IDEAS home Printed from https://ideas.repec.org/a/zbw/espost/248718.html
   My bibliography  Save this article

Can water rights trading pilot policy ensure food security in China? Based on the difference-in-differences method

Author

Listed:
  • Fang, Lan
  • Fu, Yong
  • Chen, Shaojian
  • Mao, Hui

Abstract

Ensuring food security in China is the primary task in solving the problems of 'agriculture, countryside, and farmers'. Based on Chinese provincial panel data from 2009 to 2018, this paper evaluates the impact of a water rights trading pilot policy (WRTPP) on food security and examines its underlying mechanism. To overcome the estimation bias existing in previous studies, we use the difference-in-differences method, which can separate time effects from policy treatment effects and is an effective tool to compare the effect before and after policy implementation. We, therefore, use this method to evaluate the net effect of the WRTPP on food security. It is found that the WRTPP can help ensure food security. This effect reaches its maximum in the fourth year after the policy's implementation. It is further found that the WRTPP can improve the adoption of agricultural water-saving irrigation technology to increase the grain yield. Our conclusions complement existing evidence on the factors influencing food security. From the perspective of improving farmers' water-saving irrigation technology, we confirm that the mechanism of the water rights trading pilot policy helps ensure food security.

Suggested Citation

  • Fang, Lan & Fu, Yong & Chen, Shaojian & Mao, Hui, 2021. "Can water rights trading pilot policy ensure food security in China? Based on the difference-in-differences method," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23(6), pages 1415-1434.
    • Handle: RePEc:zbw:espost:248718
    DOI: 10.2166/wp.2021.045
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/248718/1/Fang_2021_food_security_China.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.2166/wp.2021.045?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sourafel Girma & Holger Görg, 2016. "Evaluating the foreign ownership wage premium using a difference-in-differences matching approach," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 2, pages 17-32, World Scientific Publishing Co. Pte. Ltd..
    2. Elrod, Aaron A. & Malik, Arun S., 2017. "The effect of environmental regulation on plant-level product mix: A study of EPA's Cluster Rule," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 164-184.
    3. Mori-Clement, Yadira, 2019. "Impacts of CDM projects on sustainable development: Improving living standards across Brazilian municipalities?," World Development, Elsevier, vol. 113(C), pages 222-236.
    4. Bigelow, Daniel P. & Zhang, Hongliang, 2018. "Supplemental irrigation water rights and climate change adaptation," Ecological Economics, Elsevier, vol. 154(C), pages 156-167.
    5. Yoo, James & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J. & Kinzig, Ann P. & Perrings, Charles, 2013. "The value of agricultural water rights in agricultural properties in the path of development," Ecological Economics, Elsevier, vol. 91(C), pages 57-68.
    6. Wang, Y.B. & Liu, D. & Cao, X.C. & Yang, Z.Y. & Song, J.F. & Chen, D.Y. & Sun, S.K., 2017. "Agricultural water rights trading and virtual water export compensation coupling model: A case study of an irrigation district in China," Agricultural Water Management, Elsevier, vol. 180(PA), pages 99-106.
    7. Kenneth A. Baerenklau & Keith C. Knapp, 2007. "Dynamics of Agricultural Technology Adoption: Age Structure, Reversibility, and Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 190-201.
    8. Doppler, Werner & Salman, Amer Z. & Al-Karablieh, Emad K. & Wolff, Heinz-Peter, 2002. "The impact of water price strategies on the allocation of irrigation water: the case of the Jordan Valley," Agricultural Water Management, Elsevier, vol. 55(3), pages 171-182, June.
    9. Deepak K. Ray & James S. Gerber & Graham K. MacDonald & Paul C. West, 2015. "Climate variation explains a third of global crop yield variability," Nature Communications, Nature, vol. 6(1), pages 1-9, May.
    10. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-660, November.
    11. Gohar, Abdelaziz A. & Ward, Frank A., 2010. "Gains from expanded irrigation water trading in Egypt: An integrated basin approach," Ecological Economics, Elsevier, vol. 69(12), pages 2535-2548, October.
    12. Brinegar, Hilary R. & Ward, Frank A., 2009. "Basin impacts of irrigation water conservation policy," Ecological Economics, Elsevier, vol. 69(2), pages 414-426, December.
    13. Kahil, Mohamed Taher & Connor, Jeffery D. & Albiac, Jose, 2015. "Efficient water management policies for irrigation adaptation to climate change in Southern Europe," Ecological Economics, Elsevier, vol. 120(C), pages 226-233.
    14. Aidam, Patricia Woedem, 2015. "The impact of water-pricing policy on the demand for water resources by farmers in Ghana," Agricultural Water Management, Elsevier, vol. 158(C), pages 10-16.
    15. Nhantumbo, Nascimento S. & Zivale, Clemente O. & Nhantumbo, Ivete S. & Gomes, Ana M., 2016. "Making agricultural intervention attractive to farmers in Africa through inclusive innovation systems," World Development Perspectives, Elsevier, vol. 4(C), pages 19-23.
    16. Danso, G.K. & Jeffrey, S.R. & Dridi, C. & Veeman, T., 2021. "Modeling irrigation technology adoption and crop choices: Gains from water trading with farmer heterogeneity in Southern Alberta, Canada," Agricultural Water Management, Elsevier, vol. 253(C).
    17. Gehrsitz, Markus, 2017. "The effect of low emission zones on air pollution and infant health," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 121-144.
    18. Wenjiao Shi & Fulu Tao & Jiyuan Liu & Xinliang Xu & Wenhui Kuang & Jinwei Dong & Xiaoli Shi, 2014. "Has climate change driven spatio-temporal changes of cropland in northern China since the 1970s?," Climatic Change, Springer, vol. 124(1), pages 163-177, May.
    19. Ørum, Jens Erik & Boesen, Mads Vejlby & Jovanovic, Zorica & Pedersen, Søren Marcus, 2010. "Farmers' incentives to save water with new irrigation systems and water taxation--A case study of Serbian potato production," Agricultural Water Management, Elsevier, vol. 98(3), pages 465-471, December.
    20. Abebaw, Degnet & Admassie, Assefa & Kassa, Habtemariam & Padoch, Christine, 2020. "Can rural outmigration improve household food security? Empirical evidence from Ethiopia," World Development, Elsevier, vol. 129(C).
    21. Fang, Lin & Zhang, Lin, 2020. "Does the trading of water rights encourage technology improvement and agricultural water conservation?," Agricultural Water Management, Elsevier, vol. 233(C).
    22. Lee, Seung Oh & Jung, Younghun, 2018. "Efficiency of water use and its implications for a water-food nexus in the Aral Sea Basin," Agricultural Water Management, Elsevier, vol. 207(C), pages 80-90.
    23. Kansiime, Monica K. & Tambo, Justice A. & Mugambi, Idah & Bundi, Mary & Kara, Augustine & Owuor, Charles, 2021. "COVID-19 implications on household income and food security in Kenya and Uganda: Findings from a rapid assessment," World Development, Elsevier, vol. 137(C).
    24. Delorit, Justin D. & Parker, Dominic P. & Block, Paul J., 2019. "An agro-economic approach to framing perennial farm-scale water resources demand management for water rights markets," Agricultural Water Management, Elsevier, vol. 218(C), pages 68-81.
    25. Li, W. & Li, Y.P. & Li, C.H. & Huang, G.H., 2010. "An inexact two-stage water management model for planning agricultural irrigation under uncertainty," Agricultural Water Management, Elsevier, vol. 97(11), pages 1905-1914, November.
    26. Georgina Moreno & David L. Sunding, 2005. "Joint Estimation of Technology Adoption and Land Allocation with Implications for the Design of Conservation Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1009-1019.
    27. Fei, Rilong & Xie, Mengyuan & Wei, Xin & Ma, Ding, 2021. "Has the water rights system reform restrained the water rebound effect? Empirical analysis from China's agricultural sector," Agricultural Water Management, Elsevier, vol. 246(C).
    28. Berbel, J. & Gomez-Limon, J. A., 2000. "The impact of water-pricing policy in Spain: an analysis of three irrigated areas," Agricultural Water Management, Elsevier, vol. 43(2), pages 219-238, March.
    29. Feike, Til & Henseler, Martin, 2017. "Multiple Policy Instruments for Sustainable Water Management in Crop Production - A Modeling Study for the Chinese Aksu-Tarim Region," Ecological Economics, Elsevier, vol. 135(C), pages 42-54.
    30. Hanjra, Munir A. & Qureshi, M. Ejaz, 2010. "Global water crisis and future food security in an era of climate change," Food Policy, Elsevier, vol. 35(5), pages 365-377, October.
    31. Rodney Lunduka & Jacob Ricker-Gilbert & Monica Fisher, 2013. "What are the farm-level impacts of Malawi's farm input subsidy program? A critical review," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 563-579, November.
    32. Bekchanov, Maksud & Bhaduri, Anik & Ringler, Claudia, 2015. "Potential gains from water rights trading in the Aral Sea Basin," Agricultural Water Management, Elsevier, vol. 152(C), pages 41-56.
    33. Castillo, Gracia Maria Lanza & Engler, Alejandra & Wollni, Meike, 2021. "Planned behavior and social capital: Understanding farmers’ behavior toward pressurized irrigation technologies," Agricultural Water Management, Elsevier, vol. 243(C).
    34. Berbel, J. & Mateos, L., 2014. "Does investment in irrigation technology necessarily generate rebound effects? A simulation analysis based on an agro-economic model," Agricultural Systems, Elsevier, vol. 128(C), pages 25-34.
    35. Theesfeld, Insa, 2018. "From Land to Water Grabbing: A Property Rights Perspective on Linked Natural Resources," Ecological Economics, Elsevier, vol. 154(C), pages 62-70.
    36. Bocchiola, D. & Brunetti, L. & Soncini, A. & Polinelli, F. & Gianinetto, M., 2019. "Impact of climate change on agricultural productivity and food security in the Himalayas: A case study in Nepal," Agricultural Systems, Elsevier, vol. 171(C), pages 113-125.
    37. Lan, Kang & Chen, Xin & Ridoutt, Bradley G. & Huang, Jing & Scherer, Laura, 2021. "Closing yield and harvest area gaps to mitigate water scarcity related to China’s rice production," Agricultural Water Management, Elsevier, vol. 245(C).
    38. Kang, Shaozhong & Hao, Xinmei & Du, Taisheng & Tong, Ling & Su, Xiaoling & Lu, Hongna & Li, Xiaolin & Huo, Zailin & Li, Sien & Ding, Risheng, 2017. "Improving agricultural water productivity to ensure food security in China under changing environment: From research to practice," Agricultural Water Management, Elsevier, vol. 179(C), pages 5-17.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fang, Lin & Zhang, Lin, 2020. "Does the trading of water rights encourage technology improvement and agricultural water conservation?," Agricultural Water Management, Elsevier, vol. 233(C).
    2. Fei, Rilong & Xie, Mengyuan & Wei, Xin & Ma, Ding, 2021. "Has the water rights system reform restrained the water rebound effect? Empirical analysis from China's agricultural sector," Agricultural Water Management, Elsevier, vol. 246(C).
    3. Shaojian Chen & Yuanyuan Cao & Jun Li, 2021. "The Effect of Water Rights Trading Policy on Water Resource Utilization Efficiency: Evidence from a Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 13(9), pages 1-17, May.
    4. Wu, Zheng & Tian, Guiliang & Xia, Qing & Hu, Hao & Li, Jiawen, 2023. "Connotation, calculation and influencing factors of the water-use rights benchmark price: A case study of agricultural water use in the Ningxia Yellow River irrigation area," Agricultural Water Management, Elsevier, vol. 283(C).
    5. Hang Xu & Rui Yang & Jianfeng Song, 2021. "Agricultural Water Use Efficiency and Rebound Effect: A Study for China," IJERPH, MDPI, vol. 18(13), pages 1-16, July.
    6. Andrea Pronti & Julio Berbel, 2020. "Analysis of the impact of a volumetric tariff for irrigation in Northern Italy through the “Inverse DiD†approach," SEEDS Working Papers 1320, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jul 2020.
    7. Xu, Hang & Yang, Rui, 2022. "Does agricultural water conservation policy necessarily reduce agricultural water extraction? Evidence from China," Agricultural Water Management, Elsevier, vol. 274(C).
    8. Wang, Yizhong & Hang, Ye & Wang, Qunwei, 2022. "Joint or separate? An economic-environmental comparison of energy-consuming and carbon emissions permits trading in China," Energy Economics, Elsevier, vol. 109(C).
    9. Sauer, Johannes & Zilberman, David, 2009. "Innovation Behaviour At Farm Level – Selection And Identification," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51073, Agricultural Economics Society.
    10. Qian Chen & Jaume Freire González & Donglan Zha, 2023. "The Gap between Expectations and Reality: Assessing the Water Rebound Effect in Chinese Agriculture," Working Papers 1415, Barcelona School of Economics.
    11. Shahzad, Muhammad Faisal & Abdulai, Awudu, 2020. "Adaptation to extreme weather conditions and farm performance in rural Pakistan," Agricultural Systems, Elsevier, vol. 180(C).
    12. Yan, Dong & Chen, Lin & Sun, Huaiwei & Liao, Weihong & Chen, Haorui & Wei, Guanghui & Zhang, Wenxin & Tuo, Ye, 2022. "Allocation of ecological water rights considering ecological networks in arid watersheds: A framework and case study of Tarim River basin," Agricultural Water Management, Elsevier, vol. 267(C).
    13. Wang, Y.B. & Liu, D. & Cao, X.C. & Yang, Z.Y. & Song, J.F. & Chen, D.Y. & Sun, S.K., 2017. "Agricultural water rights trading and virtual water export compensation coupling model: A case study of an irrigation district in China," Agricultural Water Management, Elsevier, vol. 180(PA), pages 99-106.
    14. Sauer, Johannes & Zilberman, David D., 2009. "Innovation behaviour at micro level - selection and identification," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6t49r0fh, Department of Agricultural & Resource Economics, UC Berkeley.
    15. Berbel, Julio & Gutierrez-Marín, Carlos & Expósito, Alfonso, 2018. "Microeconomic analysis of irrigation efficiency improvement in water use and water consumption," Agricultural Water Management, Elsevier, vol. 203(C), pages 423-429.
    16. Speelman, Stijn & Buysse, Jeroen & Farolfi, Stefano & Frija, Aymen & D'Haese, Marijke & D'Haese, Luc, 2009. "Estimating the impacts of water pricing on smallholder irrigators in North West Province, South Africa," Agricultural Water Management, Elsevier, vol. 96(11), pages 1560-1566, November.
    17. Yonela Mndela & Naledzani Ndou & Adolph Nyamugama, 2023. "Irrigation Scheduling for Small-Scale Crops Based on Crop Water Content Patterns Derived from UAV Multispectral Imagery," Sustainability, MDPI, vol. 15(15), pages 1-21, August.
    18. Zhou, Qing & Zhang, Yali & Wu, Feng, 2021. "Evaluation of the most proper management scale on water use efficiency and water productivity: A case study of the Heihe River Basin, China," Agricultural Water Management, Elsevier, vol. 246(C).
    19. Pouchkarev, Igor & Spronk, Jaap & Trinidad Segovia, Juan E., 2006. "Empirical Insights on the Heterogeneity of the Spanish Stock Market/Un Análisis Empírico De La Heterogeneidad Del Mercado De Capitales Español," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 24, pages 1091-1106, Diciembre.
    20. Liu, Lining & Zuo, Qiang & Shi, Jianchu & Wu, Xun & Wei, Congmin & Sheng, Jiandong & Jiang, Pingan & Chen, Quanjia & Ben-Gal, Alon, 2023. "Balancing economic benefits and environmental repercussions based on smart irrigation by regulating root zone water and salinity dynamics," Agricultural Water Management, Elsevier, vol. 285(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:espost:248718. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.