Effective and efficient water allocation in the Yellow River Basin

August 9, 2010

A set of seven policy notes (see policy briefs under outputs) recently released by the International Food Policy Research Institute and its collaborators, including the University of Illinois at Urbana-Champaign, the Center for Chinese Agricultural Policy, Beijing Normal University, the Yellow River Conservancy Commission, and Tsinghua University, under the Challenge Program on Water and Food aims to comprehensively address the policy challenges plaguing water allocation in the Yellow River Basin (YRB).

The vast YRB—the second largest river basin in China—is a key food production center that makes up some 13 percent of China’s total cultivated area. But this important “breadbasket,” which holds a scant three percent of the country’s water resources, is under threat from growing water scarcity.

Despite its limited water resources, the basin provides water to an estimated 150 million people (both inside and outside the basin area). The largest user of water resources is the agricultural sector, which accounts for 80 percent of total withdrawals—but industrial, urban, and rural domestic sectors are increasingly appropriating water from irrigated agriculture. Water availability for irrigation is further threatened by increases in water pollution, global warming and environmental water needs.

Irrigation is key to poverty reduction
Poverty in the basin has declined rapidly over the last three decades (in line with rapid overall declines in China), but problem areas remain in the upstream areas. Poverty rates are significantly lower in irrigated areas than in nonirrigated areas: While 19.4 percent of all households living in irrigated villages are poor, the rate is more than double (41.4 percent) in nonirrigated villages. Access to reliable irrigation water is therefore integral to improving the lives of the poor.

Governance structures leave much to be desired
China has made significant changes to its water resources management. Under the country’s 2002 Water Law, the Ministry of Water Resources manages all water resources through a water-allocation system. Additional water saving regulations provide clarifications on water permits and rights, water pricing, and abstraction fees.

Despite this legislation, however, implementation of enhanced water management practices has been slow at the provincial level due to a lack of details on how to implement the law, conflicts between water users, and financial difficulties. As a result, current governance structures leave much to be desired for effective and efficient water allocation in the basin.

Effective incentives for farmers are key to solving water shortages in the YRB
Based on simulations with a hydrologic-economic river basin model, one of the seven briefs, Water Allocation Management in the Yellow River Basin: Potential for Water Trading? (click on 5b), assesses how irrigators can increase incomes while conserving irrigation water.

Published in English and Chinese, these briefs reflect the Challenge Program’s overall goal to study water poverty, water availability and access, water productivity, and water and related institutions in the YRB context as a means to develop and rank a series of high-priority, environmentally-sustainable interventions aimed at increasing water and food security for the poor.