The Study Of Water Cost Accounting In Food Production Based On Virtual Water Theory

Grain is a nation’s fundamental problem. The correct measurement of grain production cost is an essential requirement for domestic grain security and grain supply, and also the base for the correct evaluation of a nation’s international market position. As one of the main grain producing and consuming country, Correct and scientific accounting of the cost in China’s grain production is of great significance to its development of agricultural and promotion of international competitiveness.Based on assuming that China’s current food cost accounting system can’t truly reflect the food production cost for underestimating and overlooking the water factor input, choosing three basic grain corps:wheat, corn, rice as an example, this paper measures and analyzes their water factor input cost of12years among1998-2009of the major food producing provinces with the virtual water theory. And the specific accounting steps are as follows:Firstly, in order to scientifically measure the quantity of water input in grain production process, this paper sets up virtual water accounts for each grain producing province with the theoretical tool of virtual water. The result of virtual water content of China’s major grain corps in descending order is Japonica rice (820)> nonglutinous rice (678)> wheat (673)>corn (502) m3/ha.Secondly, this paper combines the water input with data of China’s agricultural products cost-benefit to estimate opportunity cost of water with the use of stochastic frontier production function model, and does comparative analysis from time and space aspects. The result shows that the current production cost accounting systems has in a large extend ignored the water input costs, to be specific, the degree in ascending order is medium-indica rice(52%)<japonica rice(61%)<early indica rice(64%)<late indica rice(68%)<wheat (79%)<corn (97%). On spatial distribution, the cost of the relative abundance of surface water resources area like the Yangtze River, Huaihe River and Haihe River Basin is higher than the cost of relative poor like northwest, northeast area, so as the distribution of ignored degree.Based on above analysis conclusions, this paper gives some policy advices with concern on the future water resources management policy and main agricultural production policy. 1. The rational estimation of virtual water in agriculture production process not only can improve the awareness of water conservation, but also drive producers to enhance water use efficiency.2. Improvement of investment in agricultural infrastructure and irrigation facilities to precisely accounting of water use can be effective in promoting the rational pricing of water resources used in agriculture, to fully reflect the value and scarcity of water resources. Only to take water input as the basic accounting elements can we further increase the production cost accounting system scenically.3. Corn should be supported and encouraged to plant with its future potential development, given its high productivity on water resources use and broad adaptability, coupled with its large potential market in near future. Because of corn has an high water opportunity cost, it’s more dependent on water rather than land in the production process, increasing the effective input of water input will more effectively contribute to the enhancement of core yields than land input.4. During the agricultural advantage region planning, industrial restructuring decision making process, not only should the demand of market, economic growth be the goal, but also, in order to improve China’s policy of appropriate assessment system, the water resources limit, environment pollution, land and other factors should be considered to pursue for the sustainable and harmonious development of natural ecosystem and the economy system.