Research on AgricultureWater Pricing in the Yellow River Basin Based on Static Multi-region CGE Model
2015, 30 (3):
Agricultural water plays an important role in water usage of the Yellow River Basin (YRB) and China. Therefore, how to quantitatively analyze the relationship between irrigation water price/usage and social economic variables is an interesting problem. First, based on the Australian TERM model and the bottom-up method, we construct a multi-regional statically computable general equilibrium (CGE) model of the YRB. This model focuses on irrigation water of 47 sectors, in which six are agriculture planting sectors. Then, we apply this CGE model to study the agricultural irrigation water price in different provinces of the YRB. This is done under five scenarios that the irrigation water consumption is reduced by 10%, 15%, 20%, 30% and 50% respectively. We also study the social and economic change under five scenariosof increasing the water price by 10%, 15%, 20%, 30% and 50% respectively. The results show that: 1) The price of agricultural irrigation increases with the decrease of the quantity of irrigation water (the scarcity of water resources is being more and more important). With 15% reduction in irrigation water, the irrigation water price in Qinghai, Gansu, Ningxia, Inner Mongolia, Shaanxi, Shanxi, Henan and Shandong provinces are 0.13, 0.28, 0.07, 1.41, 0.59, 0.80, 0.97 and 0.77 yuan/m3 respectively. With 30% reduction in irrigation water, the final prices of irrigation water in above provinces are 0.28, 0.57, 0.11, 3.34, 1.26, 1.69, 2.19 and 1.78 yuan/m3 respectively. In addition, it indicates that the current price of agriculture irrigation water is relatively low. 2) In all the five scenarios that increase the water price by 10%, 15%, 20%, 30% and 50%, the actual GDP reduces. The maximum reduction is in Ningxia, and the minimum is in Inner Mongolia in all five cases. The GDP of Ningxia decreases 0.054%, 0.08%, 0.105%, 0.155% and 0.249%, and that of Inner Mongolia decreases 0.002%, 0.002%, 0.002%, 0.004% and 0.006%. As far as the residential consumption is concerned, the increase in the price of irrigation water reduces the actual consumption level of the residents on one hand, and decreased the demand of agricultural commodity on the other. This is especially true for the six agriculture planting sectors. But the residential consumption of the non-agriculture commodity increases, where the wheat consumption reduces the most—the most is in Ningxia (decreases 0.208%), and the least is in Henan (decreases 0.078%). From these we can see the importance of wheat in the residential consumption in Henan Province. 3) In the case of 15% reduction of irrigation water, the volume of irrigation water is decreased by 9.087×108 m3 in the YRB, accounting for 1.5% of total irrigation water consumption in the YRB. The province with the largest water decrease is Ningxia. The provinces with the least reduction are Inner Mongolia, Henan and Shandong in order, which indicates that these three provinces are less sensitive to the irrigation water price. As to the type of crops, except the other crops sector, the sector with the largest reduction of irrigation water is the wheat sector, while the sectors of vegetable and fruit are two that have slightly decreased of irrigation water. This shows that these two crops are less sensitive to the irrigation water price. 4) System sensitivity analysis (SSA) shows that the results are robust.
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