Millions of farmers, householders and industries in Henan and Shandong will have to pay more for water pumped from the Yellow River from today, Xinhua said yesterday. The price hike - the first since 1989 - is aimed at discouraging waste and recouping investments in infrastructure and services, according to the agency. Xinhua said the authorities spent about 101 million yuan (HK$95 million) a year to keep the water pumping from the Yellow River in Henan and Shandong. The fees charged at the old rates raised only 20 million yuan to offset this spending. 'However, the amount actually collected often totalled about 15 million yuan a year because of the lack of awareness [among users of the value of water],' Xinhua said. Depending on its usage, the increase may almost double the price for irrigation during peak farming seasons and could result in a ten-fold price hike for households and industries in summer. Quoting a circular issued by the State Development Planning Commission, Xinhua said the authorities would take steps to work together with the governments of Henan and Shandong to prevent local cadres from putting extra charges on farmers on top of the price increase. 'Steps will be taken to remove unreasonable charges and neutralise the impact on farming due to the price increase,' the circular said. '[Efforts must be made] to ensure the farmers will not face a heavier burden because of the rise.' A traditional water source for Henan and Shandong provinces, water supply for Yellow River has dropped significantly in recent years due to weather and environmental changes. For three years beginning in 1995, the water of Yellow River stopped flowing before it reached the sea. Another major water source for the two provinces is the Huai River. But like the Yellow River, Huai River has also suffered a fall of water volume and pollution in recent years. Environmentalists have for years been calling for increases in water prices to encourage conservation. The Government was reluctant to act, fearing any rises would destabilise the countryside and trigger inflation. Economists believe the Government has become more confident after China has witnessed several years of low prices for food and consumer goods and improved government finances. Some observers in Beijing said yesterday the increase would provide the incentive for local cadres to monitor water consumption more closely and take steps to prevent abuses. Typically, households who live in the same village now often use one water meter and share the expenses equally among them. The increase could encourage some families to install individual meters so that they would not have to subsidise the heavy users.