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In an increasingly volatile world, China’s economic growth has proved remarkably resilient. While the economies of Europe and America have stalled or nose-dived since the 2008 financial crash, China’s has continued to expand. The headlines are startling: since the early 1990s, GDP growth per capita has averaged 8.9%, and nearly 600 million people have been lifted out of poverty.
Perhaps less well known is the fact that China’s growth was kick-started by investment in agriculture. This, in turn, catalysed growth in the wider rural economy and, as China’s rural inhabitants got richer, so they moved to growing towns and cities, building – literally – the skylines of Beijing, Shanghai and other megacities.
In the meantime, China’s agricultural economy has motored on. Despite rapid urbanisation, and an economy now driven by industry rather than farming, the country is still able to feed over 20% of the world’s population. Maintaining self-sufficiency in wheat and rice remains ideologically important, even if imports of feed grains for meat production have soared over recent years.
But agriculture – and particularly the irrigated agriculture that supports food production in the drier north of the country – needs water. And as other parts of the economy have boomed, water scarcity is biting hard. This has created something of a dilemma for China’s ruling Community Party (CCP): how can it safeguard food production, and the incomes of China’s farmers, while releasing water to increasingly thirsty urban and industrial users?
Globally, roughly 70% of freshwater withdrawals go to agriculture, followed by industrial and domestic sectors (roughly 20%) and power generation (10%, and increasing). Not all of these uses are ‘consumptive’, in the sense that water diverted is also used up. Hydropower, for example, is not a big consumptive user. But agriculture is, and in a growing economy, ‘who gets what’ in terms of water allocation is both economically significant, and hugely political.
In strict economic terms, water should be allocated to its most valuable uses – outside agriculture. But the farming lobby in most countries has sharp political teeth, and in China’s case, the political legitimacy of the CCP – already under strain – is still bound up with the welfare of its peasant forbearers.
Faced with this dilemma, and realising that investments in ‘new’ water developments can’t continue indefinitely with a fixed supply, China has turned its attention to managing demand. And China has made significant progress, as a new report from research think-tank ODI makes clear, despite well-rehearsed problems of environmental degradation.
Getting more ‘crop per drop’ has been key. China’s agricultural productivity has more than doubled since 1990, its total irrigated area has increased by over 30%, and its per capita grain yield has risen by over 10%. Yet over the same period, agricultural water withdrawals per hectare of irrigated land have declined by over 20%.
Despite progress, however, agricultural water withdrawals still account for over 60% of the total, and the CCP has been reluctant to implement stricter regulatory or water pricing reforms that might hurt farmers and hit food production, particularly in a country wracked by famine as recently as the 1950s.
As so often happens in China, policy makers have experimented with different reforms to see what works. In northern China’s Inner Mongolia Autonomous Region, for example, officials have initiated a novel water transfer programme aimed at alleviating water shortages for downstream industrial users on the Yellow River.
The programme transfers water saved in agriculture to downstream users, with the costs of water saving in irrigation met directly by industrial beneficiaries. By the end of 2014, roughly 170m cubic metres per year of ‘saved’ water will be transferred from irrigation to industry, keeping both farmers and industries happy.
Meanwhile, officials are setting up a water bank that will buy under-used water rights and transfer them to thirstier areas and users. In the words of one official, “We can’t change the price of water we charge to farmers – that’s fixed [at roughly one cent per cubic metre]. But we can help farmers use less, and make sure the water is transferred to those who really need it”.
Elsewhere, different approaches are reaping rewards. On the North China Plain, a densely populated and strategically important grain-growing area of some 400,000 square kilometres, sophisticated remote sensing techniques are being used to help cap groundwater withdrawals.
The aim here is to measure and control the amount of water actually consumed in growing crops (through evaporation and transpiration), rather than simply withdrawn from underground aquifers. The situation is urgent: water levels in some areas are dropping by more than one metre per year, threatening food production.
The challenges are enormous, and China is not about to solve its water problems in a few years. Left unchecked, water scarcity and pollution threaten not just food and economic security, but the political legitimacy of the CCP itself. But progress is being made. Reform is a delicate balancing act, particularly where farmers and food security are concerned. Getting the balance right will determine whether China can continue to feed itself, grow economically and protect its precious ecosystems.
Roger Calow, programme head, Water Policy Programme, Overseas Development Institute
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