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

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  • 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.

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  • 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
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    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.

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