Water Resources Management

, Volume 26, Issue 11, pp 3285–3300

Exploring Synergies Between Hardware and Software Interventions on Water Savings in China: Farmers’ Response to Water Usage and Crop Production

Article

DOI: 10.1007/s11269-012-0072-7

Cite this article as:
Mushtaq, S. Water Resour Manage (2012) 26: 3285. doi:10.1007/s11269-012-0072-7

Abstract

Evidence is presented on synergies due to the sequencing and packaging of water reforms based on a review of case studies from the Zhanghe Irrigation System (ZIS) in the Yangtze River basin in China. Faced with strategic challenges of economic growth, food security, population growth, and climate change, China has implemented numerous hardware and software interventions in the water sector to increase the availability of water. These interventions—ranging from the provincial and system level to farm and field level—allow reallocation of water from agriculture to higher value uses, without significant reduction in crop production. This review of selected hardware and software interventions suggests that water sector reforms generate significant benefits for peasant farming communities and local governments. The review indicates that all agents respond to the same set of incentives simultaneously, by changing production and resource use decisions such that cumulative benefits from hardware and software interventions reinforce synergies. Synergies from reforms are evident, yet scaling up local collective actions for optimal impact is problematic. Heterogeneity in socioeconomic factors, as well as spatial differences, are the main stumbling blocks. Rewarding reformers seems to work, yet the benefits are neither immediate nor straight forward. Local implementation of national policies requires a systematic and coherent framework suited to the level of economic development of each region in order to achieve synergies from water reforms.

Keywords

Zhanghe Irrigation System Collective action Water sector reforms Synergies Water saving irrigation practices Rice 

1 Introduction

China faces strategic challenges amid rapid economic growth and transformation of its economy (Mushtaq et al. 2008). Population growth and global change exacerbate these challenges. While food security issues are not currently serious, turbulence in global markets can trigger a red tsunami (Khan et al. 2009). Escalating water demand and water scarcity can compromise food security. An ageing population and the exodus of younger generations to cities, leaving behind children with ageing parents, are signs of a grey tsunami. A constellation of these forces can threaten global peace and stability. Answers to these complex issues have to date been sought in economic reforms.

Economic reform in socialist economies generates major gains and losses, and the distribution of impacts differs among various social groups, with implications for social equity and the course of reform. Peasant farmers are not only a particularly important group from the perspective of equity, but also from the perspective of economic reform. China has witnessed two decades of economic reform policies, which have led to significant gains in agricultural productivity and economic wellbeing. During the 1980s and 1990s, agricultural productivity rose steadily and per capita grain output reached a level similar to that in developed countries; many farmers shifted to higher value crops, and food exports grew significantly (Rozelle and Rosegran 1997). With sustained growth in agriculture, rural incomes rose dramatically, lifting millions of people out of poverty during this time (Hussain and Hanjra 2004; Hanjra and Gichuki 2008). Despite that success, more than 100 million farmers and their families still live in poverty, and the gap between rural and urban incomes has not narrowed; the inequality in the rural economy has remained high since the mid-1990s (World Bank 2005; Zhang et al. 2006). Socioeconomic uplift of peasantry—by raising rural incomes—and integration of rural economy into the modernization process—through good governance—is the greatest challenge facing a successful reform policy in China.

Water savings gained through increased water use efficiency (producing more food with less water) are critical. China’s government has identified the nation’s rising water scarcity as one of the key problems and has attempted to address this issue at nearly all levels, from the national down to the village and farm level (Zhang et al. 2001; Lohmar et al. 2003; World Bank 2005). The Chinese government successfully implemented policies that enabled them to withdraw water from the agricultural sector to fulfill growing demand in industrial and urban sectors. Water conservation projects were implemented and complemented with the introduction of water-saving irrigation practices, both of which may have caused farmers to voluntarily or forcibly reduce water use by adopting water saving irrigation practices. The farmers also contributed to these efforts by successfully maintaining their agricultural production despite a considerable decrease in water deliveries, by relying on local sources, such as ponds, and adopting water saving irrigation practices.

It has been argued that positive synergies can be realized from proper sequencing and packaging of reforms such that the aggregate benefits from the reform processes are greater than the sum of benefits from individual reforms (Dinar et al. 2007; Hanjra et al. 2009). However there are no studies exploring synergies from water reforms, particularly, farmers’ response to water usage and crop production. This paper presents evidence of synergies from the sequencing and packaging of reforms using farm level case studies from the Zhanghe Irrigation System (ZIS) in the Yangtze River basin, China.

In particular, I explore synergies between hardware and software interventions that enabled the ZIS to achieve a 60 % reduction in deliveries of water from the Zhanghe Reservoir for irrigation purposes, in order to meet the increasing demand from industry and municipal users (see Fig. 1), whilst effectively maintaining crop production. Our results provide tentative support for synergies from hardware and software interventions in the water sector. Our findings provide valuable implications for crafting policies and institutions for water policy reforms.
Fig. 1

Water allocation for irrigation and other uses, 1966-2003, Zhanghe Reservoir, China. Source: Molden et al (2007)

2 Conceptual Framework

Hardware and software interventions are complementary, but not substitutes, to each other (Hanjra et al. 2009). Hardware refers to investments in core infrastructure such as irrigation reservoirs, small and medium ponds, and delivery channels and equipment used for the application of water on-farm. This includes the development and implementation of water saving irrigation technologies and practices. Software refers to the policies and institutional mechanisms and support measures used for the governance of water resources, including water storage, allocation, distribution among and across sectors, irrigation services delivery, setting and collection of water charges, and system operation and maintenance services.

Returns on investment in hardware tend to decrease over time, and benefits may be suboptimal where such infrastructure is dysfunctional or inefficient, and where supportive policy environment and institutional mechanisms are weak or lacking. In contrast, returns on software continue to increase over time (World Bank 2007). This suggests that positive synergies can be realized through proper packaging and sequencing or coupling of hardware and software interventions. However, exogenous factors such as economic and political reforms, technological progress and macroeconomic framework also come into play, and might cancel or reinforce synergies through linkages and feedback effects among and across sectors. For instance, adoption of water saving irrigation practices by farmers can enhance production and food security at local and regional levels, and the stimulus may be transmitted to the global food market. Likewise, governmental interventions and support measures can encourage large scale adoption of water saving practices such as Alternate Wetting and Drying (AWD) of rice instead of continued submergence. Macroeconomic support measures such as tax reforms that cut farmers’ fiscal burdens can further increase benefits to farmers and support the technical change vital to agricultural transformation and socioeconomic uplift of rural communities. Other actors such as farmers and the private sector might respond positively conducive to policy framework and trigger interventions to enhance returns to farm level, regional and government interventions in aggregate terms (Fig. 2). Where such supportive policies are missing, the opportunities for positive synergies from the coupling of hardware and software reforms may be missed.
Fig. 2

Analytical approach applied to evaluate synergies between hardware and software policies

3 Study Setting

3.1 Zhanghe Irrigation System

The Zhanghe Irrigation System (ZIS) was selected to explore synergies between hardware and software interventions. The ZIS is located in the Yangtze River basin of Hubei Province of China. The Zhanghe basin has an area of 7,740 km2 and is referred to as a typical large-size irrigation system in China, irrigating an area of about 160,000 ha. The main water source in ZIS is the Zhanghe reservoir which was built between 1958–1966 for the purpose of irrigation, flood control, domestic water supply, industrial use, and power generation. The annual water supply from the reservoir is about 0.50 billion m3, of which 42 % is allotted to agriculture, 54 % to hydropower, and 4 % to industry and municipalities. However, water availability for irrigation has declined over time due to competition from municipal and industrial water use (Fig. 1). Apart from this reservoir, there are about 86,000 medium and small sized reservoirs (‘ponds’) supplying water to the irrigation system (Fig. 3). These small reservoirs allow the users to obtain water on-demand because of the in-built flexibility of storing water close to water users (Loeve et al. 2001).
Fig. 3

Area served by the Zhanghe Irrigation System. Source: Mushtaq et al (2008)

4 Collating and Synthesising Evidence

4.1 Hardware Interventions

Multiple hardware and software interventions have been employed to reduce agricultural dependence on ZIS water. The hard interventions discussed below include the development of water saving irrigation practices (WSI), especially alternate wetting and drying (AWD) for rice production, and construction of small dams capable of storing water near farmer’s field.

4.1.1 Case study: Alternate Wetting and Drying (AWD) Irrigation Practice

Historically, rice has normally been grown under flooded conditions (Bouman et al. 2007). However, water scarcity poses major challenges to rice production. The Chinese government, after recognising rising water scarcity as a key problem for the national economy, has promoted water saving irrigation (WSI) practices since the 1990s. More than 150 research stations, in collaboration with professional institutions and universities, have been conducting research on WSI practices for many years (Li 2001).

AWD irrigation practices lead to a reduction in irrigation water use, without a distinct reduction in crop yield (Li 2001). These practices allow farmers to achieve a relatively dry soil condition before receiving further water, and to store more water after rainfall. In this way, the utilization of rainfall is facilitated, the need for canal water is eased, and irrigation events are reduced. In addition, percolation and seepage losses from rice fields are controlled. Careful water management for rice saves water, improves yield, increases profitability by reducing the cost of production, and reduces risk of pests and diseases due to improvements in the microenvironment (Stoop et al. 2002).

The impact of AWD was evaluated by Belder et al. (2004) through two field experiments conducted in Tuanlin experimental stations in the ZIS, during the summer seasons of 1999 (TL99) and 2000 (TL00). The experiment (Table 1) shows that grain yield was 4 % and 7 % higher in AWD than in continuously submerged (CS) plots at TL00 while it was 4 % lower in AWD than in CS at TL99. Water productivity increased significantly with N fertilizer rate; water productivity was significantly higher in AWD than in CS when 180 kg N fertilizer rate was applied (Table 1). The amount of water saved with AWD was 14–18 % of irrigation water input. Thus, the AWD seems to lead to a reduction in irrigation water use without a distinct reduction in crop yield (Li 2001).
Table 1

Comparison of grain yield and water productivity in two experiments in Tuanlin (TL), Zhanghe Irrigation System

Nitrogen (N) regime (kg ha−1)

Continuously submerged (CS)

Alternate Wetting and Drying (AWD)

1999

2000

1999

2000

Grain Yield (t/ha)

 0

4.4

4.5

 180 (2 splits)

9.2

8.2

6.8

8.9

 180 (4 splits, early)

8.4

8.1

8.0

8.4

 180 (4 splits ’99, 6splits ’00)

8.1

8.7

8.6

8.7

Water productivity (kg grain m−3 water input)

 0

0.5

0.58

 180 (2 splits)

0.98

0.94

0.83

1.13

 180 (4 splits, early)

0.90

0.92

1.0

1.07

 180 (4 splits ’99, 6 splits ’00)

0.86

0.99

1.03

1.07

Data interpreted and summarised from Belder et al (2004)

Synthesis

With decreasing water availability for agriculture and increasing demand for rice, water use in rice production systems must be reduced and water productivity increased. The results from the experiment show that water productivity was significantly higher under AWD in two out of three experiments. The results are typical for poorly-drained irrigated lowlands in Asia, and indicate that AWD can reduce water use by up to 15 % without affecting yield. Data from other rice producing regions support these results (Törnqvist and Jarsjö 2011; Moya et al. 2004; Tabbal et al. 2002). The results indicate that adoption of AWD practices is a key factor enabling ZIS to reallocate reservoir water from irrigation to higher value uses without significantly impacting rice production.

4.1.2 Case study: Multipurpose Ponds for Reliable Water Supply

Ponds are small reservoirs located in irrigated areas that allow farmers to capture rainfall and store surplus water from other sources. Farmers build and improve existing ponds so that they are less reliant on water from the ZIS. Roost et al (2008) stated that farm ponds have given Chinese farmers sufficient flexibility in water use to practice varying forms of AWD irrigation for rice, without compromising yields and incomes.

Though farmers have constructed ponds since the 1960s, the bulk of the ponds were constructed in late 1990s and early 2000. This was perhaps due to water shortages, decreasing water supply from the ZIS, and tax reforms (Table 2). The Cost-Benefit Analysis suggests that all sizes of ponds are profitable with healthy internal rates of return (IRR) (Mushtaq et al. 2007a). A flexible multi-output, multi-input translog cost function shows that moderate economies of scale exist for large ponds and slight economies of scale exist for medium ponds, while the small size ponds show diseconomies of scale. The economic benefits and economies of scale of large ponds indicate that significant cost savings could be attained if larger ponds are constructed (Mushtaq et al. 2009a).
Table 2

Year of construction of the ponds in the Zhanghe Irrigation System

Year of construction

Percent

1960-1989

25

1990-1999

30

2000-2004

35

Data interpreted and summarised from Mushtaq (2004)

Synthesis

Small multi-purpose ponds have contributed to the transfer of water from irrigation to higher value uses by capturing rainfall and store surplus water from other sources. The results of cost–benefit analysis show that ponds of all sizes were profitable. The profitability along with decreasing water supplies from ZIS explains why farmers are increasingly investing in ponds. Overall, large ponds showed higher profits as compared to small and medium ones; this is mainly due to economy of scale, which allows farmers to store relatively large quantities of water and also provide additional opportunities for fish harvesting.

4.2 Software Interventions

The software interventions discussed below include collective action by farmers to enhance water supply from ponds; incentives to adopt on-farm water saving irrigation practices; tax-for-fee reform to adjust agricultural tax and water rates; institutional reforms; and water pricing to create artificial water scarcity to encourage water savings by farmers.

4.2.1 Case Study: Collective Action at Farmer Level

In China, ponds are local common property resources, and water in ponds is collectively owned by the farmers. Each pond provides water to several users. Management of the ponds requires local communities to pool their efforts to perform various tasks, such as removing silt, constructing channels, regulating water allocation and monitoring violations, weeding, and repair and maintenance of ponds and channels. Collective action for the management of local common property is one of the most important issues in rural development (Hayami 1997). How this collective action is performed can determine the usefulness of the ponds.

Mushtaq et al (2007b) measured the performance of collective action through farmer’s perceptions. They were asked whether desiltation, repair and maintenance (R&M) and cleaning were effective or whether they wanted these activities to be done more often. A value of 0, 1, or 2 was given to different levels of satisfaction. A value of 0 means that farmers strongly agreed that collective action was needed more often, while a value of 2 means that farmers were fully satisfied with the current level of management activities.

Results revealed that most of farmers (91 %) were dissatisfied with current pond management practices. This may be due to the growing importance of ponds because of the increasing scarcity of water, decreasing supply from the ZIS, and tax-to-fee reforms (Table 3). Of these, 58 % strongly urged for more desiltation, R&M, and channel cleaning practices. However, 9 % approved the current level of management practices, and stated that they do not agree with the need for more frequent desiltation, R&M and cleaning practices.
Table 3

Effectiveness of collective action for pond management, by pond size in the Zhanghe Irrigation System

Parameters

Percentage distribution of effective conduct of collective action

Small

Medium

Large

Overall

N

%

N

%

N

%

N

%

Do you need more desiltation of ponds, repair & maintenance and channel cleaning?

 Strongly agree

14

42

30

65

14

66

58

58

 Agree

13

39

14

31

6

28

33

33

 Strongly disagree

6

19

2

4

1

5

9

9

 Total

33

100

46

100

21

100

100

100

Data interpreted and summarised from Mushtaq et al (2007b)

Synthesis

Collective action by farmers is a critical factor in improving water management from ponds. It was found that collective action was more effective in small ponds. Dependence on ponds as a source of irrigation seems to increase the effectiveness of collective action in pond management. Larger household size also contributed to effective collective action, and farmers gave more emphasis to collective action when high quality land was involved. Although farmers have shown dissatisfaction with collective action for managing ponds, it has helped in addressing water scarcity locally by keeping water within the system. It is clear that pond operators have to maximise the use of catchment runoff for irrigation in order to minimize their dependence on ZIS deliveries.

4.2.2 Case Study: Tax-for-Fee Reform at Government Level

The Fei Gai Shui (FGS) is a central government attempt1 to relieve farmers of fee burdens that have been eroding rural incomes throughout the 1990s, especially after the 1994 tax reform (Toh and Lin 2005). Tax-for-Fee reform (Fei Gai Shui) was heralded as a solution to excessive fiscal predation by local governments (Yep 2004). Under the FGS reform, various types of irregular fees, fines and quota were completely abolished, and replaced with a single agricultural tax. The agricultural tax and overall burden, based on stipulations, should not exceed 8.4 % of net per capita income. The basic aim is to reduce the burden on farmers by 25 to 30 % (Zengke 2000), and to help bring the tax within their capacity to endure.

FGS has an immediate impact on water resources. With the FGS, farmers need to request water from ZIS (rather than going through the village or township administration) and to pay all or a portion of the water fee in advance, in addition to any increase in water prices. In 2002 and 2003, the ZIS irrigation releases were down sharply after the introduction of FGS (Fig. 1). After FGS, rice production area and yield also declined; however, the decline was greater in the dry year of 2003 (Dong et al. 2004). Adjustments were made in 2004 to correct this problem, and as a result ZIS irrigation releases were recovered in 2004 (Loeve et al. 2007). However, it remains to be seen what the long term effect of this policy will be on the operation and management of the ZIS.

Mushtaq et al (2008) evaluated the initial impact of the FGS on agricultural productivity via the agricultural water management pathway, specifically in terms of its impacts on water distribution and conservation, irrigation costs, pond water use, and rice area and yield, using household level panel data collected over a 2 year period. Multiple regression analysis was used to estimate the impact of the FGS on pond water use frequency, rice area and yield, and cost of irrigation.

Empirical Findings for the Impact of FGS

The FGS was significantly associated with changes in water use (Table 4). This relationship was explained by the fact that the introduction of FGS caused pond water use to increase significantly. That is, FGS caused an increase in the per unit price of ZIS water, and as a result farmers avoided using ZIS water and relied more on pond water for irrigation. However, the introduction of FGS also caused a significant decrease in rice area and yield (Table 4).
Table 4

Regression results for the effect of Fei Gai Shui on water use, rice area and rice yield in the Zhanghe Irrigation System

Variable

Water use

Rice area

Rice Yield

Coefficient

STD. Error

Coefficient

STD. Error

Coefficient

STD. Error

Intercept

4.789***

1.047

-2.42

1.69

650.15***

54.13

FGS

0.918***

0.196

-0.16**

0.32

-146.95***

9.95

Access to pond

0.133

0.097

0.02

0.16

2.38

5.07

Pond size

0.120

0.140

-0.35

0.23

3.98

7.29

Distance of main plot from the pond

0.0003

0.001

-0.0001

0.001

0.01

0.02

Farm size

0.022

0.021

0.78***

0.03

-0.62

1.08

AWD Score

0.247

0.159

5.94***

1.32

4.77

8.07

Education

-1.514*

0.844

-0.03

0.09

-2.70

10.57

Farmer’s experience

-0.069

0.054

-0.03*

0.02

-32.86

43.27

Dummy for village 1

-0.001

0.010

2.21***

0.56

-1.78

2.71

Dummy for village 3

-1.163***

0.346

2.03***

0.56

0.41

0.54

Dummy for village 4

-1.002***

0.345

1.26**

0.55

-112.28***

17.72

F Value

 

3.805***

 

59.15***

 

24.11***

R-square

 

0.20

 

0.78

 

0.64

Adjusted R-square

 

0.15

 

0.76

 

0.61

Number of observation

 

196

 

200

 

194

Data interpreted and summarised from Mushtaq et al (2008)

***, ** and * indicate the significance at 1, 5, and 10 % probability levels, respectively

Synthesis

The empirical results show that Fei Gai Shui (FGS) had a positive impact on pond water use, but a less desirable impact on rice area and yield. Farm pond water played an important role in sustaining agricultural production in the wake of sharp decreases in ZIS water deliveries. The results show that the presence of ponds cushioned the impact of FGS in the study areas. The empirical results also indicated that access to pond water had a positive impact on yield and crop area, and helped to reduce the irrigation cost. This posits that in near future, and especially after the implementation of FGS, ponds will continue to play an important role in sustaining agricultural production. Although these policies will ultimately affect all villages in China, the magnitude of the initial effects on local communities may differ due the fact that these policies were implemented at different times in different areas.

4.2.3 Case Study: Institutional Water Scarcity at Irrigation District Level

Institutional water scarcity is defined as a policy of rationing limited quantities of water among the largest number of farmers, creating artificial scarcity of water in order to encourage irrigators to use water more sparingly and efficiently, and maximize output from limited water supplies.

Two-Part Water Pricing in the ZIS

Water pricing plays a crucial role in water resources management (Liu et al. 2009). Water price includes a basic price and a volumetric price (two-part water price). The basic price is determined by direct salary, management cost, 50 % of depreciation, and repair cost. The volumetric price is determined by water resources fees, materials, profit and tax. For agricultural water, no profit and tax is included. Water pricing systems have been implemented in the ZIS since 1967 (Table 5). The two-part water price offers farmers both incentives (volumetric pricing) and pressures (reduced deliveries) to reduce water use (Molden et al. 2007). However, stronger institutional settings remain a key mechanism for implementing water tariffs (Zhong and Mol 2010). Ma (2007) argues that the two-part water pricing increases farmers’ water costs. In the ZIS, farmers are reducing their water costs by adopting rain-fed cropping systems and building their own ponds in order to reduce their dependency on ZIS delivery.
Table 5

Water pricing systems in the Zhanghe Irrigation System

Period

Water pricing

1967-1979

Free or low fees for maintenance and operation

1980-1991

Fees at a low level

1992-2003

Normal pricing, while causes a lot of issues

2004

Piloting two-part water price

From 2005

Two-part water price

2002-2003

Fee to tax reform

After 2005

Abolition of agricultural tax

Incentives to Save and Reallocate Water

In the ZIS, both system managers and farmers have incentives to save water. Managers would like to reduce supplies to allow more water to be allocated to non-agricultural uses, which pay more for water. The decline in water availability for irrigation from the ZIS reservoir, along with the volumetric pricing of water, provide incentive for farmers to adopt water savings practices (e.g. AWD and farm ponds) that help them cope with water scarcity and reduce the cost of water. Thus, it appears that the management of the canal water is not only a function of farmer demand but also a strong element of supply approach (Loeve et al. 2001). Available water supplies are rationed amongst the largest number of farmers, creating institutional water scarcity.

Synthesis

In summary institutional and water policy reforms had myriad effects on agents’ incentives to save water. Water pricing regimes created institutional water scarcity, affecting individual farmer’s irrigation costs, irrigated area and rice productivity; water user associations responded positively to these incentives by ordering water only when needed and adjusting their requests with rainfall; revenue from water to the ZIS increased as a result of diverting water to higher value uses; farmers responded by changing water management practices, and improving existing ponds and building new ones to store water.

4.2.4 Case Study: Adoption of Water Saving Irrigation Practices by Farmers

Water saving techniques such as AWD developed in the wake of intensifying water competition and water shortages in agriculture. However, they are adopted at limited scale. Reliable water supply is one of the key factors identified for the adoption of WSI practices (Mushtaq et al. 2006; Loeve et al. 2004).

Mushtaq et al (2006) modeled adoption of AWD at the farm level as a function of reliability of water sources namely canal water from the ZIS, water from smaller reservoirs, and water from local ponds, along with household-level socio-economic characteristics, land quality and farm size. To measure AWD adoption, an AWD score was calculated based on soil-water conditions. The AWD score falls between 0 and 1 if a farmer irrigated at a combination of different soil-water statuses. The score indicates if the farmer practices AWD or not, with the higher score indicating a greater adoption of AWD.

Empirical Findings

The average AWD score with ponds was 0.81, which indicates that the farmers’ irrigation practices were close to the ideal AWD practices. Water use from ponds was significant, suggesting that ponds are major factors responsible for the adoption of AWD irrigation practices (Table 6). Farm size and land quality were also found to have significant impact on the adoption of AWD practices.
Table 6

Tobit estimates for the adoption of alternate wetting and drying (AWD) practices in the Zhanghe Irrigation System

Variable

Tobit estimate of index function

Tobit estimate of marginal effecta

Coeff.

Std.error

P value

Coeff.

Std.error

P value

Intercept

0.573***

0.148

0.000

0.481***

0.126

0.000

Access to pond

0.003

0.018

0.846

0.003

0.015

0.846

Farm Size

-0.007**

0.003

0.032

-0.006**

0.003

0.032

Irrigation from ZIS water

-0.001

0.031

0.974

-0.001

0.026

0.974

Irrigation from pond water

-0.024*

0.012

0.059

-0.020*

0.010

0.058

Irrigation from tubewell

-0.029

0.032

0.366

-0.024

0.027

0.366

Irrigation from small reservoirs

-0.023

0.023

0.328

-0.019

0.019

0.327

Land quality

-0.061**

0.027

0.021

-0.051**

0.022

0.020

Elevation of the main plot

-0.047

0.033

0.148

-0.040

0.027

0.148

Water saving irrigation training

0.052

0.084

0.537

0.044

0.070

0.536

Education

-0.002

0.009

0.792

-0.002

0.008

0.792

Farmer’s experience

0.003

0.002

0.153

0.002

0.001

0.151

Wealth of the farmer

0.031

0.028

0.271

0.026

0.023

0.270

Dummy for village 1

0.039

0.054

0.472

0.032

0.045

0.472

Dummy for village 3

0.130*

0.074

0.080

0.109*

0.063

0.080

Dummy for village 4

0.224***

0.055

0.000

0.188***

0.046

0.000

Sigma (σ)

0.157***

Log likelihood function (unrestricted)

74.84

Log likelihood function (restricted)

49.95

Likelihood Ratio (LR)

49.78***

Pseudo R2

0.33

Scale factor for marginal or total effect F(z)

0.84

Conditional mean of dependent variable at sample point

0.67

Total observations

108

Data interpreted and summarised from Mushtaq et al (2006)

***, **, and * refer to significance at the 1 %, 5 %, and 10 % level, respectively

aMarginal effect (∂Ey/∂x) refers to the partial derivatives of the expected value with respect to the vector of characteristics. They were computed at the mean of the independent variable

Synthesis

The empirical results indicated that farm size, frequency of irrigation from the pond, and land quality have a significant but negative influence on the adoption of AWD practices. The results of the model were somewhat unexpected, but are indicative of risk-averse behaviour of farmers. Initially, it was thought that ponds are a prerequisite for the adoption of AWD practices, as described by Loeve et al (2001). However, the results highlighted that, although ponds are important for the adoption of AWD practices, access to the ponds gave farmers additional water at their disposal, which resulted in continuous flooding, a deviation from ideal AWD practices.

The results also show that the reliability of local water ponds had only a weak, significant positive effect on AWD practices. Thus reliable water supply does not necessarily result in the adoption of AWD practices. The adoption of AWD is not driven by farmer desire but rather imposed on them due to increasing water scarcity. With the steady decline in ZIS releases, farmers were forced to find ways to save water.

5 Synergies from Water Sector Reforms

Clearly both hardware and software policies have contributed to the ability of ZIS to reallocate reservoir water from irrigation to higher value uses without any significant decline in rice production. Furthermore, there appears to be an interaction among hardware and software strategies, such as the development of farm ponds and AWD practices, volumetric pricing, adoption of AWD, and institutional water scarcity by allocating diminishing supply. The key factors have been the increase in rice yields and water ponds, which kept the water within the system and sustained crop production. In particular the role of ponds in sustaining production was pronounced. We review empirical evidence presented by Mushtaq et al (2009b) on these hardware and software polices, especially water ponds, in sustaining agricultural production, specifically the impact of ponds on cost of irrigation, crop area and yield.

5.1 Case Study: Sustaining Crop Production

5.1.1 Impact on Cost of Irrigation

The regression result for the cost of irrigation indicates that variables for villages and education of the household head significantly impact the cost of irrigation (Table 7). The coefficients of pond water access, land quality, AWD score and farming experience of the household head were all negative but not significant. The negative coefficients implied that having access to pond water, good quality land, using AWD practices, sound farming experience of the household head and sound wealth status of the household reduces the cost of irrigation. This was true, as in the case of farm pond water access, as there was almost no water fee associated with the use of pond water; therefore, access to pond water reduces the cost of irrigation. Also, AWD implied less irrigation for rice, which implies less water use and less irrigation cost.
Table 7

Multivariate regression models estimates of for the impact of pond on the cost of irrigation, rice area and yield in the Zhanghe Irrigation System

Variable

Cost of irrigation

Rice area

Rice yield

Coefficients

Std. error

Coefficients

Std. error

Coefficients

Std. error

Intercept

215.43

175.45

85.599***

10.378

347.63***

68.15

Dummy for pond

–90.18

59.34

5.827

3.722

3.20

6.61

Farm size

0.82

3.51

–0.835***

0.206

0.44

1.44

Land quality

–21.20

25.39

–3.401**

1.484

9.93

10.64

AWD score

–38.14

122.11

19.191**

7.563

32.71

56.37

Elevation of the main plot

28.45

32.11

0.213

1.786

–6.69

13.54

Education of farmer

19.20**

8.86

–0.374

0.513

–0.90

3.56

Farmers’ experience

–1.09

1.86

–0.146

0.101

0.69

0.71

Wealth of the farmer

–15.00

29.65

–1.684

1.640

4.08

11.63

Dummy for village 1

233.32***

45.42

1.308

2.828

–53.64*

20.39

Dummy for village 3

77.45

57.69

–6.432**

3.152

53.63**

24.76

Dummy for village 4

169.09***

52.15

–10.241***

3.126

58.86***

21.60

F value

 

3.38***

 

4.62***

 

5.87***

R-square

 

0.32

 

0.35

 

0.43

Adjusted R-square

 

0.23

 

0.27

 

0.36

Number of observations

 

90

 

108

 

97

Data interpreted and summarised from Mushtaq et al (2009b)

***, ** and * indicate the significance at 1, 5 and 10 % probability levels, respectively

5.1.2 Impact on Rice Area

The size of the farm, land quality and variables for the villages Huangyun and Sundian were found to have a negative impact on the percentage area where rice is grown (Table 7). Larger farms are more diversified, which means that with the increase farm size, the rice area will decrease. On the other hand, the coefficient of the AWD score was found to be positive and to have a significant positive effect on the percentage of rice area. This positive result was expected, as AWD practices save around 20 % of water. Therefore, as a result of this saved water, rice area should increase.

5.1.3 Impact on Rice Yield

The result indicates, except the variables for villages, none of the variables were found to affect the rice yield significantly (Table 7). This implied that access to ponds, increase in farm size, good quality of land, farming experience and wealth of the household contributed positively, though not significantly, to rice yield.

Yield in the Sundian village were found to be significantly higher than other villages due to relatively better availability of water. The results for the AWD score showed that by adopting AWD practice, yield is increased, but that the increase in the yield was not statistically significant. Nevertheless, achieving the same yields with less water still means “same crop with few drops” and thus water savings.

6 Conclusions and Directions for Policy

Empirical evidence from the case studies on selected hardware and software interventions shows that water sector reforms can generate significant benefits for peasant farming communities and local governments. The results in particular show that all agents respond to the same set of incentives simultaneously, by changing their production and resource use decisions such that cumulative benefits from hardware and software interventions reinforce synergies. For instance, the government responds to water scarcity by allocating water away from agriculture, investing in research on water saving irrigation techniques, and through tax-for-fee reform or FGS, to lessen farmer’s tax burdens. Irrigators responded by adopting water saving practices such as alternate wet-and-dry irrigation for rice production, diverting less surface water supplies, and investing in local water ponds for rainwater storage for more reliable and cheaper water supplies; pond managers and local cadres/groups responded through collective action for improved pond management and maintenance; government introduced a two-tiered water tariff, altering incentives to use water more efficiently and motivating farmers to reduce their water use and adjust cropping pattern where feasible. Irrigation cost fell, while rice productivity stayed the same or even improved. Water deliveries to agriculture fell sharply while effectively maintaining rice production. Synergies from reforms are evident and are supported by other studies (Hanjra et al. 2009). However, scaling up local collective actions for optimal impact is problematic. Heterogeneity in socioeconomic factors, as well as spatial differences, are the main stumbling blocks. Rewarding reformers seems to work, yet the benefits are neither immediate nor straight forward. Local implementation of national policies requires a systematic and coherent framework suited to the level of economic development of each region for realizing synergies from reforms.

Does it pay to join the party? The answer is a definitive yes, compared with reforms in socialist economies, where economic reforms only have limited success. Inviting others to join the party requires further research for more robust scientific evidence.

Footnotes
1

The FGS (农村税费改革) is part of the general central government restructuring and centralizing program that can be tracked back to 1998 (Kennedy 2007). The FGS was introduced at the provincial level as a form of tax relief for the farmers. It was first introduced in Anhui province in 2002, and then broadly introduced to 20 other provinces in 2002. In order to further reduce the villagers’ burden, the central government announced complete elimination of the agricultural tax by 2006. Yan’an in Shaanxi province was one of the first districts to eliminate all local fees and agricultural tax in 2004.

 

Acknowledgements

The author greatly thank Dr. Bas Bauman, International Rice Research Institute, Philippines and Dr Luo Yufeng, Hohai University, China, and Dr Munir Hanjra, Charles Sturt University, Australia, for their feedback and comments in preparation of this manuscript.

Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  1. 1.Australian Centre for Sustainable CatchmentsUniversity of Southern QueenslandToowoombaAustralia

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