Analysis of the Performance of Government Investment and Interventions to Promote Small-Scale Irrigation Works in China's Major Grain-Producing Areas-Based on the Two-Step Model of Malmquist-FGLS

Abstract

China's major grain-producing areas have the important role of ensuring the nation's grain security. Farmland water conservation projects, which are financed by government investment and promoted by additional government policies, are vital for grain and agricultural production. Analysing the determinants of good performance of farmland water conservation, and the performance of government investments and interventions in major grain-producing areas, are important for understanding whether the scale and structure of investment are reasonable and, hence, efficient. We apply the data envelopment analysis (DEA) Malmquist index method and panel data feasible generalized least squares (FGLS) model to data from China's major grain-producing areas between 1990 and 2014. Based on this two-step Malmquist and FGLS model, we estimate the performance of farmland water conservation and the determinants of performance, emphasizing the effects of government investment and other public policies. The results show that current investment policies do not result in efficient performance in farmland water conservation projects. The scale of investment is too small and its structure needs to be adjusted. In contrast, increasing the level of economic development promotes the performance of these investments. However, rural education focusing on urban jobs rather than on modern farming skills pulls in the opposite direction. Copyright © 2017 John Wiley & Sons, Ltd.