China’s Agricultural Water Policy Reforms - Water and Agriculture: Sustainability, Markets and Policies - page 121

of China's farms would make it very costly to manage water resources on an individual
farmer basis. So in China, agricultural water resources are public resources. Due to
unclear water rights, it is easy to have a lack of a compensation mechanism when water
use rights are violated.
1.6 The irrational agricultural water tariff structure
At present, there are three problems in agricultural water pricing: one is that the water
tariff cannot reflect the water supply cost; the second is that there are too many collecting
levels, with the accompanying risk of free-riders; the third is that the current water tariff
level results in a financial burden on the government budget.
Investigation shows that the current water tariff level is less than 50% of water supply
cost. Due to the lower price level of agricultural products, and the heavy burden on and
limited affordability for farmers, the regulation of an agricultural water tariff is very
difficult. At the same time, due to the lack of a constraining mechanism on revenue
collecting and too many management levels, the real revenue of the water supply unit was
much less than the supply cost.
2. Policy reforms in China's agricultural water use
In the last 20 years, with 9% of the cultivated land and 6% of the fresh water
resources of the world, as well as uneven spatial and temporal distribution and lack of
correlation with land resources, China supports 22% of the population of the world. With
the decrease in the percentage of irrigation water use in total water use, the effective
irrigation area continues increasing, to support agricultural and economic development. In
the new century, under a market economy, agricultural water use must be reformed to
achieve the state's agricultural development aims, and to support sustainable social and
economic development with sustainable use of water resources.
2.1 Clarifying and guaranteeing basic agricultural water rights
Article 35 of the Water Law states that construction projects which utilise agricultural
irrigation water sources and irrigation facilities, or have a bad effect on original irrigation
water and water supply sources, should implement relevant compensation methods.
Those who suffer loss shall be compensated according to law.
The water administrative department in China is actively pushing for the clarification
of agricultural water use rights. According to the water rights and water market theory,
with the development of a new water resources management institution, significant
progress has been achieved in clarification of agricultural water use rights, which
guarantees the rational allocation of water resources among sectors together with basic
agricultural water use rights and farmers' benefits.
As a result of the water rights reform in Zhangye, Gansu province, each farmer has a
water right card, which clearly indicates the annual water usage for the farmer. This
legally protects the farmer's water use rights and relevant benefits while, at the same
time, limiting the farmer's water use. In the water rights transfer pilot case study area in
the Inner Mongolia Autonomous Region, the government defines the agricultural water
use rights with legal documents, and allocates agricultural water use rights to the water
user associations (WUAs) in the irrigation zone. Under the guarantee of agricultural water
use rights, water rights were transferred through compensation from industry to
agriculture.