China & Australia case studies Water Productivity Workshop, World Bank, December 2014

Some quick facts and figures about China Population 1.368 b (2014) #1 heading for 1.5b in 2033.

Second largest economy in world by nominal GDP and #1 by PPP

Agriculture is 10.1% of GDP: Food self sufficiency 90%

47% urban rising to 65% in 2033

68% water resources and 36% of cultivable area in south compared to 64% of cultivable land in north but only 32% of national renewable water resources.

Total Renewable Water Resources (TRWR) are estimated at about 2,813 BCM per year, plus 122.5 BCM groundwater = 2000m3/head

Typical land holding 0.1ha/person or 0.4ha per family

62.49 million ha irrigated by 2012 = 52% of cultivated land and 75% of cereal harvest, of which 30m ha is rice.

Water scarcity in China

Water Demand Ratio (WDR=(demand-supply)/demand) Red > 20

Per capita water availability is lowest in northern China, Yellow River Basin (Huang He, 13% cultivable land, 150 m people and 3% of the water), Huai He, Hai He and North China Plain have high populations, high water demand and low stretched resources.

Serious water shortage In North.

Factors of scarcity – competing demands and water quality

Urban/rural wss and industrial demand – surface & gw.

Competing irrigation networks

Chronic water quality degradation in most rivers, and at irrigation headworks:

NPS N+P pollution rising

Coliforms falling

Industrial pollutants high: high COD, BOD,

Environmental flow = sediment capacity in rivers or ecology?

Water Saving Society (1978) - objectives

At the micro-level, to achieve efficiency by reducing the water consumption per capita and per unit output

At the medium-level, to achieve effectiveness by increasing the value creation per unit of water consumed

At the macro-level, to achieve environmental sustainability by abstaining from water resource development at the expense of important eco-systems and the environment.

Total area of 'water saving irrigation' is 31.2 m ha (2014)

11th Five-Year Plan (2006-2010) – water targets

Water consumption per unit of industrial added value to be reduced by 30% from the 2005 value (conversely the value of water used by industry to be increased by 40%)

Irrigation efficiency to be raised from 45% to 50%

Main pollutant discharges to be reduced by 10% from the 2005 value

Forest cover ratio to be increased from 18.2% to 20%.

Implementation of water saving society Administrative reform of service provision: public funded, mix of

public and commercial enterprise and commercial service provision (all systems supply urban and industrial water)

Rehabilitation and modernisation of large and medium I.S.

Joint funding from national and provincial sources + local: $$$$ challenge

Channel lining, some automation and Information systems – reducing conveyance losses and capturing return flows: improve O&M

Devolution of management, responsibility and ownership

Water User Associations – conflicting claims on effects on IE% and WUE%

Adoption of water conserving practices on farm + high effy irrigation

(Volumetric water measurement and charging) ~~ SUBSIDIES

Water is being transferred out of agriculture to cities and industry, with and without compensation – farmers must adapt.

Farmers capture more rainfall through catchment level interception and store in local & small (on farm) reservoirs. Source substitution: less clear if water use actually decreases.

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Q(106m3)

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Manufacturing

Non-paddy irrigated Paddy field

M&QEG&W

Construction

Vegetable f ield1

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8119 1081 94 1186 4193715364

Value of product per unit of water in China relative to amount of water used (Gan Hong, CIHWR, 2009)

Water productivity & irrigation efficiency in N. China

Package of water conserving technologies on farm

Channel lining & piping to reduce distribution losses.

Improved application efficiency – levelling, graded furrows

Conversion to sprinkler & drip (mostly horticulture within protected cropping systems)

Reduction in non beneficial evap – no-till, mulching & plastic films

Step change in cropping pattern – increase proportion of summer maize to winter wheat, better use of rainfall and higher yield potential.

Most irrigation is effectively deficit irrigation – further reductions in application thought likely to badly compromise yield.

Mixed reports of adoption: ~50% H/H (Wang, 2007) to 10% (Young, 2008)

National improvements in irrigation efficiency and water productivity (CIDDC, 2009)

Average system efficiency (Et at farm/supply at source) has risen to 0.475 in 2007 from 0.3 in the 1970s.

Per unit area water use dropped from 530 m3/mu to 429 m3/mu (7,950 m3/ha to 6,435 m3/ha).

An increase in net command area from 48.87mha in 1970 to 57.58 in 2007 with no new use of water.

Rehabilitation investment 21.26 bY resulting in a rise in average canal conveyance efficiency from 0.49 to 0.54.

Yield increases due to rehabilitation claimed to average 450kg/ha with WP(I+R) rising above 1 kg/m3.

Water Saving Irrigation in Rice (Southern China)

Water regime Saturated, no ponding

Alternate wetting & drying

Semi dry (aerobic)

Rainwater capture

Soil water content Dry Drier Most dry In addition

Percent water saved 10-20 15-30 20-50 5-15

Rice Yields 3-8% increase

WSI Practices

Results of application of Alternate Wetting and Drying with optimal 3 split (basal, tillering and booting) N fertiliser regime, results in 7 large irrigation schemes in Hubai, Zhejiang, and Jiangxi Province (2007-2009) Area adopted 71,300 ha Water saved 61.6m m3 Rice production increase 41,600 t. Benefits: 73.8mY Benefits/ha: 1035Y Yield: 7000-8500 kg Irrig use: 3250-3450m3/ha WP (I): 2.03-2.64 WPI+R???? [Dong Bin 2014, Wuhan Uni]

Rice uses 55-56% of all irrigation diversions in China

Trends in area and yields of rice in China (MoA)

Rice productivity – hybrid and super hybrid rice.

Hybrids 1976-2012

Cumulative planting 490 mha

Annual area now 16.9 mha

Farm yields 7-10t/ha

Cumulative increase in production over non-hybrids: 560m tonnes.

Super hybrids 1996-2005

10.5t/ha in 2000, 12t/ha in 2005

Planting area 2012, 8.07 million ha

Targets

Upstream of Yangtze River and Northeastern China > 13.5t/ha, Max 14.2t/ha

Middle and Lower reaches of Yangtze river > 13.5t/ha, Max 15t/ha

Water use of hybrids?

Evaluation of water use & savings in China

Research studies – ACIAR, National RS studies

Increasing evidence from remote sensing assisted water balances that catchment and basin level water depletion is very high, which implies little room to (further) improve efficiency

calls for water allocation system based on Et (Xuejiao, 2014)

productivity increases imply the need for reducing yield gaps, increasing harvest index and transpiration efficiency.

SEEAW accounting pilot in 4 regions by MWR, inc. Beijing and Hai He

Development of a national water accounting system?

MWR watching depletion accounting in Colorado (Hong Gan, 2012)

Policy Conflicts

Restoration of input and output subsidies for agriculture since 2010: incentivisation of water savings. Agriculture typically contributes only 35% of household income in rural communities.

Agricultural intensification, water saving and environmental water allocation.

Subsidies on fertiliser, especially N, to ensure high productivity contributing to NPS pollution of water ways and groundwater.

Basin water accounting, efficiency and depletion: what are the effects and who is affected by improvements in irrigation efficiencies over large areas and changes in water use.

Policy dilemmas

Managing food scarcity and water scarcity, with additional stress from climate change: need for alternative approaches.

What is the real situation with environmental flow needs and trends?

When conservation fails to deliver or scarcity is simply too pronounced, supply augmentation is the expensive solution – viz three south to north transfers from Chiang Jiang to NCP.

Development of water accounting and allocation frameworks: interprovincial resistance to water sharing agreements (viz. Huang He) and to higher levels of accountability.

Water markets without water allocation framework and accounting?

Australia, a few numbers and facts Commonwealth of 5 states and 2 territories

Population ~24m; 89% urban. GDP US$ 1.56 trillion (rank #17)

Agriculture contributes ~ 3% of GDP; A$ 48 billion in 2012-2013: 40% from irrigation; farm size 50ha to 5,000 ha +

Mining 19% GDP...... mostly to China........

Surface water for irrigation 15 BCM (~2mha) or 84% of total abstraction; 60% of groundwater for non-ag use.

MDB mean annual diversion of 10.9 BCM for 1.4m ha: GW ~15% of supply in normal years – 24% in drought.

Competition for water Agriculture:Environment

Environmental issues in water management in the MDB

Flow depletion and seasonal dessication of the river and riparian eco-systems – loss of habitat and species.

Salinity (natural, but exacerbated by irrigation, dry land clearance and flow regulation)

Impacts of river regulation (storage)

Flow reversal, temperature change in stream.

Reduction in low flood frequency (new dam rules T&T)

NPS pollution (N and P) and algal blooms (multi factor)

Policies aimed at increasing economic efficiency in water resources use and agriculture

COAG (1994) National Competition Policy

Removal of subsidies to service provision – requirement for full cost recovery of operational and capital replacement costs in irrigation.

Removal of remaining impediments to water trading

~ Privatisation and corporatisation ISPs

Cap on diversions in MDB, 1995, at 1994 levels.

Further relaxation of inter-state water trade via COAG

a. Irrigation water use trends, and the need for a cap on diversions (MDBC 1995). b. Cap compliance (MDBA 2011).

Water trading and water productivity: impact of structural adjustment and drought (1998-2009)

In early stages of drought, when allocations high, water moved from marginal pasture properties in west of Victoria to high value horticulture, including new developments, along river towards South Australia. During drought, and after enabling interstate trade, water moved from NSW to horticulture in SA, and to high value dairy areas and horticulture in Victoria. Market has remained active since end of drought.

2008-2009

To $1200/ML Temp

Equiv: 10% of NSW state entitlement 30% of allocation

Policies aimed at improving the environmental sustainability of the MDB

The Cap on allocations (1995)

The Living Murray – preliminary water transfer from agriculture to environment – 500GL, by purchase of water right on market.

National Water Initiative, the Water Act (2008)

The Murray Darling Basin Plan & Water for the Future,

Federal take-over of management of MDB, replacing states (MDBC) with MDBA.

Recovery of 2250 GL of water entitlements: total transfer of 2750GL by 2019, at a cost of A$10.3 billion: equivalent to 30% of irrigation entitlements. Mean flow to rise from 55% to 66% LTMF

Water use efficiency and environmental flows.......

Temporary reversal in economic reform, due to buy back of irrigation entitlements – investment in irrigation, with a subsidy element (debate about price paid)

BAU will resume after 2019.

Components of investment in environmental purchase:

Sustainable water use and infrastructure programme - improved infrastructure, flow management and measurement aimed at reducing system losses.

National on-farm efficiency programme

Boundary functions and benchmarking water use efficiency in Australia – dryland farming and irrigated agriculture.

French and Shultz, (1984) wheat boundary function

Potential yield (kg/ha) = WUE (kg/ha.mm) x (Crop water supply(mm) – estimate of soil evaporation (mm))

Discussion / Conclusion

Chinese data shows declining agricultural water abstraction, but increasing area and yields. At the same time, research studies have shown catchment and basin scale water use efficiency is high. This implies that water productivity is in fact increasing. Is this correct? How can we find out? What can we learn?

In China, water savings are closely identified with improved water saving irrigation technologies and practices. It is hard to say how water savings materialise. Water transfers to cities and industry are inexorable, and may be compensated or not. Farmers adapt to these transfers, but clear analysis of big picture trends in water availability, net consumptive use and adaptation strategies is not yet available.

In Australia, improving water productivity is a consequence of water being a more limited resource than land, and successive economic reforms aimed at improving the economic competitiveness of irrigated agriculture.

There has been widespread adoption of the concept, through the use of boundary functions in dryland farming and indicators in irrigation, in order to benchmark farm performance:

this is uneqivocally aimed at maximising farm profit through maximising total water use and water used efficiency (kg/ha.mm) within the limits of water entitlements.

The activation of the water market has seen a progressive shift of water from marginal and lower value pasture production to to higher valued horticulture enterprises.

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Reallocation of irrigation water for environmental use is being achieved by purchase of water entitlement that constitutes a real volume of water that is not in anyway subject to performance of any form of water conservation in agriculture.

There has been limited study of actual consumptive use in Australian water accounting, which is otherwise very comprehensive.

One detailed study, done during drought at Coleambally IS, indicates that most “losses” are as recharge to saline groundwater, which efficiency improvements seek to reduce. Et from riparian vegetation and fallows both exceeded irrigated values by a large margin.

Basin wide ET assessment in Australia indicates that given the errors in Et estimation and the small proportion of Et contributed by irrigation (about 3%) at MDB scale, high resolution remote sensing and hydrological water balance measurements, tracking and monitoring are required to assess the impacts of increased application efficiency.