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GTAP Resource #1438

"A Spatial Model (SWAM) for Water Efficiency and Irrigation Technology Choices using GAMS - A Case Study from Northwestern China"
by Fang, Lan and Ernst-August Nuppenau

In order to deal with water scarcity problems, public and private sectors have made tremendous efforts worldwide. This study is to provide policy makers with a theoretical and quantitative tool to manage public water supply and conveyance systems more efficiently and to support the optimal allocation of water for irrigation projects. This tool is based on a GAMS programming model. Furthermore, the current situation and potential likelihood of adopting modern irrigation technology are taken into account for private individuals by using GAMS programming model too.
To achieve the objectives of modeling water efficiency, a spatial mathematic model, SWAM, was designed to assess the impacts of public and private investment on social welfare and water resource allocation. To fulfill the research target, a field survey was conducted in the cropping season of 2000/2001 in Liquan County, Shaanxi, China. The results of the field survey reveals: (1) Traditional surface irrigation still plays an important role in the survey area. (2) The water price becomes higher with the distance to the water source due to an increase of water conveyance costs. (3) Increasing water prices motivate farmers to adopt new water saving technologies. (4) Compared with imported irrigation technology, locally produced seepage irrigation technique under average conditions is more economic and practical for low-income farmers to save water, as compared to expensive imported technologies, in the survey area. These results will be implemented in a GAMS model.
Based on the field survey findings, the SWAM model, which contains an econometric model and a mathematical programming model was designed. Three sets of scenarios were designed to test different impacts of different policy orientations, respectively.
By analyzing the impacts of status of public investment, model results indicate that public investment will always function positively in an irrigation system, and will do especially well in a system under low soil permeability. On the other hand, its impacts on social welfare and water resource allocation are smaller under high soil permeability.
By analyzing the impacts of simultaneous public and private investment undertaken, the model results suggest that different distributions of irrigation technology will certainly change water resource allocation. And moreover an optimal solution can be achieved if different technologies at different locations rather than going for one fixed type technology are adopted. This will not only reduce total costs, but also ensure social welfare and better water use efficiency.
At last the model assesses the impacts of price regime change. The model results strongly suggest that a high water price drives farmers to go for water saving technologies, and moreover, sufficient financial credibility can drive such adoption activity. Such knowledge can be accomplished by GAMS modeling and we show how they work.
Based on the model and simulation results, the following policy recommendations can be made: (1) As public investment plays a very important role in water saving activities, government should make more efforts to improve water use efficiency, either in water generation or conveyance systems. Public investment in water conveyance system will do better under low soil permeability rather than high soil permeability. Under such a condition, an irrigation project should be rejected if it would be constructed under high soil permeability. (2) The study unveils a relationship of combination between public and private investment. With regard to effects of water efficiency, they are complementary. With regard to absolute costs of public and private investment, they show a more substitutional relationship. One investment increasing will lead to the other decreasing. Considering the vulnerable economic situation of Chinese farmers, it may be rational to let the government do more to improve water use efficiency rather than individual farmers. By doing this, the overall water use efficiency will be improved. However, due to substiutional relationship, this may not be a big burden for the public budget. (3) A high water price is the biggest incentive for farmers to adopt modern water saving technology. For government, it is very crucial to set a reasonable water price level. Such a price level should be able to encourage farmers to adopt water saving technology, and not to do damage to farmers interests.

Resource Details (Export Citation) GTAP Keywords
Category: 2004 Conference Paper
Status: Published
By/In: Presented at the 7th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2004
Created: Fang, L. (4/24/2004)
Updated: Bacou, M. (6/11/2004)
Visits: 3,149
- Technological change

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