A study of benefits compensation mechanism for agricultural water rights trading under the restriction of ecological reconstruction： a case study of Shiyang River basin

Agricultural water allocation system based on priority rights has caused regional conflicts and downstream ecological degradation. It is the urgent need to introduce the concept of the initial water rights and establish benefits compensation mechanism to resolve such problems. This paper takes the Shiyang River basin as an example to calculate the opportunity cost of 0.97×10^8 m^3 of agricultural water encroached by the middle reach based on initial water right allocation system under which water is allocated in accordance with the ratio between agricultural population of two different regions concerning the downstream ecological reconstruction needs with Bio-economic model （BEM）. The results suggest that the total economic loss of Minqin County for ecological reconstruction amounts to 2.5 7×10^8 yuan, of which 1.68×10^8 yuan is ecological compensation, representing the economic loss Minqin suffered for ecological reconstruction which shouM burden beneficial groups of ecological reconstruction and 0.89 ×10^8 yuan is the economic loss Minqin suffered due to Liangzhou＇s encroachment behavior which should be compensated by Liangzhou.

A study of benefits compensation mechanism for agricultural water rights trading under the restriction of ecological reconstruction： a case study of Shiyang River basin

Ecological reconstruction Water right trading, Benefit compensation Shiyang River basin