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Agricultural economy is usually studied by total factor analysis, while it is uncertain what factors affect agricultural production in the perspective of water utilization. The aim of this study was to investigate driving forces of agricultural economy related to water utilization effects in Ningxia during 2007 to 2017. The logarithmic mean Divisia index (LMDI) method was selected to decompose the driving forces of agricultural production value. Results showed that the agricultural production value increased significantly in 2007–2017 in all of Ningxia and in each city. In terms of the whole region, the effect of agriculture water efficiency played a leading and positive role in the increase of the agricultural production value. The effects of water stress, water utilization structure, and water resource endowment all showed a negative driving force, while population exerted a positive effect. For five cities, the effect of agriculture water efficiency and water utilization structure showed no spatial difference; whereas the other effects expressed different driving forces between cities in the northern plain area and southern hilly area due to varied natural conditions and agricultural activities. The results of this research suggested that the first and foremost strategy of agricultural development and water resource management in Ningxia should be to promote water-saving irrigation and optimize agricultural structure.

Driving Force Analysis of Agricultural Economic Growth Related to Water Utilization Effects Based on LMDI Method in Ningxia, Northwest China