sustainability of the system in the long term.

The Zhanghe System

The Zhanghe Reservoir is built on the Zhanghe Riverand is a multi-purpose reservoir designed for irriga-tion, flood control, water supply, hydro-power andindustrial use (Figure 1). The climate of the region istypically continental, with a temperature varyingfrom a minimum of –19˚C in January to a maximumnear 41˚C in July. The annual frost-free period rangesfrom 246 to 270 days on average. Rainfall is charac-terised by a typical subtropical monsoonal regimewith an annual precipitation of 970 mm, and largeand between-year variability ranging from 610 mmto 1327 mm. Most of the precipitation (82%) fallsbetween April and October, coinciding with the rice-growing season.

The water distribution system in ZIS consists of sixmain canals (Figure 1): 1. general main canal2. west main canal3. first main canal4. second main canal5. third main canal6. fourth main canal.

In addition to the main distribution system, thesystem includes an extensive network of 13,984 branchcanals with over 15,000 structures. The west and firstmain canal operate under the Dang Yang WaterResources Bureau. The third main canal is managed byJingmen City Water Resources Bureau. The ZhangheIrrigation Administration Bureau (ZIAB) controls thegeneral, second and fourth main canals.

This project was designed as a research and dem-onstration project centred on the fourth main canal ofthe ZIS (Figure 2). The total length of the fourth maincanal is 18.75 km, of which 7.4 km is lined and the


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rest is earthen. Generally, the fourth main canalreceives water 3–4 times a year and the duration ofeach irrigation varies between 5 and 15 days. Fourmanagement stations operate under the fourth maincanal: Longquan, Anzhankou, Wenjia-Xiang andYanchi.

The fourth main canal bifurcates into two canals:the east branch canal and the north main canal. Theeast branch canal is 25 km long. The east branchcanal operates under two management stations:Wenjia-Xiang and Anzhankou. The east branch canalalso supplies water to two townships: Heji andLengshui. The main grain crops grown in the districtare rice and winter wheat. Paddy cultivation accountsfor about 80% of the total area, of which about 85%

is planted to summer rice (May–September). Theremaining area is planted with a short durationvariety of rice later in the season. The main uplandcrops are beans, sesame and sweet potatoes.

Agricultural water use

The ZIAB is responsible for long-term allocationof water in the system. The annual allocation plan isdeveloped at the start of each irrigation season, basedon the surveyed irrigated area, water in storage andinflow forecasts. Agriculture has the first priority forwater use. Figure 3 shows the quantity of waterreleased to different sectors from 1993 to 2003. It isclear that there has been a decline in agricultural

Figure 2. The project area in the Zhanghe Irrigation System, central China

Figure 1. Schematic of the Zhanghe Irrigation System, central China


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water use in recent years, and that the ZIAB has allo-cated this freed-up to power generation. After gener-ating power the water is diverted to the river toprovide for dilution of pollutants but is not availablefor irrigation diversion.

Agricultural water use from all sources was esti-mated at 430 million m3 in 2001 (Figure 4). Waterused for irrigation in the ZIS (reservoir release) foragriculture has declined to 14 million m3 in 2002 froman average value of 198 million m3 over the period1994–2001. The decline in agricultural water use ismainly due to a sharp reduction in ordering by farmersas a result of recent changes in water-pricing policyand institutional arrangements. Notably, no water wassupplied to the fourth main canal during 2002.

Operational procedure

Annual operation planningThe ZIS is operated under an arranged demand

schedule in which farmers and farmer groups request

water deliveries from the supply agency when needed.Farmers’ decisions to order water are often influencedby a number of factors, including the actual crop waterdemand, expected rainfall, the price of water andfarmers’ perceptions of the system’s reliability. Beforethe start of the irrigation season, water users mustsubmit their water demand and cropping pattern totheir respective water management stations (WMSs).Based on this information and the historical water useby farmers, the ZIAB formulates an aggregated annualplan based on the demand and forecast inflow into thereservoir. Once the plan is finalised, the ZIAB signs acontract with the fourth main canal offices (FMCOs)which, in turn, signs a contract with the WMSs. TheWMSs will then sign a contract with the farmers orfarmer groups before the start of the season. Waterusers are entitled to the quantity specified in the con-tract at a basic rate subject to water availability andactual rainfall. If the water use exceeds the specifiedquantity, farmers are charged at a higher rate.

Day-to-day operation The day-to-day operation involves the water man-

agement stations collating all the farmers’ orderswhich they forward to the main canal offices. Duringthe irrigation season, farmers must place their waterorders with the WMSs at least 3 days in advance. Iffarmers want to change the discharge or to cancel theorder, they must apply to the WMS at least 24 hours inadvance of the order’s delivery. As it takes about 2–3days of travel time for water to reach the end of thesystem, once the water is released, farmers must paythe charge for the volume ordered even if it rains andthe water is not used. In years with average demand,farmers typically order water three times a year forsoaking and land preparation (10–25 May), irrigation(10–20 July), and grain formation stage (mid August).Farmers pay for 30–50% of the water fee on the day ofordering and must settle the remaining amount soonafter the irrigation has finished.

Institutional arrangements

The administrative system in China consists of ahierarchy of water resource bureaus, functioning at thetownship, county, prefecture and provincial levels(Figure 5). The Ministry of Water Resources is inoverall charge of the water resources of the entirecountry. At the top of the irrigation management struc-ture is the irrigation district (irrigation administrationbureau) which functions under the provincial adminis-

Figure 3. Water releases from the ZhangheIrrigation System, central China todifferent sectors

Figure 4. Agricultural water use in the ZhangheIrrigation System, central China


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tration bureau and is charged with managing the entireirrigation system. Below is the main canal officewhich is responsible for the operation of the main andsecondary canals. Water management stations are thesubunits of the main canal office and they operate andmanage the key water control structures along thecanal, with responsibility for the maintenance ofbranch canals and the collection of water fees.

Water pricing system

The Chinese Government introduced wide-ranging reforms in water pricing in the early 1980s,including the volumetric pricing of irrigation water.This policy has had a major impact on the water con-sumption in some irrigation areas, and has been themain driver in the adoption by farmers of water-saving irrigation practices. Before 2002, a two-tiersystem of payment for irrigation water was applied inthe fourth main canal: a basic charge (30 Yuan/ha ofpaddy) and a volumetric water fee (0.04235 Yuan/m3). Generally, farmers used to pay this charge to thevillage (township) administration which, in turn, for-warded this revenue to the water management sta-tions. The farmers who were pumping water forirrigation had to pay the additional operational cost ofpumping. In actual practice, the water managementstations received only a fraction of the volumetricwater fee paid by farmers after the township admin-istration collected its taxes.

The Chinese Government implemented a newpolicy called Fee Gai Shue in 2002 in which thewater fee was separated from other taxes. Under thenew policy, farmers are charged on a volumetricbasis. The water management stations are respon-sible for collecting the water fee, which is levied atapproximately 0.050 Yuan/m3. Under this pricingpolicy the area (rice) based water fee is no longerapplied. The policy had an immediate effect onfarmers, who responded very quickly by reducingwater demand. As a result, the area irrigated fellsharply in 2003 when no irrigation water wasdemanded by several of the main canals.

The policy was revised in 2004 to reverse thedrastic reduction in cultivation. Under the revisedpolicy, farmers are again charged on a two-tier basis:(a) an area-based payment and (b) a volumetric waterfee. Both water fees are collected by the water man-agement stations, which then forward the receipts tothe main canal office. Under the revised policy,farmers pay an area-based water fee of 75 Yuan/haand a volumetric water fee of 0.033 Yuan/m3.

Operational modelling

Modelling of system operation planning

The main function of the irrigation system is todeliver water to satisfy well-defined service provi-sion objectives defined in terms of flexibility, relia-bility and adequacy. Chinese systems often fall shortin one or more of these attributes, depending on thelocation-specific conditions of the system.

Computer modelling provides the capability todescribe irrigation system networks and their opera-tion and test system responses to alternative opera-tional procedures and rules. As part of this project,the irrigation main system operation (IMSOP) modelwas further developed and adapted to simulate avariety of system configurations and provided withthe necessary adaptive capacity to incorporate themore salient features of the irrigation systems.

IMSOP is a steady-state hydraulic model that sim-ulates the operation of the main and secondary canalsin an irrigation system (Turral et al. 2002; George etal. 2004). The model calculates the reference cropevapotranspiration using weather station or panevaporation data, whichever is available. It then cal-culates steady, uniform flow in the channels on thebasis of accumulated offtake demands and transmis-sion losses. The model is based on a graphical user

Ministry of WaterResources

Provincial WaterResources Bureau

Prefecture WaterResources Bureau

County WaterResources Bureau

Township

Village or WUA

IrrigationAdministration Bureau

Main Canal Office

Management Station

Water UsersAssociation

Administration

IrrigationManagement

Figure 5. The organisation of irrigation manage-ment in Hubei Province, China


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interface (GUI) built on Visual Basic 6. A Chineseversion of the software has been developed as part ofthis project.

The model requires the description of the irriga-tion system in the form of a network diagram, whichincorporates all reaches of the main canal and usuallysome secondary canals, all hydraulic structures onthose canals, and all offtakes to secondary- or ter-tiary-level farm units. All other inflow and outflowpoints, reservoirs and pumping stations are describedas nodes in the network diagram.

The IMSOP model can be used in three ways:• assessment of historical performance of the

irrigation system, comparing simulated perform-ance with monitoring data

• simulation and analysis of alternative operationalregimes to enhance system performance

• near real-time operation of the system.

Scheduling water orders

An additional software utility, Order Manager©, toassist the Branch Canal Office in scheduling thedelivery of water orders was developed. The utilityaccommodates the requirements of systems such asZhanghe that are operated on request. The software isdesigned to aggregate and route the water orders so asto determine the discharge that is required at the headregulator at different times during the day. The modelcan also calculate the water charge based on thevolume ordered.

The database management system was developedusing Microsoft Access™ which allows the operatorto enter the water orders into the database using theGUI. The users can also update the water order dataor can delete orders if cancelled by farmers. The man-agement office makes use of this utility to aggregatethe water order each day and advise the fourth maincanal office to release the volume demanded,schedule the delivery to different offtakes and calcu-late the discharge required at the head regulator atdifferent times (Figure 6). The results can be dis-played either as graphs or in reports generated usingMicrosoft Excel™.

Supply–demand analysis

East branch canalThe performance of the east branch canal system

during the 1999–2004 cropping seasons was investi-gated using the IMSOP model (Figure 7). The waterdemands simulated by IMSOP were compared with thevolumes supplied over this period. This showed that theseasonal demand exceeded the canal supply every year.In some years the canal supply was only 50% ofdemand. The rest of the crop water demand was metfrom local water sources (off-line reservoirs and ponds)which are beyond the control of the ZIAB. Supply fromthese sources was not quantified in the project.

Supply:demand ratios (actual supply versusIMSOP-calculated demand) in different service areasin the east branch canal are compared in Table 1.

Figure 6. Example of an ordering schedule to minimise canal flowfluctuations


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During the 2004 irrigation season, the seasonaldemand exceeded supply in all the service areas. Theaverage supply:demand ratio for the entire area showsthat 23% of the total irrigation demand is suppliedfrom the Zhanghe reservoir. An unknown amount issupplied in addition by local ponds and reservoirs.

During the 2003 season, 18% of the water demandwas supplied by the east branch canal. Farmers orderedwater only once in the whole season and met the rest oftheir requirements from the local water sources. Rain-fall during the 2003 and 2004 seasons was well distrib-uted, which may have also affected the pattern ofdemand. A survey of farmers in the third main canalconcluded that there is, on average, one pond for every3.0 ha of rice to supplement the irrigation, yielding anaverage pond capacity 833 m3/ha. These ponds arerefilled during rainfall events throughout the season.The actual catchment areas and hydrology of theseponds were not analysed in this study.

Main canal systemIn order to understand the shortcomings of the

existing operation, the seasonal irrigation demand ofthe ZIS main system was estimated using IMSOP for

the water years 1999, 2000, 2001 and 2002, and com-pared with monitoring data. A comparison of supplyand demand for the different parts of the canal systemduring irrigation season of 1999 is shown in Figure 8.The supply:demand ratio was found to vary from11% to 55% in 1999 (Table 2), indicating that onlypart of the irrigation demand is supplied from theZhanghe main reservoir. During 2002, only 13% ofthe overall demand was supplied from the Zhanghereservoir, while in other years the reservoir met up to50% of the demand.

The amount of water allocated for irrigation fromthe Zhanghe reservoir has fallen from 171 million m3

in 1999 to 38.3 million m3 in 2003. The ZIAB hasallocated to hydro-power generation the water nownot used for irrigation.

Order delivery

Historical water order data were analysed to deter-mine how well the managing agency functions in

Figure 7. Comparison of water actually suppliedand IMSOP-simulated irrigation demandin the east branch canal of the ZhangheIrrigation System, central China

Table 1. Supply:demand (IMSOP) ratio and itsvariation in different service areas of theeast branch canal, Zhanghe IrrigationSystem, central China

Service area 2003 2004

Whole systemWenjiaxiang and AnzhankouHejiLengshui

0.180.28

No irrigation0.08

0.230.260.220.19

Figure 8. Comparison of water actually suppliedand IMSOP-simulated irrigation demandin different branch canals of the ZhangheIrrigation System, central China in 1999

Table 2. Supply:demand (IMSOP) ratio in differentbranch canals of the Zhanghe IrrigationSystem, central China

Canal branch 1999 2000 2001 2002

GeneralWest mainFirstSecondThirdFourth

0.110.550.400.540.320.53

0.230.220.420.840.490.85

0.370.590.480.430.450.68

0.100.070.170.120.20

–


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delivering water orders to farmers. The managementstations were able to deliver more than 70% of theorders on the same day. Only about 10% of the orderswere delivered 3–5 days after being placed (Figure9). The delay was mainly due to the fourth main canaloffice being unable to supply water if the aggregatevolume order by the stations was less than aminimum threshold amount. The critical discharge orwater volume is set in relation to that of the initialwater loss and filling of the canal in each delivery. Ifthe cumulative water ordered by the farmers is lessthan this threshold value, the management office willwait for more orders to accumulate to reduce theinitial losses and dead canal storage.

Comparison of historical supply and order volume

Historical water order data were collected fromWenjiaxiang and Anzhankou stations and aggre-gated. A comparison of the volume of water orderedand the volume of water abstracted in this section ofthe fourth main canal as calculated from the canalwater balance reveals a large oversupply varyingbetween 29% and 66%. This includes canal fillingand other losses, which may account for a large pro-portion of this amount but were not disaggregated inthis study (Figure 10). In a single irrigation eventduring 2004, 300,000 m3 (20%) of a total supply of1,700,000 m3 was estimated to consist of canal fillingand other losses. This large volume can be traced towith the configuration of the hydraulic infrastructure.The canal is very long (25 km) and the flow is con-trolled by only one cross-regulator located towards

the tail end of the canal section. Moreover, cross-reg-ulators in this system are not used to regulate waterlevels but rather to switch flow on and off to the lowerpart of the system. A further reason is the poor con-dition of the canal. A survey of the longitudinal andcross sections of the east branch canal shows that thecanal cross section varies widely every 10–20 metres.

Canals in this system are relatively long and, insome cases such as the east branch canal, water mustbe supplied to small reservoirs or ponds demanding alarge amount to fill dead canal storage. Lengshui andHeji townships are the main irrigation areas on theeast branch canal located in the end of the canalwhere there are many local sources of water. Whilethese areas may delay water ordering, areas in theupstream reaches of the east branch canal such asWenjiaxiang and Anzhankou must incur periods ofdroughts because downstream orders do not meet thecritical flow.

Infrastructure management

A further objective of the project was to develop aninfrastructure management strategy to determine thecost of service provision that will ensure sustaina-bility of the infrastructure. An adaptive asset man-agement framework developed in ACIAR project9834 in Vietnam (Malano et al. 2004) was imple-mented on a pilot basis in the east branch canal.

Figure 9. Percentage of water orders delivered in theZhanghe Irrigation System, central Chinaat various time lags

Figure 10. Comparison of aggregate volume of waterordered and supplied in Wenjiaziang andAnzhankou service areas in the eastbranch canal of the Zhanghe IrrigationSystem, central China


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Asset survey

Irrigation and drainage infrastructure often con-sists of a large number of individual assets dispersedover large areas. The ZIAB does not have any data-base of the assets it owns. A major component ofasset management planning is the assessment of theextent, function, condition, value and performance ofthe individual assets (Burton et al. 2003). The task isusually cumbersome and accounts for a large propor-tion of the cost of implementing an asset-manage-ment program. The project employed a rapid datacollection technique using GPS technology (Malanoet al. 2005). This approach involves a seamless inte-gration between the collection of field data and assetcondition information with geographic informationsystem (GIS) and asset management software. Theirrigation and drainage infrastructure surveyed in theeast branch canal consisted of 69 offtakes, 4 regula-tors, 27 pedestrian bridges, 20 vehicle bridges, 11pumps and 22 km of canal.

Asset-management software

An effective asset-management informationsystem must be capable of integrating data collection,storage, retrieval and processing. Asset data arestored in an asset register which enables asset opera-tors to maintain up-to-date records of the existingasset base. An asset-management software programcalled Asset Manager© was developed to facilitatethe rapid recording, update, retrieval and manipula-tion of the existing asset base. The software wasapplied on a pilot basis to the east branch canal (thefourth main canal bifurcates into an east branch canaland north main canal). The Asset Manager softwarewas adapted for use by ZIS staff.

The Asset Manager software has three importantcomponents: a graphical user interface, a model baseand a GIS-based database management system(Malano et al. 2005). A spatial database related tocanal network and locations of structures was createdby digitising the original system’s maps usingArcView™ GIS software. The data collated by GPS-based asset survey can be directly geo-referenced tothe asset GIS. Asset condition attributes and assetcost data, together with design conditions, can beuploaded using the GUI. The GUI was built usingMap Objects3 and Visual Basic4 and is mouse-driven

with pop-up windows and pull-down menus. Themap objects enable the user to display the GIS files sothat the database can be retrieved and updated easilyusing the graphical interface. The results can begraphically displayed or exported into a spreadsheetfor further analysis.

The software has special functionality to searchand update asset information. Based on the assetdatabase, asset strategy modelling can be carried outby calculating and tallying asset categories and con-ditions, future asset investment and asset financialannuities. The software is designed to help irrigationcompanies monitor the condition of their assets andcarry out financial analysis calculations to developservice costing and pricing policies.

The software was applied on a pilot basis on the eastbranch canal system to provide a representative modelfor the whole Zhanghe system. The asset survey wasconfined to the canal sections under the control of theAnzhankou and Wenjiaziang management stations, butthe processes for describing structures and asset condi-tions are similar in all the other branch canals inZhanghe. The software is designed so that it can beextended to other parts of the system without changes.

Renewal strategy and annuity cost

Sustaining the infrastructure in perpetuity requiresadequate provisions to carry out appropriate inter-ventions such as replacement and modernisationwhen required (Malano et al. 1999). Asset Managerwas used to analyse the long-term investment provi-sions necessary to achieve sustainability. Figure 11shows the tally of asset condition for east branchcanal. Offtakes, regulators, culverts and bridges arein fair condition, with some assets in poor conditionand requiring renewal in the short term. In the eastbranch canal, 89 assets are in condition 1 (good), 33in condition 2 (fair), 13 in condition 3 (poor), and 4 incondition 4 (very poor). The assets include offtakes,regulators, bridges, pumps and canals.

The investment profile shows that a large invest-ment is required in the next 15 years, as certain groupof assets will reach the end of their lives within thatperiod. The irrigation management company willneed to invest 0.40 million Yuan5 in the next 15-yearperiod to replace assets in poor condition. This willtranslate into high cost recovery annuities during thisperiod.

3 Map Objects is a trade mark of ESRI4 Visual Basic is a trademark of Microsoft Co. 5 1 US$ = 8 Yuan


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The Asset Manager software calculates asset annu-ities based on the asset condition. The linear depreci-ation, full and partial annuity for the east branch canalsystem are estimated on average as 110, 235 and 140Yuan per ha (US$13.7, 29 and 17.5/ha), respectively,over the next 15 years. An interest rate of 5% andinflation rate of 3% were used in these calculations.Canal excavation costs occur only once in the life ofthe asset and are therefore not included in therenewals calculation, although the initial cost must betaken into account. On the other hand, the cost oflining is included in the annuity calculation as itrequires future replacement and regular maintenance.

Financial viability and service costing

Data were obtained from the company’s financialbalance sheets from 1999 to 2003. The company’sfinancial analysis showed that revenues for the fourthmain canal office had declined from 5.1 million Yuanin 1999 to 4.6 million Yuan in 2003 (11%). This canbe ascribed mainly to a reduction in revenues fromirrigation from 0.66 million Yuan in 1999 to 0.02million in 2003 (Figure 12). As indicated earlier, therevenue from irrigation water fees was nil during2002 as no irrigation water was demanded. In typicalyears, however, irrigation water use accounts for as

Figure 11. Tally of asset condition in the Zhanghe Irrigation System, central China

Figure 12. Annual revenue from different users of Zhanghe Irrigation System water


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much as 70% of the total water allocated to the fourthmain canal. Income from household and industrialsupply remained nearly constant over the sameperiod. Although agriculture is the largest water user,the revenues from irrigation water supply account foronly 10% of the total income (in 1999). During 2003,irrigation receipts contributed only 0.5% of the totalrevenue.

Total expenditure rose between 1999 and 2003,from 2.04 million to 3.9 million Yuan. Two expend-iture items account for most of the costs: wages andsalaries and miscellaneous expenses. Repair andmaintenance expenditure declined over the sameperiod. The current maintenance expenditure repre-sents only 1.4% of the total expenditure.

The sustainability of the company and systemoperations, however, depends on the ability tosupport its recurrent cost and sustain its asset base inperpetuity (Davidson et al. 2005). From a companyperspective, this implies the ability to renew its assetbase when the current assets reach the end of theireconomic life. If the capital fully depreciates andeventually breaks down, it will need to be scrapped orrebuilt.

The financial costs associated with a sustainableoperation of the irrigation company can be groupedinto eight categories:• asset costs• personnel costs, including staff salaries• repairs and maintenance• administration• insurance• payment of loans• taxes• miscellaneous.

The comparison of the total service costs,including the asset replacement annuity for theperiod 1999–2003, are presented in Figure 13. Thecapital costs associated with the renewal of the assetbase were estimated to average 235 Yuan/ha. It isimportant to note that only irrigation assets are repre-sented in the asset annuity. Headworks and othercompany assets used to supply urban and industrialwater are not included.

The full cost of providing water delivery service bythe fourth main canal office is estimated to have been5.06 million Yuan during 2003 (Figure 13). The ratioof irrigation revenues to irrigation service costs isvery low. In 2003, when only one irrigation eventwas supplied by the office, irrigation revenuesaccounted for only 0.6% of the total cost.

The nominal irrigation water fee set by theZhanghe Irrigation Administration Bureau is0.04235 Yuan/m3. However, the actual revenuesfrom water fees, calculated on the basis of the waterdiverted for irrigation in the fourth main canal, is 0.01Yuan/m3, or about 25% of the nominal water fee.This may be due to the large losses in the canal, lackof proper devices to measure the amount suppliedand low revenue collection level associated with thepost-delivery payments.

Adoption of results

An important aim of the project was to promote theadoption of system management innovations in otherirrigation schemes in China. Melbourne Universitystaff conducted training for Wuhan University staffand Zhanghe staff on the use of GPS for rapid assetdata collection, on operation modelling with IMSOPand in the use of Order Manager. Adoption was alsofacilitated by translating all software interfaces anduser manuals into Chinese.

As a result of the project training activities, ZIABstaff have initiated the extension of the integrated

Figure 13. Renewal-based service cost for the fourthmain canal of the Zhanghe IrrigationSystem, central China


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operational framework to the whole of ZIS. Theproject staff laid-out a GIS for the entire main systemto provide a platform for extending the results to thewhole of ZIS. ZIAB staff have completed the assetsurvey of the whole of ZIS, and Wuhan Universitystaff are helping them to modify the Asset Managersoftware to extend the model to the whole system.The future application of the improvement frame-work to systems in the rest of China can be supportedthrough Wuhan University and ZIAB staff who wereinvolved in the project.

Improved scheduling of supply requires improvedquantification of irrigation demand which can beachieved through better modelling. The long-termsustainability of the company depends on the abilityto support its recurrent costs and sustain its asset basein perpetuity. In practice, the skill level required tocarry out these tasks may currently be beyond that ofthe staff of many irrigation management companies.Company management and operational staff wouldneed to develop a clear understanding of the opera-tional objectives, infrastructure sustainability andmechanisms to improve them. It would need a rig-orous training program to achieve the managementcapability. A provincial or country level policy toimplement these technical and managementimprovements would ensure success.

Conclusions

This research has provided a useful and practicalmethodology to diagnose deficiencies in the irriga-tion system infrastructure and its operation, and toestablish the basis of a management system toprovide defined levels of service to users. The meth-odology is aimed at ensuring the sustainability ofexisting and rehabilitated systems in China. Theresults of the project are both useful and applicable tomillions of hectares of irrigated areas in China. TheIMSOP and Asset Manager models provide a flexibleapproach to the operation of irrigation systems andmanagement of infrastructure. They enable companymanagers to diagnose and improve the operation oftheir systems.

The following are the major impacts resulting fromthe operational and management improvementprocess:• The implementation of the modelling framework

to a pilot area in ZIS enabled the identification ofshortcomings in the operation of the irrigation

system. The application of the IMSOP and OrderManager models demonstrated an improvement inthe level of operational management and identifiedspecific shortcomings in the hydraulic controlinfrastructure of the pilot area.

• The amount of water used for irrigation is steadilydeclining. Farmer demand for irrigation water hasfallen considerably in recent years as farmers havebecome more reliant on rainfall and local watersources for irrigation in response to recent changein government policies. This could imply, amongother things, a marginal utility of irrigation in thisregion.

• Comparison of historical water order data revealedthat the Wenjiaxiang and Anzhankou areas incurperiods of water deficit because of inadequaterouting of water orders from these two sections.The main reasons are the Lengshui and Hejisections delaying orders on the expectation offorthcoming rainfall precluding the volume oforders reaching the delivery threshold.

• The pilot asset-management program developed aspart of this project enabled the managing authorityto plan a long-term strategy for the maintenanceand replacement of infrastructure assets in thesystem. The asset-management program enablesmanagement to estimate the actual cost ofproviding irrigation and drainage services andraises awareness of the financial viability of theauthority in the long term. The program enablesthe identification of full service cost and theshortfall in the current revenue structure.

• The analysis of the financial performance of theZIS showed that the income from supplyingirrigation water has been steadily declining overthe last 5 years by 65% to only 1.1% of the totalincome. This is a threat for the sustainability ofirrigation in future. All these project findings can readily be incorpo-

rated into the formulation of future policy for the irri-gation sector in China. The project trained localresearchers and managers to the point where theycan, without outside assistance, extend the modellingto the whole of ZIS system or any other systems inChina. The ZIAB has initiated the application of theimprovement and modelling framework to the rest ofthe Zhanghe system and an asset survey of the wholeof the system is in progress.


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References

Burton, M., Newcombe, W., Dedja, Y. and Key, T. 2003.Development and application of simplified assetmanagement procedures for transferred irrigationsystems. Irrigation and Drainage Systems, 7, 87–108.

Davidson, B., Malano, H.M. and George, B.A. 2005. Thefinancial viability of irrigation management companies:a case study of Cu Chi Irrigation System, Vietnam.Irrigation and Drainage Systems, 19, 127–137.

George, B.A., Malano, H.M., Tri, V.K. and Turral, H. 2004.Using modelling to improve operational performance inthe Cu Chi Irrigation System, Vietnam. Irrigation andDrainage, Journal of the International Commission onIrrigation and Drainage, 53, 237–249.

Hamdy, A., Ragab, R. and Elisa, S.M. 2003. Coping withwater scarcity: water saving and increasing waterproductivity. Irrigation and Drainage, Journal of theInternational Commission on Irrigation and Drainage, 52,3–20.

Malano, H.M., Chien, N.V. and Turral. H.N. 1999. Assetmanagement for irrigation and drainage infrastructure.Irrigation and Drainage Systems, 13, 109–129.

Malano, H.M., George, B.A. and Davidson, B. 2004. Aframework for improving the management of irrigationsschemes in Vietnam. Canberra, ACIAR Proceedings No.118, 72p.

— 2005. Asset management modelling framework forirrigation and drainage systems: principles and case studyapplication. Irrigation and Drainage Systems, 19, 107–127.

Small, L.A. and Svendsen, M. 1992. A framework forassessing irrigation performance. IFPRI Working Paperson Irrigation Performance No. 1. Washington, DC,International Food Policy Research Institute.

Turral, H., Malano, H.M. and Chien, N.V. 2002.Development and specification of a service agreementand operational rules for La Khe irrigation system, HaDong, Vietnam. Irrigation and Drainage, Journal of theInternational Commission on Irrigation and Drainage, 51,129–140.


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Economic and institutional considerations for irrigation water savings

Shahbaz Khan1

Abstract

Some measures that may improve irrigation water productivity in agriculture are canal lining, irrigationscheduling, advanced irrigation technologies, improved cropping patterns and conversion to crops with highereconomic returns. Each of these options has its own economic merits and institutional issues. This papersummarises an economic evaluation of water-saving interventions at the field, irrigation area and catchmentslevels. Supply and demand theory is used to explore how to internalise the social costs created by irrigationactivity and saving of associated losses that burden the local and regional environment.

A market-based approach which utilises a ‘water leasing’ and ‘preferential right to access saved water’ isargued to take advantage of the market mechanisms for the preservation of the environment. Private–publicinvestment for ‘efficient’ water supplies which can account for third-party impacts needs to be established topromote investment in water-saving technologies. This will help provide secure ‘saved water supplies’ for‘water efficient irrigation and environment’, especially during drought because of real water savings from‘fixed system losses’.

1 CSIRO Land and Water, and School of Science andTechnology, Charles Sturt University, Locked Bag 588,Wagga Wagga, NSW 2678, Australia. Email: <[email protected]>.


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Introduction

As elsewhere in the world, Australia’s irrigationsystems suffer from problems associated with losses instorage and conveyance, on-farm losses and variablewater-use efficiency. In the Murray–Darling Basin(MDB), it is widely accepted that 25% of diversions forirrigation are lost during conveyance in rivers, 15% arelost from canals and 24% are lost on-farm, meaningthat only 36% of irrigation water is actually delivered toplants. Such losses are typical across the world (Table1). The data in Table 1 for the Murrumbidgee IrrigationArea (MIA) do not include river conveyance losses andindicate on-farm losses better than the overall MDBaverage (Khan et al. 2004). However, given that theworld will need to feed 1.5–2 billion extra people by2025, there has to be scope to reduce water conveyancelosses and irrigation efficiency worldwide.

In recent years, there has been a growing concernin Australia about the effect that major diversions ofwater for irrigation are having on the environment.This is creating further ‘economic’ competition forwater, along with demands from urban and industrialusers. Given that rural water use (predominantly irri-gation) accounts for over 70% of Australia’s totalwater use, a figure similar to that in most SoutheastAsian countries, and given the increasing scarcity ofthe resource due to climate change and other environ-mental factors, it is not surprising that pressure isincreasing on irrigators to increase water-use effi-ciency and to achieve true water savings by con-serving water otherwise lost through non-beneficialevaporation or seepage to saline aquifers.

The key to achieving real and substantial watersavings lies in the technical, economic and institu-tional assessment of water-saving options in a whole-of-the-system context. In the Murrumbidgee Catch-ment, adoption of a systems approach showed thataccounted losses greater than 300 GL can be saved(Khan et al. 2005 a,b).

Economic issues

To target on-farm and regional water savings, it ishypothesised that the marginal costs for saving irri-gation water will increase with the volume of watersaved and that it is possible to formulate irrigation-water-saving cost curves for traditional or alternativeirrigation technologies to help shift these cost curvesto lower costs, as illustrated in Figure 1. Figure 1shows a simplified schematic of the marginal costsand benefits for the current cropping systems. ‘X’represents the current viable levels of water savingswhich can be shifted to the right through the low-costalternative technology.

The economic analysis of on-farm conversions tosave each extra megalitre of water show that the costincreases with the total savings, as shown in Figure-2. Typical capital costs to save a megalitre of watervary from less than $2000 to over $7000 dependingupon soil type, crop and irrigation technologies used.

Break-even analysis (not presented here) showsthat the break-even interval for conversion fromflood to pressurised irrigation systems is too long

Table 1. Surface water irrigation efficiency in three irrigation systems

Key indicators Liuyuankou,China

Rechna Doab,Pakistan

Murrumbidgee Irrigation Area,

Australia

Area (ha)Losses from supply system (%)Field losses (%)Net surface water available to crop (%)

40,724351846

2,970,000411532

156,605121177

Figure 1. Benefit–cost curves for water savingtechnologies


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(greater than 15 years). There is a need to reduce thebreak-even period by considering leasing of water forthe environment from farmers at around $300/ML fora fixed period of 5–10 years after which the water canbe returned to the farmer, and the government canthen lease the next lot of water from another group offarmers. This will help remove barriers to the adop-tion of irrigation technologies, reducing local andregional environmental impacts and securing waterfor better ecological futures.

The economic analysis of alternative water-savingtechnologies for channels shows that the cost ofsaving a megalitre of water increases with the totalsavings, as shown in Figure 3. Typical capital costs tosave one megalitre of water vary from less than $500to over $4000 depending upon losses per unit lengthand the seepage-reduction method used.

A similar economic analysis in the Liuyuankou Irri-gation System in China indicates that, to save about20 million m3 of water over a 60 km length ofchannel, capital investment of 3.8 Yuan/m3 would berequired. The current water productivity is 1.35 Yuan/m3. The capital cost of water saving when comparedto Australian costs is $A619/ML. With the currentwater productivity it is not feasible for farmers or irri-gation agencies or companies alone to achieve watersavings in China. There is a need for private–publicinvestment and realisation of third-party beneficiariessuch as the environment and downstream water usersto share the water saving costs.

In Australia there is general feeling that watersavings that cost more than $1000/ML are not viable.The break-even analysis of different channel-liningmaterials by Khan et al. (2004) shows that the price ofsaved water on an annual basis needs to be from $30/ML to over $200/ML to break even within the designlife of the project. This investment can be achieved ineither of two ways: by using the saved water onhigher-value crops, or by including the costs of savingwater in the overall water supply charges, with a pro-portionate cost-sharing arrangement. Water deliverycharges, for example, will increase by $5–15/ML/season to provide water more efficiently (the currentwater delivery charges is less than $20/ML/season).This will also reduce waterlogging and salinity-abate-ment costs (current estimates of costs for waterlog-ging and salinity abatement are $10–200/ML orrecharge/year). The proportional cost to be paid by thefarmer may be less than discussed here if it can beshared with the wider environmental beneficiaries.There is a need to promote a water efficiency culturethrough preferential rights of access, by providing agreater security to farmers and irrigation companiesinvesting in water-saving technologies.

Institutional issues

Who saves and who owns the water losses?

One of the key impediments to achieving real watersavings is the issue of ownership of losses and how toreallocate on-farm and off-farm water savings. InNew South Wales, Australia conveyance system,losses are collectively ‘owned’ by the farmers throughthe privatised irrigation companies, in terms of a con-veyance allowance. There is a provision in the Mur-

Figure 2. Capital investment and total water savingsby for advanced irrigation technologies inthe Murrumbidgee Irrigation Area,Australia

Figure 3. Capital investment curves for savingseepage losses


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rumbidgee Water Sharing Plan (DLWC 2003), forexample, for a conveyance access component for theMurrumbidgee Irrigation company up to 243,000 MLto make up for the transmission loss in wateraccounting. Similarly, farmers are given water entitle-ments irrespective of the actual crop water use. Thiswater entitlement is used to irrigate crops and resultsin evaporation and deep percolation losses. If farmersinvest in new technologies to save water losses, theymay wish to increase their area of production or sellthe saved water in the open market.

Institutional complications are caused by thecommon-pool nature of the irrigation supply infra-structure and deep drainage below the root zone. Thismay lead to lack of collective action. Managing irri-gation systems requires coordinating the actions ofmany users sharing the same resources of water andirrigation infrastructure. Users receiving the directbenefit are likely to ignore the effect of their actionson the common pool when pursing their self- interest.Environmental sustainability of surface- and ground-water and maintenance of irrigation infrastructureresources are therefore at risk of becoming a ‘tragedyof the commons’.

To explore reasons for the lack of action byfarmers and irrigation companies reference is madeto the long break-even interval (greater than 15 years)to achieve net profit from investment for conversionfrom flood to pressurised irrigation systems in case ofthe Murrumbidgee catchment. Farmers also havelittle interest in permanently surrendering their waterentitlements in exchange for capital incentives fornew technology due to uncertainty arising fromcurrent and proposed water reforms.

A business case for achieving water savings at thefarm, regional and basin level has already been estab-lished by the Pratt Water Feasibility Study in theMurrumbidgee Catchment. This seeks a uniformnational water efficiency and environmental regula-tory framework using a Council of Australian Gov-ernments framework (Pratt Water Group 2005).

The Australian Government recently initiated aNational Water Commission (NWC) to acceleratereforms. At the water distribution and on-farm level,the focus of reform and research is on the identifica-tion and reduction of leakage and water losses, thedetermination of water benefits and improved wateraccounts, improved efficiency of water deliverysystems including the change-over from gravity-fedto pressurised delivery systems and better design ofirrigation requirement and delivery to the root zone,

as well as on the development of market-basedinstruments to facilitate improved natural resourcemanagement. However, there are still major differ-ences in productivity across farms, so considerablymore effort is also required at identifying the bio-physical, management practices and social reasonsbehind this variability in order to get all enterprisesworking more productively.

Conclusions and way forward

In order to achieve true water savings, a systemsapproach is necessary to target real water savings andto remove technical, economic and institutional bar-riers.

The on-farm and off-farm water saving costs varyfrom less than $50/ML to well over $5000/ML. Suchinvestments can be possible either by using the savedwater on higher-values crops or by including savingcosts as part of the overall water supply charges witha proportionate cost-sharing arrangement. There is aneed to reduce the break-even period by considering‘leasing of water’ for the environment from farmersat around $300/ML for a fixed period of 5–10 yearsafter which the water can be returned to the ‘owner’and government can then lease the next lot of waterfrom another group of farmers.

If the water-saving technologies are considered ontheir own, the costs involved will be too high toattract any substantial investments by the individualfarmers and irrigation companies. This is mainlybecause the irrigation supply systems represent ashared and jointly owned common pool resource.There is possibility of inaction among local, regionaland national actors, leading to market failure and aclassic tragedy of the commons. Institutional reformsaimed at minimising risk of market failure driven bythe tragedy of commons are required to secure a win–win situation for all stakeholders.

Due to low commodity prices, farmers and irriga-tion companies on their own will be unable to achievewater savings. Unless water saving costs and benefitsare shared by all players in a catchment, real watersavings are not possible. Private–public investmentmodels aimed at providing preferential access rightsto those who save water by investing in water-savingtechnologies may be one of the ways forward. Thereis a need for realising benefits to the environment anddownstream water users to share the water savingcosts.


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Acknowledgments

Data inputs from the New South Wales Governmentdepartments of Land and Water Conservation, andPrimary Industries, and from irrigation companies,are acknowledged. Funding support from ACIAR,the Pratt Water Group and CSIRO’s Water for aHealthy Country Flagship is appreciated.

references

DLWC (Department of Land and Water Conservation)2003. Water sharing plan for the Murrumbidgee regulatedriver water source. Sydney, DLWC.

Khan, S., Akbar, S., Rana, T., Abbas, A., Robinson, D.,Paydar, Z., Dassanayke, D., Hirsi, I., Blackwell, J., Xevi,E. and Carmichael, A. 2005a. Off-and on-farm savings ofirrigation water. Murrumbidgee valley water efficiencyfeasibility project, Water for a healthy country flagshipreport. Canberra, CSIRO Australia, 16p. At <http://www.cmis.csiro.au/healthycountry/reports/Water_savings_low.pdf>.

Khan, S., Rana, T. and Blackwell, J. 2004. Can irrigation besustainable? Proceedings of the 4th International CropScience Conference – New directions for a diverse planet,Brisbane, 26 September–1 October 2004. At <http://www.regional.org.au/au/cs/2004/symposia/1/7/1399_shahbazkhan.htm>.

Khan, S., Rana, T., Beddek, R., Blackwell, J., Paydar, Z. andCarroll, J. 2005b. Whole-of-catchment water and saltbalance to identify potential water saving options in theMurrumbidgee Catchment. Water for a healthy countryflagship report. Canberra, CSIRO Australia, 16p. http://www.cmis.csiro.au/healthycountry/reports/Water_savings_low.pd

Pratt Water Group 2005. The business of saving water.Report of the Murrumbidgee Valley water efficiencyfeasibility project. Report prepared under the Pratt WaterMurrumbidgee project, a collaborative venture fundedjointly by the NSW and Australian governments underthe National Action Plan for Salinity & Water Quality,and by Pratt Water Ltd.


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Water reallocation in northern China: towards more-formal markets for water

A. Heaney1, A. Hafi1, S. Beare1 and Jinxia Wang2

Abstract

Rapid economic and population growth has driven increasing demand for water from industrial and urbansectors, and placed pressure on resources available for agricultural production. While there has beenwidespread economic liberalisation of commodity markets, access to natural resources such as land and waterremains constrained. The capacity to reallocate water resources to best meet these competing demands is animportant aspect of both water and agricultural policy reform in northern China.

This paper explores the institutional framework for water management in northern China. Data from farmhousehold and water manager surveys are used to make preliminary estimates of the benefits of waterreallocation in the Yellow River Basin. Using information from this case study, future directions for waterproperty rights and policy are discussed in light of China’s commitment to a more efficient allocation of waterresources both within and between irrigation districts, and between competing uses.

1 Australian Bureau of Agricultural and ResourceEconomics, GPO Box 1563, Canberra, ACT 2601,Australia.

2 Center for Chinese Agricultural Policy, No. Jia 11,Datun Road, Anwai, Beijing, People’s Republic ofChina.


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Introduction

Since the mid 1970s, China, particularly the regionsof the Huai, Hai and Yellow River basins, has facedwater shortages of growing magnitude. Rapid eco-nomic and population growth has driven increasingdemand for water from industrial and urban sectorsand placed pressure on resources available for agri-cultural production. Historically, the transfer ofwater from agriculture to urban and industrial use hascaused social unrest, with disputes and clasheserupting as farmers struggle to retain access to waterresources. Further, the potential to improve farmincomes by moving from staple agricultural com-modities, such as wheat and maize, into higher-valuecrops such as horticulture has also placed pressure ondeveloping mechanisms to reallocate water used forirrigation within the agricultural sector, includingbetween regions.

In response to concerns of water scarcity and allo-cation, water policy over recent decades has shiftedfrom investing in large storage and delivery infra-structure and water conservancy projects to policiesand institutions designed to ration and allocateexisting resources more efficiently. The policy shiftfrom infrastructure projects that increase watersupply to improving water allocation represents amajor ideological shift in water management inChina. Consequently, the definition and establish-ment of water property rights that underpin thesereallocation mechanisms are important componentsof both water and agricultural policy reform.

This paper explores the institutional framework forwater management in northern China. This regionwas selected because it contains around two-thirds ofChina’s cultivated land but less than a quarter of thenation’s water resources. Almost 50% of the nation’sgross domestic product is generated in northernChina and the region is a significant producer ofwheat and maize (Ministry of Water Resources2000). Data from farm household and water managersurveys are used to make preliminary estimates of thebenefits of water reallocation in the Yellow RiverBasin. Using information from this case study, futuredirections for water property rights and policy arediscussed in light of China’s commitment to a moreefficient allocation of water resources both withinand between irrigation districts, and between com-peting uses.

The Yellow River Basin

The Yellow River is the second longest in China,with a total length of almost 5500 km (Figure 1). TheYellow River Basin covers an area of 795,000 km2

and is characterised by varying climate and relief.The basin can be divided into three distinct reaches— the upper, middle and lower — according to thosecharacteristics. The upper reaches where the river issourced are mountainous with deep valleys until theriver flows across the alluvial plains of Ningxia andInner Mongolia. The reach from Lanzhou to theMongolian steplands receives minimal rainfall butfaces large irrigation demands. The middle reaches,between Hekouzhen and Huayuankou, encompassthe major irrigation areas of Shanxi and Shaanxi thatare fed by the Yellow River’s two major tributaries,the Fen River and the Wei River. Massive amounts ofloess soil enter the main stem and tributaries, whichresults in sediment loads unprecedented in theworld’s major waterways. The lower reaches stretchfrom the Taihang Mountains to the Bohai Sea. Muchof the alluvial plain area of the lower Yellow Riverarea is below river bed level and the river is ‘sus-pended’ (IWMI and YRCC 2002; YRCC 2005).

Annual precipitation distribution falls from 600mm to 200 mm more or less progressively fromsoutheast to northwest. Annual average run-off isaround 58 billion m3. Several large storages provideflood control, ice-run control, sediment mitigation,hydropower and water-supply services. Water con-sumption is estimated to be around 31 billion m3,with agricultural uses accounting for around 80% oftotal water consumption in 2000. The average percapita share of water resources in the Yellow RiverBasin is less than 20% of China’s average, and con-siderably less than that in the rest of the world (IWMIand YRCC 2002; YRCC 2005).

The Yellow River Basin is regarded as the cradle ofChinese civilisation and irrigated agriculture has beenpractised there for thousands of years. Massive govern-ment investment in irrigation infrastructure increasedrural livelihoods and agricultural output in the 1960sand 1970s. Irrigated agriculture has expanded signifi-cantly over the past four decades and new irrigation andagronomic technologies have increased yields consid-erably in some areas. Key agricultural data for nineprovinces in the Yellow River Basin in 2002 are givenin Table 1. Irrigation requirements vary considerablybecause of the large variations in soil and climatic con-ditions across the basin. This is, in part, reflected in the


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variation in crop water use between provinces. Basedon provincial level data, per hectare crop water use inupstream provinces (such as Qinghai, Ningxia andInner Mongolia) is higher than in other provinces. Thismay also be due to these upstream regions havinggreater access to water resources. Climatic conditionsin the lower reaches, such as in Henan and Shandong,mean that crop water requirements are lower than inother parts of the basin. Due to variation in irrigationconditions and other factors, land use intensity andcropping structures in these regions also vary. Morefavourable agronomic and climatic conditions meanthat farmer incomes are higher in the downstream prov-inces (IWMI and YRCC 2002; Huang et al. 2006).

While there are still opportunities for water sav-ings, utilisable water resources are currently fullyexploited in the Yellow River Basin, so meeting newdemands will almost certainly be achieved byreducing supplies from other sectors. As agricultureis a large water user, further reductions in supplyseem inevitable, although this will have implicationsfor rural livelihoods and the long-standing policy offood self-sufficiency. One of the key policy chal-lenges is how to reallocate water supplies whilemaintaining rural incomes and agricultural output.

The focus of the remainder of this paper is to assessthe role that water property rights could play in facil-itating water reallocation, and to estimate the impactson farm household income of reallocating water inthe Yellow River Basin.

Water management in China

Despite the liberalisation of the broader Chineseeconomy, China does not currently have formal watermarkets that are supported by clearly and universallyassigned water property rights. There are, however,non-market mechanisms for assigning water userights and allocating water. Usufructuary rights towater use have evolved either explicitly through lawsand regulations or implicitly through conventions.These rights are generally assigned based on one ofthree systems: first come-first served allocation(‘prior appropriation’ rights); allocation based onproximity to flows (‘riparian’ rights); and public allo-cation. The focus of this paper is water that is publiclyallocated and distributed: public authorities allocatewater using guidelines or laws establishing priorities(Holden and Thabani 1996; Haddad 2000).

Figure 1. The resource regions of the Yellow River Basin, China


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The Water Act, decreed in 1998 and amended in2002, states that the state owns water and that waterrights are not associated with land rights. Land isowned either by the state or by the collective. The statedepartment exerts ownership over water resources onbehalf of the nation. There is a vast and complexbureaucracy to manage water resources. It is designedto manage often conflicting policy goals of allocation,management and pricing of agricultural, urban andindustrial water, water conservation, flood and sedi-ment control, and power generation. Surface- andgroundwater, for example, are managed by differentinstitutions, despite the interrelatedness of the use andmanagement of these two resources. As China’s stateand administrative system is continuing to evolve to amore decentralised structure, there is considerableregional diversity in the details of governance struc-tures, particularly as the definition of roles and scope ofthe various institutions develops (Mollinga et al. 2003).

The Ministry of Water Resources formulatessurface-water-related policies and medium- andlong-term development plans designed to balancewater conservation and demand management goals.Other agencies, including the Ministry of LandResources, have jurisdiction over access to ground-water. The Ministry of Water Resources administerswithdrawal permits under which irrigation districtsare granted a right to withdraw a fixed amount ofsurface water from the river or storage. Irrigation dis-tricts draw water from the river and distribute it alonga main canal to villages via a metered gate. Thevillage maintains the canal network, and all of thewater that flows into the village is for the exclusiveuse of the village’s own residents. This water doesnot have to be shared with villages either upstream or

downstream. Typically, in most villages, the villageleader or water officer in the village committee takescharges of the village’s water management systemand assesses water fees (Wang et al. 2005).

The current charging policy for water varies acrossthe basin although prices are usually uniform for aspecific end use, such as agriculture, in a specificprovince. The central government has encouraged theadoption of volumetric surface water charging, but asplots are so small, it is not feasible to charge indi-vidual farmers according to how much water they use.Current charges take into account both water scarcityand the ability of farmers to pay. They remain low,however, particularly in comparison to domestic andindustrial water charges. Consequently, there is littleincentive for farmers to conserve water (Lohmar et al.2003; Wang et al. 2005).

Outside of the central government, there are manywater management institutions at the provincial, pre-fectural and county level that also influence waterpolicy and management. The Yellow River Conserv-ancy Commission is the overall planner and regulatorof water in the basin. The duties of the provincial waterbureaus include planning, survey, design, construction,operation and management of irrigation, drainage,flood control works and rural hydropower. The waterresources bureaus at the prefecture and county levelsare directly responsible for constructing and main-taining irrigation infrastructure, associated flood-control facilities and medium-size reservoirs. Mostcounty offices have water resource stations in eachtownship that construct and maintain branch canals andsmall reservoirs. These offices interact with local vil-lages (Bin 2003; Lohmar et al. 2003; Wang et al. 2005).

Table 1. Agricultural water use and farmer income, 2002

Province Agricultural water use

(109 m3)

Irrigated area

(’000 ha)

Crop water use

(m3/ha)

Farmer income

(Yuan/year)

SichuanGansuQinghaiNingxia Inner MongoliaShanxiShaanxiHenanShandong

122.2597.2520.3676.03

448.8535.5054.62

145.74188.27

2500.6988.3193.5410.0

2537.61103.71314.74802.44797.4

48,88898,401

105,220185,439176,880

32,16541,54630,34739,244

210815901669191720862150159622162948

Data source: China Statistic Yearbook, 2003


12 Heaney.fm Page 133 Tuesday, July 25, 2006 10:28 AM

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A formal legal structure has not been an importantcomponent of water property rights and local partyleaders often handle disputes and conflicts on a non-legal basis. As the complexities of these disputesincrease, transactions costs escalate and non-formalmeans for resolution have become less appropriate.

China is slowly reforming its water laws, institutionsand policies to better manage water and other naturalresources. Water management policy in the YellowRiver Basin is now predominately focused on reallo-cating water resources under conditions of scarcityrather than developing new sources of supply throughlarge infrastructure projects. There is a focus on inte-grated water management and allocation, the enhance-ment of water-use efficiency, strengtheninggovernance in water resources planning and coordina-tion, and poverty alleviation. A national waterresources plan, which was due to be completed by theend of 2005, is being promoted as a tool with compo-nents of water resource assessment, utilisation anddevelopment to progress toward integrated water man-agement. A preliminary legal and policy frameworkunder the Water Act, and others, has been establishedto implement more-formal water rights regimes andwater reallocation mechanisms (Zhang 2005).

Water rights are not transferable under the WaterAct. There have, however, been many attempts toreallocate water in China, few of which have beensuccessful due to lack of enforcement and poorincentive structures and, in some instances, the lackof an institutional framework to do so. In 1999, forexample, a program was initiated to alleviate watershortages in the downstream reaches of the YellowRiver. It was proposed that reductions in water allo-cated to each province in the upstream reaches beintroduced gradually. The volume of the reductionswas based on an evaluation of demands claimed byprovincial officials in the lower reaches and the fea-sibility of being able to save water in each of theupstream provinces. Water prices were alsoincreased in the upper reaches to provide a furtherincentive to save water (Wang et al. 2005).

A further example of an attempt to reallocate waterwas a proposal to transfer water between borderingcities, Dongyang and Yiwu, in the upper reaches ofthe Jinhua River in Zhejiang Province. The proposalincluded an investment by the municipal governmentof Yiwu in a reservoir owned by Dongyang City inexchange for the right to water supply of 50 millionm3 each year. While this transfer appeared to havethe potential to improve the social and economic effi-

ciency of resource utilisation, the transfer did not goahead because neither the buyer nor the seller of thewater had the legal right to surplus water usage. Con-sequently, there was no legal support for the ‘perma-nent’ transfer of water, which could undermine thetransaction in the future. As such, the transfer couldbe considered to be only a ‘debt use right contract towater’ since the permit to use water could not betransferred (Bin 2003). Although this example isdrawn from outside of the Yellow River Basin, itshows how inadequate legal and institutional frame-works can preclude water transfers, even though theymade lead to a more efficient outcome.

Both these examples highlight the shortcomings ofadministrative reallocation decisions and the problemsassociated with inadequate water property right andinstitutional structures. Given that water reallocationmechanisms based on direct administrative interven-tion rarely lead to economically efficient outcomes, itis likely there are economic benefits to more-formalmarket structures. Further, by their nature, more-formal market structures will provide the mechanismto transparently reallocate water and resolve disputesusing legal institutions. The next section discusses themodelling framework used to estimate the benefits ofwater reallocation in agriculture.

Estimating the benefits of water reallocation in the Yellow River Basin

Model specification

The methodology used to model water reallocationin the Yellow River Basin involved four steps. First, aflexible production function was estimated to charac-terise the agricultural production technologies in thebasin for each region and for seven agricultural crops:wheat, maize, rice, vegetables, cotton, soybean andpotatoes. Second, a non-linear profit maximisationproblem was formulated for each region. The objectivefunction embeds the flexible crop production functionsand input costs. The constraints reflect regionalresource limits on the availability of land and water, aswell as any policy restrictions. Third, the optimisationmodel was solved over a range of water prices to esti-mate the parameters of a regional water demand func-tion. Fourth, these water demand functions wereincorporated into a spatial equilibrium model ofregional water markets for the Yellow River Basin toestimate the potential gains from water transfers withinthe basin.


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This methodology was chosen because data sourceswere limited and the majority of the data that wereavailable are cross-sectional. Production and costparameters are derived from empirical data. Thesecond stage is to determine the resource costs of landand water, or any policy constraints as these costs arenot fully reflected in input prices. These are derived bycalibrating the optimisation to recreate the base-yearproduction and resource-use data. The end result of thiszero degree of freedom approach is the development ofa positive rather than a normative model that can beused to evaluate policies designed to reallocateresources through trade or administrative means.

RegionsFor the purpose of this study, the Yellow River

Basin was divided into 10 regions based on hydro-logic, agroclimatic, and soil conditions. This is con-sistent with previous work undertaken by the WorldBank (World Bank 1993). The important administra-tive boundaries and provinces included in eachregion are provided in Table 2 and shown in Figure 1.There are three basic principles underlying this clas-sification: first, within regions, natural geographicconditions, water resource development and use, andwater conservancy development and objectives aresufficiently similar or sufficiently dissimilar; second,distinctions important to different main-stem riversections or tributaries are maintained; third, if pos-sible, the administrative boundaries and catchmentareas corresponding to major works on the main stemor tributaries are preserved.

Estimating parameters of crop production and implicit land cost functions

Assembling a minimum datasetThe data for the research come from both field

surveys and secondary sources. The results of twolarge survey activities are included in the field surveydata. The first survey, the China Water ManagementSurvey (CWMS), was conducted in 80 villages inNingxia, Henan and Hebei provinces in 2001 and2004. A second survey in 2004, the North China WaterResource Survey (NCWRS), collected data fromvillage leaders and accountants from more than 400villages in Inner Mongolia, Hebei, Henan, Liaoning,Shaanxi and Shanxi provinces. The methodology usedwas an extended version of the community-scalevillage instrument of the CWMS survey. The samplewas chosen using a stratified random samplingstrategy for the purpose of generating a sample repre-

sentative of northern China. The secondary sourcesinclude production-cost data at provincial level, andareas and yield of crops at county level collected by theMinistry of Agriculture.

The parameters of production technology andregional resource use were estimated from a dataset forthe base year, 2002. The dataset combined county-levelagricultural statistics with village and farm-levelsurvey data. The assembled database included landarea allocated, water use, labour and material inputs,product and input prices, and average yield for eachregion and crop. Water use was estimated by multi-plying the area allocated by the long-term average oftotal crop evaporative requirement of water, estimatedusing Penman evaporation data, crop coefficients andthe number of days of a year the crop occupies the land.Summing the land area allocated and the volume ofwater used over all crops gives an approximation of theregional land and water endowments that can be allo-cated between crop enterprises.

The minimum dataset to estimate the parameters offlexible crop production functions and true costs alsorequired, for each region, the scarcity or rental value ofallocable land and water resources. As there are nomarket price data for land or water, a method suggestedby Howitt (1995) was used and the resource scarcityvalues were estimated by fitting a linear programmodel for available data. These scarcity values aretreated as implicit market prices. In each regional linearprogram model, profits from regional crop productionare maximised subject to resource constraints levels, asestimated above, and a set of calibration constraints

Table 2. Regions of the Yellow River Basin

Region Provinces included in each region

123A3B45A5B67A7B

Sichuan (3), Gansu (1), Qinghai (11)Gansu (23), Qinghai (16)Gansu (7), Ningxia (16), Shaanxi (1)Inner Mongolia (28)Shanxi (21), Inner Mongolia (2), Shaanxi (10)Shanxi (50), Henan (6)Gansu (23) Ningxia (4), Shaanxi (68)Shanxi (6) Shaanxi (1), Henan (20)Henan (37)Shandong (65)

Note: In column 2, the figures in brackets are the numbers ofprovincial counties that should included be in the region.

Source: Authors’ calculation based on county-level data providedby the Institute of Geographical Sciences and NaturalResources Research, Chinese Academy of Sciences.


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designed to exactly calibrate to base-year land alloca-tions. Depending on the relative endowment of landand water in the region, one of the two resourcesbecomes scarcest with a positive scarcity value. Thedual values or the shadow prices of the resource con-straints of the linear program models are taken astheir scarcity values.

Crop production functionsThe specification of production technology that

was used is more flexible than the commonly usedfixed-coefficient Leontief specification. This is pre-ferred because the Leontief specification mayproduce misleading results from the impacts ofpolicy changes. For each crop, the production tech-nology is assumed to exhibit constant elasticity ofsubstitution (CES) between inputs. For each regionand crop, a CES production function of the formgiven in (1) is to be estimated.

where γ = (σ – 1)/σσ = elasticity of substitutionβrij = share of input j in the production of

crop i in region r, with

αri = scale parameter for crop i, in region r.

For each region, r and crop i, production function(1) which uses j inputs has j unknown parameters (j –1 share parameters of βrij and αri). Just as in the case ofcalibration of computable general equilibrium (CGE)models, for each input j, the share parameter βrij is esti-mated using data on the use and unit cost of all indi-vidual inputs (Howitt 1995). The unit factor cost usedhere includes scarcity value estimated as explainedabove, on top of the nominal cost. In the case of land,the unit factor cost also includes a marginal crop-spe-cific cost derived from the shadow price of calibrationconstraints to reflect the heterogeneity in land allo-cated to different crops. The unit factor costs used hererepresent true costs that exactly exhaust total revenuefor each crop and thus ensure the model exactly cali-brates to base-year land allocation to alternative crops(Howitt 1995). For each region, r and crop i, theremaining parameter, αri, is estimated by invertingequation 1 and then substituting estimated values ofβrij and base year yri and xrij values.

Implicit land cost functionsAs the estimated share parameters, βrij, include

marginal crop-specific costs due to land heteroge-neity, the parameters of the corresponding total landcost function should also be derived. This cost func-tion accounts for an implicit cost that needs to beexplicitly incorporated to exactly calibrate to base-year land allocation data. For each region, r, andcrop, i, the implicit cost, cri, is given by a quadraticfunction of the area allocated to that crop

cri = δri,x2

ri,j=land

and thus the marginal cost by

∂cri/∂xri,j=land = 2∂rixri,j=land

The parameters δri are estimated by substituting theshadow prices of linear programming calibrationconstraints for the LHS and the base year land allo-cation for xri,j=land on the RHS of the latter (marginalland cost) expression.

Regional agricultural production problemIt is assumed that in each region, scarce land and

water resources are allocated to alternative croppingenterprises to maximise aggregate profits. The corre-sponding profit maximisation problem is given inequations (2)–(4).

where pri = price of product of crop i in region r(Yuan/t)

ωrij = nominal price of input j used in crop iin region r (Yuan/’000 m3 for waterand Yuan/day for labour)

ψrj = endowment of resource j in region r(ML for water, days for labour and hafor land).

For each region, r, the production problem is tomaximise the aggregate profit from crop production(1) subject to a CES production technology for eachcrop (3) and regional resource constraints (4) whichstate, for each input, j, its use by all crops cannotexceed the endowment, ψrj.

This model is specified and solved in GAMS (gen-eral algebraic modelling system), a modelling frame-work for mathematical programing and optimisation,

(1)

(2)

(3)

(4)

1rijj

β =∑


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as a non-linear programing problem. For furtherinformation on GAMS, see <www.gams.com>.

Estimation of water demand elasticitiesFor each region, the model given in equations (2)–

(4) is run to estimate regional demand for water at 50discrete scarcity values (or prices) of water, ωr,j = water,ranging from 0 to 300 Yuan/ML. For each region, thedataset with 50 observations of water price and quantitydemanded is used to estimate the elasticity of demandassuming a constant elasticity specification. The base-year water demand, water scarcity value and the esti-mated elasticities are given in Table 3. The derivedmarket prices or water scarcity values differ substan-tially between regions and suggest that there can be sig-nificant gains from reallocating water between regions.

Regional water market modelFor each region, r, water use, dr, is a declining

function of the user price, pr. Assuming a constantelasticity specification, the demand function can begiven as dr = φrpr

ηr, where: φr is the scale parameterand ηr is the elasticity of demand. For each region,the value of scale parameter, φr is estimated by sub-stituting the estimated demand elasticity and thebase-year water use and price given in Table 1. Foreach region, water supply is assumed to be equal tobase-year water use. The relatively high scarcityvalue of water (or implicit price) in region 5B is due,in part, to it drawing the majority of water used forirrigation from the Wei River. This region cannot bean importer of water after the reallocation, as it is not

possible to substitute Wei River water for YellowRiver water for environmental reasons. It can, how-ever, be an exporter of water.

Inter-regional water tradeInter-regional trade can be shown graphically in a

back-to-back diagram. Figure 2 illustrates price–quantity combinations before and after trade andmeasures of welfare changes for the case of tworegions.

Demand and supply schedules are denoted by D andS and quantity and price by Q and p. Subscripts 1 and2 are used to denote the region. Price quantity combi-nations for region 1 and 2, before trade are given by(Q1, p1) and (Q2, p2) and after trade by (Q'1, p'1) and(Q'2, p'2). The unit cost of transport losses of waterbetween the two regions is given by p'2t. When tradebetween the two regions is allowed, region 1 sells qvolume of water to region 2 that receives q(1 – t) afternetting out the transport losses.

Water users in region 1 lose consumer surplusmeasured by the trapezoidal area p1p'1ac while theygain from sales of water measured by the rectangleQ'1abQ1. The gains from trade for region 1 are thusgiven by Q'1abQ1 less p1p'1ac. Water users in region2 gain consumer surplus measured by the trapezoidalarea p2p'2ed. Total net gain from trade is given byp2p'2ed plus Q'1abQ1 less p1p'1ac. If water is trans-ferred administratively rather than traded through themarket, assuming the same price and quantity com-binations given in Figure 1, the area Q'1abQ1 repre-sents a fair compensation payment for region 1 waterusers.

Table 3. Water use and price and estimatedelasticities by region, 2002

Region Base-year water use

(million m3)

Scarcity value of watera

(Yuan/ML)b

Demand elasticity

12

3A3B4

5A5B6

7A7B

181,1293,7941,786

7354,3479,2413,2498,304

15,908

66

16191650

189120133103

–0.76–0.78–0.87–0.88–0.84–1.13–1.81–0.85–0.88–0.89

a Estimated as the net agricultural return of an additional 1000 m3

of water use in the region less delivery charges.b 1000 m3 = 1 megalitre (ML).

Figure 2. Water trade between two regions: price–quantity combinations before and aftertrade and measures of welfare changes


138


Trade flowsSee equation (5) at the foot of this page. For each

region, s, regional water use plus water exported todownstream regions, qsr, cannot exceed the regionalwater supply, s, plus water imported from upstreamregions, qrs. If the regional water use plus waterexports is less than the supply plus imports fromother regions after adjusting for transport losses, thenthe price of water is zero and if the price is positivethen the first expression is satisfied with strictequality.

Price arbitrage conditions

pr ≥ ps(1– t), qrs[pr–ps(1–trs)] = 0, for r = 1,....,10

At each region r, there is a common price or scar-city value of water traded from the region to the adja-cent downstream region, pr, that cannot be lower thanthe price of water in the adjacent downstream regionnet of the cost of transport losses involved in trans-ferring water to it. If the price in region r exceeds theprice in the downstream region s net of the cost oftransport losses, then there are no sales of water to thedownstream region. If water trade between the twoadjacent regions is positive, then the price in thesetwo regions differs only by the cost of transportlosses between them.

This model is also specified and solved in GAMSbut as a mixed complementarity problem (MCP).

Effects of water reallocation in the Yellow River Basin

The total value of agricultural production in theYellow River Basin is estimated to be around 57billion Yuan. Total cultivated land in the YellowRiver Basin is almost 16 million ha (Table 4). Acrossthe 10 regions, cultivated land ranges from more than3 million ha (such as regions 5B and 7B) to less than1 million ha (such as region 1). The share of irrigatedland varies considerably between regions, with thosein the lower reaches having the highest proportion ofirrigated land. For example, in region 7A (HenanProvince), more than 80% of cultivated land is irri-gated. In contrast, only 4% of cultivated land is irri-gated in region 1, in the upper reaches, and only 11%in region 4, in the middle reaches. This is becauseirrigators in the downstream reaches have access togroundwater that is used conjunctively with surface

water resources. Irrigation in upper and middlereaches depend mainly on surface water.

Land-use intensity and cropping structures in theseregions are also highly varied. Due to various irriga-tion conditions and other factors, land use intensity indownstream reaches also is higher than that in theupper and middle stream reaches (Table 3). Forexample, the multiple cropping index in region 7A isnear 2, while it is less than 1 in region 1.

The optimal reallocation of irrigation water wasestimated by simulating trade between regions. Withtrade, the scarcity value of water is equated acrossregions, allowing for differential conveyance losses.

After the trade, water is reallocated from upstreamto downstream and from low to higher returning uses,leading to an overall increase in irrigated agriculturalproduction. Under an optimal reallocation in theYellow River Basin, a large volume of water wouldbe imported into regions 6 and 7A and, to a lesserextent, region 7B (Figure 3). This water is used forrice, cotton, maize and wheat production after thetrade. The increase in rice and wheat production inthe importing areas more than offsets the reductionsin wheat production in the exporting areas, andoverall production in the basin rises.

The water is exported mainly from regions 3A and5A, and to a lesser extent, from regions 2, 3B and 4where the scarcity value of water is low relativeto downstream regions. That is, downstream usersare willing to pay a price greater than the use value inupstream regions, creating profitable trading oppor-tunities. Much of the imported water is used forwheat and rice production, the same crops that areforgone in all water exporting regions. However, theproductivity of these crops in the importing region ishigher. In addition, maize production in importingregions is increased as it is a high-value crop used asanimal feedstock.

Production of maize, cotton, potatoes and rice inimporting regions increases, provided there is moreland and labour available to make use of the importedwater. Total cultivated area increases by 30% each inregions 6 and 7A, and by 22% in 7B, assuming thatmore labour will be available in these regions. Simi-larly, less labour will be required by exportingregions.

(5)


139


The trade equalises the scarcity value of wateracross all regions in the basin, except region 5B.After the trade, the price of water increases signifi-cantly in the upstream exporting regions, mainly 5Aand 3A, and decreases in the downstream importingregions, regions 6, 7A and 7B.

There is an estimated welfare gain of almost 1.3billion Yuan per year in the importing regions afterthe water reallocation (Table 5). These benefitsaccrue as a result of significant increases in crop pro-

duction in the importing regions. This is partiallyoffset by reductions in agricultural production in theexporting regions of around 277 million Yuan peryear. The total benefit of water reallocation, com-prising the increase in the value of agricultural pro-duction, is around 1 billion Yuan per year. Thisrepresents an increase in the value of agricultural pro-duction of around 1.8 per cent.

The benefits that are generated as a result of watersales accrue to the holders of the property rights in theexporting regions. If, as is the case now, irrigators orirrigation districts do not own the water, the benefitsof the water sales would go to the state. This wouldresult in a loss in potential income from the sale ofwater to irrigators in the exporting regions of morethan 500 million Yuan per year. That is, irrigators inthe exporting regions would be more than 500million Yuan worse off each year after the realloca-tion as they do not currently hold the property rightsto the reallocated water. Alternatively, this is theamount that they would need to be compensated forthe loss of access to water resources if the water wasadministratively reallocated. This is in addition to thereduction in agricultural production valued at around277 million Yuan per year.

The impact of water reallocation on farm house-hold incomes is presented in Table 6. If exportingregions are not compensated for the reallocatedwater, reductions in farm household income aregreatest in the middle reaches of the basin — regions5A, 3A and 4 – which have the greatest reductions in

Table 4. Cultivated land, share of irrigated land, sown area, multiple cropping index and farm household incomein the ten regions of the Yellow River Basin, 2002

Region Cultivated land(’000 ha)

Share of irrigated land(%)

Total sown area (’000 ha)

Multiple crop-ping indexa

Farm household income

(Yuan/year)

12

3A3B4

5A5B6

7A7B

79913

12461910131517353160848

14113102

4263951114034448263

59103413501185106917734061127726595370

0.751.131.080.620.811.021.291.511.891.73

1682144017762419234129031521218921782759

a Multiple cropping index is the ratio of sown area over cultivated area.Source: Authors’ calculations based on county-level data provided by the Institute of Geographical Sciences and Natural Resources Research, Chinese Academy of Sciences.

Figure 3. Water demand in regions of the YellowRiver Basin


140


agricultural production. Conversely, with compensa-tion, all regions benefit from the reallocation, withthe largest benefits going to some regions that havethe lowest farm household income in the basin, suchas regions 2 and 3A. The increase in farm householdincome in the importing regions is considerablylower if farmers hold water property rights as theywould need to pay for the water they received (inaddition to delivery charges), reducing the benefits ofwater reallocation in that region.

Concluding remarks

Preliminary findings from the modelling work pre-sented here suggest that there would be considerablegains from water reallocation. In the scenario pre-sented, water moved downstream to higher valueagricultural use under conditions of free trade. Theeconomic benefit, in terms of the increased value ofagricultural production, was around 1 billion Yuanper year. If farmers in water-exporting regions hadthe property rights to transferred water, income fromwater sales would more than offset the forgoneincome from reduced agricultural production. Theincome from water sales is estimated to be around500 million Yuan per year. In the absence of propertyrights, the lost value of agricultural productionlowers farm household incomes substantially. Con-versely, with revenue from the sale of water, farmhousehold incomes in the exporting regions would

rise substantially. Importantly, without compensa-tion, the regions with the lowest incomes are likely tobe affected the most by water transfers.

Water can be reallocated using by a number ofmeans, two of which have been considered here —administrative reallocation and free water trade.While it may be theoretically possible to reach aneconomically efficient outcome by administeringwater reallocation, there are number of barriers thatprevent this from happening in practice. Forexample, the information requirements aredemanding. Information asymmetry between theadministrative body and irrigators on the marginalvalue and opportunity costs of water mean that allo-cation decisions would be made based on imperfectinformation about where the greatest benefits can begenerated.

Water markets, on the other hand, coordinate pricesignals and disperse information and preferences.Water markets would provide a mechanism totransfer water to higher-value uses on a large scaleand to the other productive uses, such as industry, andthe environment. For formal water markets to workefficiently, property rights to water must be private,exclusive and transferable. Secure ownership pro-vides the incentive to invest in human or physicalcapital to improve the productivity of the resource.Transferability provides the flexibility to reallocatethe rights according the changing demand and otherconditions. The role of the state is to protect these

Table 5. Benefits of water reallocation in the Yellow River Basin (million Yuan)

Water-importing regions

Water-exporting regions

Basin wide

Change in value of agricultural production Value of the water transferredTotal benefit of reallocationa

1335–498

837

–277498221

10580

1058a Include benefits of water sales accruing to irrigators in the exporting regions. For those farms that sold water, farm income after

reallocation also includes the annual lease value of water sold or the annualised value of the compensation received if the water wastransferred administratively.

Table 6. Impact of water reallocation on farm incomes (Yuan/farm) in different regions of the Yellow River Basin

Region 1 2 3A 3B 4 5A 5B 6 7A 7B

Before reallocationChange in farm household income without property rightsChange in farm household income with property rightsa

1682

–59

105

1440

–20

40

1776

–64

57

2419

–49

38

2341

–58

54

2903

–46

19

1521

0

0

2189

176

113

2178

183

118

2759

27

15a For those farms that sold water, farm income after reallocation also includes the annual lease value of water sold or the annualised value

of the compensation received if the water was transferred administratively.


141


property rights by enforcing contracts and reducingtransactions costs and other barriers to exchange.However, legislation, institutions and the necessaryregulatory framework to support water reallocationdo not currently exist in the Yellow River Basin.

While the issues facing resource managers inChina are unique in many ways, establishing andimplementing water property rights structures tofacilitate reallocation has been undertaken in manydeveloped and developing countries. A body of liter-ature exists drawing lessons from experience in thesecountries and assessing its relevance in others. Hu(1999), for example, explored the relevance of theAustralian experience in the Murray–Darling Basinto the Chinese context and concluded a similar legaland institutional framework would not be suitablebecause of the existing administrative framework inChina and the incomplete and uncertain specificationof resource access. Perhaps the most pervasive of rea-sons, however, is the small scale of farming in Chinaand the consequent transactions costs of imple-menting water property rights at that scale. If, on theother hand, water rights are granted at a higher level— for example, at the irrigation district level — theremay not be sufficient incentive for farmers to engagein water-saving practices unless they are adequatelycompensated.

Acknowledgments

This research was conducted under ACIAR projectnumber ADP/2000/120 ‘Institutions and policies forimproving water allocation and management in theYellow River Basin’. The Australian Bureau of Agri-cultural and Resource Economics and the Centre forChinese Agricultural Policy gratefully acknowledgefunding and support provided by ACIAR, the Inter-national Water Management Institute and the UnitedStates Department of Agriculture, EconomicResearch Service and the guidance of Jikun Huang,Scott Rozelle and Bryan Lohmar.

References

Bin, L. 2003, Water rights in China. Ministry of WaterResources paper presented at the International workingconference on water rights: institutional options forimproving water allocation, Hanoi, Viet Nam, 12–15February 2003.

China Statistics Press 2003. China statistic yearbook 2003.Beijing, National Bureau of Statistics.

Haddad, B.M. 2000. Rivers of gold: designing markets toallocate water in California. Washington, DC, IslandPress.

Holden, P. and Thobani, M. 1996. Tradeable water rights: aproperty rights approach to resolving water shortages andpromoting investment. Policy Research Working PaperNo. 1627. Washington, DC, World Bank.

Howitt, R.E. 1995. A calibration method for agriculturaleconomic production models. Journal of AgriculturalEconomics, 46, 147–159.

Hu, Z. 1999. Integrated catchment management in China:application of the Australian experience. WaterInternational, 24, 323–328.

Huang, Q., Rozelle, S., Lohmar, B., Huang, J. and Wang, J.2006. Irrigation, Agricultural Performance and PovertyReduction in China, Food Policy, 31, 30–52.

IWMI (International Water Management Institute) andYRCC (Yellow River Conservancy Commission) 2003.Yellow river comprehensive assessment: basin featuresand issues. IWMI Working Paper 57. Colombo, SriLanka, IWMI.

Lohmar, B., Wang, J., Rozelle, S., Huang, J. and Dawe, D.2003. China’s agricultural water policy reforms:increasing investment, resolving conflicts, and revisingincentives. Economic Research Service AgricultureInformation Bulletin 782. Washington DC, United StatesDepartment of Agriculture.

Ministry of Water Resources 1994–2000. China waterresources bulletin, various issues. [In Chinese]

Mollinga, P., Hong, G. and Bhatia, A. 2003. Leadership andturnover: the contradictions of irrigation managementreform in the People’s Republic of China. Research paperpresented to the Sixth International Conference onParticipatory Irrigation Management, Beijing, April2003.

Wang, J., Xu, Z., Huang, J. and Rozelle, S. 2005. Incentivesin water management reform: assessing the effect onwater use, production and poverty in the Yellow RiverBasin. Environment and Development Economics, 10,769–799.

World Bank 1993. China Yellow River Basin investmentplanning study: volume 2, Report No. 1146 CHA, 30 June30. Washington DC, World Bank.

YRCC (Yellow River Conservancy Commission) 2005.Background material for Yellow River Basin. At <http://www.lanl.gov/chinawater/documents/yellowriver.pdf>,accessed 1 September 2005.

Zhang, Y. 2005. Statement by deputy permanentrepresentative Ambassador Zhang Yishan, Intergovern-mental Preparatory Meeting for the CSD 13 on Water, 1March 2005. New York.


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The potential use of FILTER technology for treatment and reuse of wastewater in China

N.S. Jayawardane1, Zhanyi Gao2, J. Blackwell1, E.W. Christen1, S. Khan1, Xianjun Cheng2, F. Cook1, T. Biswas1, Jinkai Zhang3

and Guoxia Meng3

Abstract

In an ACIAR research project, the potential use of FILTER (filtration and irrigated cropping for land treatmentand effluent reuse) technology developed in Australia is being evaluated for overcoming the problems ofwastewater treatment and reuse in China. The FILTER technique combines the use of nutrient-rich effluent forcropping, with filtration through the soil to a subsurface drainage system during periods of low croppingactivity and high rainfall. FILTER field trials in Australia showed that the system could be operated to ensurethat the subsurface drainage water has pollutant concentrations that meet environmental authority criteria forpotential discharge to natural water bodies. Use of the FILTER system on a saline–sodic soil to treat salinesewage effluent led to continuing high crop yields and progressive reduction in salinity and sodicity of the soil,by maintaining an adequate leaching fraction.

FILTER trials in China were conducted at Wuqing, located 65 km southwest of Tianjin City. At this site, FILTERplots measuring 60 m x 40 m were used. During four cropping seasons there were reductions of 97–99% and 83–87%, respectively, in total-nitrogen and total-phosphorus loads in the drainage waters. The loads of suspendedsolids, BOD and COD were markedly reduced also, by 68–81%, 61–79% and 75–86%, respectively. A pesticide–spiking experiment on the FILTER plots showed complete removal of malathion in the drainage waters and, in thecase of chlorpyrifos, the load reduction was 99.8%. In a heavy metal spiking trial using cadmium, copper, mercuryand lead, there was a 96% reduction in the concentration of the heavy metals in the drainage water, indicating theirstrong absorption by the soil. The heavy metal load reduction exceeded 99%. Overall, the results indicate that thesilty clay soils at the trial site have good pollutant removal and retention properties.

The field trials in both China and Australia indicate that the FILTER system offers opportunities forsustainable irrigated cropping with saline wastewater on degraded salinised lands. It is also capable ofremoving the major pollutants in wastewaters such as nutrients, BOD, COD, total suspended solids, E. coli andagricultural chemicals that adsorb onto the soil during filtration, thereby increasing the potential reuse of thedrainage water for downstream irrigation and other uses. The pollutant load reduction rates were comparableat the two sites at Griffith and Wuqing with clay and silty clay soils, respectively.

FILTER field trials have also been installed in Da Tong in Shanxi Province to evaluate its potential, as wellas design and management requirements at a site with permeable soils, deeper water tables and very coldweather conditions. Early indications are that the harsh winters in Shanxi are not easily managed by simplemodifications to the FILTER approach. Combining FILTER with controlled environment poly-greenhouses isbeing investigated to try to overcome the winter wastewater renovation problems.

1 CSIRO Land and Water, GPO Box 166, Canberra, ACT2601, Australia. Email: <[email protected]>.

2 China Institute of Water Resources and HydropowerResearch, 20 West Chegongzhuang Road, Beijing100044, People’s Republic of China.

3 Shanxi Institute of Water Resources and HydropowerResearch, 113 Xinjian Road, Taiyuan, Shanxi, People’sRepublic of China.


143



144


Introduction

Environmental protection agencies (EPAs) in manycountries have promoted land treatment and reuse ofsewage effluent and other wastewaters to reduce pol-lution of natural water bodies. When soil conditionsare suitable, land treatment of wastewater for irrigatedcropping or forestry systems can be successfully prac-tised. However, on soils with restricted drainage andhigh watertables, effluent irrigation can lead to water-logging as well as salinisation and sodification, wherethe leaching fraction required to remove excess salts inwastewater is inadequate. This could reduce cropyields and nutrient removal, and hence the long-termsustainability of such sites. In addition, where thewastewater needs to be stored on expensive semi-urban lands during wet weather and winter periods,when the evapotranspiration needs for irrigated crop-ping falls, the costs escalate. Therefore, alternativeland application technology has to be developed forsuch marginal application sites on urban lands.

The land FILTER technique The land FILTER (filtration and irrigated croppingfor land treatment and effluent reuse) technique wasproposed to overcome the aforementioned problems,and to provide a sustainable and cost-effective land-treatment system on the limited available areas ofhigh-value land around urban centres (Jayawardane1995). The FILTER technique combines usingnutrient-rich effluent to grow crops, with filtrationthrough the soil to a subsurface drainage systemduring periods of low cropping activity and heavyrainfall (Figure 1). It thus provides wastewater treat-ment throughout the year and the use of highhydraulic loading rates on the small areas of availableland, with reuse or discharge of the subsurfacedrainage waters.

In the FILTER system, the rate of wastewaterapplication and subsurface drainage could bedesigned to ensure adequate pollutant removal,thereby producing low-pollutant subsurface drainage

Figure 1. Schematic diagram of FILTER plots


145


water that meets EPA criteria for discharge to surfacewaterbodies or for other urban reuses. This filtrationphase could be followed, if and when necessary, by acropping phase to remove any nutrients stored in thesoil of FILTER plots, thereby maintaining a sustain-able system. The preliminary experiments at the Grif-fith, New South Wales FILTER trial site in Australiashowed that adequate crop growth and nutrientremoval could be achieved by crops grown during thefiltration phase, which eliminated the need for a sep-arate cropping phase (Jayawardane et al. 1997a,b).

In the FILTER system, the land at the effluentapplication site is prepared as follows. In soils withlow permeability, physical loosening and chemicalamelioration of the soil to about 1 m depth is used toincrease soil macroporosity and hydraulic conduc-tivity. A network of subsurface drains is installed atthe bottom of this loosened layer, with control valvesto allow for the regulation of leaching rates throughthe soil. Alternatively, controlled pumping from adrainage sump could be used to regulate the outflow,to approximately match the net hydraulic loading ofthe system. The controlled drainage system enablesmanipulation of the watertable, and hence providescontrol of the depths of the aerated and anoxic soillayers above the drains, to maximise the pollutantremoval and to provide adequate root-zone condi-tions for crop production.

A commercial FILTER system requires installa-tion of 7–10 FILTER blocks. In operating the system,the wastewater is applied to each block on a 10–14day rotation. Each effluent application cycle or filterevent (Figure 2) consists of four consecutive stages.These four stages are: wastewater application (irriga-tion); followed by a post-irrigation equilibrationperiod; a pumping period (until drainage outflowapproximately matches the net inflow); and finally ano-pumping equilibration period (leading to flat-tening of the watertable). The subsurface drains areclosed except during the pumping period, to max-imise the wastewater interaction with the soil. Themanipulation of these four-stage effluent applicationand drainage operations could be used to maximisethe removal of nutrients and other pollutants, as thewastewater flows through the soil. Crop uptake andmicrobial degradation processes could be used toprevent the long-term excessive build-up of pollut-ants in the soil. The FILTER design and managementat a given site depend on factors such as the land areaavailable, the pollutants present in the wastewater,

the daily wastewater production rate and the require-ments for pollution reduction by the local EPAs.

Field testing of the FILTER system in Australia and China

Preliminary testing of the FILTER technique wascarried out at the Griffith Sewage Works site incentral New South Wales, Australia, on eight 1 hapreliminary experimental plots (Jayawardane et al.1997a,b), and on a 15 ha pilot trial (Biswas et al.1999a,b; Jayawardane et al. 1999, 2001a) on a highlysalinised, heavy clay soil with impeded drainage anda high watertable. The results obtained during theGriffith preliminary trials and pilot trial showed thatthe FILTER system meets its primary objectives ofproviding pollutant concentration reductions tobelow EPA limits in drainage waters, while main-taining adequate drainage flow rates and crop pro-duction. For instance, during the five croppingseasons on the pilot trial, the total phosphorus in theeffluent applied varied between 2.0 and 8.2 mg/L,while the mean value in the drainage waters was0.31 mg/L (Figure 3). The total-nitrogen concentra-tion in the effluent applied ranged from 4.6 to 33.1.The total-nitrogen concentrations in the drainagewaters were initially high due to leaching of pre-FILTER soil accumulations of nitrogen, but fellbelow 11 mg/L after filter event 5 of the first crop-ping season, and remained below this value for thenext four cropping seasons. Concentrations of sus-

Figure 2. FILTER irrigation and drainageoperations, during a filter event


146


pended solids, BOD5 and chlorophyll a were alsomarkedly reduced in the drainage waters.

Pollution load reductions in the drainage waters(Table 1) during the five cropping seasons of the pilottrial for total P, total N, suspended solids, BOD5,chlorophyll a, and oil and grease were 96, 60, 81, 93,100 and 60%, respectively (Jayawardane et al. 1999,2001a).

Soil chemical analysis at the Griffith trial siteshowed that the pre-FILTER nutrient accumulationswhich occurred due to previous effluent irrigationswere depleted by intensive cropping under theFILTER system. Soil analysis also indicated a reduc-tion in the pre-FILTER levels of soil salinisation(Figure 4) and sodification after installation of theFILTER system, through removal of excess salt in

the subsurface drainage (Jayawardane et al. 2001a,b;2002a). The FILTER system could thus be used toameliorate degraded salinised and waterlogged land,thereby adding economic value to the reclaimedlands. This is in contrast to wastewater irrigationschemes where good quality and high-value agricul-tural lands with adequate drainage are required toprovide a sustainable system. Substantial crop yieldswere obtained on FILTER plots. These could be usedto offset costs of installation and operation of com-mercial FILTER systems.

Figure 3. The mean total-phosphorus concentrationsin the sewage effluent applied andsubsurface drainage discharges from thepilot FILTER trial, during successive filterevents over five cropping season

Table 1. Pollutant load reductions (%) during the Griffith preliminary and pilot FILTER trials, and in the WuqingFILTER trial (with drain spacings of 5 m and 10 m)

Pollutant Griffith preliminary

Griffith pilot

Wuqing (5 m drains)

Wuqing (10 m drains)

Total P 96 96 99 99

Total N 75 60 82 86

Suspended solids 81 68 81

BOD5 93 61 79

COD 75 86

Grease and oil 60

Chlorophyll a 100

Malathion 99.4 100

Chlorpyrifos 100 99.8

Other pesticides 98–100

E. coli (counts) 100

Figure 4. Soil salinity reductions during operationof the pilot FILTER trial


147


Spiking trials with the full range of pesticides usedin the Murrumbidgee Irrigation Area (bensulfuron,molinate, malathion, chlorpyrifos, diuron, bromacil,atrazine, metolachlor and endosulfan) showed thatFILTER systems could be used to reduce the pesti-cide concentrations from excessively high levelsobserved in surface drains of the area to values wellbelow EPA limits (Jayawardane et al. 1997a; Biswaset al. 2000a,b). The pesticide loads were reduced bymore than 98%.

Wastewater pollution surveys in China indicatesevere pollution problems in many rivers, lakes,bays, groundwater and coastal waters. Recognisingthe need to develop and evaluate economically andsocially acceptable methods of treating and reusingwastewater to increase crop production and minimisepollution of waterbodies in China, the China Instituteof Water Resources and Hydropower Research(IWHR), Tianjin Water Conservancy ScientificResearch Institute (TWCSRI) and CSIRO Australiacarried out an ACIAR research project on theFILTER system for land treatment of wastewaters.The research was carried out at a field site in Wuqingcounty near Tianjin, China. The field site is located inan area where there is intense competition for scarcefreshwater resources among users and extensive pol-lution of waterbodies from wastewater discharges.The area also has saline wastewaters and extensiveareas of agricultural lands with saline soils and highwatertables, which could potentially be amelioratedfor cropping by the FILTER technique, thereby pro-viding a dual benefit. The area surrounding the fieldtrial site receives irrigation diverted from Beijing

City ‘sewage river’, which also collects untreatedsewage effluent discharge from a nearby township.

FILTER trials in China were conducted at Wuqing,located 65 km south-west of Tianjin City. The mainaim of the Wuqing trial was to evaluate the FILTERtechniques for sustainable crop production and forremoving pollutants in wastewater (Gao et al. 2000). Atthis site, FILTER plots measuring 60 m × 40 m wereused (Figure 5). During four cropping seasons therewere reductions of 97–99% and 83–87%, respectively,in total-nitrogen and total-phosphorus loads in thedrainage waters. The loads of suspended solids, BODand COD were also markedly reduced, by 68–81%,61–79% and 75–86%, respectively. A pesticide-spiking experiment on the FILTER plots showed com-plete removal of malathion in the drainage waters and,in the case of chlorpyrifos, the load reduction was99.8%. In a heavy-metal spiking trial using cadmium,copper, mercury and lead, there was a 96% reduction inconcentration of the heavy metals in the drainagewater, indicating a strong adsorption of the heavymetals in the soil. The heavy metal load reductionexceeded 99%. Overall, the results indicate that thesilty clay soils at the trial site have good pollutantremoval and retention properties. The results indicatepollutant reduction rates comparable to those observedin the Australian field trials on a clay soil (Table 1),while maintaining adequate flow rates and crop pro-duction. The FILTER site at Wuqing was also used totreat wastewater from a nitrogen fertiliser factory thatwas known to be polluting a river near Tianjin. TheFILTER system markedly reduced the pollutants in thewastewater, and the yield of crops grown increased dueto the nitrogen additions in the wastewater.

Figure 5. FILTER trial site in Wuqing, China. The subsurface drainage from the FILTER plots locatedon both sides of the centre road collects in the drainage sumps (located in a row adjacent to theroad) and is then pumped to the drainage storage tank (right foreground)


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Collaborative research between the Australian andChinese scientists was also carried out on developingFILTER operational systems and models to provideimproved understanding and management of FILTERsystems to treat different wastewater (Jayawardane etal. 2002b,c; Cheng et al. 2003). Collaborative studieswere also conducted on optimisation modelling, toassist wastewater managers in optimising the FILTERdesign and management according to the needs forpollutant removal and wastewater reuse at specificsites (Gao et al. 2002).

Current FILTER trials in Shanxi Province, China

The main aim of the new field trial at Shanxi is todevelop a holistic, integrated system for using waste-water in a sustainable irrigated cropping system,combined with reduction of pollutants in the drainagewater to low concentrations that meet potential dis-charge and reuse standards. We propose to install aFILTER-type system with adequate modification tosuit the specific site conditions. A preliminaryinspection of the field site and assessment of the

available information indicates that the followingtwo modifications need to be applied to meet the siterequirements: (a) subsurface drainage designedaccording to the regional groundwater hydrology ofthe site, which has more permeable soils and deeperpiezometric levels than on sites previously used forFILTER; and (b) wastewater application underfreezing conditions in winter.

Shanxi authorities selected a field site close to DaTong City to install and monitor a FILTER system.Currently at this site, wastewater from a small city ofaround 30,000 inhabitants is subject to primary treat-ment. About half of the sewage effluent from the city,consisting of a flow rate around 2 ML/day, is cur-rently discharged into a tributary of the Yang River.A part of this wastewater is used during summer assupplementary irrigation in an agricultural field closeby. Three trial plots were established and instru-mented in May 2004 (Figure 6). The field instrumen-tation is designed to allow the automatedmeasurement of soil water content, soil pressurepotential and soil temperature at various depths. Aweather station was also installed at the site. The soilphysical and weather data are stored in the data

Figure 6. FILTER trial site in Da Tong, Shanxi Province showing terminating boxes,cages over tensiometers and soil suction samplers in the plot in the foreground.The three terminating boxes can be seen on the three plots. The cablingbetween these terminating boxes and through to the data logger is buried.


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logger and can be accessed through a modem. Thedata logger was housed in a building for securityreasons and cables were run from the terminatingbuses in each plot, back to the house in a serialmanner. The boxes holding the terminating buses areshown in Figure 6. During the spring/summer maizecropping months, excess effluent irrigation wasapplied to the plots. During winter months the plotswere subjected to wastewater filtration through thesoil without a crop.

The hydrogeology of this system was investigatedto understand how a FILTER system for effluent irri-gation and pollutant removal can be operated withoutcausing unwanted environmental damage. If shallowgroundwater conditions develop under the FILTERplots, it will be possible to use shallow horizontaldrains to recycle water. However, if this is not thecase, then deeper drainage techniques such as singleor multiple strainer shallow tubewells will be needed.We also need to know the impact of increasedhydraulic and nutrient loading on the regionalgroundwater in terms of altered groundwater regime,interaction with surface channels or pollutant con-tamination. Thus, we need to know where this waterwill move to, and its quality in the long term.

The analysis of the preliminary data on the soilphysical properties at the field site and on-field obser-vations indicates that the soils at the site have highhydraulic permeability and deep watertables. The sitetherefore appears to be more suitable for a modifiedFILTER system with a vertical drainage system, thanthe conventional horizontal system. On the basis ofhydrogeological properties at the experimental site, aradial flow model of a FILTER site is being developedto test recharge, pumping and drawdown scenarios.

Combining FILTER with poly-greenhouses for wastewater renovation in cold winters in

northern China

The harsh cold climates in northern China are animportant climatic deterrent to year-round adoptionof land application of wastewater for irrigated crop-ping such as in the FILTER system. The soils arefrozen for long periods of each year. Innovativemethods are needed to overcome this problem.IWHR researchers have developed a novel approachto modifying FILTER systems for application in the

cold winter areas in northern China, by combiningFILTER with existing poly-greenhouses (Figure 7).

In the outskirts of most cities in northern China,use of protected canopies or greenhouses is acommon practice for production of vegetables andother crops to meet year-round heavy demand fromurban dwellers, but these enterprises often face short-ages of irrigation water. Modifying these green-houses to combine them with FILTER technologycould provide complementary benefits of potentiallyincreased crop production and provision of low-costwastewater renovation. Thus, in addition to usingpartly treated wastewater to grow specific crops withinaccepted health guidelines, the land FILTER systemsinstalled under appropriately heated greenhouses canbe potentially used through the cold winter months toremove the pollutants in the wastewater as it drainsthrough the soil to the subsurface drainage systemsinstalled beneath the poly-greenhouses. This drainagewater can be discharged to natural waterbodies or bereused to help overcome the acute water shortageproblems in cities in northern China.

A preliminary trial site has been established in theBeijing Water Commission area to develop and testthe efficacy and potential application of the combinedFILTER and poly-house technologies (Figure 7).

Potential application of FILTER technique in addressing the

wastewater pollution problems in China

Wastewater pollution surveys in China indicatesevere pollution in many rivers, lakes, bays, ground-water and coastal areas, due to lack of strict EPA con-trols in the past. The economic and environmentalbenefits of improved wastewater reuse in China inincreasing agricultural production and preventingpollution of downstream water supplies and fisheriesare well documented. In China, irrigated landsproduce two-thirds of the total crop production. Irri-gation is therefore a key factor influencing agriculturalproduction in China, which is being threatened byincreasing demands for domestic and industrial water(MWREP 1987; Wang 1989; CNCID 1994). The dailytotal water and wastewater resources available for irri-gation are 7.7 and 0.1 million ML, respectively. How-ever, during low rainfall seasons, the proportion ofwastewater to total water resources can exceed 20% inthe drier river basins in northern China. This propor-


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tion will increase in the future (Wang 1989) andhence provides an important water resource.

It has also been recognised in China that the dailydischarge of untreated sewage and industrial effluentcauses serious pollution to watersheds and damagesbiological environments (Wang 1989; Mei and Feng1992; CNCID 1994). In 1985, the proportions ofsewage and industrial effluent that were treatedbefore discharge were less than 3% and 22%, respec-tively. Many lakes and rivers close to cities receivelarge quantities of untreated effluent, thereby losingtheir previous functions of drinking water supply,recreation and aquatic production. In a survey of 878rivers in the early 1980s, 82% were polluted to somedegree and in more than 5% of total river length therewere no fish. Over 20 waterways were consideredunusable for agricultural irrigation because of pollu-tion (Wang 1989). Concerns have also beenexpressed about the risk to public health by the use ofmixed industrial and sewage effluent for irrigation ofedible crops, especially from accumulation of heavymetals such as cadmium, lead, mercury and chro-mium (CNCID 1994). This also leads to degradationof irrigated cropping lands by pollutant accumula-tion. Surveys indicate that more than 85% of the pol-lution load in China comes from 9000 point-sourcepolluters. The major pollutants in the waterways inChina are organic matter, nutrients, heavy metals andtoxic organic chemicals (Wang 1989; Mei and Feng1992). As only 3% of the sewage effluent is treated,pathogens counts could be expected to be high neardischarge points. Presence of excess nutrients in

wastewater discharge can cause algal blooms indownstream waterbodies, making the water unsuit-able for consumption by humans and farm animalsand for other uses, as exemplified in recent outbreaksof algal blooms in Lake Dianchi in Yunnan Province.

With increasing public awareness of the impor-tance of environmental pollution control, Chineseauthorities have started introducing laws to forcewastewater producers to clean their wastewater.While wastewater treatment plants may be econom-ical in the larger, affluent cities with only limitedavailable lands, wastewater renovation and reuse byland application systems could be more suited forsmaller and less affluent cities, and for industrieslocated in rural areas.

The specific choice of the wastewater land appli-cation system or combination-systems for providingadequate wastewater renovation without pollutionrisk of public water supplies will be determined bythe hydrological conditions at the site, as discussed indetail by Foster et al. (2003). Figure 8, taken fromFoster et al. (2003), illustrates hydrological condi-tions in which poorly designed effluent irrigation canlead to pollution of public water supplies, while com-bination systems which could involve pre-treatmentwith recharge lagoons or FILTER systems eliminatesuch risks. Thus, FILTER systems in combinationwith other wastewater treatment and reuse schemescould be used to overcome the water pollution con-cerns, in both new city planning and in solving prob-lems of existing smaller cities and rurally locatedindustries in China.

Figure 7. (left) Poly-greenhouses with FILTER plots, underlain with a subsurface drainage system; (right)Cheng Xianjun inspecting the drainage sump into which subsurface FILTER drainage water flows.This drainage water (with pollutants reduced below EPA limits) could be reused, or discharged intosurface water bodies.


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The optimum combination of FILTER with otherwastewater treatment practices will vary widelyaccording to specific site conditions (Jayawardane etal. 2002c). In such integrated planning, both the con-cerns of the environmental authorities on reducing pol-lution of the waterbodies and interest of thewastewater managers to reuse the wastewater eco-nomically, need to be considered. In addition, aholistic and integrated approach for combining water-supply management and wastewater reuse should beadopted, where the adequately treated wastewater canoffset the demands on fresh water supplies. Accordingto specific site conditions and available land resources,the following advantages of FILTER systems shouldbe considered in the integrated water and wastewatermanagement plans. The FILTER system can be sus-tainably used on saline, sodic, waterlogged and otherdegraded low-cost lands, and for dealing with salinewastewaters. A high hydraulic loading could be used

to reduce the required area of semi-urban land forwastewater renovation and the ‘cleaned’ drainagewaters can be reused for agricultural, industrial andother uses, thereby reducing the demand on watersupply requirements. As illustrated in Figure 8, the lowvolumes of industrial wastewater containing heavymetals should be isolated from the high volumes ofdomestic sewage, for separate treatment.

The producers of such wastewaters with heavymetals could be encouraged to use relatively smallareas of FILTER plots to grow non-edible crops, andthe cleaned wastewater draining out of these FILTERplots can be reused (Figure 8). Other innovative, opti-mised combinations of treatment systems incorpo-rating FILTER could be developed according tospecific local hydrological conditions. The Shanxistudies aim to provide guidelines for designing suchcombined systems including FILTER, to suit thelocal hydrological conditions.

Figure 8. General schematic diagram of wastewater generation, treatment, reuse and infiltration to aquifers(from Foster et al. 2003). P, S and T denote primary, secondary and tertiary sewage treatments.(a) Poorly designed wastewater irrigation can lead to pollution of public water supplies. (b) Well-designed systems to reduce pollution risks, such as pre-treatment using recharge lagoons

within the whole-catchment hydrological cycle. FILTER systems could substitute for therecharge lagoons, to provide an economic return through cropping. The separated industrialwastewater could also be renovated by application to small FILTER plots growing non-consumable crops, and the drainage water reused.


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References

Biswas, T.K., Chattopadhyay, G., Jayawardane, N.S.,Blackwell, J. and Waite, T.D. 2000b. Organochlorinepesticide removal from contaminated water using anactive soil barrier system. Indian Chemical EngineeringCongress, 18–21 December, Indian Institute of ChemicalEngineering, Calcutta 700032, India.

Biswas, T.K., Jayawardane, N.S. and Blackwell, J. 1999a.Contaminant removal and sewage effluent reuse througha land FILTER technique. In: Proceedings of 2ndInternational Conference on Contaminants in the SoilEnvironment in the Australasia–Pacific Region, 12–17December, New Delhi. Rafi Marg, New Delhi 110001,India, Council of Scientific and Industrial Research.

Biswas, T.K., Jayawardane, N.S., Blackwell, J., Christen,E.W. and Cook, F.J. 1999b. The ‘FILTER’ technique foryear round treatment of wastewater. In: Patterson, R. ed.,Proceedings of On-site 99 — making on-site wastewatersystems work. PO Box W90, Armidale 2350, Australia,Lanfax Laboratories, 59–65.

Biswas, T.K., Naismith, A.N. and Jayawardane, N.S. 2000a.Performance of a land FILTER technique for pesticideremoval from contaminated water. ANZSS/ASSS Soil2000 Conference, 3–8 December 2000, LincolnUniversity, Canterbury, Christchurch, New Zealand.

Cheng, X., Robinson, D., Blackwell, J., Liu Q., Gao Z. andJayawardane, N.S. 2003 Financial evaluation of theFILTER system at Wuqing in the North China Plains.CSIRO Land and Water report to the Australian Centrefor International Agricultural Research.

CNCID (Chinese National Committee of Irrigation andDrainage) 1994. Response to preliminary questionnaire.CNCID, September 1994.

Foster, S., Garduno, H., Tuinhof, A., Kemper, K. and Nanni,M. 2003. Urban wastewater as groundwater recharge —evaluating and managing the risks and benefits. WorldBank Global Water Partnership Associate Program, GW-MATE Briefing Note No. 12.

Gao, Z., Biswas, T., Song, Y., Cheng, X., Fu, M., Li, D.,Yao, H., Jayawardane, N.S., Cook, F. and Blackwell, J.2000. Planning, installation and operation of the FILTERtrial in Wuqing, China. CSIRO Land and Water report tothe Australian Centre for International AgriculturalResearch.

Gao, Z., Jayawardane, N.S., Biswas, T. and Cheng, X. 2002.Dynamic programming models to minimise the landFILTER area required for wastewater treatment, whilemaintaining phosphorus balance or allowing for soilphosphorus saturation in a specified time period. CSIROLand and Water report to the Australian Centre forInternational Agricultural Research.

Jayawardane, N.S. 1995. Waste treatment and reuse throughirrigation, with special reference to the Murray Basin and

adjacent Coastal areas. CSIRO Division of WaterResources, Divisional Report 95/1.

Jayawardane, N.S., Biswas, T.K., Blackwell, J. and Cook,F.J. 1999. The research project on land treatment ofeffluent from the Griffith City Council sewage work —Report 9. Planning, installation and operation of the PilotFILTER trial, during the period June 1998 to December1998. Report prepared for GCC and ACIAR. ConsultancyReport No. 99–55.

—2001a. A review of the land FILTER technique fortreatment and reuse of sewage effluent and otherwastewaters. In: Juhasz, A.L., Magesan, G. and Naidu, R.,ed., Waste management. Enfield, NH, USA/Plymouth,UK, Science Publishers, Inc., 249–275.

—2001b. Management of salinity and sodicity in a landFILTER system for treating saline wastewater on asaline-sodic soil. Australian Journal of Soil Research, 39,1247–1258.

Jayawardane, N.S., Blackwell, J. and Biswas, T.K. 2002a.Management of salinity at the FILTER site, and thedischarge of salt during reclamation and subsequentoperation of the FILTER site – Report 11. Consultancyreport prepared for Griffith City Council.

Jayawardane, N.S., Blackwell, J. and Christen, E.W. 2002b.Farm operation manual for Griffith FILTER site – Report12. Consultancy report prepared for Griffith City Council.

Jayawardane, N.S., Blackwell, J., Nicoll, G. and Wallett, D.J. 1997a. The research project on land treatment of effluentfrom the Griffith City Council sewage work — Report 7.Final report on pollutant removal by the FILTER systemduring the period November 1994 to November 1996.Report prepared for GCC, DL&WC (PWD) and DPIE.Consultancy Report No. 97/40.

Jayawardane, N.S., Cheng X., Christen, E. and Blackwell, J.2002c. Guidelines for using FILTER systems to treatwastewater in China. CSIRO Land and Water report tothe Australian Centre for International AgriculturalResearch.

Jayawardane, N.S., Cook, F. J., Blackwell, J., Ticehurst, J.,Nicoll, G. and Wallett, D.J. 1997b. The research project onland treatment of effluent from the Griffith City Councilsewage work — Report 8. Final report on hydraulic flowproperties of the FILTER system during the periodNovember 1994 to November 1996. Report prepared forGCC, DL&WC (PWD) and DPIE. Consultancy ReportNo. 97/42.

Mei, Y.D. and Feng, C.Y. 1992. The present situation,variation trend and prevention counter measures of waterenvironment pollution in China. Ziranziyuan, 4, 48–54.

MWREP (Ministry of Water Resources and Electric Power)1987. Irrigation and drainage in China. People’s Republicof China, MWREP.

Wang, J.S. 1989. Water pollution and water shortage inChina. Journal of Applied Ecology, 26, 851–857.


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The perspective of farmers on why the adoption rate of water-saving irrigation techniques is low in China

Yongping Wei1, Deli Chen1, Robert Edis1, Robert White1, Brian Davidson1, Jiabao Zhang2 and Baoguo Li3

Abstract

The adoption rate of water-saving irrigation techniques in the North China Plain (NCP) has been estimated tobe only 10–35%, which is low compared with 55% for better fertiliser practices. A farmer survey wasconducted in 2004 to study farmers’ perspectives of reasons for low adoption rates in Fengqiu County, HenanProvince, NCP, where a large research project was conducted supported by the Australian Centre forInternational Agricultural Research (ACIAR). A multi-stage random sampling method and a face-to-faceinterview questionnaire were used. The total sample survey size was 210 farmers. The survey results showedthat four factors contributed to the low adoption rate: perception of no need for water-saving irrigationtechniques; strong risk aversion and low affordability of the water-saving techniques; lack of economicincentives; and little encouragement from extension services. A combination of both economic measures(realistic water pricing) and education (training) is suggested as a viable policy instrument to improve theadoption rate of water-saving irrigation strategies. A recommendation for future ACIAR projects is to researchthe dissemination of technology, as well as developing the technology itself.

1 School of Resource Management, University ofMelbourne, Melbourne, Victoria 3010, Australia.

2 Institute of Soil Science, Chinese Academy of Sciences,No. 71, East Beijing Road, Nanjing 210008, People’sRepublic of China.

3 China Agricultural University, Yuanmingyuan Xilu 2,Haidian District, Beijing 100094, People’s Republic ofChina.


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Introduction

Water scarcity and water pollution are serious prob-lems in China. Water availability in North China aver-ages 500 m3 per person, a figure close to the extremescarcity level defined by the United Nations (Lasserre2003). Groundwater has been over-exploited forseveral decades with the average depletion rate being1–1.5 m per year over an area of 150,000 km2 (Liu2003). Over 70% of the total length of seven riversystems in China has been polluted (Zhao 2004).Meanwhile, waste of water is very common in China.China has 49 million hectares of irrigated land, whichaccounts for 63% of total water use. However, the irri-gation water utilisation coefficient (water used forcrop/total water conveyed) is only 0.4–0.5, comparedwith 0.7–0.8 in developed countries (Liao 2004).

Many water-saving irrigation techniques havebeen developed in China, some of them in coopera-tion with countries like Australia through programssuch as ACIAR-funded projects. The adoption rate ofthese techniques, however, is only about 10–35%(Harris 2004; Yang et al. 2004).

Adoption of agricultural technology depends onboth the extension personnel and the farmers. InChina, the literature on causes for the low adoptionrate of agricultural technologies has focused mostlyon extension agencies. However, farmers’ character-istics strongly affect the rate of adoption of tech-nology (He 2000; Wang and Lin 2002; Fu 2003,Vanclay 2004).

This paper examines the causes of the low adoptionrate of water-saving irrigation techniques in Chinafrom the perspectives of farmers, so as to provide rec-ommendations for the design of future projects.

Hypothesis and methods

Many characteristics of farmers, and of the environ-ment they live in, affect their decision whether or notto adopt water-saving irrigation techniques. We canconsider four key factors affecting adoption of irriga-tion techniques (Figure 1).

People’s perceptions contain goals that includethose achieved and those yet to be achieved. Percep-tion can therefore be regarded as a guiding concept ofbehaviour and decision-making (Rahman 2003).Farmers’ risk aversion and concerns about farm prof-itability are key factors, as water-saving irrigationtechniques involve changes to farmers’ traditionalpractices. This entails perceived risks at the early

stages of adoption and usually requires inputs oflabour or money. The cost that farmers have to payfor water is another key factor, because farmers mayoveruse irrigation when they are required to pay onlya partial cost and there are no incentives for them toadopt water-saving irrigation techniques (Harker1998). Finally, it is commonly argued that the exten-sion service is an important exogenous factor in pro-moting adoption of technology.

A sample group of farmers in Fengqiu County,Henan Province (Figure 2) was surveyed to examinethe effect of the four factors on farmers’ adoption ofwater-saving irrigation techniques. Fengqiu Countywas chosen because it was an ACIAR project site fora study on water and nitrogen management for agri-cultural profitability and environmental quality onthe NCP (Chen et al. 2002, 2006), and water-savingirrigation practices were recommended by theproject.

A multi-stage random sampling method wasemployed to locate towns, villages and the samplehouseholds. Sampling was conducted in consultationwith local technicians and economists. The totalsample size was 210 farmers and the sampled areasare encircled in Figure 2.

A questionnaire presented during a face-to-faceinterview was considered to be the most suitablemeans of gathering the required information. Asample of 10 households in Pandian Town was usedto pre-test the questionnaire. The survey period was25 May–24 July 2004.

In addition to basic socioeconomic characteristicsof farmers, the questionnaire included four sectionscorresponding to the abovementioned four factors.The first section examined farmer perceptions about

Figure 1. Factors affecting farmers’ adoption ofwater-saving irrigation techniques


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irrigation water-use efficiency and its influence onenvironmental quality. Five indicators were definedto reflect irrigation and its adverse influence on theenvironment, based on international experience(OECD 1997, 1998). They were: irrigation water-useefficiency, fertiliser use efficiency, nitrate leaching,groundwater depletion and proportion of total waterused for agriculture. Respondents were then asked toreply to each indicator based on a four-grade scale(very important, moderately important, not impor-tant, and do not care). In addition to these four grades,a fifth response category was introduced because itwas found during pre-testing that respondents mighthave no knowledge of the concepts in the surveyquestion. The rating scale was A (3 score) = veryimportant, B (2 score) = moderately important, C (1score) = not important, D (0 score) = do not care, andE (0 score) = did not know before.

The second section recorded input and outputinformation about farms and farmers. This was toinvestigate farm profitability and the price paid byfarmers for water. The third section was designed toevaluate levels of farmers’ risk aversion and theeffect of extension services on farmers’ irrigationdecisions. Respondents were asked: 1. which factorsdo you consider when you decide on your croppingpattern? 2. which factors, excluding climatic influ-ences, do you consider when you decide on your irri-gation scheduling? 3. what would you do if the waterprice was increased gradually? It should be noted that

each question was answered by selection from a setof multiple-choice answers. The last section includedtwo questions: 1. what is the highest water price youcould accept, if it has to be increased? 2. what are themain difficulties which have confronted farmers inproduction? These two questions attempted toprovide additional information for policy recommen-dations.

Results

The survey was generally welcomed by farmers withresponses from 99% of all farmers selected.

Farmers’ perceptions on irrigation water-use efficiency and its influence on the environment

Although all the surveyed farmers practised irriga-tion and fertiliser application, 76% and 66%, respec-tively, did not know what was meant by irrigationwater-use efficiency and fertiliser use efficiency(Figure 3). Only 12% rated nitrate leaching as ‘mod-erately to very important’. Approximately 80% offarmers responded that they did not care about theagricultural share of total water use. Farmers said thatagricultural water use is an inescapable fact of life,otherwise who would supply food to urban residents?Groundwater resources are closely related to thefarmers’ production, and 45% gave the response

Figure 2. Town-based map of Fengqiu County, Henan Province


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‘moderately to very important’ to the depletion ofgroundwater question. This result shows that farmerslack familiarity with the concept of irrigation water-use efficiency and the adverse influence of irrigationon the environment. It therefore appears that farmersgive little consideration to environmental andresource issues when they make decisions related toirrigation. Further, they did not perceive a need toadopt water-saving irrigation techniques.

Farmers’ risk aversion and farm profitability

Some 70% of respondents considered ‘profit max-imisation based on grain self-sufficiency’ when theydecided on their cropping pattern (Figure 4). Tradi-tional habit was found to be the second-most importantfactor (with 45% respondents). Such high responserates on food self-sufficiency and traditional habitssuggest that farmers have a strong risk-aversion, whichleads to low acceptance of innovative techniques.

The annual farm income per person was 2081Yuan (A$1 = 6.2 Yuan) (Table 1). After agricul-tural taxes were deducted, the disposable incomewas only 2026 Yuan. Although food self-suffi-ciency was the most common important factor, theincome from grain production provides only about

one third of farmers’ net income. It should be notedthat labour cost is not included as an input cost ofgrain in China. Under such low farm profits, it isunlikely that farmers will adopt water-saving irriga-tion techniques that need investment or additionallabour input.

Water costs farmers need to pay

In the Yellow River diversion irrigation areas,water is charged at a flat rate on the basis of land area(31.8 Yuan/mu; 15 mu = 1 ha). The price of water isabout half of the water supply cost (Zhao 2004). Ingroundwater irrigation areas, the price of irrigation isprimarily that of power for pumping and equipment— the water itself is free. Further, irrigation cost rep-resents about 11% of total input cost and 17% of totalmaterial input cost (Table 2). This indicates thatfarmers lack incentives to conserve water throughadopting water-saving irrigation techniques.

The effect of extension services on farmers’ irrigation decisions

In China, the public extension agencies are themain transferors of agricultural technology. Whenrespondents were asked ‘Which factors do you con-sider when you decide on your cropping pattern?’,‘Which factors, excluding climatic influences, do

Figure 3. Farmers’ perceptions of irrigation and itsadverse influence on the environment

Figure 4. Factors farmers consider when theydecide on their cropping pattern


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you consider when you decide on your irrigationscheduling?’, and ‘What would you do if the waterprice was increased gradually?’, only about 3–5%respondents ticked ‘the proposals from extensionagencies’ (Figure 5). It appears that extension agen-cies have a very limited impact on farmers’ decisionsabout irrigation. There is therefore little impetus fromextension agencies to induce farmers to adopt water-saving irrigation techniques.

Policy recommendations

Generally, the farmers’ perceptions of irrigation water-use efficiency and the negative influence of irrigation

on the environment were weak (Figure 3). To under-stand the variation in farmers’ perceptions of the fiveindicators, and hence identify potential areas for policyintervention, correlations between perceptions of theindicators and factors on which they may depend werecarried out with multivariate linear regression (Table3). It can be seen that farmers’ perceptions of irrigationwater-use efficiency, fertiliser use efficiency andnitrate leaching were significantly correlated with levelof education (years of schooling).

In addition, farmers have strong risk aversion, asexpressed in their concern about food self-suffi-ciency and accordance with traditional habits (Figure4). So, the provision of education, training and exten-sion services in intensive crop management is a fea-sible policy instrument. Farmers also listedagricultural technology availability as the second-most important difficulty in their production (78% ofrespondents), which is similar to their concern aboutagricultural input prices (Figure 6).

Farmers pay a partial irrigation cost, whichaccounts for only 11% of total input costs (Table 2).Further, water is charged at a flat rate on the basis ofland area. Thus, water pricing is a feasible policyinstrument to encourage farmers to use water moreefficiently. However, because of extremely low farmprofitability (Table 1), water pricing should be real-istic. This is apparent from farmers’ responses to‘What is the highest water price you could accept, ifit has to be increased? (Figure 7)’. Sixty percent ofrespondents indicated that they could could acceptonly 1.2 times the current water price.

Figure 5. Effect of extension agencies on farmers’decisions related to irrigation

Table 2. Distribution of total input costs for one winter wheat crop

Total material input cost (yuan/mu) Machine rent for sowing

and harvesting(Yuan/mu)

Total input cost

(Yuan/mu)Subtotal Seed Fertiliser Pesticide Irrigation

13968%

2010%

8040%

157%

2411%

6532%

204100%

Note: the labour cost is not included in total input cost in this table.

Table 1. Distribution of farmers’ average annual net income per capita

Net income per capita (yuan) Tax(Yuan)

Disposable Income per

capita(yuan)

Subtotal Grain Non-grain in planting

Non-planting in agriculture

Non-agriculture in total production

Off-farm employment

2081100%

73434.7%

45021.2%

331.6%

73034.5%

1718%

55 2026


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Public extension agencies affected farmers’ deci-sions on irrigation in a very limited way (Figure 5).Agricultural extension in China is regarded as beingat a crossroads (He 2000; Dou et al. 2001; Wang andLin 2002; Fu 2003; Yu 2004), requiring rapidchanges. An alternative to the current situation forresearch projects is to have research on extensionincorporated in them. The performance of the exten-sion within the project should be progressivelyassessed by appropriate verification means, to findstrategies for further improvement and extension tolarge areas after project completion.

Farm profitability and off-farm income are impor-tant factors affecting farmers’ perceptions of irriga-tion and its negative impacts on the environment, aswell as farmers’ acceptability of a higher water priceand their capacity to pay for new irrigation technolo-

gies. Improvement in farmers’ incomes could there-fore greatly promote the adoption of water-savingirrigation techniques. Farmers’ income improvementis, however, a long-term social problem in China, andit needs to be considered from the viewpoint ofnational macro-economic policy.

Conclusion

Four key reasons for low adoption rates in Chinawere found: farmers do not perceive a need for water-saving irrigation techniques; they have strong risk-aversion and believe they cannot afford water-savingtechniques; they do not have economic incentives toadopt water-saving irrigation techniques; and there islittle impetus from extension agencies to inducefarmers to adopt water-saving irrigation techniques.

A combination of both economic measures (real-istic water pricing) and education (training) is sug-gested as a policy instrument to improve the adoption

Figure 6. Main production difficulties faced byfarmers in their production

Table 3. Multiple regression analysis of relationships between indicators and the factors which may influencefarmers’ perceptions of the indictors

Proposed indicator Factors on which farmers’ perceptions may depend

Regression coefficient

Significance R2

Irrigation water-use efficiency EducationCultivation area

0.2950.158

0.0010.026

0.103

Fertiliser use efficiency Education 0.475 0.001 0.225

Nitrate leaching EducationOff-farm income

0.4920.258

0.0010.001

0.299

Groundwater depletion Off-farm income 0.218 0.003 0.047

Proportion of total water used for agriculture Cropping patternAge

0.3710.220

0.0290.038

0.047

Figure 7. The highest water price farmers couldaccept, if it had to be increased


160


rate of water-saving irrigation techniques. A recom-mendation for future ACIAR projects is to researchthe dissemination of technology in addition to thetechnology itself.

Acknowledgment

This study was funded mainly by an ACIAR projectand partially funded by the National Basic ResearchProgram of China (973 project). The authors are alsoindebted to Vice-Director Zhou of the Fengqiu Agr-oecological Experiment Station of the ChineseAcademy of Sciences and Director Zhao, Mr Zhang,Mr Cui, Ms Liu et al. from the Agricultural Bureau ofFengqiu County for their help in survey organisation,data collection and participation in the survey.

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