World's Largest Water Diversion Plan Won't Quench China's Thirst
bloomberg.com
bloomberg.com
This discount on water is effectively a cash subsidy for agriculture that increases with the amount of water wasted instead of useful goods sold.
Seems like every country everywhere has the same issue: they don't want to sell water at the price it is actually worth, so it gets wasted and people complain about water security issues. (Then if it's a city residential area, they introduce rules like "no watering your lawn" in the hope that it will reduce waste, instead of canceling the 90% off all-year-round water sale.)
You're framing this as a question of "should we give these peasants free water, OR just let them starve?" That's not what's being debated, and is disingenuous at best.
Did I get it wrong?
Correct. It is a large subsidy to the peasants.
> Instead, we should let the market decide, ie, let industry buy the water and leave the peasants without it.
Yes, but with the money, which as earlier discussed is worth several times more than its value in subsistence agriculture. The person you were originally replying to was complaining that a 90% discount on the sale of water was essentially an extremely inefficient cash subsidy; the obvious solution is replacing it with an efficient cash subsidy. That's hardly humane.
> What will the peasants do then? Why, they are free to move to the cities and become industry workers
If that was a practical solution at the required scale, they'd have already done it. Hence why a subsidy is needed.
> Did I get it wrong?
It does look that way, yes.
The water shortage will not take hundreds of millions of farmers to equalize. Price rises by 0.01 cents per gallon and many farmers will will become more water efficient while selling freed up water on the open market. This, assuming some water vs trade off, would also raise food prices giving more money to farmers who do nothing differently.
The poor and everyone else would get higher food prices, but access to more reliable sources of water.
I think its perfectly reasonable to value a scare resource at a market rate. If the rate is too high to be tolerable then the government has an incentive to invest in water infrastructure. And people have an incentive to move where resources are under less strain.
Or we could just rape the environment for short term gain. It seems to be everyone's solution on every side.
Keyword: rate monitoring, not rate limiting
China might not be there yet, but thankfully, they're already got rid of the central planning.
And now the market is saturated with cheap, industrially farmed food, making his output worthless. It's hugely oversupplied with obsolete farmers. Yes, the market will even things out eventually - but that can have a steep, painful human cost.
Remember the old cliche, "America: the land of the free, terms and conditions apply"
Of course issues exist, because inefficiency is subsidized.
For example, growing quinoa is a freaking gold mine yet there's still not enough competition.
Yet growing corn and wheat is a life living on the edge of bankruptcy yet it is heavily subsidized by the state everywhere.
There's no free market in farming, probably never will be because the ruling class is afraid of food shortages and set-in-stone food luxury standards.
And of course, as you mentioned, grains make cows, pigs, etc. cheaper. Again, not ideal for the human body and even less so for Mother Nature.
The free-market might lead to the same, but it certainly seems less likely.
If it turns out that the farmer that uses the water for his grain fed factory-farm animals, then the allocation of that money was useless.
There's much more protein/carbs/fiber calories per energy wasted in vegetables than it is in meat in the case of factory farmed meat.
To me it just looks as if luxury foods like meat have large industry players that have influenced the law and the politicians to get subsidies they need to keep their products as cheap as ordinary poor-man food (potatoes, beans, dark greens etc.).
Note: I understand the rise of obesity is a more complicated than overeating. That said, you don't get obese by under-eating.
p.s. Ironic that obesity has been declared a threat to national security. That is, we're too fat to fight.
Differential billing by amount consumed is already a thing. Use restrictions are a stop-gap measure to conserve water when you wouldn't trigger the higher price due to high consumption.
Our water security solution should not stop us from growing food. Increasing the price of water used for drinking, washing, and bathing is the outcome we want here.
If they would get water at the normal price, their goods would all increase in price, but from a higher price with the same profit margin they'll be able to save for water saving technologies, which will allow them to increase their margin further (or offer lower prices - as eventually everyone will invest in water conservation methods).
And then cities will have more water and food will cost a bit more.
Farmers are land rich and cash poor.
You can subsidize them for their water, or capital investments, or you can not get food.
Domestic food security is a national security issue.
Or put another way, the total economic value of all exported almonds from California is about $3.5 to $4 billion. The water use is about on par with the entire city of Los Angeles for that almond export crop. The metro area of LA has a trillion dollar economy by comparison (250+ fold larger than the almond exports). That's an economically irrational imbalance.
The obvious question becomes: is that what California wants to do with its scarce water resources, export large parts of it at an extremely low value basis? At some point in the near future it's likely some hard choices will need to be made, including whether to invest extremely large sums of money into more desalination plants or to begin restricting the most voracious water consumers (cattle are another one, although I'm unsure of their export ratios).
Then you get to subsidize food but still have an efficient allocation of water.
Farmers might be more incentivized to grow crops with less water requirements but more food value.
The "free market" solution to take food out of people's table is a very good way to have some politicians at the gallows in no time (see Arab Spring)
Free market agriculture has been far more successful at eliminating hunger than any other system.
There is no free market in agriculture.
World hunger has not been 'solved' and any success cannot simply be credited to 'free markets' for a such a large scale complex human social problem.
It makes sense for countries to protect their domestic food production as a military asset - cutting off the food supply is a common warfare tactic. Subsidies also come about because of powerful agricultural lobbying interests. As to if subsidies reduce hunger, the evidence is scant to none. There is plenty of evidence, however, that they result in inefficient misallocation of resources, such as water.
Check out the great American pig slaughter during the Depression:
Subsidized agriculture has been responsible for pretty much ending hunger in most of the world. Free market agriculture hasn't been responsible for ending any hunger.
That depends on what you count as a "subsidy". Are all the roads, dams, diverting of rivers, etc counted as "subsidies"?
> Its effect has been shown quite convincingly in Massachusetts and China.
Modern subsidized agriculture in both countries has quite convincingly showed it.
Not sure why you are now moving the goalpost to welfare.
Archaeological bone evidence of the pre-Columbian Indians is that they periodically had famines. Having land is not a sufficient condition for having a consistent, sufficient food supply.
The US, around 1800, was the first country in history to achieve a consistent food surplus.
It's a bit like the mining industry, government doesn't want to even risk damaging the top 2 industries this country has.
It's not a state vs. state thing, as even the local NSW communities are screaming about it. It's a small corrupt group vs. the nation, and it stinks.
None address the root problem: population growth. Globally, not just in China.
Everyone will knee-jerk respond about their one-child policy. It doesn't change that population growth is the root problem and all the other solutions only enable more population.
The article doesn't even suggest the possibility of lowering the birth rate. It's long past time we put the topic back into civil discourse.
China already has less than replacement ration (2.1) child births, what do you want ? People to not have children?
The issue is that there is not enough water per person.
Efficiency gains and technology will help with the numerator somewhat, though probably swamped by increased material consumption.
We can talk about the denominator or not, but we probably can't do anything about it if we don't.
If you believe that areas have already overshot their carrying capacity. Then yes.
[0] https://www.idfa.nl/en/film/34d44e48-0092-4d5e-abdf-d501b524... & http://www.imdb.com/title/tt3755604/
[1] https://en.wikipedia.org/wiki/South%E2%80%93North_Water_Tran...
I do wonder tough, about contamination given floods can easily breach the levies and in the cities runoff is pretty polluted. And wonder if any gets syphoned off --unless they have the very long fencing guarded 24x7.
Eerily relevant.