IDEAS home Printed from https://ideas.repec.org/a/eee/agiwat/v122y2013icp63-66.html
   My bibliography  Save this article

Agricultural water trade under farmland fragmentation: A simulation analysis of an irrigation district in northwestern China

Author

Listed:
  • Takahashi, Taro
  • Aizaki, Hideo
  • Ge, Yingchun
  • Ma, Mingguo
  • Nakashima, Yasuhiro
  • Sato, Takeshi
  • Wang, Weizhen
  • Yamada, Nanae

Abstract

Agricultural water trade has been adopted in many countries as a measure to overcome water deficiency facing irrigated regions. When correctly applied, the system can allocate more water to more productive farmers, thereby improving efficiency in resource utilisation. Despite this enormous advantage, the water trading scheme set up in Zhangye City, of China's arid northwestern region, is being virtually ignored by local farmers, with the penetration rate standing at less than one percent of the total water use. To investigate the reasons behind the system's malfunction, farmers, farmers’ associations, and relevant governmental agencies were extensively interviewed. Then, based on the information collected from the field, a nonlinear programming model replicating the local water market was constructed. The modelling analysis showed that the solutions for the farmer's optimisation problem, hereby simulated under geographically scattered plots that are typical in the study area, are significantly different from those derived under the assumption of single plot operations. The optimal level of price intervention also differs for the two operations, as the fragmentation of farmland induces additional water demand. This result reiterates the importance of market designs that are tailored to local situations, and the danger of unconditional acceptance of economic institutions that are prevalent and successful elsewhere.

Suggested Citation

  • Takahashi, Taro & Aizaki, Hideo & Ge, Yingchun & Ma, Mingguo & Nakashima, Yasuhiro & Sato, Takeshi & Wang, Weizhen & Yamada, Nanae, 2013. "Agricultural water trade under farmland fragmentation: A simulation analysis of an irrigation district in northwestern China," Agricultural Water Management, Elsevier, vol. 122(C), pages 63-66.
    • Handle: RePEc:eee:agiwat:v:122:y:2013:i:c:p:63-66
    DOI: 10.1016/j.agwat.2013.03.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378377413000589
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.agwat.2013.03.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Junlian, 2007. "Barriers to water markets in the Heihe River basin in northwest China," Agricultural Water Management, Elsevier, vol. 87(1), pages 32-40, January.
    2. Carey, Janis & Sunding, David L. & Zilberman, David, 2002. "Transaction costs and trading behavior in an immature water market," Environment and Development Economics, Cambridge University Press, vol. 7(4), pages 733-750, October.
    3. Kung, James Kai-sing, 2000. "Common Property Rights and Land Reallocations in Rural China: Evidence from a Village Survey," World Development, Elsevier, vol. 28(4), pages 701-719, April.
    4. Yong Wang & Hong-lang Xiao & Rui-fang Wang, 2009. "Water Scarcity and Water Use in Economic Systems in Zhangye City, Northwestern China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 23(13), pages 2655-2668, October.
    5. Joan Pujol & Meri Raggi & Davide Viaggi, 2006. "The potential impact of markets for irrigation water in Italy and Spain: a comparison of two study areas ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 361-380, September.
    6. E. L. Lawler & D. E. Wood, 1966. "Branch-and-Bound Methods: A Survey," Operations Research, INFORMS, vol. 14(4), pages 699-719, August.
    7. Hearne, Robert R. & William Easter, K., 1997. "The economic and financial gains from water markets in Chile," Agricultural Economics, Blackwell, vol. 15(3), pages 187-199, January.
    8. Bauer, Carl J., 1997. "Bringing water markets down to earth: The political economy of water rights in Chile, 1976-1995," World Development, Elsevier, vol. 25(5), pages 639-656, May.
    9. Rosegrant, Mark W. & Binswanger, Hans P., 1994. "Markets in tradable water rights: Potential for efficiency gains in developing country water resource allocation," World Development, Elsevier, vol. 22(11), pages 1613-1625, November.
    10. Sharma, Purushottam & Sharma, R.C., 2006. "Factors Determining Farmers’ Decision for Buying Irrigation Water: Study of Groundwater Markets in Rajasthan," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 19(1), January.
    11. Javier Calatrava & Alberto Garrido, 2005. "Spot water markets and risk in water supply," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 131-143, September.
    12. Zhang, Jun-Lian & Zhang, Feng-Rong, 2008. "Mutual monitoring in a tradable water rights system: A case study of Zhangye City in Northwest China," Agricultural Water Management, Elsevier, vol. 95(3), pages 331-338, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yingchun Ge & Xin Li & Ximing Cai & Xiangzheng Deng & Feng Wu & Zhongyuan Li & Wenfei Luan, 2018. "Converting UN Sustainable Development Goals (SDGs) to Decision-Making Objectives and Implementation Options at the River Basin Scale," Sustainability, MDPI, vol. 10(4), pages 1-17, April.
    2. Yang, Gaiqiang & Guo, Ping & Huo, Lijuan & Ren, Chongfeng, 2015. "Optimization of the irrigation water resources for Shijin irrigation district in north China," Agricultural Water Management, Elsevier, vol. 158(C), pages 82-98.
    3. Ruishi Si & Yumeng Yao & Xueqian Zhang & Qian Lu & Noshaba Aziz, 2022. "Exploring the Role of Contiguous Farmland Cultivation and Adoption of No-Tillage Technology in Improving Transferees’ Income Structure: Evidence from China," Land, MDPI, vol. 11(4), pages 1-25, April.
    4. Ye Sun & Tomohiro Akiyama, 2018. "An Empirical Study on Sustainable Agriculture Land Use Right Transfer in the Heihe River Basin," Sustainability, MDPI, vol. 10(2), pages 1-13, February.
    5. Cuimei Lv & Huiqin Li & Minhua Ling & Xi Guo & Zening Wu & Changkuan Gu & Yang Li, 2021. "An Innovative Emergy Quantification Method for Eco-economic Compensation for Agricultural Water Rights Trading," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 35(3), pages 775-792, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bajaj, Akshi & Singh, S.P. & Nayak, Diptimayee, 2022. "Impact of water markets on equity and efficiency in irrigation water use: A systematic review and meta-analysis," Agricultural Water Management, Elsevier, vol. 259(C).
    2. Ye Sun & Tomohiro Akiyama, 2018. "An Empirical Study on Sustainable Agriculture Land Use Right Transfer in the Heihe River Basin," Sustainability, MDPI, vol. 10(2), pages 1-13, February.
    3. Sheila M. Olmstead, 2010. "The Economics of Managing Scarce Water Resources," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 179-198, Summer.
    4. Deng, Xiaohong & Xu, Zhongmin & Song, Xiaoyu & Zhou, Jian, 2017. "Transaction costs associated with agricultural water trading in the Heihe River Basin, Northwest China," Agricultural Water Management, Elsevier, vol. 186(C), pages 29-39.
    5. Olmstead, Sheila M., 2014. "Climate change adaptation and water resource management: A review of the literature," Energy Economics, Elsevier, vol. 46(C), pages 500-509.
    6. Zhang, Jun-Lian & Zhang, Feng-Rong, 2008. "Mutual monitoring in a tradable water rights system: A case study of Zhangye City in Northwest China," Agricultural Water Management, Elsevier, vol. 95(3), pages 331-338, March.
    7. Hong, Yu & Berentsen, Paul & Heerink, Nico & Shi, Minjun & van der Werf, Wopke, 2019. "The future of intercropping under growing resource scarcity and declining grain prices - A model analysis based on a case study in Northwest China," Agricultural Systems, Elsevier, vol. 176(C).
    8. Garrick, Dustin & Whitten, Stuart M. & Coggan, Anthea, 2013. "Understanding the evolution and performance of water markets and allocation policy: A transaction costs analysis framework," Ecological Economics, Elsevier, vol. 88(C), pages 195-205.
    9. Reto Foellmi & Urs Meister, 2012. "Enhancing the Efficiency of Water Supply—Product Market Competition Versus Trade," Journal of Industry, Competition and Trade, Springer, vol. 12(3), pages 299-324, September.
    10. M Ejaz Qureshi & Tian Shi & Sumaira Qureshi & Wendy Proctor & Mac Kirby, 2009. "Removing Barriers to Facilitate Efficient Water Markets in the Murray Darling Basin – A Case Study from Australia," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-02, CSIRO Sustainable Ecosystems.
    11. Narain, V., 2009. "Water rights system as a demand management option: potentials, constraints and prospects," IWMI Books, Reports H042163, International Water Management Institute.
    12. Francesco Prota, 2002. "Water Resources And Water Policies," Working Papers 8_2002, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    13. Zhang, Junlian, 2007. "Barriers to water markets in the Heihe River basin in northwest China," Agricultural Water Management, Elsevier, vol. 87(1), pages 32-40, January.
    14. Backeberg, G.R., 1997. "Water institutions, markets and decentralized resource management: Prospects for innovative policy reforms in irrigated agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 36(4), pages 1-35, December.
    15. Ereney Hadjigeorgalis, 2009. "A Place for Water Markets: Performance and Challenges," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(1), pages 50-67.
    16. Delorit, Justin D. & Parker, Dominic P. & Block, Paul J., 2019. "An agro-economic approach to framing perennial farm-scale water resources demand management for water rights markets," Agricultural Water Management, Elsevier, vol. 218(C), pages 68-81.
    17. Li Zhang & Shao Jia & Chi Leung & Li Guo, 2013. "An Analysis on the Transaction Costs of Water Markets under DPA and UPA Auctions," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(2), pages 475-484, January.
    18. Easter, K William & Rosegrant, Mark W & Dinar, Ariel, 1999. "Formal and Informal Markets for Water: Institutions, Performance, and Constraints," The World Bank Research Observer, World Bank, vol. 14(1), pages 99-116, February.
    19. Zhang, Chunmei & Zhao, Yuanfeng & Xiu, Changbai, 2020. "Does Water Rights Trading Promote Economic Efficiency of Water Resource? : A global literature review," Conference papers 333128, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. Shi, Tian, 2006. "Simplifying complexity: Rationalising water entitlements in the Southern Connected River Murray System, Australia," Agricultural Water Management, Elsevier, vol. 86(3), pages 229-239, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:agiwat:v:122:y:2013:i:c:p:63-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/agwat .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.