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Two interesting articles and commentary examined a new groundwater management system instituted in Qinxu, a County in Shanxi Province in China – called the Qinxu Groundwater System.

The first, via Aquadoc, give us an overview of the Qinxu Groundwater Management System

A new groundwater management system in Qinxu, China is a promising solution:

• Farmers are allocated quotas of how much water they can pump out.
• The quota, and how much of it they have used, is registered on a swipe card they can use to access any well in the village.
• All wells are monitored by a county-level information system. The system updates the usage data everytime a card is used. A higher tariff is charged for usage over and above the quota limit.
• People are allowed to trade unused units from their quota.

Here is the blurb:

The Qinxu Groundwater Management System, masterminded by Professor Fan Guishang from Tanjuan University of Technology University, regulates all groundwater usage in the Qinxu, one of the counties in Shanxi Province in China.

Under the system, all 1473 wells in the county have been equipped with an automatic operating system that farmers operate with individual swipe cards. The amount of water that can be used is based on a quota that is allocated annually.

The system also comprises of 60 solar-powered groundwater observation wells, that continuously transmit groundwater-related data to a county-level information centre.

The quota are determined first for each of the 197 villages within the county, and then for each farmer within the village. The quota vary from area to area, and depend on the groundwater resources sustainably available. The quota can also also traded – between villages and between farmers.

Since Lester Brown’s seminal book “Who will feed China?” many eyes have been watching the Achilles heel of global agriculture: the over-pumping of ground water in the world’s two largest countries, China and India.

The dry northern plains of China produce half of the country’s wheat and one-third of its corn. They do so by using groundwater at a rate that greatly exceeds the way at which it is replenished. The estimate is that no less than 130 Million people in China depend for their staple food on the unsustainable use of groundwater. Groundwater levels have dropped by a meter a year over large parts of Hebei, Hunan, Shanxi. The ramifications are enormous: once China runs out of groundwater, it would have to resort to the world market for its grains, thus skyrocketing food prices all over the globe.

But here is an answer: the Qinxu Groundwater Management System. This system, masterminded by Professor Fan Guishang from Taiyuan University of Technology University, regulates all groundwater usage in the Qinxu, one of the counties in Shanxi Province. It took five years to set it up, but this is a short time for a system that has all the features of a dream coming true.

What the Qinxu Groundwater System has done is equipped all 1473 wells in the county with an automatic operating system that farmers operate with individual swipe cards. The amount of water that can be used is based on a quota that is allocated annually.

The quota are determined first for each of the 197 villages within the county, and then for each farmer within the village. The quota vary from area to area, and depend on the groundwater resources sustainably available. The quota for families are based on the land owned, the number of family members and the livestock owned. If water is used within the quota, the price is ¥ 0.41 (Euro 0.05) per unit. If the water-use exceeds the quota, the price is raised to ¥ 0.55. The units indicate the number of electricity units consumed. As some wells are very shallow and others deep, the volume of water drawn using one unit may vary from 500 to 5000 litres.

Quota are also traded – between villages and between farmers. There is an upper limit to the price (twice the basic amount) – which cannot be exceeded. Among farmers it is more common to share ‘excess water’ with family members and neighbours than to trade.

The swipe card transactions are transmitted through internet to the Digital Water Resource Information Centre in the Water Resources Bureau of the county. This centre meticulously record the number of units consumed by each farmer based on his swipe card transactions.

The second, via Wisdom in Water,

Several things hit me as I was reading about the new management system.  First, as I’ve said since I became manager of GMD 4 in 1977 – Groundwater management is easy – just don’t pump it.   If GMD 4 had full control of all the groundwater, we could have easily had a quota system set up many years ago. The sum of all quotas could have been set to achieve any outcome desired – all the way from restoring historic groundwater levels to increasing the current decline rates as much as we wanted to.  Our problem is that in Kansas, water rights are real property rights to the use of the State’s water.  I can see where the government of China can at any time allot, reallocate or adjust any or all water, but not so in Kansas.  Of course, this doesn’t make either system “right” or “wrong”.  

Secondly, the story from Frank van Steenbergen (that was reported on by WaterWired) states the huge dependence China has on irrigation water currently being used – half the country’s wheat and one third of its corn.  His conclusion is what a disaster it would be if this area of China were to run out of water and have to replace all that production on the world grain markets.  Well, if the new Qinxu quotas are correctly sized to achieve groundwater sustainability (so they never run out of water), some percentage of that production will be lost.  My point is that nowhere in the articles does anyone talk about the total quotas relative to the amount of water having been used before the new system.  This could be nothing more than a fancy accounting system to continue the current overdrafts.  I don’t think it is, but then without this information, how can I agree that it is “the solution” they say it is?

Thirdly, the system clearly tries to use price to discourage overpumping ones quota, but it doesn’t seem to prohibit over use.  As grain prices rise, the incentive to over use ones allocation (to increase production) goes up as well.  As more water is used, the quotas must be reduced further.  Yes, its the tragedy of the commons again.  I have no idea what .05 Euro per unit of water really means, and the fact that everyone’s units can vary between 500 and 5000 liters per unit renders these values very hazy.  Of course, all these numbers and values can be adjusted to make them highly relevant – if there is the political will, or the outright power, to do so.  I should do the math to quantify the relevance of the price to the quotas – maybe tomorrow.

Fourthly, the marketability of the units is a great feature, but it’d be even more relevant if there was a prohibition to exceeding ones’ quota. Also, with groundwater, I’m thinking that trades need to be spatially restricted to some degree.  Otherwise an inappropriate amount of groundwater could be used in too small an area – causing excessive declines or impairments.  Maybe this system addresses this, but it wasn’t stated.     

Fifthly, there is mention of 60 telemetry observation wells that track groundwater levels, but no mention of how these are used.  Presumably the quotas would be adjusted periodically to reflect the water table responses shown by these 60 wells to the previous years pumpage??  It is awfully hard to efficiently operate production agriculture without knowing what all your inputs are.  Here in NW Kansas cropping rotations are often used to take advantage of nutrient inputs, fallowing periods and marketing plans, and they plan 3 to 5 years out.  Water quotas that might change within this time period would reduce the overall efficiency of these operations.  Of course, the quota system could be designed over longer periods to accommodate these needs – it’s just not covered.

In conclusion, it might sound like I’m being critical of the new system, but I’m really not.  It could work, but it could easily fail as well.  As usual, the devil, and the real impacts, are always in the details.  The bottom line is that to slow the decline rates, consumptive water use must be reduced, and that reduction will mean less economic opportunity – always a touchy issue to attempt.  Comments?

Update (November 12, 2012):  I did the math on the prices and they are:  at .44 Yuan (the base rate per unit (.05 Euro / .06 $US) and the largest unit at 5000 liters, an AF of water will cost the user $14.81.  For the highest rate of .55 Yuan (assessed for those exceeding a quota) that same AF will cost $22.14.  Has price been appropriately applied in this system?