Water constraint mitigation and agricultural productivity: Evidence from the China’s South-to-North Water Diversion Project

Zehui Wang and Jianhui Xie

Agricultural Water Management, 2025, vol. 314, issue C

Abstract: Water scarcity is a critical constraint on agricultural productivity, particularly in northern China. The South-to-North Water Diversion (SNWD) project, launched in 2014, aims to alleviate this constraint by reallocating water resources across regions. This study evaluates the long-term impact of the SNWD project on regional Agricultural Total Factor Productivity (ATFP) by employing a two-step approach based on Data Envelopment Analysis (DEA) and a Difference-in-Differences (DID) framework. First, we construct a comprehensive efficiency indicator based on DEA methodology to measure ATFP. Second, we exploit the opening of the middle route of the SNWD project as a quasi-natural experiment and estimate its impact on ATFP through a DID model. The results show that the SNWD project has increased the ATFP in the traversed counties by 0.412 (13.55 %). Moreover, the SNWD project has a stronger effect on enhancing ATFP in counties with lower precipitation and non-rice-producing counties, which indicates that the SNWD project can significantly improve ATFP by mitigating water scarcity. Additionally, the SNWD project has a more significant impact on improving ATFP in regions with a higher proportion of grain crops, revealing the crucial role of structural adjustments in enhancing agricultural productivity.

Keywords: South-to-North Water Diversion Project; Data envelopment analysis; Agricultural total factors productivity; Difference-in-differences model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:agiwat:v:314:y:2025:i:c:s0378377425002252

DOI: 10.1016/j.agwat.2025.109511

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