China’s leaders face the daunting challenge of feeding the world’s largest population with limited resources. China’s per capita endowment of arable land is low and water scarcity is of particular concern. Not only is China’s endowment of water resources extremely low, but it is also badly distributed, with the North China Plain having one of the lowest per capita endowments in the world. The serious water shortage, particularly in the north of China, is exacerbated by poor efficiency in its use and contradictions in the way water is allocated, distributed and managed. Water pollution is contributing to water shortages as well as increasing the cost of provision of water for agriculture.

Since agriculture is the main consumer of water and one of the main users of land resources, China’s future development critically depends on initiatives that will raise the efficiency and efficacy of the use of these resources. In June 2006, the OECD and the Chinese Government invited specialists and experts with a wide range of expertise to address these issues and to provide answers to the following questions: How can balance be achieved between the objectives of expanding food production, raising rural welfare, opening up the domestic market to international trade and protecting the environment? How might policy measures be changed or shifted towards market-based policy instruments to ensure that polluters pay and providers of environmental benefits are rewarded? What would be the best policy mix in China combining taxes and payments, regulations, and voluntary and stakeholder participation in watershed and land resource management to further environmental and social objectives, and long term sustainability?

These questions and issues were debated on the basis of the papers reproduced in this publication. They offer the reader timely analytical and policy thinking by a number of highly regarded experts on China’s agri-environmental issues and policies.