> Still, in many cases there’s little incentive for farmers to save water. Agriculture uses 62 percent of China’s water, but crops have a relatively low marginal value. So the government bans the sale of agricultural water to industry, which pays 10 times the price, to ensure food supply. This discount on water is effectively a cash subsidy for agriculture that increases with the amount of water wasted instead of use…
Did it ever occur to you that pricing hundreds of millions of poor Chinese farmers out of their ability to grow food to eat, so that much richer exporting industries can have more water, while being a "market solution", might not be an acceptable - even a humane - solution?
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.