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Although the ways in which farmers access irrigation services in areas that rely on groundwater have changed over the past decade, little empirical work has measured the impact of these changes. This is surprising given the potential effects�both positive and negative. In this paper we explore the impacts of the emergence of the markets for irrigation services from groundwater on agricultural production � including crop water use and crop yields � and farmer income in northern China. From a survey of 35 randomly sampled villages and 338 households in two provinces (Hebei and Henan Provinces) in 2001 and 2004, we show that when farmers access water from markets for irrigation services, they significantly reduce water use, compared with farmers who have their own tubewells. However, there is no significant difference between the volume of water used by farmers who access irrigation services provided by the village, and the volume used by farmers who access water from markets for irrigation services. Importantly, although water use decreases, we find little effect on either agricultural productivity (yields) or income.
