China’s irrigated farmlands have a large output but are located in water stressed regions. With irrigated area & water demand expected to grow. China has already capped irrigation water use & is improving irrigation efficiency with water-saving measures. However, water use per hectare still lags the US & more investment, especially from the private sector, is needed. China Food Security
China’s irrigated areas are mostly water stressed
75% of China’s total grain and >90% of cash crops such as cotton and vegetables are now grown on irrigated farmlands. Agriculture
Growing irrigated area & high water demand Since 2010, China has become the country with the largest irrigated area and in 2015, its irrigated areas reached 66.1 mn hectares. This is more than 3x the size of irrigated areas in the US (20.2 mn hectares). Plus, irrigation is the largest water user in China. As of 2013, China’s total irrigation water use stood at 340 bn m3. This is equivalent to the average annual flow of the Pearl River, China’s third longest river.
China has capped irrigation water use & improving irrigation efficiency Irrigation water use is capped at 372 bn m3 by 2020 & 373 bn m3 by 2030. In the 13th Five Year Plan period (2016-2020), 6.7mn additional hectares of farmland is to be equipped with highly efficient water-saving tech with the irrigation efficiency co-efficient to reach >0.55. 3 Red Lines
Water use per hectare declining but still lags the US Average water use per hectare of irrigated land fell from 6,750m3/ha to 5,700m3/ha in 2004-2016 (see chart adjacent) but this is still nearly a quarter more than the US average.
More efficient irrigation needs investment Reaching the 13FYP targets set out above needs up to RMB 127.9bn. Since 12FYP, China has already been promoting agriculture water-saving projects in four key regions: Northeast China, North China Plain, Northwest China and South, investing >RMB139 billion to equip 7.5mn hectare of farmland with highly efficient water-saving irrigation by 2017/2018. See charts below for estimated investments for respective water-saving measures.
Private sector has a role to play Irrigation is not only the business of farmers and the government, it is also vital to ensuring raw material production that is essential for industries such as textile and food & beverages. The on-going water tariff reform and water rights trading also expect to provide more incentives for financing irrigation improvement. Water Risk Exposure Water Permits & Rights Food & Beverage
Further reading – 8 reasons to invest in irrigation in China
CWR’s Hu shares why business and investors should invest in irrigation in China for food & water security
- China’s irrigation demand is as much as the Pearl River; yet 18mn ha or 27% more land needs water-saving tech
- >RMB139 bn to promote highly-efficient irrigation; price reform & water rights set to incentivise private finance
- Renewable powered irrigation benefits climate & water; optimising crop mix & reducing food losses also help
Sources: China Statistical Yearbook 2017; Regulation on Farmland Water Conservancy 2016; China Water Risk article ” 8 Reasons To Invest In Irrigation In China” 18 August, 2016;13th FYP “Implementation plan to increase 100 million mu of efficient water-saving irrigation area” 2015; National Sustainable Agriculture Development Plan (2015-2030); US Farm and Ranch Irrigation Survey 2013; Various news on irrigation investment