Optimal allocation of agricultural water resources under the background of China's agricultural water price reform-a case study of Heilongjiang province

Abstract

To improve the performance of agricultural water resources and food production against a background of China's agricultural water price reform, an interval two-stage stochastic programming model is established and applied to account for impacts of agricultural water price reform and a water-saving technology subsidy in Heilongjiang Province, China. A water price affordability constraint and a water-saving technology subsidy to support uptake of water-saving irrigation technology are both introduced. Results of model runs show that when the current agricultural water price is increased to reflect national water price reform without a technology subsidy, the total income of irrigation farming is reduced by 2%-8%, with potential negative impacts on food production. However when an irrigation water-saving technology subsidy is introduced to accompany the increased water price, farm income can be protected and overall food production can be maintained. The two part mechanism of increased water price and water-saving technology subsidy can be used to encourage farmer to reduce water application rates as well as reduce land in production of high-water-consuming crops. Such a two part program offers considerable hope for protecting unsustainable use of water in water scarce regions while protecting farm income and food security in the face of unknown future water supply fluctuations.