China Issues New Regulation on Water Management, Sets Fees for Usage

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The Chinese government recently passed a new regulation on water management, updating its system of use permits and stipulating charges for water consumption in agriculture. According to officials in the State Council (China's parliament), the move is expected to enforce water-saving measures in irrigation and motivate farmers to economize on water use. The regulation will take effect on April 15 of this year.

Building on an earlier permit system enacted in 1993, the ruling outlines the process for applying for water-use permits and explains the fee system for water taken directly from rivers, lakes, or underground. According to the regulation, provincial governments at the headwaters of these resources are responsible for setting the fee levels, though the central government will oversee charges for central and cross-provincial water conservation projects.

The new regulation could affect agriculture production by imposing extra costs on farmers. In certain situations, however—such as if the water is taken from their own ponds and reservoirs or is used for daily consumption—farmers are not required to apply for intake permits or pay usage fees. Water use within a certain quota is also not charged, which will exempt a large number of individual producers.

Improving water efficiency in agriculture is considered the most effective way to achieve significant water savings in China. In 2004, agricultural uses consumed nearly 359 billion cubic meters of water, accounting for 65 percent of total national use. Of this, some 323 billion cubic meters—90 percent—went to farmland irrigation, according to the Ministry of Water Resources. Most of China's fields use flood irrigation methods that can result in significant waste, with one hectare of farmland typically requiring 20,000–30,000 cubic meters of water a year.

China has experienced serious water shortages over the past two decades. In the north, average annual flows in the Yellow, Huai, and Hai Rivers have dropped by 10–40 percent. Declining water quality is leading to reduced supply as well, even in water-rich areas. According to a recent report on the country's current status of water resources funded by the Chinese Ministry of Science and Technology, water shortages in China cause direct economic losses averaging 280 billion yuan (US$35 billion) each year, 2.5 times more than the figure caused by floods.

Globally, water usage increased six-fold over the 20th century—twice the rate of world population growth. Water use for irrigation, which already claims nearly 70 percent of all fresh water consumed for human use, will only continue to rise as countries struggle to meet global demand for 55 percent more food by 2030, according to the United Nations World Water Development Report. Urbanization is driving global water demand as well. By 2030, the share of the world population living in cities is expected to rise to nearly two-thirds, and an estimated two billion people are projected to suffer from lack of clean water and sanitation.