To uncover economic losses and mitigation benefits of agricultural water scarcity by considering water availability, quality, and efficiency in China's largest dryland River Basin

Abstract

Water scarcity constrains agricultural production and leads to significant economic losses. However, existing water scarcity risk (WSR) assessments often overlook the combined effects of water availability, quality, and efficiency, as well as potential mitigation benefits. This study develops an integrated assessment framework that incorporates these factors to evaluate agricultural WSR in the Yellow River Basin, a critical grain-producing region in China. The framework quantifies both direct economic losses in agriculture and indirect impacts on non-agricultural sectors through intercity trade, while also estimating mitigation benefits. Results show that insufficient water quality significantly amplifies economic losses, reaching 1189.9 billion CNY, compared to 391.0 billion CNY when only water quantity is considered. Key supply chain sectors, including food and tobacco processing, chemicals, and textiles, account for 56.6 % of total indirect agricultural WSR exports. Among mitigation measures, improving water quality and water-use efficiency reduces economic losses by 72.5 billion CNY and 53.2 billion CNY, respectively. Meanwhile, utilizing mine water in coal-rich regions and reclaimed water in urban centers can significantly reduce economic losses, with Ordos and Qingdao experiencing reductions of 75.4 % and 39.1 %, respectively. This framework provides a comprehensive approach to agricultural water management, integrating economic loss estimation with mitigation benefits to support sustainable water resource management.