Irrigation Management Reform in Northern China: Case Studies in Shanxi Province

Irrigation in northern China is exposed to declining groundwater resources and institutional issues. As a response, authorities have developed measures that include differentiated resource allocation and charging, collective and individual water rights, a block pricing system, prepaid access to water, and real‐time monitoring of resource and use. This paper analyses this alternative management model and its implications at the farm and system levels, using institutional, technical and economic analyses of case studies from Qingxu County, northern China. The results show that the prepaid system helps solve cost‐recovery, free‐riding, agency and resource overuse problems. All water fees are prepaid, therefore fully collected. However, while most operation and maintenance costs are covered, personnel costs are covered in only one case, due to low water fees. The agency problem is also addressed by the continuous monitoring of water resources. Water use value is high compared to actual water fees, owing to high maize yields and reasonable use of supplemental irrigation. This indicates potential for a water price increase, if needed. This paper shows that the new management system at the county level epitomizes China's whole rural financial reform and the realignment of local water institutions with public administrative layers. It finally discusses achievements, pending questions and limitations for long‐term impacts.