Did it ever occur to you that a cash subsidy might be a lot more acceptable and humane answer that the current water subsidy?

You're framing this as a question of "should we give these peasants free water, OR just let them starve?" That's not what's being debated, and is disingenuous at best.

This is what I understood was being debated: industry requires a lot of water, and they can pay it 10 times what the peasants pay for it. But, currently, they aren't allowed to buy the water that is needed for farming, which is the same as giving a subsidy to peasants. Instead, we should let the market decide, ie, let industry buy the water and leave the peasants without it. What will the peasants do then? Why, they are free to move to the cities and become industry workers; perfect market solution.

Did I get it wrong?

> which is the same as giving a subsidy to peasants.

Correct. It is a large subsidy to the peasants.

> Instead, we should let the market decide, ie, let industry buy the water and leave the peasants without it.

Yes, but with the money, which as earlier discussed is worth several times more than its value in subsistence agriculture. The person you were originally replying to was complaining that a 90% discount on the sale of water was essentially an extremely inefficient cash subsidy; the obvious solution is replacing it with an efficient cash subsidy. That's hardly humane.

> What will the peasants do then? Why, they are free to move to the cities and become industry workers

If that was a practical solution at the required scale, they'd have already done it. Hence why a subsidy is needed.

> Did I get it wrong?

It does look that way, yes.

Depends on the implication. If you supplied the same water in the same way then allowed resale farmers would strictly be better off. (Ignoring graft.)

The water shortage will not take hundreds of millions of farmers to equalize. Price rises by 0.01 cents per gallon and many farmers will will become more water efficient while selling freed up water on the open market. This, assuming some water vs trade off, would also raise food prices giving more money to farmers who do nothing differently.

The poor and everyone else would get higher food prices, but access to more reliable sources of water.

Did it ever occur to you that by not pricing out poor, upstream farmers that hundreds of millions of poor Chinese workers will die of thirst?

I think its perfectly reasonable to value a scare resource at a market rate. If the rate is too high to be tolerable then the government has an incentive to invest in water infrastructure. And people have an incentive to move where resources are under less strain.

Or we could just rape the environment for short term gain. It seems to be everyone's solution on every side.

Yeah, I think some people forget what "farmer" means in China - are we talking about big agribusiness farms or subsistence-farming peasants who haven't made it into China's industrial revolution yet?

An appallingly minuscule tax (eg: $0.01/1000L) would encourage appropriate (nay, mandatory) rate monitoring as well as provide a modicum of oversight.

Keyword: rate monitoring, not rate limiting

If richer exporting industries are richer than hundreds of millions farmers, doesn't it mean that they are more effective, and may be a large industrial farm would be more effective than individual farmers, too?

It does, and it would, but what are you going to do with those 100 million farmers? Their children are rushing to the cities faster than you can possibly imagine. But it takes at least a generation or two to change a country of poor farmers into an industrial, educated, urbanized society. And until then, you have this problem.

In a capitalist, free market economy, we don't have to do anything with people. They're doing anything they want instead.

China might not be there yet, but thankfully, they're already got rid of the central planning.

That only works in a reasonably static society, where people can make informed decisions about what they want. If an elderly farmer had an opportunity to learn a trade or get an education, yes, he might be a welder, or a wine taster, or a writer - but it's a little late for that when he's 40 with a house and wife and kid, and everything he owns is in that farm, which was the best option he had as he steered himself down the path of his life.

And now the market is saturated with cheap, industrially farmed food, making his output worthless. It's hugely oversupplied with obsolete farmers. Yes, the market will even things out eventually - but that can have a steep, painful human cost.

They're doing anything they want and can afford, an important additional constraint.

Remember the old cliche, "America: the land of the free, terms and conditions apply"