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saving technologies. Despite this investment,
including in innovative delivery mechanisms,
In part these have been exacerbated by a
lack of coordinated and integrated approaches
between regions and sectors. Meeting demand
in one sector or region can be achieved; however,
too often this creates shortages downstream.
Another barrier is the lack of property rights
to water, restricting the ability to price water
through market interactions.
Irrigation schemes in China, such as the
Zhanghe Irrigation Scheme, operate as centrally
managed institutions, responsible for supplying
water to end users. In the Zhanghe scheme,
the subject of another ACIAR-funded project,
improvements were sought for main system
water management, where farmers are charged
for any water they use.
Orders for water must be placed with the
irrigation managers at the nearest canal station
three days prior to delivery. The Main Canal
office aggregates these demands to calculate
the total inflow into the canal from the river
system. Water is then priced on a volumetric
basis---the more requested, the higher the bill.
The ACIAR project team, led by Professor
Hector Malano of the University of Melbourne,
found that the scheme operates as a
disincentive to farmers to place advance
orders. Instead the farmers delay orders in
the hope of rain. Where rain does not fall,
crops become water-stressed, resulting in a
high number of orders, which then cause the
system to become congested. The system is
unable to meet this demand, resulting in only
some orders being delivered.
Two computer-based models, developed
through similar ACIAR-funded research into
Vietnamese irrigation schemes, were adapted
to the peculiarities of the Zhanghe scheme.
The Irrigation Main System Operation (IMSOP)
model was used to analyse and improve
operations, with asset data collected and
analysed by the ASSET Manager model.
Utilising the IMSOP model the project team
was able to develop prediction and sequencing
information, including linkages to climate data
collected from a nearby weather station. More
accurate management of demand in turn has
helped make water-saving irrigation techniques
Changes to water pricing in the years prior
to the project had exacerbated the farmers'
habit of delaying orders, resulting in reduced
demand and a revenue shortfall. This in turn
impacted on the cost of water supply. The
ASSET Manager model was used to calculate
the actual operational costs and develop a
sustainable fee structure.
Valuing water correctly is essential in
any future approaches to water trading,
including changes in the Yellow River Basin, as
demonstrated by the ACIAR project. Property
PARTNERS NOVEMBER 2009 FEBRUARY 2010
rights for water would allow farmers, villages
and communities to buy and sell water,
lessening the reliance on state-run irrigation
systems to allocate water and set prices.
Similarly the lack of a value on water, other
than in purchases from irrigation schemes,
makes compensating for water transfers an
impediment. This includes mechanisms to
transfer revenues from water sales. Resistance to
water-trading schemes has in part been based
around uncertainties regarding water transfers
on rural incomes, particularly where water is not
priced and compensation not delivered.
Water trading may accelerate the adoption
of local solutions to water scarcity by creating
economic incentives for technical solutions based
on local needs. Additionally, such approaches
could also enhance grain self-sufficiency.
This could include adopting
recommendations from the project to consider
water use by crops. For example, the economics
of transport and location suggest that high-
value perishable crops be grown closer to urban
centres, and crops that are more dependent on
water, such as summer-grown cotton or maize,
be grown in the wetter parts of China.
These and other key findings from research
into institutional and policy arrangements
relating to water in the Yellow River Basin have
been used in AusAID project work on water
governance in China, which has examined
policies and priorities for institutional reform. n
PROJECTS: LWR/2000/120: Institutions and policies
for improving water allocation and management
in the Yellow River Basin, China;
LWR/2001/001: Improving main system water
management in China: a demonstration project in
the Zhanghe Irrigation Scheme
CONTACT: Dr Mirko Stauffacher,
Irrigated water in China is often free, undermining efforts to ensure it is seen as a valuable commodity.
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