Improving the performance of agricultural temporary water markets : The role of technology-based and transaction-based subsidies
Duan, Yeqing LU
; Zhou, Shenbei
; He, Jiangping
LU
and Bai, Minghao
(2024)
In Agricultural Water Management
303.
- Abstract
Water markets are increasingly advocated for combating agricultural water scarcity. However, in developing countries’ arid and semiarid regions, water market performance is greatly weakened by the insufficient demand-side and supply-side driving forces stemming from farmers’ limited awareness and capacity. Building an agent-based model and taking Hami City, Xinjiang in northwestern China as the case study area, this study explores the roles of technology-based and transaction-based subsidies in adjusting market driving forces and promoting the performance of agricultural temporary water markets. The results show that, without government support, water transactions are limited to only 8.054×103 m3, which can hardly... (More)
Water markets are increasingly advocated for combating agricultural water scarcity. However, in developing countries’ arid and semiarid regions, water market performance is greatly weakened by the insufficient demand-side and supply-side driving forces stemming from farmers’ limited awareness and capacity. Building an agent-based model and taking Hami City, Xinjiang in northwestern China as the case study area, this study explores the roles of technology-based and transaction-based subsidies in adjusting market driving forces and promoting the performance of agricultural temporary water markets. The results show that, without government support, water transactions are limited to only 8.054×103 m3, which can hardly protect agricultural interests. However, with improved market driving forces, water transactions can be substantially increased—potentially exceeding 100×103 m3—by technology-based and transaction-based subsidies This effect is particularly evident when the technology-based subsidy induces water shortages for recipients (e.g., retrieve 5820 m3/ha water entitlements) and its acceptance rate is below 50 %, and when the transaction-based subsidy approaches the average opportunity costs of selling water for traditional irrigation farmers (0.462 RMB/m3). Combinations of technology-based and transaction-based subsidies prove to be more cost-effective in improving water market performance and protecting agricultural benefits, owing to the enhanced market driving forces and the promoting effect of transaction-based subsidies on the implementation of technology-based subsidies. This promoting effect also helps to alleviate fiscal burdens. Furthermore, results indicate that irrigation technology promotion and water markets are complementary, and their dynamic interaction can facilitate the gradual transformation of irrigation practices in arid and semiarid regions of developing countries.
(Less)
- author
- Duan, Yeqing
LU
; Zhou, Shenbei
; He, Jiangping
LU
and Bai, Minghao
- publishing date
- 2024-10-01
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Agent-based model, Agriculture water markets, Financial subsidy, Market driving force, Water market performance
- in
- Agricultural Water Management
- volume
- 303
- article number
- 109062
- publisher
- Elsevier
- external identifiers
-
- scopus:85203628601
- ISSN
- 0378-3774
- DOI
- 10.1016/j.agwat.2024.109062
- language
- English
- LU publication?
- no
- additional info
- Publisher Copyright: © 2024 The Authors
- id
- 036af780-5375-4987-a3c8-6f1adf087bd3
- date added to LUP
- 2025-05-19 09:49:17
- date last changed
- 2025-05-19 15:12:37
@article{036af780-5375-4987-a3c8-6f1adf087bd3,
abstract = {{<p>Water markets are increasingly advocated for combating agricultural water scarcity. However, in developing countries’ arid and semiarid regions, water market performance is greatly weakened by the insufficient demand-side and supply-side driving forces stemming from farmers’ limited awareness and capacity. Building an agent-based model and taking Hami City, Xinjiang in northwestern China as the case study area, this study explores the roles of technology-based and transaction-based subsidies in adjusting market driving forces and promoting the performance of agricultural temporary water markets. The results show that, without government support, water transactions are limited to only 8.054×10<sup>3</sup> m<sup>3</sup>, which can hardly protect agricultural interests. However, with improved market driving forces, water transactions can be substantially increased—potentially exceeding 100×10<sup>3</sup> m<sup>3</sup>—by technology-based and transaction-based subsidies This effect is particularly evident when the technology-based subsidy induces water shortages for recipients (e.g., retrieve 5820 m<sup>3</sup>/ha water entitlements) and its acceptance rate is below 50 %, and when the transaction-based subsidy approaches the average opportunity costs of selling water for traditional irrigation farmers (0.462 RMB/m<sup>3</sup>). Combinations of technology-based and transaction-based subsidies prove to be more cost-effective in improving water market performance and protecting agricultural benefits, owing to the enhanced market driving forces and the promoting effect of transaction-based subsidies on the implementation of technology-based subsidies. This promoting effect also helps to alleviate fiscal burdens. Furthermore, results indicate that irrigation technology promotion and water markets are complementary, and their dynamic interaction can facilitate the gradual transformation of irrigation practices in arid and semiarid regions of developing countries.</p>}},
author = {{Duan, Yeqing and Zhou, Shenbei and He, Jiangping and Bai, Minghao}},
issn = {{0378-3774}},
keywords = {{Agent-based model; Agriculture water markets; Financial subsidy; Market driving force; Water market performance}},
language = {{eng}},
month = {{10}},
publisher = {{Elsevier}},
series = {{Agricultural Water Management}},
title = {{Improving the performance of agricultural temporary water markets : The role of technology-based and transaction-based subsidies}},
url = {{http://dx.doi.org/10.1016/j.agwat.2024.109062}},
doi = {{10.1016/j.agwat.2024.109062}},
volume = {{303}},
year = {{2024}},
}