Evolution of tubewell ownership and production in the North China Plain

Abstract

The overall aim of the present paper is to better understand the evolution of tubewell ownership in the North China Plain, especially focusing on the factors that determine ownership and its effect on production. Based on a random sample of 30 villages in three counties in the Hai River Basin, our results show that collectively owned tubewells have been gradually privatised. The analyses demonstrate that increasing water and land scarcity and policy intervention (mainly fiscal and financial subsidies for tubewell investment) leads to the observed shifts in tubewell ownership patterns. The results also show that the privatisation of tubewells has affected cropping patterns in the North China Plain. When villages shift towards private tubewells, farmers move into more water-sensitive and high-value crops. Privatisation, however, has no negative effect on crop productivity in the present sample. Importantly, the evolution of tubewell ownership in the villages studied does not accelerate the fall of the groundwater table. © Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd 2005.