In the arid areas of Northwest China, agriculture especially crop farming consumes most of water resource. Water-intensive and low value-added wheat is cultivated as a staple food of the local people in large scale. Because of the surface water scarcity, irrigation mainly depends on pumping the groundwater in these areas. Based on field surveys conducted in 2005 and 2006 both in the south and the north of Minqin County, Gansu province, this study is designed to study the role of groundwater irrigation on wheat production and how to improve the technical efficiencies (TEs) of wheat farmers by estimating a Stochastic Frontier Production Function (SFPF). The above information is valuable for how to save wheat water consumption and improving the food safety in the arid areas. The empirical results showed that expenditure on pumping groundwater played important role in wheat production. Meanwhile, the same expenditure played more effectively on wheat intercropping with maize in the south than that in the north. As a result, the farmers in the south are more likely to increase expenditures on pumping water than the farmers in the north. Therefore, the government should make new program to restrict wheat water consumption and to secure the farmers in both areas to use the groundwater fairly. Meanwhile, it is suggested that younger farmers can achieve a higher TE both in the south and the north. For the input-intensive intercropping in the south, a larger family, higher education of the farm managers, and coordination of their part-time jobs with agricultural production activities can also help to get higher TEs.
