CHINA'S AGRICULTURAL WATER SCARCITY : EFFECTS ON INTERNATIONAL MARKETS

Water shortages in important grain-producing regions of China may significantly affect China's agricultural production potential and international markets. This paper provides an overview of how water scarcity could affect China's agricultural production and trade. The paper identifies the areas where available water resources are most overexploited and the crops most vulnerable to reductions in irrigation. We present preliminary results from modeling a decline in irrigated land in water scarce areas in China and the effect this would have on China's production and trade. Wheat and cotton are most vulnerable to a decrease in irrigated area in water scarce regions, and production for these crops could fall by 7-10 percent under a severe cutback in irrigation. The effect this will have on international markets will depend largely on the openness of China's border to imports. In addition, we describe recent conservation policies and how these may affect crop production in China.