Optimizing Water Resource Allocation for Food Security: An Evaluation of China’s Water Rights Trading Policy

Handong Lyu (), Hongfei Xing and Taixiang Duan
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Handong Lyu: School of Law, Hohai University, Nanjing 211100, China
Hongfei Xing: School of Law, Hohai University, Nanjing 211100, China
Taixiang Duan: School of Law, Southwest Petroleum University, Chengdu 610500, China

Sustainability, 2024, vol. 16, issue 23, 1-23

Abstract: Water scarcity is a critical barrier to sustainable food production and food security. To address this issue, China introduced a pilot policy for water rights trading in 2014. Using panel data from 29 provinces (cities and districts) in China from 2006 to 2022, this paper investigates the impact of the water rights trading policy on food security and explores its underlying mechanisms through the DID model. It is found that (1) the water rights trading policy substantially boosts food production in pilot areas and mitigates the effects of water scarcity on food security. (2) The water rights trading policy enhances food security by advancing water-saving irrigation technology and optimizing crop-planting structures. (3) The impact of the water rights trading policy proves more pronounced in areas with lower water use efficiency and higher food production potential. Therefore, it is recommended that the government continue advancing the water rights trading policy and adjust it dynamically based on regional differences. Additionally, strengthening guidance on water-saving irrigation technologies and optimizing cropping structures will further enhance the adaptive capacity of the agricultural system, helping to ensure food security.

Keywords: water rights trading policy; food security; water-saving irrigation; cropping structure; difference-in-differences (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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