Producer response

Although China's central and regional governments currently have little control over groundwater in most parts of northern China, groundwater governance is not stagnant. In fact, when assessing the way groundwater is managed, the way farmers gain access to water and the way technology is being used to conserve the resource, the sector can be considered to be extremely dynamic. In this section, we examine three sets of issues: the privatization of tube wells, the emergence of groundwater markets and the adoption of new, water-saving technologies.


Among any individual features of northern China's groundwater economy, the privatization of tube wells is perhaps the most prominent. Before the rural reforms in the 1960s and 1970s, township governments and village leadership councils financed, owned and managed most tube wells. In most villages individual farmers at most contributed their labour for tube well construction. Financed primarily by collective retained earnings, commune, brigade and team cadres were largely responsible for arranging for well-drilling companies run by the water resource bureau to sink tube wells. Pumps in the pre-reform era all came from either the water resource bureau pump supply company or the state-run local agricultural inputs corporation.

Soon after the general economic reforms began in the early 1980s, however, the ownership of China's tube well began to shift sharply. According to our survey in Hebei province in the late 1990s, collective ownership accounted for 93% of all tube wells in the early 1980s. Throughout the late 1980s and 1990s, however, the collective ownership of tube wells diminished. During this period the share of private tube wells increased from 7% to 64%. Data from the NCWRS largely support these findings. Tube well ownership in our study area, representing all of northern China, has also shifted sharply from collective to private (Table 3.3). In 1995, collective ownership accounted for 58% of tube wells in the average groundwater-using village. From 1995 to 2004, however, the collective ownership of tube wells diminished and accounted for only 30% of wells in 2004. In contrast, during the same period the average share of private tube wells increased from 42% to 70%.

Our interviews also revealed that the rise of privately financed investment means that the shift of tube well ownership is the result of the establishment of new tube wells rather than ownership transfers of collective tube wells. Due to the fall of the groundwater table and lack of maintenance on pumps and engines, a number of collective tube wells became inoperable during the last two decades and the absolute number of collective tube wells fell. During this time, the number of private wells increased rapidly.

Groundwater markets

As tube wells and the accompanying pumping equipment have come under the control of private individuals, access to groundwater for those farmers who do not own and operate their own wells has become a new issue. In fact, these markets have not always existed. In the 1970s and 1980s, when most wells were owned and operated by collective ownership, in almost all villages simple rules governed water allocations; most of the rules were based on a system in which all individuals were provided with water in an equitable way. In some villages, the collective ownership provided water free or at a subsidized rate. In the early period after reform, however, for a number of reasons the traditional institutions began to break down (see e.g. Wang et al., 2005). In today's world in which most wells are owned by some, but not all, farmers there must be some way to transfer water from those with wells to those without.

In response to the demand for water in an environment increasingly dominated by private and privatized wells, following a pattern similar to that observed in South Asia (Shah, 1993), groundwater markets have begun to emerge in recent years as a way for many producers in rural China to gain access to

Table 3.3. Changes of well ownership from 1995 to 2004.

All wells

Private wells





Share of wells (%)

1 995










groundwater.19 In the 1980s, groundwater markets were almost non-existent. Indeed, according to the NCWRS, only 21% of villages had groundwater markets in 1995. By 2004, however, tube well operators in 44% of villages were selling water. Across all villages about 15% of private tube well owners sold water. Although groundwater markets exist in less than half of northern China's villages, the numbers are still significant: farmers in more than 100,000 villages are accessing water through groundwater markets. Moreover, in villages that have groundwater markets, these markets play an important role in transferring large volumes of water to a large number of households.20

Household and village adoption of water-saving technology

Another possible response to perceived water shortage is the adoption of new cultivation techniques and technologies. Our survey covered three sets of technologies: traditional technologies (agronomic-based, highly divisible21); household-based technologies (highly divisible, low fixed cost, requiring little collective action), which were generally practiced by farmers in pre-People's Republic of China; and community-based technologies (high fixed costs, requiring collective action for adoption and maintenance). The adoption paths of these three different water-saving technologies trace three distinct sets of contours. Moreover, the general path of each technology within each major category - traditional, household-based and community-based - tends to follow the trajectory of the other similar technologies within its category. In this section, we track the adoption with one set of measures - a village-based set of measures in which a village is considered to have adopted a technology if at least one plot or farmer in the village uses the technology. In another study (Blanke et a/., 2005), we also examine a measure of area of adoption (which gives largely the same pattern of results).

As the name implies, according to our data, traditional water-saving technologies have been used for many years (Fig. 3.5, top set of lines). The strongest distinguishing characteristic of traditional water-saving technologies is that they were being used in a relatively large number of China's villages even in the early 1950s. For example, in 1949 farmers in 55% of northern China villages were already leveling their land. During the reform period, the adoption of traditional technologies grew slowly, in part because traditional technology adoption rates were already high in the pre-reform and early reform era.

In contrast, household-based technologies have taken a different technological adoption path over the last 50 years (Fig. 3.3, middle set of lines). Although it is difficult to distinguish exact levels of adoption from Fig. 3.2 (the paths are too tightly bunched), household-based water-saving technology adoption rates were all low in 1949, ranging from 1% (surface pipe) to 10% (retain stubble/low till). Unsurprisingly, due to the relative abundance of water and the nature of farming at the time (collective-based with few incentives to maximize profits), household-based technology adoption rates at the village level remained low over the next 30-40 years. It was not until the early 1990s that these adoption rates soared. By 2004, farmers in at least 45% of villages were using each type of household-based water-saving technology mentioned in the Appendix.


Fig. 3.5. Share of villages adopting water-saving technologies over time.



Surface pipe

Plastic sheeting

Retain stubble/low till

Drought-resistant varieties

Underground pipe Lined canal


Fig. 3.5. Share of villages adopting water-saving technologies over time.

Finally, although the basic pattern of community-based technology adoption follows the same fundamental trend as household-based technologies, these paths start lower and rise at a slower rate (Fig. 3.3, lowest set of lines). Between the 1950s and 1980s, like household-based technologies, adoption rates were low. By the beginning of the reforms in the mid-1980s, the highest village-level adoption rate of a community-based technology (lined canals) was only 10%; on average the level of adoption of community-based technologies during the mid-1980s was around 5%. By 2004, as in the case of household-based technologies, the rate of adoption rose sharply relative to previous years. Because community-based technologies started from a lower level and rose less by 2004, the village-based measures still show that, on average, only about 20% of communities had adopted community-based technologies.

Although it is unclear, based on these descriptive contours, what is driving the adoption path of community-based technologies, it is likely that there are two sets of forces that are at once encouraging and holding back adoption. On the one hand, the rising scarcity of water resources is almost certainly pushing up demand for community-based technologies. On the other hand, the predominance of household farming in China (Rozelle and Swinnen, 2004) and the weakening of the collective ownership's financial resources and management authority (Lin, 1991) have made it more difficult to gather the resources and coordinate the effort needed to adopt technologies that have high fixed costs and involve many households in the community. In contrast, household-based technologies may be more widely adopted due to relatively low fixed costs, divisibility and minimal coordination requirements.

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