Trade-offs between crop-related (physical and virtual) water flows and the associated economic benefits and values: a case study of the Yellow River Basin

Abstract. Water issues in many river basins associated with droughts, water over-exploitation and pollution are increasingly being driven by remote pressures through intensified virtual water (VW) flows. However, little attention has been paid to the internal trade-offs between the (physical and virtual) water flows and the associated economic benefits and incomes that the water generated. Here we estimate the concomitant reversed flows of economic benefits and values to the physical and VW flows in crop production and consumption at a basin level, by taking the Yellow River Basin (YRB) in both current three typical years (2003, 2004, and 2006, which were dry, average, and wet, respectively) and possible four scenarios for 2050 under climate-socio-economic changes as the study case. An algorithm for estimation of the economic net benefits of green and blue water use for crop production based on the water footprint (WF) accounting is developed. Results show that the net benefit of blue water (irrigation) was 13–42 % lower than that of green water used in irrigated croplands in the basin. Cropping pattern has defined the spatial heterogeneity in the levels of net benefits of water used for crops within the YRB. Provinces located in the relatively drier upper and middle reaches had high irrigation withdrawal rates while a low economic return to farmers because of growing relatively cheap crops. The YRB got increasingly net income due to exports of wheat, cotton and apples even though as a crop-related net VW importer associated to the intra-national trades. Considered scenarios for 2050 suggested that the economic returns of crop-related physical and VW flows were more sensitive than the quantity levels of corresponding water flows. This study implies the importance of managing the internal trade-offs or mutual effects between the water resources consumption and economic returns, in order to get a win-win situation in maximizing both the water use efficiency and economic productivities per drop of water flows.