Sustainability of Agriculture: A Study of Digital Groundwater Supervision

Groundwater depletion caused by agricultural irrigation is a worldwide problem. Digital technology has the potential to mitigate the groundwater over-exploitation problem by precisely restricting agriculture groundwater withdrawal and borewell construction. This study estimates how farmers respond to a pilot on digital groundwater supervision, which was implemented by the county government to limit the number and clarify property rights of irrigation borewells. By utilizing this recent pilot in rural China, we assess the causal impact of the digital groundwater supervision pilot on farmers' water-saving irrigation (WSI) behaviors and investigate the heterogeneity effects and mechanisms related to the policy contents. A difference-in-differences (DID) strategy is applied to address the treatment effect of the digital groundwater supervision pilot. The results, which were based on a unique plot-crop-level panel dataset, indicate that farmers reduced water use after the pilot implementation, with most of the responses created through introducing water-saving technology and reducing water use intensity rather than through reducing irrigated acreage. In addition, village supervision, information, and cooperative incentives positively encourage farmers to adopt WSI technologies.