34361 Shaping the Future of Water for Agriculture A Sourcebook for Investment in Agricultural Water Management Shaping the Future of Water for Agriculture A Sourcebook for Investment in Agricultural Water Management © 2005 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved 1 2 3 4 08 07 06 05 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank.The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. 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CONTENTS Foreword vii Acknowledgments ix Acronyms and Abbreviations xiii Overview Sourcebook Objectives 1 Background of the Three World Bank Corporate Strategies 2 The Agricultural Water Management Sourcebook 4 Challenges Facing Agricultural Water Management 4 Cross-Cutting Themes of the Sourcebook 7 Lessons and Next Steps 12 Chapter 1: Building Policies and Incentives Overview 21 Investment Note 1.1: Preparing a National Agricultural Water Strategy 24 Investment Note 1.2: Development Policy Lending to Support Irrigation and Drainage Sector Reforms 31 Investment Note 1.3: Agricultural Trade, Water, and Food Security 38 Investment Note 1.4: Pricing, Charging, and Recovering for Irrigation Services 45 Investment Note 1.5: Economic Incentives in Agricultural Water Use 53 Innovation Profile 1.1: Agricultural Water in the New Country Water Resources Assistance Strategies 59 Innovation Profile 1.2: Enabling Smallholder Prosperity: Irrigation Investments for Ready Markets 63 Chapter 2: Designing Institutional Reforms Overview 67 Investment Note 2.1: Investing in Participatory Irrigation Management 70 Investment Note 2.2: Investing in Water Rights, Water Markets, and Water Trade 78 iii Investment Note 2.3: Investing in Building Capacity in Agricultural Water Management 87 Innovation Profile 2.1: Drivers of Public Irrigation Reform in Australia 93 Innovation Profile 2.2: Investing in Farmer Networks for Inclusive Irrigation Policy Processes in South India 96 Chapter 3: Investing in the Improvement and Modernization of Irrigation Systems Overview 101 Investment Note 3.1: Lending for On-Farm Water-Saving Technologies 105 Investment Note 3.2: Investing in Irrigation for Crop Diversification 110 Investment Note 3.3: Investing in Smallholder Irrigation 114 Investment Note 3.4: Selecting Technologies for the Operation and Maintenance of Irrigation Systems 119 Investment Note 3.5: Cost-Effective Operation and Maintenance of Irrigation and Drainage Projects 123 Investment Note 3.6: Using Satellites to Assess and Monitor Irrigation and Drainage Investments 127 CONTENTS Investment Note 3.7: Prioritizing Lending for Public Irrigation Schemes with the Rapid Appraisal Method 134 Innovation Profile 3.1: Investing in Automation and Centrally Operated Irrigation Systems 139 Chapter 4: Investing in Groundwater Irrigation Overview 143 Investment Note 4.1: Investing in Shallow Tubewells for Small-Scale Irrigation 145 Investment Note 4.2: Deep Tubewell Irrigation 150 Investment Note 4.3: Conjunctive Use of Groundwater and Surface Water 156 Investment Note 4.4: Groundwater Governance and Management 162 Innovation Profile 4.1: The Republic of Yemen's Sana'a Basin Water Management Project 169 Chapter 5: Investing in Drainage and Water Quality Management Overview 173 Investment Note 5.1: Investing in Land Drainage 176 Investment Note 5.2: Investing in the Reuse of Agricultural Drainage Water 181 Investment Note 5.3: Investing in the Reuse of Treated Wastewater 185 Innovation Profile 5.1: Drainage Investments in the Context of Integrated Water Resources Management 190 Innovation Profile 5.2: Investing in Controlled Drainage 193 Innovation Profile 5.3: Investing in Evaporation Ponds 196 Innovation Profile 5.4: Investing in Biodrainage 198 Innovation Profile 5.5: Investing in User Operation and Maintenance of Drainage 201 Chapter 6: Investing in Water Management in Rainfed Agriculture Overview 205 Investment Note 6.1: Investing in Supplemental Irrigation 208 Investment Note 6.2: Investing in Watershed Management 214 Investment Note 6.3: Investing in Water and Soil Fertility Management 219 Innovation Profile 6.1: Investing in Community-Based Soil Conservation and iv Watershed Management Projects 225 Innovation Profile 6.2: Investing in Watershed Management in China's Loess Plateau 229 Innovation Profile 6.3: Integrated Water Management to Enhance Watershed Functions and to Capture Payments for Environmental Services 232 Chapter 7: Investing in Agricultural Water Management in Multipurpose Operations Overview 237 Investment Note 7.1: Investing in Agricultural Water through Community-Driven and Social Fund Approaches 239 Investment Note 7.2: Investing in Aquaculture Activities 244 Innovation Profile 7.1: Rural Water Supply and Irrigation 251 Chapter 8: Coping with Extreme Climatic Conditions Overview 255 Investment Note 8.1: Investing in Drought Preparedness 258 Investment Note 8.2: Investing in Flood Control and Management 264 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT Innovation Profile 8.1: Planning Scarce Water Resources Using Evapotranspiration Quotas: The Hai Basin Integrated Water and Environment Project in China 270 Innovation Profile 8.2: Fighting the Adverse Impacts of Climate Change on Agriculture 272 Innovation Profile 8.3: Investing in Participatory Approaches for the Cultivation of New Varieties and Soil and Water Conservation in India 275 Chapter 9: Assessing the Social, Economic, and Environmental Impacts of Agricultural Water Investments Overview 279 Investment Note 9.1: Monitoring and Evaluating the Poverty Impacts of Agricultural Water Projects 281 Innovation Profile 9.1: Assessing the Economic Benefits of Land Drainage 286 Innovation Profile 9.2: Guiding Environmental and Social Safeguard Assessment in Agricultural Water Projects 290 Innovation Profile 9.3: Estimating the Multiplier Effects of Dams 294 Innovation Profile 9.4: Benchmarking for Improved Performance in Irrigation and Drainage 299 Innovation Profile 9.5: Applying Environmental and Social Safeguard Policies to Agricultural Water Operations and Monitoring Them during the Project Cycle 304 Index 315 v CONTENTS FOREWORD vii Agricultural water management is vital to food security, poverty reduction, and environmental protection. As demand for increased rural incomes and agricultural productivity grows, human systems increasingly put pressure on water supplies, and this is especially true for agricultural water. After decades of success- fully expanding irrigation and improving productivity, farmers face emerging crises in the form of poorly performing irrigation schemes, slow modernization, declining investment, constrained water availability, and environmental degradation.Taken together, these crises profoundly compromise rural livelihoods. Three World Bank sectoral strategies--rural development, water resources management, and environ- ment--all call for using water more productively,managing water and land resources in a more sustainable manner, and reducing poverty. To respond to this challenge, and to the challenge of the Millennium Development Goal of halving poverty and hunger by 2015, the World Bank, working with many partner agencies, has compiled a selection of good practices that can guide practitioners in the design of high-quality investments in agricultural water. This Sourcebook's messages center around the key challenges to agricultural water management, specifi- cally the following: · Building policies and incentives · Designing institutional reforms · Investing in irrigation system improvement and modernization · Investing in groundwater irrigation · Investing in drainage and water quality management · Investing in water management in rainfed agriculture · Investing in agricultural water management in multipurpose operations · Coping with extreme climatic conditions · Assessing the social, economic, and environmental impacts of agricultural water investments As is the case with its companion, Agriculture Investment Sourcebook, which focuses on investments in the agricultural sector more generally, our hope is that, by sharing acknowledged good practice widely among practitioners, further excellence in practice may be identified and brought to bear in what are intended to be living documents. Kevin Cleaver Sushma Ganguly Director Sector Manager viii Agriculture and Rural Development Agriculture and Rural Development A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT ACKNOWLEDGMENTS ix The work leading to this Sourcebook involved a large group of people interested in agricultural water both from within and outside theWorld Bank.The AgriculturalWater team in the Agricultural and Rural Devel- opment Department (ARD), consisting of Safwat Abdel-Dayem, Salah Darghouth, Geert Diemer, Gretel Gambarelli, Corazon Solomon, and Ariel Dinar (Sourcebook Task Team Leader [TTL]), assumed overall responsibility for managing the preparation and the production of the Sourcebook. Geert Diemer coordi- nated the first stage in the preparation of the individual notes, with administrative input by Corazon Solomon. Gretel Gambarelli provided research and coordination input in the final stage of the revision of the Sourcebook. Christopher Ward prepared the overview of the Sourcebook and the chapters' highlights. Kathleen A. Lynch edited the Sourcebook. Safwat Abfel-Dayem, Salah Darghouth, and Ariel Dinar provided feedback and comments on individual Sourcebook chapters during their preparation. The following members of the regional and anchor core team reviewed and provided inputs for the prepara- tion of the concept note and the selection of the topics to be included in the Sourcebook: Musa S. C.Asad, Derek Byerlee, Louise J. Cord, Ijsbrand H. De Jong, Rafik Fatehali Hirji, Robin Mearns, Douglas C. Olson, Stan Peabody, Eija Pehu, Srinivasan Raj Rajagopal, Claudia W. Sadoff, Jose Simas, and Joop Stoutjesdijk. An advisory group, including the Country Directors Mahmood Ayub, James Bond, and Ishac Diwan, pro- vided feedback throughout the preparation of the Sourcebook. The following peer reviewers provided valuable comments on the various Sourcebook entries:Amadou Alla- houry, Gershon Feder (World Bank, Development Research Group), Keith Pitman (World Bank, Opera- tions Evaluation Department), Mark Rosegrant (International Food Policy Research Institute, IFPRI), and Ashok Subramanian (World Bank, Middle East and North Africa region). The following thematic groups (TG) and networks contributed to the preparation of various chapters or individual notes: the Gender and Rural Development TG, the Irrigation and Drainage Network, the Qual- ity Assurance Group, the Natural Resources Management TG, the Groundwater Management Advisory Team of the Bank­Netherlands Water Partnership Program (GW-MATE/BNWPP). The following institutions kindly offered staff time to prepare, provide inputs, and review some of the notes: the International Food Policy Research Institute (IFPRI), the International Water Management Institute (IWMI), the Food and Agriculture Organization (FAO), the Canadian International Development Agency (CIDA), the International Development Enterprises (IDE), the International Commission on Irrigation and Drainage (ICID), the International Institute for Land Reclamation and Improvement (ILRI), and the Interna- tional Center for Agricultural Research in the Dry Areas (ICARDA). This Sourcebook would not exist without the work carried out by the following authors: Theodore Her- man, Chris Perry, Christopher Ward, and Shobha Shetty (chapter 1); R. Doraiswamy,Tony McGlynn, Peter x Mollinga, Geoffrey Pearce, Larry Simpson, Joop Stoutjesdijk, and Doug Vermillion (chapter 2);Wim Basti- aanssen, Mohamed Bazza, Charles M. Burt, Jack Keller, Jon Naugle, Edwin Noordman, Hervé Plusquellec, and Daniel Sellen (chapter 3); Peter Koenig, Larry Simpson,Walter Ochs,Tushar Shah, and Albert Tuinhof (chapter 4); Safwat Abdel-Dayem, Shaden Abdel-Gawed,William Oliemans, Geoffrey Pearce, Christopher Scott, and Bert Smedema (chapter 5); Richard Chisholm, Jumana Farah, Erick Fernandes,Ahmed Hachum, Theib Oweis, Eric Smaling, and William Smith (chapter 6); Peter Gardiner, Carlos Linares, Christopher Ward, and Mei Xie (chapter 7); Ariel Dinar, Hamdy Eisa, Douglas Olson, Rama Chandra Reddy, Frank van Steenbergen, and Donald Wilhite (chapter 8); and Ramesh Bahtia, Martin Burton, Cor de Jong, James R. Davis, Ian Makin, and Mona Sur (chapter 9). The individual notes were enriched with comments by the following reviewers and input providers: Jan Bojo, Sarah Cline, Erick C. M. Fernandes, Nalin Kishor, John Nash, Richard Reidinger, Mark Rosegrant, Hagie Scherchand, and Timothy Susler (chapter 1);Adel Bichara,Arunima Dahr, David Groenfeldt, Philip Keefer, Eija Pehu, Maria Saleth, Geoffrey Spencer, and Wendy E.Wakemen (chapter 2); Shawki Barghouti, Jan Bron, A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT Jack Keller, Hassan Lamrani,Walter Ochs,Aly M. Shady, and Joop Stoutjesdijk (chapter 3); Keizrul Abdullah, Ijsbrand de Jong, Stephen Foster, Karin Kemper, Ohn Myint, Hervé Plusquellec, and Usman Qamar (chap- ter 4); Keizrul Abdullah, Adel Bichara, Peter Koenig, Manuel Schiffler, and Bart Snellen (chapter 5); Inčs Beernaerts, José Benites, Kenneth Chomitz, Jean-Marc Faurčs, Erick Fernandes, Rod Gallacher, Benjamin Kiersch, Stefano Pagiola, Jim Smyle,Tanja Van den Bergen, and Juergen Voegele (chapter 6); Keizrul Abdul- lah, Sarah Cline, Parameswaran Iyer, Mark Rosegrant, Daniel Sellen, Bart Snellen,Timothy Sulser, Melissa Williams, and Ronald Zweig (chapter 7); Shawki Barghouti, Jean-Marc Faurčs, Abla Ilham, Peter Jipp, Jack Keller, Ian Noble, Alessandro Palmieri, Aly M. Shady, Shobha Shetty, and Bart Snellen (chapter 8); and Pramod K.Agrawal, Martin Burton, Sarah Cline, Ian Makin, Hector Malano, Colin Rees, Mark Rosegrant, Maria Saleth, L. Panneer Selvam, and Timothy Sulser (chapter 9). The team is also grateful to the ARD Core Management Committee for continuous feedback and support throughout the preparation and production of the Sourcebook. Anuradha Mahajan, Rebecca Oh, and Melissa Williams provided valuable support to comply with budget and publication procedures. Special thanks go to Kevin Cleaver and Sushma Ganguly who encouraged and guided us in the process. xi ACKNOWLEDGMENTS ACRONYMS AND ABBREVIATIONS xiii ACIAR Australian Centre for International Agricultural Research AIS Agriculture Investment Sourcebook ANAE National Association for Environmental Action (Association Nationale d'Actions Environnementales) ANCID Australian National Committee of the International Commission on Irrigation and Drainage ARD Agriculture and Rural Development Department,World Bank APL Adaptable Program Loan APP Agricultural Perspective Plan ASAL Agricultural Sector Adjustment Loan ASCE American Society of Civil Engineering AWS Agricultural water strategy B/C Benefit-cost (ratio) BCM Billion cubic meter(s) BNWPP Bank-Netherlands Water Partnership Program BP Bank Procedure CAS Country Assistance Strategy CDD Community-driven development CDHI Centre for Development of Human Inititatives CGE Computable general equilibrium CIDA Canadian International Development Agency CGIAR Consultative Group on International Agricultural Research CGISP Community Groundwater Irrigation Sector Project, Nepal COAG Council of Australian Governments COTAS User-oriented technical commission(s) of water (ComitéTécnico de Aguas Subterraneas, Mexico) CRS Colorado Revised Statutes CWRAS Country Water Resources Assistance Strategy DECRG Development Economics Research Group DFID Department for International Development, U.K. DPL Development Policy Lending / Development Policy Loan DRAINFRAME Drainage Integrated Analytical Framework DRI Drainage Research Institute DWR Department of Water Resources xiv EA Environmental assessment EMP Environmental Management Plan EPA Environmental Protection Agency EPADP Public Authority for Drainage Projects, Egypt ERL Emergency Recovery Loan ERR Economic rate of return ESCAP Economic and Social Commission for Asia and the Pacific (UN) ESSD Environmentally and Socially Sustainable Development ET Evapotranspiration FAO Food and Agriculture Organization FI Financial Intermediaries FMIS Farmers-Managed Irrigation Systems GEF Global Environment Facility A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT GIS Geographic information system(s) GW Gigawatt GW-MATE Groundwater Management Advisory Team HACCP Hazard analysis and critical control point HPIL Hybrid Policy and Investment Loan I&D Irrigation and drainage IBRD International Bank for Reconstruction and Development ICARDA International Center for Agricultural Research in the Dry Areas ICID International Commission on Irrigation and Drainage ICLARM International Center for Living Aquatic Resources Management IDA International Development Association IDE International Development Enterprises IFAD International Fund for Agricultural Development IFC International Finance Corporation IFPRI International Food Policy Research Institute IIAV International Information Centre and Archives for the Women's Movement IIED International Institute for Environment and Development IIMI International Irrigation Management Institute IIIMP Integrated Irrigation Improvement and Management Project ILRI International Institute for Land Reclamation and Improvement IMF International Monetary Fund IN Investment Note INCID Indian National Committee on Irrigation and Drainage I/O Input/output xv IP Innovation Profile IPDP Indigenous Peoples' Development Plan IPM Integrated pest management IPTRID International Programme for Technology and Research in Irrigation and Drainage, UN ISC Irrigation service charge ITRC Irrigation Training and Research Center IUCN World Conservation Union IWASRI International Waterlogging and Salinity Research Institute, Pakistan IWSFM Integrated water and soil fertility management IWDP Integrated Wasteland Development Program IWMI International Water Management Institute ACRONYMS AND ABBREVIATIONS IWRM Integrated Water Resources Management KfW Kreditanstalt für Wiederaufbau kWh Kilowatt-hour LBOD Left Bank Outfall Drain, Pakistan LIL Learning and Innovation Loan LoDP Letter of Development Policy LSI Large-scale irrigation M&E Monitoring and evaluating MCM Million cubic meter(s) MDG Millennium Development Goal MODIS Moderate Resolution Imaging Spectroradiometer MOM Management of Operation and Maintenance MRRP Mahaweli Restructuring and Rehabilitation project MW Megawatt MWRI Ministry of Water Resources and Irrigation, Egypt MWRRA Maharashtra Water Resources Regulatory Authority NACA Network of Aquaculture Centers in Asia-Pacific NATP National Agricultural Technology Project NGO Nongovernmental organization NPK Nitrate, phosphorous, and potassium O&M Operation and maintenance OLIBS On-Line Irrigation Benchmarking Service OD Operational Directive xvi OED Operations Evaluation Department OP Operational Policy PAD Project Appraisal Document PAVCOPA Agricultural Trading and Processing Promotion Pilot project (Projet d'Appui ŕ laValorisation et Commercialisation des Produits Agricoles), Mali PCB Polychlorinated biphenyl PDPL Programmatic Development Policy Lending PESW Programmatic economic and sector work PIM Participatory irrigation management PLC Programmable logic controller PMP Pest management plan PROMMA Programa de Modernización del Manejo de Agua (Water Resource Management Modernization Program, Mexico) PRI Institutional Revolutionary Party, Mexico A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT PRSP Poverty Reduction Strategy Paper PSAC Programmatic Structural Adjustment Credit PSAL Programmatic Structural Adjustment Loan PVC Polyvinyl chloride QAG Quality Assurance Group QACU Quality Assurance and Compliance Unit RAP Rapid Appraisal Procedure R&D Research and development RDS Rural Development Strategy,World Bank RIL Rehabilitation Investment Loan RP Resettlement Plan RPF Resettlement Policy Framework RWSS Rural water supply and sanitation S-I/O Semi-input/output SA Social assessment SAM Social accounting matrix SEA Sectoral Environmental Assessment Strategic Environmental Assessment SEBAL Surface energy balance SECAC Sector Adjusment Credit SECAL Sector Adjusment Loan SEO State Engineer's Office SF Social fund SI Supplemental irrigation xvii SIL Specific Investment Loan SIWI Stockholm International Water Institute SIP Subsectoral Irrigation project, Peru SPS Sanitary-phytosanitary standard(s) SRH Secretariat of Water Resources, Brazil STREAM Support for Regional Aquatic Resources Management SWIM Systemwide Initiative on Water Management TG Thematic group TORs Terms of Reference TTL Task Team Leader ULA Upper level association UN United Nations UNDP United Nations Development Programme ACRONYMS AND ABBREVIATIONS UNIFEM United Nations Development Fund for Women UP Uttar Pradesh USBR United States Bureau of Reclamation VDC Village development committee WRAP Water Resources Action Program, Zambia WATSAL Water Resources Sector Adjustment Loan WBI World Bank Institute WHO World Health Organization WIN Women Irrigation Network, Zambia WP Water productivity WRAP Water Rights Adjustment Program, Mexico (PADUA in Spanish) WRMG Water Resources Management Group WRS Water Resources Strategy WRSS Water Resources Sector Strategy,World Bank WUA Water user association WUAF Water user association federation WUE Water use efficiency WWF World Wildlife Fund ZATAC Zambia Agribusiness Technical Assistance Center xviii A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT OVERVIEW 1 SOURCEBOOK OBJECTIVES PROBLEMS FACING AGRICULTURALWATER MANAGEMENT There are heavy demands on agricultural water to provide more food to consumers and inputs to industry, create incomes and wealth in rural areas, reduce poverty among rural people, and con- tribute to the sustainability of natural resources and the environment. As urban demand grows, agriculture is also increasingly viewed as a reservoir of water for transfer to towns, sometimes in exchange for recycled wastewater from cities. After a century of expansion of large-scale surface irrigation and decades of rapid groundwater development, opportunities to harness new resources are fewer and more expensive. Improving the productivity of existing water use and reusing secondhand water are therefore becoming common investment objectives. However, returns on public investment have been generally disappointing. New solutions have emerged, based on widely RDS also argues forcefully for a strengthened available technology and new management role for the Bank as an advocate for rural options. The role of government is changing, poverty reduction and as a leader in investment responsibility is being decentralized, farmers and policy dialogue. are playing an increasingly important role in decisions and investment, and markets are driv- Agricultural water management is critical to ing growth. achieving key RDS objectives: durable rural growth, enhanced productivity and competitive- How to grow more food, increase incomes, ness, and sustainability of natural resource man- reduce poverty, and protect the environment-- agement. Underlining the growing shortage of all from an increasingly constrained resource water and competition from other users, RDS out- base--are the challenges facing agricultural lines the agenda for improved water resources water management discussed and addressed in management: to ensure that agricultural water is this Sourcebook. managed within an integrated basin approach, to allocate water to environmental uses, to prepare BACKGROUND OFTHETHREE for the likely increase in recycled water use in WORLD BANK CORPORATE irrigation, and to devise long-term approaches to STRATEGIES issues of waterlogging and salinization. RDS also focuses on improving the productivity of existing water management systems, especially on small- The World Bank's approach to the agricultural scale projects characterized by demand-driven water management challenges summarized on-farm improvements, rehabilitation, and partic- above is guided by the recent corporate strate- ipatory approaches. On the economic side, RDS gies for Rural Development, Water Resources, emphasizes the key role of incentives and the and the Environment. These three corporate need to increase the role of private investment strategies all assign a vital role to agriculture and management as well as the efficiency of pub- and water management in promoting rural lic investment. Finally, RDS outlines an agenda growth, sustaining the environment, and reduc- for reform of fragmented institutions and unac- ing poverty. countable and inefficient public bureaucracies. The Bank's Reaching the Rural Poor: A Renewed Strategy for Rural Development (RDS) (World The Bank's Water Resources Sector Strategy: 2 Bank 2003) highlighted the pivotal importance of Strategic Directions for World Bank Engage- the rural sector as the home of the vast majority ment (WRSS) (World Bank 2004b) also gives of the world's poor and underlined the centrality prominence to irrigation as the key producer of of rural development to the Bank's poverty food and source of livelihood for the world's reduction mission. RDS demonstrates that agri- poor, and as the largest user of water. WRSS cultural development is the primary instrument underlines that water management and devel- for poverty reduction in most developing coun- opment are essential for growth and poverty tries and urges, against a sharp decline in agri- reduction and argues that both broad and cultural lending in recent years, the return of poverty-targeted interventions further those agriculture to the forefront of the Bank's agenda. results. WRSS emphasizes two imperatives: to expand investment in irrigation and to change the way irrigation is managed. Calling for "prin- cipled and pragmatic reforms," the strategy What Is AgriculturalWater Management? stresses the need to return to basic economic principles that incentives should reflect both Agricultural water management includes irrigation on large the financial cost of supplying services and the and small schemes and farms, drainage of irrigated and rainfed areas, watershed restoration, recycled water use, rainwater opportunity cost of water. WRSS also argues harvesting, and all in-field water management practices. that, although the Bank portfolio in irrigation has been shrinking, there are compelling reasons to A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT "get back in." As for RDS, WRSS envisages a to be harnessed through expanded private broader and more active role for the Bank in and user participation at every level, and the irrigation sector, arguing that dealing with through inclusion, notably of women. complexity and risk is a strength of the Bank, which should embrace "affirmative engagement · Integration and sustainability. Water has with risk," through a business model that puts to be used sustainably within an integrated development impact first. approach. Resource constraints and envi- ronmental risks impose integrated water WRSS proposes an agenda for agricultural water management approaches. Productivity at management directed toward improving the every level hinges on integrated manage- efficiency of water service delivery and use at ment of land and water and on integration the farm, scheme, and sector levels, underlining of policies and programs among water man- that water efficiency is pro-poor. The strategy agement, agriculture, and the environment. emphasizes the role of demand management (cost recovery and water pricing, water rights, OPERATIONALIZINGTHE and the links between energy subsidy and CORPORATE STRATEGIES groundwater depletion), the need to improve The priority assigned to the agricultural sector in governance (user associations, gender partici- these three corporate strategies, along with their pation, modernizing formal irrigation institu- arguments that the Bank can and should play a tions, addressing the political economy of central role in the development of the sector in reform), and integrated approaches and multi- the coming years, impelled the Bank's decision functional technologies (basin management, to prepare a set of documents putting into oper- packages for drought, saline soils and floods, ational terms the messages in the strategies. For and drainage). the agriculture sector as a whole, the Agricul- ture Investment Sourcebook (World Bank 2004a) The Bank's Making Sustainable Commitments: sets out specific examples and guidance on An Environment Strategy for the World Bank project design and investments that World Bank (World Bank 2001) recognizes irrigation's vital task team leaders can consider when preparing contribution to rural economies and welcomes their projects to promote sustainable develop- the increased attention to mitigating adverse ment and poverty reduction in the sector. The environmental impacts. The strategy supports Agriculture Investment Sourcebook is comple- participatory approaches to address problems mented by a Directions in Development Report, 3 of groundwater depletion and drainage. Agricultural Growth and the Poor: An Agenda for Development (World Bank 2005a), which sets Although each corporate strategy has a different out guidance on policy interventions and reform thematic emphasis, their combined messages initiatives that can underpin pro-poor invest- for agricultural water management are clear: ment and sustainable growth. · Productivity. The age of expansion is draw- In conjunction with these documents, the pres- ing to a close. In the future, governance, ent Sourcebook and its companion Directions in management, and technology must combine Development Report, Agriculture Water Man- to improve the productivity of existing assets agement: An Agenda for Sustainable Develop- and available resources. ment (World Bank 2005b) have been compiled. · Incomes. The bottom line is sustainable The preparation of two documents specifically increases in farmer incomes, with a focus devoted to agricultural water management on the poor. demonstrates that agricultural water manage- ment is vital to meeting the objectives of the cor- · Institutions. Improved governance is porate strategies and underlines the intersectoral basic to increasing efficiency of resource nature of water use in agriculture, reflected in its use, and the energies of water users need central place in all three corporate strategies. OVERVIEW Taken together, the above publications are · It suggests ways of increasing investment among the World Bank's handbooks for its reen- and improving its quality and sustainability. gagement with the agricultural sector. They give policy, investment, and implementation guid- ance for the operationalization of the Bank's WHAT IS NOT COVERED corporate strategies on rural growth and poverty The Sourcebook's coverage is not always com- reduction through agricultural development and prehensive and it is expected that there will be sustainable natural resources management. periodic updates as fresh topics arise and mate- rial becomes available. The Sourcebook is THE AGRICULTURALWATER essentially a guide to designing investment pro- grams. Policy issues are discussed where they MANAGEMENT SOURCEBOOK are relevant to investment. However, enabling policy issues are treated more broadly in the With the background of the corporate strate- companion Directions in Development paper gies and alongside its companion publica- (World Bank 2005b), where they are presented tions, the Shaping the Future of Water for within the wider strategic framework. Agriculture: A Sourcebook for Investment in Agricultural Water Management is designed This section of the overview has briefly out- to show how--in conjunction with macroeco- lined the overall problem of investing in agri- nomic and broader sectoral policies and cultural water and has described the purpose of investments--policy and investment in agri- the Sourcebook. The next section will look in cultural water management can contribute to more detail at the challenges facing investment sustainable rural growth and poverty reduc- in agricultural water. tion. Although the Sourcebook covers a whole range of issues, the focus is operational, con- centrating on the following: CHALLENGES FACING AGRICULTURALWATER · The policy and institutional reforms needed MANAGEMENT to make improved water productivity prof- itable for the farmer and for the nation Challenges facing agricultural water manage- through governance, management, markets, ment include (1) the policy and institutional and trade policy challenge, (2) the economic and financial chal- 4 lenge, (3) the problem of declining investment, · The investment, technology, and manage- (4) the challenge of technology and water ment means available to increase water resources to supply growing demand, (5) the productivity poverty and rural incomes challenge, and (6) The Sourcebook guides Bank staff in the design environmental dimensions and the sustainabil- of agricultural water management investments: ity imperative. · It documents a range of solutions and good practices from Bank and worldwide experi- THE POLICY AND INSTITUTIONAL CHALLENGE ence that can be mainstreamed into the Governments readily shouldered the develop- Bank's portfolio, including policy and insti- ment mission in the 1970s and 1980s, with the tutional reforms, investments in hardware state as principal investor and service provider. and software, and recent innovations and In irrigation, government planning and top- successes for scaling up. down solutions often led to poor choices, high costs, poor service, low cost recovery, and a · It highlights means of improving perform- culture of dependency on the state. In many ance and increasing production, incomes, countries, the poor track record of the state has and social returns. prompted a shift toward a new public-private A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT paradigm for irrigation, in which government agriculture. There is evidence that, for the serv- progressively becomes more of a facilitator, and ice provider and the farmer, a well-balanced regulator and users and markets play a growing incentive framework improves efficiency and role in management and finance. Reconciliation accountability, raises productivity, and promotes of agricultural policy with macroeconomic poli- sustainable and environmentally responsible cies is often challenging: governments that aim resource use. The parallel financial challenge on for low-cost, domestically produced food irrigation schemes is to generate cost recovery encounter problems in providing adequate adequate to finance an excellent service to farm- incentives--and incomes--to farmers, and gov- ers. A broader financial challenge is to set up an ernments have to adjust to the best tradeoff enabling and incentive framework that will between support to agriculture and an econom- encourage both large- and small-scale private ically efficient food security policy. Within agri- investment. These challenges are considerable. culture, too, there is a need to integrate At the international level, markets are widely agricultural water management issues into protected and commodity prices generally low. broader agricultural policy. Both irrigated and Domestically, many agricultural economies are rainfed agriculture use and invest in water characterized by inadequate or noncompetitive resources and management as one of the many markets, pervasive subsidies, and food self-suffi- inputs to the agricultural production process ciency goals that are inconsistent with compara- and in response to market opportunities and tive advantage. Cost recovery remains a incentives that are determined in the broader contentious issue in many countries and private agricultural and macro economies. Thus, invest- investment is often crowded out by public sub- ment and incentive policies for agricultural sidy or deterred by uncertain investment envi- water management have to be developed in an ronments and distorted incentive frameworks. integrated way within a broader agricultural policy. At the same time, agricultural water allo- cations and management priorities have to be THE PROBLEM OF DECLINING INVESTMENT integrated with overall water management pri- Governments are investing less public money in orities at the basin and national levels. These agriculture worldwide; public investment in agri- and other policy and governance adjustments culture has dropped, and investment in irrigation, drive sector reforms in many countries. An drainage, and other agricultural water manage- understanding of the political economy of these ment projects has also been declining worldwide. reforms, and of how reform processes work, is World Bank lending for new irrigation and 5 needed. New water management skills and drainage projects dropped to a record low of $220 institutional capacity building are also needed. million in fiscal 2003, a dramatic plunge from the levels of the 1980s and early 1990s, when it aver- aged between $1.0 billion and $1.2 billion annu- THE ECONOMIC AND FINANCIAL CHALLENGE ally. There are several reasons specific to Compared to other water-using sectors, agricul- agricultural water management for this decline. ture in most locations generates the lowest value First, investment costs have risen because irriga- added per unit of water, and so will progres- tion has moved into more marginal areas. With sively give up water to domestic, municipal, and the average cost of developing new irrigated land industrial uses as water scarcity increases and now above $6,000 per hectare, rates of return on competition mounts. Yet within agricultural use new schemes are generally in single digits. Sec- there is considerable scope for improving returns ond, the performance of large surface schemes on water. Low returns mean low incomes; higher has been disappointing. Third, much of the effort returns will boost incomes for farmers, including on large schemes now goes into rehabilitation the poor. The key economic challenge is to get and management changes to improve water deliv- an incentive framework in place that encourages ery service. These investments are inherently efficient water use and profitable high-value lower cost than developing new schemes. OVERVIEW In groundwater irrigation, investment has been farmers to meet this increase in demand is con- predominantly private. In most countries, strained. Indeed, the pace of technological groundwater is now fully exploited, often over- change has slowed down--the water resource exploited, and investment has to switch to base is in most places fully developed, and now improving on-farm efficiency. Improving water more than half the world's population lives in use efficiency pays high economic returns, but water scarcity. Intersectoral competition for often the incentive framework is distorted so that water is growing, with water supply to cities farmers do not invest because it is not financially taking priority and demand for water for nonir- profitable. Another area in which investments rigation purposes projected to increase 62 per- are needed but neglected is drainage, where the cent between 1995 and 2025 (Rosegrant, Cai, multifunctional aspects and multiple impacts and and Cline 2002). Efficiency of agricultural water externalities are not usually taken into account in supply and use remains well below technical project design and socioeconomic justification. potential. Groundwater overdraft and pollution Cost-benefit analysis typically understates bene- are further reducing available resources, espe- fits, and cost recovery is difficult. A final reason cially for poor and small farmers, and climate sometimes adduced for decline in investment is change is also expected to increase farmer vul- that the safeguard policies of the World Bank are nerability and reduce water availability in seen as adding to the transaction cost of prepar- water-scarce regions, especially through ing projects. increased risk of drought. Domestic, industrial, and, increasingly, environmental and resource protection needs will take a growing share of THE CHALLENGE OF TECHNOLOGY ANDWATER the world's water. The share of agriculture, RESOURCESTO SUPPLY GROWING DEMAND which already uses about 70 percent of total The threat of global food shortages that water abstractions worldwide, can only shrink. appeared in the 1960s has diminished through The International Food Policy Research Institute innovations and investments in the Green Revo- (IFPRI) calculates that, on current trends, global lution and water control technologies. Increases annual cereals production will be 300 million in irrigated areas and improved yields have tons1 less in 2025 than would be the case if an helped to increase food production per capita, adequate supply of water were available, a dif- despite significant population increases. For all ference nearly as large as the entire U.S. cereals developing countries, average daily caloric crop in 2000 (Rosegrant, Cai, and Cline 2002). intake per person has risen from 2,360 in the 6 mid-1960s to 2,800 during 1997­9. Output per The water resources challenge thus requires bet- unit of water worldwide rose 100 percent dur- ter resource allocation--systems of integrated ing 1961­2001--for wheat, the increase was 160 management and incentives that allow water to percent. As a result, the water needed to feed a flow to the highest social and economic priori- person for a year has been halved in the last 40 ties. But it also requires a reinforcement of the years, from 6 m3 to 3 m3 a year. In addition, intensification process: most of the extra produc- investments in irrigation, drainage, and general tion needed in the future will have to come from water management have driven the growth of intensification of land and water use and only a rural economies and of lasting employment in minor share from newly harnessed land and many parts of the world. Today, irrigated agri- water resources. Globally, cereals yields will have culture supplies about 40 percent of the world's to increase from the current average of about 3 food, though occupying only 17 percent of the tons per hectare to 4 tons per hectare by 2030. cultivated land. However, for the future, the Agricultural water management will thus have to Food and Agriculture Organization (FAO) esti- provide more efficient and equitable solutions for mates that by 2030, food production needs to intensification at the basin level to increase water grow at 1.4 percent a year, and about half of and land productivity at the field level. Farmers this growth would have to be generated from everywhere will seek to improve their incomes irrigated agriculture. The ability of the world's from an increasingly constrained water resource, A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT and this too will provide a powerful impetus to hectares worldwide, and a further half million increasing water use productivity. hectares go out of production each year--as much farm land as new irrigation creates. Dis- posal of agricultural drainage water and reuse THE POVERTY AND RURAL and recycling of water are causing environmen- INCOMES CHALLENGE tal and health problems. The "multifunctional" Agricultural growth is central to poverty reduc- dimension of much agricultural water use and tion. Seventy percent of the world's poor live in the prevalence of environmental externalities rural areas, and most of them are dependent on create a complex challenge, which integrated agriculture. Typically, the rural poor live on mar- water resources management is only beginning ginal lands or on drylands, with little or no to take up. At the same time, drought and access to controlled water sources. Their techno- floods, exacerbated by climate change, have a logical options for improved water management heavy impact on agriculture, and particularly on are limited, and they face high risks from rainfall the poor. In many countries, watersheds are variations. The poor are also exceptionally vul- degrading under multiple use. nerable to drought, floods, effluent discharge, aquifer depletion, waterlogging, salinization, and Improvements in agricultural water management water quality deterioration. Thus the key agricul- have much to contribute to the goals of improv- tural water challenges for the poor are food ing productivity and sustainability, and thereby security, risk mitigation, and income growth. Mil- to increasing incomes and reducing poverty. lennium Development Goal (MDG) 1--Eradi- However, not all goals can be achieved together cate extreme poverty and hunger--can be in all circumstances; tradeoffs will be needed, for achieved only if agriculture grows and can pro- example, where environmental concerns and vide access to food for the poorest and most vul- poverty reduction goals cannot both be met. nerable. Improved management of available Informed policy decisions have a key role to water thus has a critical role to play in poverty play in selecting alternatives in these circum- reduction and food security. Other MDGs such stances. The Directions in Development Report as gender equality,2 child nutrition, and market Agricultural Water Management: An Agenda for access also depend directly or indirectly on pro- Sustainable Development (World Bank 2005b) poor agricultural growth and related manage- that accompanies this Sourcebook will give guid- ment of scarce water. ance on the management of these tradeoffs. 7 The next section summarizes the cross-cutting ENVIRONMENTAL DIMENSIONS ANDTHE themes that emerge from the Sourcebook. SUSTAINABILITY IMPERATIVE Rural people are the trustees of much of the CROSS-CUTTINGTHEMES OF world's land and water resources, and therefore THE SOURCEBOOK are central to achieving MDG 6--Ensure envi- ronmental sustainability. However, this trustee- Shifts have occurred in the way countries ship is increasingly hard to respect. Many approach development policy for agricultural countries are at the limit of water resources water management in recent years, including development, and pressure on land and water the following: is intense. The tension between production and protection of natural resources has grown. In · A stronger focus on poverty reduction; some basins, water no longer reaches the sea, and environmental flows have virtually ceased. · An awareness of the need to "manage In many basins, where competition is allowed, scarcity"--of water, capital, and institutions; overabstraction of groundwater is leading to irreversible decline in water tables. Salinization · Growing emphasis on sustainability and and waterlogging have affected 30 million environmental externalities; OVERVIEW · More consideration of the value of markets national food requirements, generating income and economic incentives; and and supporting most of the poor. Therefore, pol- icy for agricultural water management is vital: it · Political economy processes of democrati- must deal with managing scarcity, with water zation, decentralization, and participation. allocation, with food security, with poverty reduction, and with environmental risks. These These shifts have brought about significant issues are central to the Bank's mandate and are changes in agricultural water management. at the heart of poverty reduction strategies in Almost every country is moving along the con- most countries. The Bank should invest in agri- tinuum shown schematically in table 1. cultural water policy (chapter 1). These shifts in emphasis are captured in the cross-cutting themes of the Sourcebook, which Reconciling best-practice water management are presented briefly below. The references are principles (integrated approach, basin man- to the relevant chapter of the Sourcebook. agement, participation and decentralization, water as an economic good) with local physi- cal, economic, and sociopolitical realities is FACILITATING POLICY REFORM unlikely to be easy, and the policy reform In most countries, agriculture uses more than 80 agenda for agricultural water management is percent of water resources and produces most a difficult one: setting the legislative and regu- Table 1 Agricultural Water Management: Changing Emphasis From: To: Area expansion System improvement and increased water use efficiency, intensification, and reuse Major physical investments to harness water Targeted investment in irrigation improvement, drainage, resources, large-scale irrigation schemes and agricultural intensification Development of institutions and the incentive structure Resource development Resources management and environmental protection 8 Food self-sufficiency, increasing output Food security, increasing incomes, diversification, intensification, high-value crops, poverty reduction Centralized planning approaches Demand-driven approaches, participatory planning, dialogue, and political economy analysis State focus Focus on the private sector, market, and community ownership Government as service provider Government as catalyst, facilitator, and regulator Subsidies and nonmarket interventions Market-led growth Government-run and -subsidized Participatory irrigation management, cost sharing, and irrigation irrigation schemes management transfer Studies Dialogue, pragmatic political economy analysis Project focus, investment lending Long-term focus, program approaches, lending for selected investments and for policy reform Sectoral approach Integrated resource management approach Source: Author. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT latory framework; establishing an incentive more than 50 countries, this movement has taken regime consistent with poverty reduction, rural the form of participatory irrigation management, development, and agricultural goals and with with user associations emerging as decentralized trade and macroeconomic policies; matching and democratic user groups and taking responsi- investment and incentive policies in agricul- bility for some management tasks. In the long tural water management with broader agricul- run, the transfer of irrigation management, or tural policies on both the input and the output even of full ownership, may be the target. The sides; ensuring that agricultural water fits counterpart is the modernization of formal irri- within an integrated, intersectoral water man- gation institutions, tightening accountability, and agement framework; designing institutional improving performance. These changes, together models to separate bulk water delivery from with the development of an increasingly knowl- distribution and to provide efficient least-cost edge- and skills-based agricultural and irrigation water service; redefining the role of public and economy, create a need for significant invest- private sectors and of markets; and ensuring an ment in institutional development and capacity enabling environment for private investment. building (chapter 2). Although policies cannot be uniform, success- ful reforms generally limit the role of govern- ment, decentralize responsibility to local SETTING AN INCENTIVE FRAMEWORK authorities and agencies, and to water users, Investment and management in agricultural promote market-based solutions and private water are driven by incentives, and distorted investment, and emphasize market-led growth incentive structures have been at the root of policies with domestic and global trade reform. poor water management. Service providers Tradeoffs between food self-sufficiency goals often have little incentive or accountability to and efficiency goals will be increasingly on the deliver good service. Farmers have been faced policy agenda, as water-scarce nations faced with an array of prices and markets distorted with high opportunity costs of domestic food by subsidies and administrative decisions and production turn increasingly to virtual water by trade, energy, and macroeconomic policies. imports, which result in water savings for The results have been risk aversion and importing countries but also real global water reduced private investment, slow adoption of savings because of the differential in water pro- new technology and diversification, low cost ductivity between exporting and importing recovery, and groundwater depletion and countries (chapter 1). other environmental degradation. Good out- 9 comes from investment in agricultural water Many water management reforms have high require an incentive framework that encour- political transaction costs. These can be absorbed ages both service providers and farmers to at least in part by investing in participatory invest and to manage water efficiently and processes of ownership building. Adjustment sustainably (chapter 1). lending may also help. Typically, reform is likely to take a long time, requiring stamina Subsidies have been used to make irrigation and consistency both from the nation and from accessible to farmers, to promote technological external partners such as the Bank. Under- innovation, to compensate for externalities, or standing the political economy of reform is to target the poor through watershed manage- essential (chapter 2). ment, flood-risk management, or drought pre- paredness. In general, the use of subsidies should be limited, as good investment packages BUILDING GOVERNANCE AND CAPACITY have built-in incentives, and cost sharing cre- The character of governance for agricultural ates ownership and improves investment qual- water is changing everywhere. Many countries ity and sustainability. If subsidies are used, they are pursuing decentralization, participation, and need to be carefully designed to achieve their demand management policies in irrigation. In policy objective (chapter 1). OVERVIEW Reticence on subsidies reflects the market- irrigation. As diversification continues, driven by driven approaches to improving agricultural market forces, farmer investment will grow. Thus, water management developed in the Source- the policy and incentive environment for private book. Technological solutions are generally investment is key (chapters 1 and 3). available, and ways to improve water manage- ment and farm management are known and Investment in large-scale irrigation should have can be adapted. Successful investment is ulti- high returns because of economies of scale, mately a matter of incentives--a matter of especially where investment is in improvement addressing the question, "What is the bottom of existing systems. However, despite the avail- line for the farmer?" The answer lies in private ability of cost-effective technology for modern- markets, not public subsidies. New instruments ization, results of improvement projects have being developed can offer a market-based not always been satisfactory. Successful invest- approach to paying upstream farmers for good ment in irrigation modernization requires a sys- natural resource management in the common tematic benchmarking approach to rank interest (chapters 2 and 3). investments according to their contribution to the service delivery goal of cost-effective and Water charges are often contentious, but ade- timely water delivery. In the case of investments quate cost recovery to pay for good service for such as watershed management or dams, bene- farmers is a key element in improving invest- fits are too often understated, and investment ment outcomes. This can be best achieved preparation needs to ensure that all benefits are where the institutional framework makes serv- taken into account (chapter 3). ice providers accountable and efficient and where user associations have a positive effect The quality of Bank lending for agricultural on recovery (chapter 1). water can be improved not only by the applica- tion of good practices, but also by the appropri- Often, lack of clear water rights, particularly for ate choice of lending instrument from the wide groundwater, drives excessive consumption and range available (see the section on Lessons and overirrigation. Definition of water rights is, in prin- Next Steps below). Quality should be ciple, a strong incentive to efficient use. If water improved, too, by the application of Bank safe- rights are tradable, water markets can develop, guard policies, which were designed not as a helping intersectoral transfer and optimizing eco- constraint but as an aid to investment, to inte- nomic incentives by raising the market price to grate environmental and social issues into proj- 10 match opportunity cost. However, there is often ects, and to support participatory approaches disagreement on the subject of water rights, par- and transparency--all requirements for quality ticularly where there is cultural reticence and investment (chapter 9). weak governance. In most countries water rights are a long-term solution (chapter 2). PUTTINGTECHNOLOGYTOWORK With irrigation efficiencies worldwide well Increasing Investment Returns below technical maxima, pressurized systems Many approaches in the Sourcebook promise and protected agriculture still occupying only a more income from better use of water; some small area, low-value staples predominating in promise more income for less water. Some com- cropping patterns, and agricultural yields and plementary investments such as conjunctive use farmer incomes well short of potential, the pay particularly high returns. Increasing net scope for investing in efficiency gains is enor- returns to farmers is the main incentive to invest- mous (chapters 3 and 4).3 ment. Ultimately it is this potential to generate "more income for less water" that justifies invest- There is "more technology available than we ment. Already, many farmers finance all their know what to do with" (box 1). Technology to own on-farm investments in, for example, micro- improve water service on major schemes is well A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT known and available; on-farm technologies such Box 1. SomeTechnologies and Management as piped distribution, drip, and bubbler are Practices Discussed in the Sourcebook widely available and becoming more affordable; many water management and crop husbandry · Large scheme irrigation improvement (chapter 3) improvements are known; drainage, drought · On-farm improvement (chapter 3) management, and flood control technologies are · Conjunctive use (chapter 4) all well developed; and technology exists for · Drainage technology (chapter 5) · Reuse of treated waste and drainage water (chapter 5) watershed management and for even the most · Supplemental irrigation (chapter 6) unpromising of marginal rainfed systems. Much · Groundwater recharge (chapter 8) technology already exists and only needs to be put to work. Adoption of water-saving technolo- gies has been slow and performance below potential. Adoption requires knowledge, reliable ensure intersectoral coordination, allocative effi- water service, and an economic environment ciency, and social and environmental protection that provides undistorted incentives, manageable (chapters 1, 3, and 6). risk, and access to product and credit markets. Ultimately, farmers will adopt new technology MAKING PARTICIPATORY MECHANISMS when it is shown to increase incomes and MORE EFFECTIVE reduce risk, and when there is market access. However, the intensification needed to feed the Farmers in rainfed cropping, traditional irrigation, world and to raise rural incomes in coming or watershed management traditionally worked decades cannot rely only on existing technolo- together, and farmer organization is recognized gies; the size of the increase needed creates a as a powerful force for improving management. future research agenda on water and land pro- The Bank's effectiveness in implementing partici- ductivity, both for irrigated and rainfed produc- patory irrigation management and helping user tion (chapters 1, 3, 6, and 8). associations to develop has been rated highly by its Operations Evaluation Department (OED) (World Bank 2002). Participation is a key element OPERATIONALIZING INTEGRATED APPROACHES in successful investment for poverty reduction TO AGRICULTURALWATER MANAGEMENT through agricultural water management. The Successful investment in agricultural water Sourcebook gives many examples of how farmer requires an integrated approach to the different involvement (including women's involvement) inputs to the production system--soil, water, can also improve investment outcomes in other 11 agronomy. Many examples are discussed in the areas, including policy making, technology Sourcebook--integrated water-saving approaches development, intersectoral transfer through water to on-farm management; supplementary irrigation rights and water markets, community-driven and conjunctive use; combined water and soil fer- development (CDD) approaches to small-scale tility management; and integrated approaches to irrigation and watershed management, private combating drought, salinity, and floods. At policy irrigation (supplementary irrigation, groundwater level, agricultural water management investments management, conjunctive use), and drought and incentives have to be integrated within over- management (chapters 2 and 7). all agricultural policy, both on the input side (with polices for research, extension, fertilizer, investment, and input support) and on the output TARGETING POVERTY REDUCTION IMPACTS side (with policies for transport, market develop- The Bank's OED has found irrigation projects to ment and trade, agricultural prices, and protec- be effective in reaching the poor, provided that tion). Integration is also imperative at the level of macroeconomic policies are conducive (World water resources management, where bulk water, Bank 1994). However, as intensification proceeds, irrigation, drainage, wastewater, and floods all it is the better-off farmers who benefit most, have to be managed within basin plans that because they can finance on-farm investments, OVERVIEW assume risk, and access knowledge and informa- gives guidance on how to put the knowledge to tion services. Care is needed to ensure a pro-poor work in policy analysis, technical assistance, element in investment programs, because a and--above all--lending. purely market-driven approach will favor the bet- ter off. To offset this, irrigation investments can be targeted at the poor. For example, priority can be SOURCEBOOK LESSONS given to small-scale irrigation and water conser- Two principal areas of investigation are vation investments, which are more pro-poor and addressed in the Sourcebook: policy and institu- characterized by high flexibility and rapid imple- tional reforms, and investment, technology, and mentation (chapter 3). management practices. Much of the material is familiar, and the value added lies in bringing it Some investments (for example in supplemen- all together in a systematic way within a single tary irrigation, infrastructure, and market publication. Among the well-known elements development) described in the Sourcebook on the policy and institutional reforms front also help reduce risk for rainfed farmers. treated in the Sourcebook are solutions to prob- Other investments to help the poor include lems of sector governance: decentralization, improving market access and better manage- participation, and the emphasis on private sec- ment of environmental risk, including water- tor involvement and the role of markets. The shed management approaches and drought need for an integrated approach in agricultural and flood management (chapter 6). water investment is another familiar element, and the Sourcebook emphasizes integration not only within the context of the whole rural mar- MANAGINGWATER FOR SUSTAINABILITY ket economy, but also as part of the hydrologi- The Sourcebook covers a range of environmen- cal and overall ecosystem, and as a component tal investments in agricultural water manage- of the macroeconomy. One aspect of this need ment. Recovering control over groundwater for an integrated approach is the insistence requires user and government commitment, an throughout the Sourcebook on the enabling incentive structure that favors conservation and environment, particularly input and output mar- efficiency, and a governance system that allo- kets and prices, financial markets, and risk cates and regulates rights. There are few success- reduction for the poor: participation, land ful examples of groundwater overdraft being tenure, water control, disaster management. brought under control, but as resource-mining 12 problems grow worse, this could be a significant Regarding investment, technology, and manage- investment area. In drainage, the economic logic ment practices, the Sourcebook confirms that is clear--the cost of "saving" an irrigated hectare there is a broad array of technology available. through drainage is less than $1,000, compared For large-scale irrigation, combinations of man- with more than $6,000 to create a new irrigated agement and investment can greatly improve hectare. Few countries are yet awake to this the cost-effectiveness of water service. For small compelling case for investment in drainage, but farmers, low-cost technology is widely available, those that are--the Arab Republic of Egypt and and there are technical solutions for even the its participatory drainage program, for exam- most marginal land and water situations. ple--are benefiting. In watershed management investments, integrated and participatory Some of the main lessons for investment emerg- approaches with a focus on poverty reduction ing from the Sourcebook are briefly summarized are working (chapters 4 and 5). in the following paragraphs. TRADE AND MARKETS PLAY A KEY ROLE IN IMPROVING LESSONS AND NEXT STEPS AGRICULTURAL WATER INVESTMENT. The Sourcebook underlines the role of trade and markets in driv- This section of the overview summarizes some ing technology adoption, investment, and of the lessons learned from the Sourcebook and growth, even for smallholders. The lesson is that A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT policy for agricultural water has to be analyzed diversification has to look not only at technical within an integrated framework that includes solutions, but also at the incentive structure and trade and market development policy, and that market environment. investments may be needed to promote market development. INTEGRATION IS A KEY THEME ACROSS THE WHOLE RANGE OF WATER INVESTMENTS. The role of water ADEQUATE COST RECOVERY AND GOVERNANCE as just one input in complex production IMPROVEMENTS ARE CRITICAL FOR SUSTAINABLE IRRI- processes is reflected in the Sourcebook's insis- GATION MODERNIZATION. The Sourcebook shows tence on integration of irrigation system mod- how adequate cost recovery is key to ensuring ernization and farming intensification, on the efficient water service, and how this has to be need to integrate technical packages (soil, matched with accountability and cost-effective water, crop management), and on integration of water supply on the part of the service provider. technical and market aspects. The Sourcebook's The lesson is that investments in irrigation mod- underlining of the need for integration in multi- ernization need to be accompanied by both a purpose investments such as dams and credible cost-recovery strategy and by gover- drainage reflects a more complex aspect of nance improvements that ensure accountability, water: its multisectoral and multi-institutional and by least-cost and efficient service delivery by character and the widespread externalities asso- the service provider. ciated with its use. The lesson is that all agricul- tural water management investments have to THERE ARE NEW TOOLS TO HELP IMPROVE INVEST- consider integration aspects within the produc- MENT QUALITY. Investment quality is a wide- tion system and within the agricultural sector, spread concern, and the Sourcebook provides but also integration of agricultural water use some tools and orientations to help improve with other uses and users and their representa- outcomes and impacts. These include a rapid tive stakeholders and institutions, together with appraisal benchmarking tool to help focus irri- environmental and social externalities. gation modernization investment on cost-effec- tive service delivery and a tool to plan for PARTICIPATION IMPROVES THE QUALITY OF INVEST- drainage investments integrated within a basin MENTS. Many contributions to the Sourcebook approach. The lesson is that tools are avail- underline the value of participation in improving able--or can be developed--for an output- investment quality, developing technology, influ- based approach to investment design. encing policy, and improving ownership across 13 the board. One insight is that the social and envi- INVESTMENT IN TECHNOLOGY NEEDS TO BE BACKED ronmental safeguards, with their transparency BY A CONDUCIVE INCENTIVE FRAMEWORK. There is requirement, can be a mechanism to improve disappointment with modernization programs participation and ownership of investments. The in large-scale irrigation, and more generally a lesson is that participation, properly adapted and vast gap between potential and actual perform- managed, improves quality and ownership across ance in irrigated agriculture. The finding is that the whole range of investments, innovations, and there is a great deal of technology that can be institutional development. applied but is underused at present, both on large schemes and on-farm, where supplemen- AGRICULTURAL WATER MANAGEMENT IS A VITAL tary use, conjunctive use, protected agriculture, COMPONENT OF POVERTY REDUCTION STRATEGIES. agronomic improvements, and drainage have The Sourcebook documents the wide availabil- great potential for improving water use effi- ity of technologies that can help poverty ciency and farmer incomes. The Sourcebook reduction in both irrigated and rainfed situa- finds the causes less in knowledge and technol- tions and the scope for making this technology ogy transfer capability than in distorted incen- available and affordable for the poor. The tive frameworks and markets, which reduce Sourcebook also highlights the vulnerability of farmer motivation and increase risk. The lesson the poor to negative environmental and water- is that investment in crop intensification and related impacts (drought, flood, watershed OVERVIEW degradation, groundwater depletion, surface Country Assistance Strategy (CAS) investment water contamination) and the consequent high and sector work program. The agreed CWRAS poverty reduction impact of investing in control becomes an agenda for a Bank-government and mitigation. The Sourcebook also underlines partnership in the water sector. the potential of market liberalization to drive pro- poor growth and the parallel need to target inter- USING WORLD BANK INSTRUMENTS SELECTIVELY. ventions, because the better-off typically gain For sector work, the range of Bank products more from free market approaches. One lesson is has widened. A CWRAS would normally pro- that all agricultural water investments can be pose a balance among policy dialogue, capacity designed with a pro-poor approach but that tar- building, technical assistance, and investment geted interventions may be needed. A second les- lending. Of particular value for long-term devel- son is that certain types of agricultural water opment processes such as water sector reform investment such as watershed management will is "programmatic economic and sector work" have particularly high poverty reduction impacts. (PESW), which allows the Bank and the mem- ber government to agree on a multiannual NONCONVENTIONAL WATER IS AN AREA FOR FUTURE structured program of study and technical assis- INVESTMENT. The Sourcebook reviews the possi- tance, supporting reform but not necessarily bilities of harnessing nonconventional water tied to subsequent lending. sources such as drainage water, wastewater, and flood water. The lesson is that "unwanted water" For lending, a broad range of instruments is is not necessarily a problem; it can be turned to available (table 2). As the table shows, a Devel- good account as a resource, and investment is opment Policy Lending instrument may be likely to increase. appropriate for supporting policy reform. When a reform can be better implemented gradually Following this summary of some of the key les- through stepwise revised regulations, a Pro- sons for investment emerging from the Source- grammatic Development Policy Lending instru- book, the next section examines ways in which ment could be appropriate. For long-term the World Bank could put the Sourcebook investment programs, the Adaptable Program knowledge to work. Loan is indicated, or a Specific Investment Loan for a free-standing investment project. If policy and investment components interact strongly, a PUTTINGTHE SOURCEBOOK INTO PRACTICE Hybrid Policy and Investment Loan, or two 14 GETTING THE POLICY, STRATEGIES, AND PROGRAMS independent but highly correlated loans (such RIGHT. The Sourcebook describes the vital role of as a Development Policy Loan and a Specific policy and strategy processes and of governance Investment Loan) can be used. A Learning and and incentives. It also describes how reforms Innovation Loan may support pilot projects, take place, including the reforms' political econ- and an Emergency Recovery Loan can be used omy aspects. Clearly, it is important for the Bank in the wake of disaster. to accompany its partner countries along the sequence from policy determination to choice of governance and incentive structures to sector TARGETING SECTORWORK,TECHNICAL strategy, and thus to choice of investments. One ASSISTANCE, AND STUDIESTO STRATEGIC key instrument for following this sequence and PRIORITIES for adding value through policy dialogue is the The program of sector work, technical assis- new Country Water Resources Assistance Strat- tance, and studies agreed by the Bank and egy (CWRAS) introduced by the WRSS (see government as part of a partnership approach chapter 1). CWRAS links the Bank's program to will be determined by the country situation. national strategies, helps mobilize the linkages Best-practice approaches will likely be char- between sectors, and ensures that an integrated acterized by a longer-term commitment on approach to water is incorporated into the both sides and by a structured approach to A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Table 2 World Bank Lending Instruments for theWater Sector Nature of investment Instrument What does it do? Major multi-institutional policy and Development Policy Lending It supports institutionally difficult institutional reforms (such as changes in (DPL) "quick-disbursing" policy reforms, agreed with the governance or incentive structures for tranched balance of payments government in a Letter of agricultural water) that can be done in a support Development Policy. short time frame of one to two years. Longer-term water sector reform that can Programmatic Development As for DPL but supports a be divided into phases with benchmarking. Policy Lending (PDPL) long-term reform program May be used where issues are sensitive or through a series of DPLs over political support for reform may shift. three to five years. Investment program accompanied by Hybrid Policy and Investment Supports sector investments and reforms needed to ensure outcomes but Loan (HPIL) institutional development linked to which are not major and can be implemented relevant policy reforms. during the investment period (for example, restructuring an irrigation agency). Restoration of assets and production levels Emergency Recovery Loan (ERL) Rapid appraisal and fast disbursing in the wake of disaster. Could also be used investment loan. to establish a more provident disaster management capability. Long-term, phased water investment Adaptable Program Loan (APL) Supports investment program in programs. Performance criteria can be set two to three projects over 10 to 15 to allow break points and correction. years, subject to performance criteria at completion of each project. Investment program in agricultural water Specific Investment Loan (SIL) Finances specific investments. Can with monitorable outputs and outcomes. set reform conditions to Reforms may be promoted but are not accompany the program. critical to outcomes. Testing high-potential innovations for Learning and Innovation Loan (LIL) Short-term pilot projects to test 15 subsequent scaling up. ideas for subsequent large-scale investment.Typically rapid preparation, lighter procedures, two-year implementation period. Source: Author. issues, by a focus on governance and institu- The Bank and its government partners would tions, and by integration of water sector also seek and sustain partnerships with other issues with other sectors (rural development, international institutions in the field of agricul- agriculture, social, and environment). These tural water management, including FAO, IFPRI, characteristics of a Bank-government relation- IWMI, ICID, and the International Fund for ship would be mirrored within the Bank by a Agricultural Development (IFAD). Also impor- similar long-term commitment to a reform tant will be financing from the Global Environ- program and by internal integration of the ment Facility (GEF) and partnerships with Bank's work on water. international institutions in the environmental OVERVIEW field, including World Conservation Union countries through a Poverty Reduction Strategy (IUCN) and World Wildlife Fund (WWF). Paper [PRSP], and in all countries through its operations in most sectors of the economy). Examples of poverty-reducing investments REVIVING AND REORIENTING include flood and drought preparedness pro- THE LENDING PROGRAM grams, integrated programs that include supple- The range of possible investments discussed in mentary irrigation, conjunctive-use or low-cost the Sourcebook is vast (table 3). Each country pressurized systems, programs that integrate situation will be different, but several common smallholders into the supply chain, and water- approaches can be proposed. A first investment shed management programs. approach is piloting for innovative solutions or for adapting practice from elsewhere. For this A final area where the Bank can have a com- type of operation, the Bank has the advantage parative advantage is investment in technical of international expertise and cross-country assistance at the cutting edge, for example pro- experience and a facility for learning and dis- grams to evaluate water resources, groundwater seminating lessons. The Bank is also a develop- management programs, studies on multifunc- ment risk taker, with an appropriate lending tional approaches to drainage, and benchmark- vehicle (the LIL). Areas suitable for piloting ing to improve irrigation service delivery. include institutional innovations such as water user associations or basin committees, water rights, and water markets. Piloting may also be MOTIVATING AND ENABLING BANK STAFFTO appropriate for technically innovative solutions PROMOTE GOOD AGRICULTURALWATER such as pressurized systems, integrated soil and MANAGEMENT ANDTO INVEST IN IT water management for smallholders, water Bank staff from all disciplines working on agri- management by evapotranspiration quotas, and cultural water management would benefit from risk management instruments such as crop focused training based on this Sourcebook. insurance or commodity risk management. Training--and staffing--needs to be balanced between engineering and nonengineering con- A second investment area that follows logically siderations. Engineers are essential to trace out from a piloting approach is scaling up good the critical path to efficient irrigation service practices and successful experiences. Here the delivery, to manage the benchmarking process, Bank's comparative advantage is in its financing to bring in technical innovations, to factor in 16 strength and its ability to commit to longer-term environmental risks and management require- programs. Examples include work on institu- ments, and to set agricultural water manage- tional change, watershed restoration, integrated ment in its integrated context. Nonengineering water management, and new hardware and profiles and skills requisites include gover- software mixes. nance, institutional development, economics, environment, political economy, and social and A third area of business is in multifunctional community-driven development expertise. Most operations such as drainage and wastewater important, all staff should have the ability and treatment and reuse, where the Bank has not motivation to see agricultural water manage- only the financial resources needed but a com- ment in its bigger context of poverty reduction, parative advantage in technical know-how and growth of livelihoods, and wealth creation. in integrating and convening power for the multiple institutions involved. ADAPTINGTHE MESSAGESTOTHE SPECIFIC A fourth priority area for the Bank would be NEEDS OF EACH REGION operations that directly reduce poverty. The Analysis of the main issues in the six regions of Bank has the advantage of an integrated the World Bank reveals that each may have a poverty reduction approach (in the poorer unique situation requiring a different focus and A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Table 3. Some Investment Opportunities Described in the Investment Notes and Innovation Profiles Some typical operations mentioned in the Sourcebook Notes Investment type Integration of smallholders into supply chains Pilots Controlled drainage Institutional innovations such as water user associations or basin committees, water rights, and water markets Technically innovative solutions such as pressurized systems or integrated soil and water management Development of financing and risk management instruments such as crop insurance or commodity risk management Weather-based insurance Modernization of irrigation schemes Specific investment projects Water resources development for supplementary irrigation Water retention, flood mitigation, and flood protection Drought and salinity investments Watershed management Integrated water management Multifunctional operations such as drainage, wastewater treatment, storage, and reuse Water trade facilitation Supplementary irrigation Alternative technologies within Pressurized irrigation with protected agriculture` integrated programs Smallholder irrigation under social fund and community-driven development approaches Integrated land and water management Policy analysis and related capacity building Technical assistance Water resources assessment 17 Benchmarking to improve irrigation service delivery Capacity building of farmer and extension Drainage Integrated Analytical Framework (DRAINFRAME) multifunctional approach to drainage Participatory irrigation management, water user associations, and irrigation management transfer Water markets development Groundwater management programs Water rights governance systems Drought and flood preparedness programs Irrigation and drainage research Rapid appraisals for irrigation modernization Water swap programs Monitoring and evaluation systems Impact evaluation Source: Author. OVERVIEW perhaps a different set of approaches. Table 4, ------. 2003. Reaching the Rural Poor: A based on consultations with the regions, gives Renewed Strategy for Rural Development. an indicative picture of the messages that are Washington, DC: World Bank. priorities in each region. The issues mentioned have been raised by staff in the regions. They ------. 2004a. Agriculture Investment Source- are, of course, not mutually exclusive, and will book. Washington, DC: World Bank, Agricul- evolve over time and be adapted to specific ture and Rural Development Department. country situations. ------. 2004b. Water Resources Sector Strategy. Strategic Directions for World Bank Engage- REFERENCES CITED ment. Washington, DC: World Bank. Burt, C. M., A. J. Clemmens, T. S. Strelkoff, K. H. Solomon, R. D. Bliesner, L. A. Hardy, T. A. ------. 2005a. "Agricultural Growth and the Howell, and D. E. Eisenhouer. 1997. "Irriga- Poor: An Agenda for Development." Direc- tion Performance Measures: Efficiency and tions in Development Report. World Bank, Uniformity." Journal of Irrigation and Washington, DC. Draft, January. Drainage Engineering 123(6): 423­42. ------. 2005b. "Agricultural Water Manage- Jensen, M. E., ed. 1973. Consumptive Use of Water ment: An Agenda for Sustainable Develop- and Irrigation Water Requirements. New ment." Directions in Development Report. York: American Society of Civil Engineers. World Bank, Washington, DC. In prepara- tion, January. Rosegrant, M. W., X. Cai, and S. A. Cline. 2002. Water and Food to 2025: Policy Response to the Threat of Scarcity. Washington, DC: IFPRI. ENDNOTES 1. All references to "ton" in this Sourcebook WHO (World Health Organization). 2000. "Gen- denote a metric ton. der, Health and Poverty." Fact Sheet No. 25, June. Available on the Internet at http://www. 2. Women form 70 percent of the rural poor who.int/mediacentre/factsheets/fs251/en/. and produce between 60 and 80 percent of the food in most developing countries World Bank. 1994. Review of World Bank Expe- (WHO 2000). 18 rience in Irrigation. Washington, DC: World Bank, Operations Evaluation Department. 3. There are a number of water use efficiency definitions and measures. These are best ------. 2001. Making Sustainable Commit- discussed and summarized in Jensen (1973) ments: An Environment Strategy for the and Burt et al. (1997). World Bank. Washington, DC: World Bank. ------. 2002. Bridging Troubled Waters: Assess- ing the World Bank Water Resources Strategy. Washington, DC: World Bank, Operations Evaluation Department. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Table 4. Some Indicative AgriculturalWater Management Issues in Each Region Middle Latin Europe Sub- East and America East Asia and Saharan North and the South and Central Type of issue Africa Africa Caribbean Asia Pacific Asia Policy, institutions, and governance Policy and strategy issues * * * * * * Demand management * * * Public-private role * * * Participatory irrigation management/ water user associations/irrigation management transfer * * * * * Cost recovery * * * * * * Water resources management Integration, IWRM issues * * * * * Managing scarcity * * * Watershed management * * * * Surface water management * * * * Groundwater management * * * * Environmental issues, water quality * * * * Technology * Focus on productivity rather than area expansion * * * * Enabling environment Land tenure * * * Input markets and credit * * Output markets and prices * * 19 Large-scale irrigation development New schemes * Rehabilitation * * * * * Management * * * * * * Smallholder programs, poverty focus Poverty focus * * * Rainfed issues (drought, floods) * * * Nonconventional water Drainage, waterlogging, salinity, soil depletion * * * * * Source: Author. IWRM: Integrated Water Resources Management. OVERVIEW 1 BUILDING POLICIES AND INCENTIVES · Investment Note 1.1 Preparing a National Agricultural Water Strategy · Investment Note 1.2 Development Policy Lending to Support Irrigation and Drainage Sector Reforms · Investment Note 1.3 Agricultural Trade,Water, and Food Security · Investment Note 1.4 Pricing, Charging, and Recovering for Irrigation Services · Investment Note 1.5 Economic Incentives in Agricultural Water Use · Innovation Profile 1.1 Agricultural Water in the New Country Water Resources Assistance Strategies · Innovation Profile 1.2 Enabling Smallholder Prosperity: Irrigation Investments for Ready Markets 21 OVERVIEW This chapter presents a snapshot of different approaches to the many reform challenges in agricultural water management.There are key themes on process, particularly the need to be clear about goals and to orient policies, strategies, and investments toward those goals; on the importance of political economy, identifying champions and winners and losers; on the central value of participation and inclusion in all processes; and on the need to pilot in areas where solutions are not yet proven. The chapter also shows how reforms are driven and facilitated, and how they can be supported by dia- logue, analysis, and lending.The role of incentives in change is examined at two levels. In reform, the incen- tives have to be sufficiently attractive to persuade all parties to make policy adjustments that are sometimes difficult. In agricultural water management, incentives are the key to the adoption of new prac- tices and open the door to higher productivity and incomes. GETTINGTHE POLICY gains, increasing and diversifying incomes, and FRAMEWORK RIGHT IS ESSENTIAL providing employment. A case study from Zam- Governments are inevitably major players in the bia illustrates these effects. (See IN 1.1 on over- water sector because water resources are in part all growth policy, IN 1.3 on agricultural trade, a public good, because water is closely linked and IP 1.2 on growth from smallholder irrigation to major public policy goals such as poverty in Zambia. See also "Reform of Agriculture Sub- reduction, and because water use creates wide- sidy and Protection Policy," and "Facilitating spread "externalities" (what one person does Efficient Adjustment to Liberalized Trade" in AIS, with water affects other people and the envi- Module 1.) ronment). Because agriculture is the major water user (80 percent worldwide and more than 90 percent in developing countries), gov- . . .ANDTHE INCENTIVE FRAMEWORK ernment policy is critical to successful invest- HASTO MOTIVATE FARMERS ment in agricultural water management. (See IN Incentives for agricultural water use are often 1.1 on formulating policy and strategy, and IN identified with water charges. But economic 1.2 on facilitating reforms with lending. See also incentives understood, in a broader sense, as "Preparing a National Agricultural Development "all signals that affect farmer decisions" provide Strategy," Module 1 in the Agriculture Invest- the essential framework for quality investment ment Sourcebook (AIS).) in agricultural water. The incentive framework can encourage water use efficiency, promote environmentally friendly practices, reduce costs POLICIES ONTRADE AND to government, and increase farmer income. MARKETS DRIVE GROWTH . . . The incentive framework should encourage Open trade in agricultural products can con- farmers to invest and manage their farms and tribute to growth in agricultural investment and water resources efficiently and profitably. "Neg- incomes and promote more efficient and less ative" incentives, which increase the costs of water-intensive crop management practices and current behavior and provide a push for cropping patterns--fruit, vegetables, flowers. change, need to be matched with "positive" There are well-known constraints to freeing incentives, which facilitate change toward a trade internationally, particularly with the most more efficient, sustainable use of water. (See IN lucrative markets. Often, governments will cre- 1.5 on economic incentives in agricultural water use. See also IN 3.1 on incentives for on-farm 22 ate internal restraints to market development, too. Trade-driven growth needs to be accompa- water saving.) nied by knowledge-intensive agriculture. Care is needed on the environment--market prices do not reflect the social cost of soil and water COST RECOVERY CONTRIBUTES depletion or pollution, so some regulatory TO GOOD INVESTMENT measures may be needed. Properly managed, irrigation service charges are a key element in ensuring good investment out- Overall, evidence shows that properly managed comes. Full recovery of operation and mainte- liberalization drives growth and can benefit the nance (O&M) costs ensures good water service poor. Trade reform enhances both domestic and scheme sustainability and reduces reliance food security and national growth, and poorer on government for subsidies or rehabilitation. countries benefit the most. Overall, investment However, the service provider must be held outcomes are likely to improve where trade and accountable within a well-designed governance markets are liberalized. At the household level, framework. Irrigation service charges have trade-driven modernization can be the engine of proven less effective for encouraging water use growth and poverty reduction by reducing food efficiency. Volumetric pricing can affect use pat- costs and supply uncertainties, generating terns, but it is hard to administer. (See IN 1.4 on growth through diversification and productivity cost recovery for irrigation.) A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT STRATEGY IS KEYTO A country departments, and the anchor depart- GOOD INVESTMENT PROGRAM ments of the Environmentally and Socially Sus- Agricultural water strategy translates pro-poor tainable Development Network requires economic growth policies and improved effi- constant attention. The new CWRAS is proving ciency and governance into action. Best practice useful in this kind of coordination. (See IN 1.1. on strategy will bring all partners into a coherent For CWRAS, see IP 1.1.) framework for action. Strategy should show how macro and sector policies are aligned; inte- grate land, water, and environmental strategies; SOMETYPICAL INVESTMENTS and define institutional relations and develop- Investments in technical assistance could ment paths. It should set the legal agenda and include the following: make the case for changes in the incentive framework. Strategy should be linked to an · Policy analysis investment program, which can be a means of attracting donor and private investment. The · Water resources assessment World Bank frequently takes part in participa- · Capacity building tory water strategy processes and has devised a new instrument--the Country Water Resources · Strategy formulation (including CWRAS) Assistance Strategy (CWRAS)--to link national strategies and Bank programs. The CWRAS Pilots may include the following: should set an agreed long-term strategic context, identify quality investments, and set out a policy · Weather-based insurance contracts and institutional agenda that will ensure sound investment outcomes. (See IN 1.1 on strategy · Integration of smallholders into commercial and IP 1.1 on the CWRAS.) supply chains · Development of financing and risk manage- ment instruments INTEGRATION AND COORDINATION AREVITAL Water is a multisectoral and multi-institutional These pilots could be undertaken in collabora- business, and integration of resource manage- tion with the International Finance Corporation ment and interinstitutional coordination are (IFC). vital. For example, in China 12 separate depart- 23 ments are responsible for some aspects of water Project investments may include trade facilita- management at different levels. Coordination is tion, and research and development (R&D). vital within the Bank also, where interaction And finally, policy-based investments may among the various sector departments, the include major policy reform. BUILDING POLICIES AND INCENTIVES INVESTMENT NOTE 1.1 contribution, income and employment genera- tion, water use efficiency, and so on; define the role of the private sector (in investment and PREPARING A NATIONAL market development); define the public sector's AGRICULTURALWATER role (in planning, investment, management, and research); set incentive frameworks, including STRATEGY cost-recovery practices; show how water use efficiency will improve,1 and guide investment, An agricultural water strategy (AWS) is a set of pro- including the public investment program. grams that brings all partners into a coherent frame- work for action. It defines institutional relations and An AWS usually covers the following elements: development paths, sets the legal agenda, mobilizes support for changes in the incentive framework,sets · National objectives and policies for the investment program, attracts investment, and agricultural water creates a public-private dynamic.Participation brings ownership and strengthens prospects for implemen- · Resource assessment--agricultural water use tation. The strategy is a process, a product, and an in the national water resources strategy, links action plan. Lessons learned point to a need to bal- to basin management, watershed manage- ance management improvements with investment in ment, rural-urban competition, groundwater infrastructure,to work across sectors,and to sustain overdraft, water quality dialogue over the long term. · Information systems--data quality and avail- ability, monitoring and evaluation systems As a multisector input with pervasive externali- ties, water requires rules and organization-- · Technical aspects--improving water use effi- legal framework, planning and allocation ciency and, where relevant, increasing supply systems, and economic instruments. The Dublin Principles treat water as a social, environmen- · Economic aspects--returns on capital, scope tal, and economic resource within an integrated for efficiency gains and efficiency incentives, strategic approach built through participatory supply- and demand-management instru- means. Water overall is thus an area for public ments (such as water permits, volumetric policy and strategy. water charges, and water markets) 24 · Human aspects, including incomes and Agriculture is the major water user and therefore poverty aspects a major component of water strategies at national and basin levels. An AWS is a set of medium- to · Institutional and governance issues--rela- long-term action programs to support the tion to governance systems for water achievement of development goals of equitable resources management, mechanisms for and sustainable wealth creation and poverty conflict resolution and intersectoral alloca- reduction (see box 1.1 for an example of poverty tion, water rights, public-private areas of reduction as a key determinant of irrigation strat- responsibility, water user associations egy in Tanzania). AWS also serves as a roadmap (WUAs), irrigation management transfer, to assist government, civil society, and donors in local informal management groups and translating agricultural water policies into action. rules, and participation issues · Financial aspects--investment framework, INVESTMENT AREA investment needs and financing, public and Agricultural water policies normally set sec- private investment, and subsidy and cost toral objectives in terms of macroeconomic recovery A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT · Investment and implementation issues and Box 1.1 Tanzania's NationalWater Policy key constraints to future sector development and Irrigation Strategy · Public health considerations, including In Tanzania, water is vital to poverty reduction, food security, water-related diseases and growth. In the early 1990s, the country was approaching crisis in agricultural water use.The World Bank and the gov- · Environmental aspects--covering surface ernment agreed on the "TZ-River Basin Management and water (stream flow variability, environmen- Small Holder Irrigation Improvements Project," which linked tal flow requirements, upstream and down- investment in irrigation and basin management with participa- stream issues, sedimentation, groundwater tory work on national water policy. recharge, runoff, and water quality issues With project support,Tanzania developed a policy that treats such as drainage discharge and irrigation- water as a social resource (participatory basin management), an related salinity); groundwater (including environmental resource (environmental flow requirements), and depletion, land subsidence, saltwater intru- an economic resource (water permits,volumetric water charges, sion, waterlogging, and groundwater qual- water markets). It separated development from regulatory functions. Project investments in irrigation increased water ity); and watershed management and availability, mobilizing support for water resources manage- rainfed farming issues ment, and improving farmer incomes and cost recovery. Imple- mentation and participatory development of an irrigation · Riparian and international issues strategy are next. A successful AWS process starts with an assess- Lessons from the project are summarized below: ment phase, which reviews policy goals, prepares · Linking irrigation investment to strategy development an inventory of information and experience on creates synergies. the elements discussed above, and then selects, · Project support to strategy development provides neces- analyzes, and ranks issues (box 1.2). It is typically sary time and resources but requires follow-up after the followed by a review phase, in which stakeholder project. reaction and expert advice is brought to bear on · A sequence starting with water policy and followed by irrigation strategy is workable. the assessment results. The strategy phase devel- · An irrigation strategy can be prepared after an invest- ops and evaluates options and proposes a strat- ment period provides lessons. egy, action plan, and investment program. Each Source: De Jong 2003. phase could take six months, and getting all part- ners to adopt a strategy may take a year. An AWS should have a long-term vision (up to 25 years), a 25 medium-term strategic framework (3 to 10 years), and a short-term action plan (2 to 5 years). Box 1.2 The Strategic Planning Cycle Good water strategy focuses on institutional The strategic planning cycle can be seen as the answer to a issues (including the legal framework), agricul- series of questions: tural and irrigation sector organization, and pric- · Where do we want to be? Setting development objec- ing and markets but does not neglect the need tives and key water policies for infrastructural investment, particularly where · Where are we now? Assessment and analysis of issues · How can we get where we want to be? Options and water resources are undeveloped. A good AWS choices balances supply and demand issues, is founded · Which way is best? Strategy on sound economics, and incorporates social and · How will resources be allocated? Investment plan environmental aspects. It explicitly reconciles the · How do we ensure arrival at goals? Implementation and country situation with the Dublin Principles in a control "principled-but-pragmatic approach," and adopts · How did we do? Monitoring and evaluation participatory approaches for both preparation Source: Adapted from LeMoigne et al. 1994. and action, thus strengthening ownership. BUILDING POLICIES AND INCENTIVES Country situations indicate different paths to private dynamic. Participation brings ownership the best strategy and strongest ownership. In and support for implementation. the Republic of Yemen, where there is a low level of governance, full participation was Bank involvement brings cross-country experi- essential. In Brazil's stronger institutional envi- ence and networks, capacity building (includ- ronment, the Bank opted for sector work in ing the World Bank Institute [WBI]), additional partnership with government (box 1.3). In Tan- finance (including the Global Environment zania, with uncertain prospects for dialogue, Facility [GEF] and IFC), partnerships, and strategy work was anchored within an invest- macro- and microeconomic links. The focus of ment project. All three approaches produced AWSs on the Bank's main missions--poverty viable, well-owned strategies. alleviation, food security, governance, and pub- lic finance--leads directly into Country Assis- tance Strategies (CASs), Country Water BENEFITS Resource Assistance Strategies (CWRASs), and An AWS brings all partners--national and exter- Poverty Reduction Strategy Papers (PRSPs). nal--into a framework for action. It defines insti- tutional relations and development paths, sets the legal agenda, mobilizes support for changes in POLICY AND IMPLEMENTATION the incentive framework, sets the investment pro- ADAPTING THE SCOPE TO THE KEY CHALLENGES. gram, attracts investment, and creates a public- Scope has to be decided in the country context. In Brazil and Tanzania, the focus was on irriga- tion. In the Republic of Yemen (box 1.4), the Box 1.3 Brazil's Regional Agricultural strategy covered groundwater management, Water Strategy rural-urban transfer, and water resources man- agement and sector governance. To prepare the next phase of irrigation investments in Brazil's semi-arid region, government, the private sector, and the METHODS OF STAKEHOLDER INVOLVEMENT. Partici- World Bank revisited the agricultural water strategy in the patory approaches cannot be uniform. Strategy light of empirical observation and economic analysis.The Bank contributed a study measuring returns from irrigation in terms work starts by analyzing stakeholders and ways of poverty, equity, growth, and employment.The study showed to involve them. There are risks: when political the following: or populist voices or weak national institutions are given a forum, quality may be sacrificed to 26 · Irrigation took 10­15 years to reach full development. · The secondary employment and wealth impacts were ownership. Table 1.1 shows a framework for considerable. stakeholder participation. · Success depended on private management and innova- tion. INTELLIGENT TIMING. Timing is also crucial. In the · Irrigation-related jobs demanded less investment than did Republic of Yemen (box 1.4), the key step of manufacturing jobs. raising diesel prices was made in a ratchet fash- · Irrigation investment reduced poverty and migration. ion when the economy was prospering. In Jor- · Land markets and administrative rules hindered private dan, irrigation sector adjustment was helped by development. · Research and technology transfers were inadequate to improvements in the regional political situation. support new crops. MULTIPLE MINISTRIES AND "SECTORS." The Dublin From this analysis, an irrigation strategy was developed aimed at poverty, efficiency, and growth.The process set priorities to Principle--that the basin must be the unit of optimize existing infrastructure, improve the institutional analysis and that land and water must be man- framework, and promote private irrigation. It also helped aged together--proves hard to put into prac- develop sequencing--intensification before expansion--and tice. Interests stemming from separate action plans. institutions and strategies for water resources Source: Simas 2003. management, watershed protection, rangeland and forest management, and irrigation and A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Table 1.1 Managing Participation Level of participation Role Stakeholder profile Typical forum HIGH Forming/agreeing to decisions Decision makers/originators Formal negotiations, mediation to Having an influence on decisions Advisers Workshops LOW Being heard before decision Reviewers Task forces Knowledge about decisions Observers, listeners Public hearing, seminars Source: Adapted from LeMoigne et al. 1994. agriculture may thwart application of the prin- (box 1.3). Managing the risk requires astute ciple. Analysis of what is feasible for agricul- identification of issues and good dialogue tural water must match broad water resources throughout the strategy process. management imperatives. In Tanzania, work- ing down from global and basin plans has IMPLEMENTATION. Implementation has worked succeeded (box 1.1). In Brazil, working up well where government is committed, an over- from regional irrigation strategies has worked sight body coordinates and ultimately validates, a Box 1.4 The Republic of Yemen: Strategy forWater and Agriculture In 1996, the Republic ofYemen requested World Bank help in developing a water strategy. Given limited national capacity and the crisis in the sector, it was agreed to focus on just three problems: groundwater mining by irrigators, lack of water for cities, and low potable supply coverage. Because agriculture uses 90 percent of the available water, irrigation was the central element of the strategy. The intervention was timely. Government was creating a water resources authority. Economic conditions were right--diesel prices, the main motor of groundwater overdraft, were rising, and a fiscal crisis was forcing a rethinking of public assistance to irrigation. Donors were promoting the Dublin Principles. A participatory sequence began with working groups, dialogue, and analysis.Then a Bank paper was debated with support from WBI. Preparation of a national strategy and an irrigation strategy culminated in a water law. Dialogue continued for five 27 years. Projects supporting the strategy were implemented in groundwater and spate irrigation, urban and rural water supply and sanitation, and basin management. The design of the participatory approach included officials,"wise men and women" from civil society and the religious estab- lishment, technical working groups, and a multidonor group for the Republic of Yemen's water. Gender issues were carefully examined: women were consulted through the field review of rural water supply and sanitation that was carried out within one of the supporting projects.Women's representatives and women's nongovernmental organizations also attended the main workshop at which strategy recommendations were discussed.The role of women features prominently in the strategy that emerged from the process. Opposition to change moderated as open debate made the risks and costs clear and allowed a say in solutions.Weak gover- nance and implementation capacity restricted options.The long-term commitments required stretched government and Bank stamina. The lessons · Strengths. Increased awareness through national debate, grounding in sociopolitical realities, dialogue supported by WBI, links to the CAS, prompt action by projects' "locking" agreed strategies into projects. · Weaknesses. Slow progress on local management, water rights, and regulation, and hence on groundwater overdraft. Source: Ward and MacPhail 1997. BUILDING POLICIES AND INCENTIVES broad range of stakeholders participates, and an tice points to the need for prioritized pragmatism expert team (including nationals) offers inputs. that aims to achieve efficiency, equity, and sus- tainability but which recognizes political process, RISK OF WORDS, NOT DEEDS. Strategy is the point vested interests, and implementation prospects. in policy making where nations allocate resources. A good AWS shapes institutional KEEP AWSS LINKED TO WATER RESOURCES MANAGE- behavior and investment patterns. Throughout MENT STRATEGY. Because agriculture is the major the process, care is needed to prioritize issues, water user, AWSs and water resources manage- keep solutions practical, ensure stakeholder ment strategies are interconnected and should ownership, produce a viable action plan and be developed together. This applies particularly investment program, and, above all, avoid to arid countries such as the Republic of Yemen vagueness. (box 1.4), where water demand from thirsty cities and industry is growing. Mechanisms for RISK OF EXCLUSION. Even with good "participa- intersectoral transfer will gain importance and tion planning," key stakeholders may be left must be developed in a framework of Integrated out. In the Republic of Yemen (box 1.4), deci- Water Resources Management (IWRM). Water- sions on groundwater are made by 100,000 well shed management should not be neglected. owners. No groundwater management effort will work if the users' points of view are not DEMAND MANAGEMENT IS MORE THAN WATER understood. It is a mistake to imagine that a CHARGES. Water charges have sometimes domi- public agency effectively voices their views. nated AWSs. In Jordan in the mid-1990s, they Special approaches may be needed. In the nearly undermined overall strategy. Balancing Republic of Yemen, as a follow-up to a policy this element with "positive" incentives, such as study, a field pilot tested approaches to ground- transferring ownership or management to users, water management. should be considered. RISK OF NEGLECTING SOCIAL AND ENVIRONMENTAL ISSUES. In an AWS, analysis of the role of women LESSONS LEARNED ON PROCESS and the poor tends to be neglected. Environ- AN APPROACH ACROSS SECTORS IS HARD TO PULL mental aspects are often discarded as too com- OFF. Both in the Bank and in countries, generat- plex and troublesome. Inclusion of these key ing a multisectoral and integrated approach is aspects requires special effort. hard. On the other hand, integrated teams do 28 create synergies that help implementation. LESSONS LEARNED ON SUBSTANCE PARTICIPATION DOES STRENGTHEN OWNERSHIP. BALANCE HARDWARE AND SOFTWARE. Infrastructure Experience with the Bank's 1993 water strategy and management have to be balanced in an shows that participation does strengthen owner- AWS. This balance differs for each country. The ship. In Brazil (box 1.3), the demand-driven Bank's Water Resources Sector Strategy notes study helped gain ownership of the AWS. In the that many countries lack hydraulic infrastructure Republic of Yemen (box 1.4), the participatory and could invest in harnessing more available process and the WBI-supported dissemination water, especially in Africa (World Bank 2004). program helped create broad support. This is a risky area, but an AWS should help countries choose and develop their hydraulic STAY IN FOR THE LONG HAUL. In natural resources infrastructure, putting development impact first. management, decades can pass from problem identification to final resolution. AWS develop- ESPOUSE PRINCIPLED PRAGMATISM. Ten years of ment and implementation require years of experience with the Dublin Principles shows that stamina and consistency within the country and it is hard to apply them to irrigation. Good prac- the Bank. Governments think short term, and A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT even Bank commitments are short term. Teams The Bank should design dissemination change--a CAS covers only three years. The plans with performance measures, budget, Comprehensive Development Framework and and a role for WBI. PRSP have not resolved this problem, although · Managing subsidiarity and integration. CWRAS should help. The challenge is develop- Subsidiarity must be reconciled with the ing context-specific, prioritized, sequenced, need for an integrated approach. In an realistic, and patient approaches (World Bank AWS, the watchwords are "think integrated" 2002). Sustained dialogue is essential. Consen- and "act pragmatically." sus, once reached, must be locked in by an action plan and investment program. INVESTMENT OPPORTUNITIES SEQUENCE PLANNING. The AWS process has to The Bank requires that an AWS effect clarity be adapted to country situations. An AWS can on development goals, policy, and strategy; be prepared once a national water resource reconcile agricultural water use with overall strategy is in place and after an investment water resources management (and the Dublin period provides lessons (as in Tanzania, box Principles); bring all partners into a long-term 1.1). In other countries, an AWS is a precondi- framework for action and investment; and be tion for government and donors to invest in developed through an ownership-building irrigation. process. RECOMMENDATIONS FOR PRACTITIONERS In that vein, investments may include facilita- · General recommendations on process. A tion and dissemination, technical assistance for decade of experience in AWSs suggests the specific studies, and implementation through need to adapt processes to circumstances; projects. prepare a plan to get stakeholder participa- tion; be issues oriented; prioritize; set practi- REFERENCES CITED cable action plans and investment programs; start with success; adapt AWSs to broader De Jong, I. 2003. "Water and Macroeconomic economic programs (macro reforms, adjust- Growth in Tanzania." Draft. World Bank, ment); and back champions. Washington, DC. · Manage the integration process within the LeMoigne, Guy, Ashok Subramanian, Mei Xie, 29 Bank, too. In preparing an AWS, it is vital to and Sandra Giltner. 1994. "A Guide to the keep the other water-using sectors involved, Formulation of Water Resources Strategy." to ensure ownership by country department Working Paper No. 263. World Bank, Wash- management, and to plan for an integrated ington, DC. and long-term approach within the Bank. This could include setting up and motivating an Simas, J. 2003. "Social Impact and Externalities intersectoral team, persuading and updating of Irrigated Agriculture in the Brazilian management, and interacting with broader Semi-Arid Region." Draft report for the Bank processes such as CASs or PRSPs. World Bank, Washington, DC. · Plan for social and environmental analysis Ward, C., and A. McPhail. 1997. "Yemen: Towards as a central part of the process. Poverty, a Water Strategy." Report for the World Bank, watershed management, and environmental Washington, DC. implications should not just be add-ons. World Bank. 2002. Bridging Troubled Waters. · Plan for dissemination. A strategy is only a Washington, DC: World Bank, Operations first step in a long process toward impact. Evaluation Department, Washington, DC. BUILDING POLICIES AND INCENTIVES ______. 2004. Water Resources Sector Strategy. ENDNOTE Washington, DC: World Bank. 1. Agricultural water efficiency is defined as meaning "more crop per drop" and includes improved conveyance efficiency (less loss WORLD BANK PROJECTS DISCUSSED between source and field), improved in-field Tanzania. "TZ-River Basin Management and efficiency (more water reaches the plant Small Holder Irrigation Improvements Pro- roots), and economic efficiency (higher ject." Closed. Project ID: P038570. Approved returns per unit of evapotranspiration). fiscal 1996. This Note was written by Chris Ward and reviewed by Sarah Yemen, Republic of. "Water Strategy." Active. Cline,Timothy Sulser, and Mark Rosegrant of the International Project ID P041351. Approved fiscal 1996. Food Policy Research Institute (IFPRI). 30 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 1.2 needed to enable adoption of IWRM policies, strategies, and interventions. Macroeconomic policy and other reforms may also be required DEVELOPMENT POLICY in other sectors for the reforms needed in the LENDINGTO SUPPORT water sector to be fully effective (for instance, for I&D affected by agricultural policies). Wher- IRRIGATION AND DRAINAGE ever "champion" leadership and political will for SECTOR REFORMS policy reforms affecting one or more sectors is strong, the development policy lending instru- Development Policy Lending (DPL) gives national ment can be effective. governments an incentive to undertake the com- prehensive multiagency policy and institutional reforms necessary to improve water resources and irrigation sector performance despite their high AWORLD BANK INSTRUMENT: DEVELOPMENT political and economic transaction costs. Reforms POLICY LENDING of this nature might not be effectively addressed by DPL CHARACTERISTICS. Development Policy Lend- sector investment projects alone, especially when ing is a World Bank lending instrument that the sector agency itself needs reform. In some focuses on policy and institutional reforms cases, when there are strong cross-conditions (World Bank 2004). It is regulated by Opera- between policy and investment component dis- tional Policy/Bank Procedure (OP/BP) 8.60, bursements, a Hybrid Policy and Investment Loan, which replaced Operational Directive (OD) 8.60 or two independent loans (a DPL that is independ- in August 2004 (World Bank 2004).1 It provides ent but highly coordinated to a Specific Investment "fast-disbursing" deposits in tranches to a special Loan) can be used. Moreover, if many revised regu- account in the national treasury as an incentive lations are required to achieve the reform out- to undertake institutionally difficult policy comes desired, a Programmatic Development reforms. The government commits itself to the Policy Lending instrument could be appropriate. agreed reform program through a Letter of Development Policy (LoDP), signed by a senior Water resources sector investment and manage- minister. The program design includes measura- ment is undertaken in most developing coun- ble indicators for monitoring progress during tries by large, "top-down," "supply-driven" implementation and evaluating outcomes upon bureaucracies, using "command and control" completion (for example, issuing of regulations organizational systems. The irrigation and and establishment of participatory institutions 31 drainage (I&D) sector usually uses 60­80 per- and new agencies). DPLs do not support sector cent of available water resources. Water is deliv- investments or agency expenditures but may ered by costly assets under a low (or no) service support either balance of payments or specific cost-recovery policy, which strains government sector-related imports such as food or agricul- fiscal capacity. The ensuing shortage of funding tural or irrigation equipment (see Jordan in for O&M results in deferred maintenance and "World Bank Projects Discussed" at the end of premature deterioration and rehabilitation. This this Investment Note). Consequently, DPL situation is often exacerbated by low personnel tranche disbursement is always conditional on remuneration and chronic overstaffing, political the government's maintaining satisfactory interference, rent-seeking focus on investment macroeconomic policies and performance. "Sat- projects, and declining agency governance, isfactory" macroeconomic performance is a accountability, and management efficacy. judgment made by the International Monetary Addressing such problems requires a combina- Fund (IMF) and/or a Bank Country Economist. tion of reforms in the policy, legislative, and reg- Because of the complexity involved, no indica- ulatory framework; in sector institutions and tors are given in the Loan Agreement. stakeholder participation; in agency structure and organization; and in economic instruments. However, if a water law amendment or many Such comprehensive reforms are also often revised regulations are required to achieve the BUILDING POLICIES AND INCENTIVES reform outcomes desired, a Programmatic could include reforms such as national sector Development Policy Lending instrument, policy revision; legislative and regulatory focused on a sector instead of the macroecon- changes; governance improvements (including omy, could be appropriate. A Programmatic provisions for stakeholder and gender participa- Development Policy Lending is an adaptable, tion); institutional and organizational reform to medium-term approach. It involves an inte- address market failures; change in financial grated medium-term framework of reforms, incentive regimes; improvement of monitoring with notional amounts and dates linked to a and safeguard arrangements; and encourage- country's policy and budget cycle. Within this ment of private sector participation (box 1.5). framework is a planned series of operations, Thus, preparation and execution of the reform phased to support the country in achieving its program usually involves many other ministries reform program, with monitorable indicators of and agencies in important sector roles. progress and triggers for moving from one operation to the next. LENDING INSTRUMENT ALTERNATIVES. The selective policy and institutional interventions included REFORM PROGRAM CONTENT. An agreed reform in Specific Investment Loans (SILs) are limited program outlined in a LoDP is derived from prior and not always effective because sector agen- Bank economic and sector analysis, prior sector cies cannot reform themselves and usually project lending experience, and intensive dia- focus on infrastructure investment components logue with the government, donors, and non- to the neglect of "difficult" policy and institu- governmental stakeholders. A reform program tional reforms. This often occurs when the loan Box 1.5 IndonesiaWater Resources Sector Adjustment Loan* Approved in 1999, the Water Resources Sector Adjustment Loan (WATSAL) is a US$300 million SECAL, for balance of pay- ments support,disbursed in three tranches over a period of 3.5 years.The government was committed to four IWRM reforms as follows: · Policy, institutional, regulatory, and management information system frameworks. Revision of legislation and organization to include a National Water Council with stakeholder members; a National Water Resources Policy (a water rights and water use licensing framework); representation of nongovernmental stakeholders on provincial and river basin water resources councils and establishment of such councils in eight provinces and their river basins; a national hydrology man- 32 agement framework; a national water quality monitoring network; and an integrated sector management decision-sup- port framework. · Improved river basin management institutions. Includes improved basin management regulations; formation of provincial basin management units in key basins in eight provinces; and establishment of river basin management corporations in four economically strategic basins. · Improved water quality management institutions. Includes improved framework for water quality management and pollution control; tax incentives for corporate investment in wastewater treatment facilities; payment of effluent discharge fees by polluters; and undertaking of effluent monitoring and an effluent discharge fee program in six river basins. · Improved irrigation management institutions and arrangements. Reforms include issue of a policy and national framework for the establishment of empowered self-financingWUAs andWUA federations (WUAFs) and their establishment in at least eight provinces; revision of the roles and responsibilities of provincial and district irrigation agencies to provide support services to WUAs and WUAFs; sustainable mechanisms for financing of irrigation O&M by government, WUAs, and WUAFs; and a "demand-based" WUA Irrigation Improvement Fund for financing of rehabilitation of networks under WUA/WUAF management control. *The box is titled according to the old nomenclature (that is, Sector Adjustment Lending/Loans instead of Development Policy Lending), because the project was approved before August 2004. Source: See Indonesia entries in "World Bank Projects Discussed" at the end of this Investment Note. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT is the borrower's main concern, while the Bank the outcomes. It also facilitates coordination of requires governance and economic reforms to subsequent sector lending by all donors. ensure that investments remain sustainable. A Hybrid Policy and Investment Loan (HPIL) could be used instead of a DPL if the reforms POTENTIAL BENEFITS AND IMPACTS are not too comprehensive (for example, involv- The outcomes of a DPL in the agricultural water ing new regulatory concepts and paradigms). sector are mainly of an institutional nature, An HPIL supports sustainable sector investment residing in the formal and informal rules and programs and improvements in institutional practices affecting economic, developmental, capabilities that are closely linked to policy and regulatory activities that govern, constrain, reforms (for example, major sector issues and or change the behavior and actions of individu- policy related to investment productivity). An als and organizations. Its beneficiaries are the HPIL can be appropriate if the reforms are a national or regional economies that benefit precursor to an investment program to ensure from improved sector performance; the sector their efficacy and sustainability; and/or if policy agencies whose operational environment and reform and the investment can unfold together, incentives are more conducive to better man- without allowing the investment infrastructure agement and quality assurance; and the various to take precedence over and compromise the beneficiaries of sector investment and water reform process. HPIL policy reforms (such as services, as well as other stakeholders affected decrees to raise water charges or reorganize an by more socially and environmentally sustain- agency), if they must precede asset investments, able sector management. In cases such as a should not take a long time. Strong cross-condi- WATSAL, where reforms introduce legislation tions between policy and investment compo- and institutions for water use rights together nent disbursements are needed for HPIL with stakeholder participation and empower- success. However, HPILs are generally "discour- ment, social capital is created, benefiting soci- aged" by Operation Policies and Country Ser- ety as a whole. vices, since their hybrid nature makes them too complex and may slow down the whole If some of the policy and institutional root process. Hence, two independent but highly causes of poor sector performance are not also coordinated loans, namely, a DPL and a SIL, addressed (for instance, poor governance of may be better suited in these cases. sector agencies), sustainable benefits may be unlikely. Policy reforms can adversely affect 33 The effectiveness of a DPL, contrary to the stakeholder groups nationwide: for example, Bank's sector investment instruments, resides elimination of agricultural subsidies and import in the fact that it allows amendment of national protection, together with water price increases sector laws and regulations during project can reduce farmer income benefits as in the Jor- implementation. This "power" does not have to dan Agricultural Sector Adjustment Loan (ASAL) be interpreted as a means of imposing reforms (see Jordan in "World Bank Projects Discussed" by the donor. On the contrary, the new OP at the end of this Investment Note). Thus, insists on "country ownership" of the reform reforms may have to include mitigation policies proposal and implementation process. This is (for example, establishing a subsidized why a DPL involves the highest levels of gov- demand-based fund to assist WUAs to which ernment, whose collective will can foster inter- management of unrehabilitated irrigation net- sector coordination. The process of works have been transferred) or alternative intergovernmental dialogue while preparing instruments to achieve the reform.2 Where the reform program and reaching consensus on some reforms are implemented gradually (for its content creates mutual understanding and instance, incremental water charge increases), a strengthens intergovernmental "ownership" of parallel project may be used to monitor reform BUILDING POLICIES AND INCENTIVES impacts and make corrections (see Jordan in how such gaps or shortcomings would be "World Bank Projects Discussed"). addressed before or during program implemen- tation, as appropriate. POLICY AND IMPLEMENTATION Upstream analytic work on the environment LOAN PERIOD. The loan period is the maximum and natural resources can be useful to support time needed to deliver all outcomes listed in the preparation of development policy loans. the program design. For reforms that are pri- Strategic Environmental Assessment (SEA), in marily government administrative decisions particular, concentrates on policies and institu- (examples include formulation of a policy, tions within a specific sector. SEA considers the agency reorganization, and increased water linkages between a given sector (agriculture, prices), a shorter period of one to two years for example) and the environment and natural may be adequate. For reforms requiring clear- resources, reviews the policy and institutional ance of new regulations, an intergovernmental framework for dealing with environmental and/or parliamentary process, up to three to issues within the sector, assesses institutional five years, is advisable. capacity, and may make recommendations for reforms of policies or institutions. LOAN AMOUNT. The loan amount depends on the amount of specific budget support needed. For This assessment should be based on a credible balance of payments support, the loan amount national public consultation process involving may be determined by the funding needed to all stakeholders. The WATSAL SEA is a "good supplement other adjustment operations in the Bank practice" example of this process and Bank's CAS undertaken in collaboration with the methodology (see Indonesia in "World Bank IMF and a country donor aid group, and by the Projects Discussed"). nature of the reforms in terms of implementa- tion difficulty and political transaction costs. For GOVERNMENT COMMITMENT AND SUSTAINABILITY. To import support, the loan amount and tranching ensure government commitment, it is good prac- would be related to the expected foreign tice to ensure that some reform actions are exchange cost of the sector's import package undertaken prior to loan negotiations--for exam- needs over the loan period. For multitranche ple, the promulgation of an irrigation manage- DPLs, the individual tranche amounts are related ment reform policy or the establishment of an to the above considerations; however, it is pru- interministerial coordination team. Reform sus- 34 dent to reduce the Bank's risks by end-loading, tainability risks are also mitigated if the reform making the last tranche amount the largest one. program includes establishment of organizational units or other concrete results (such as water ENVIRONMENTAL AND NATURAL RESOURCES ASPECTS. price increases) during the loan period (box 1.5). According to the new OP/BP 8.60, the Bank determines whether specific country policies IMPLEMENTATION ARRANGEMENTS. Policies and supported by the operation are likely to signifi- regulations should be prepared by a govern- cantly affect the country's environment, forests, ment-appointed multidisciplinary intergovern- and other natural resources. For country policies mental task force (see Indonesia in "World with likely significant impacts, the Bank assesses Bank Projects Discussed"). in the Program Document the borrower's sys- tems for reducing adverse effects and enhancing As part of its country dialogue, the Bank advises positive effects, drawing on relevant country- borrowing countries to consult with and engage level or sectoral environmental analysis (under- the participation of key stakeholders (including taken by the country, the Bank, and third senior agency professionals, some representa- parties). If there are significant gaps in the analy- tives of nongovernmental organizations [NGOs], sis or shortcomings in the borrower's systems, and civil society) in the country formulating the the Bank describes in the Program Document country's development strategies. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT The task force would be chaired by a "neutral" the use of a Programmatic Development entity (such as the National Planning Board) Policy Lending (PDPL). Details in a water reporting to a steering committee of heads of the law should be amended, instead of drafting ministries involved, who may refer to the inter- an entirely new law addressing all issues ministerial coordination body to resolve major and introducing new principles to enable policy issues. Such an arrangement improves the IWRM. Presentation of a new law to parlia- transparency of the reform process and protects ment invites extensive debate, and its the interests of weaker agencies. uncertain outcome may conflict with the government's prior LoDP commitments. If government desires a new law instead of LESSONS LEARNED amending the existing one (as was the case The principal lessons learned from SECALs, such with WATSAL in Indonesia), a PDPL frame- as Indonesia's WATSAL (box 1.5), that can be work should be sought for the introduction applied to new DPL instruments are as follows. of those reforms. The regulations needed for the new law may be issued during a sec- · Reforms cannot be imposed; those that are ond PDPL. may create roadblocks. The Bank's credibil- ity is harmed when it supports unrealistic · A PDPL instrument should be used if polit- targets linked to the wrong instruments. The ical conditions are likely to change and Bank has to be sensitive to the reform's undermine basic assumptions underlying political economy, acceptability, and timing. the reform program. If major government When the conditions are right for a particu- system changes are likely (such as the lar issue, reform can go quickly. If, by con- introduction of administrative and fiscal trast, a reform is unacceptable (owing to, for decentralization in Indonesia during the instance, cost recovery, water rate increases, WATSAL), use of a PDPL approach reduces or volumetric pricing), other ways should be the Bank's operational risks. sought to achieve the reform objective. If · Successful piloting of controversial aspects this cannot be done, the DPL operation of a reform program prior to, or during the should not be pursued and the Bank should loan period creates confidence and gener- cease sector investment support until condi- ates political support. The chances of tions are conducive to reform and invest- reform success are enhanced if untried con- ment support. cepts (such as irrigation management trans- 35 · Not everything can be done at once--it is fer and empowered federations of WUAs) better to have a sequence of more narrowly are first piloted under a parallel project or a focused goals ranked according to the Learning and Innovation Loan. extent of borrower ownership. Sector oper- ations should be as simple as possible, while consistent with achieving their goals. RECOMMENDATIONS FOR PRACTITIONERS This problem occurs when both agricultural These lessons have implications for practition- and I&D reforms are pursued simultane- ers--they illustrate the flow of policy from the ously, and the linkages cause adverse task force to the agencies charged with putting impacts, as occurred with the ASAL in Jor- policy into practice. dan. Large reform agendas also take a long time, and a balance must be struck between · Implementation organization. The govern- the need for sector reform and the govern- ment's task force should have a small secre- ment's desire for macroeconomic support. tariat for organization, reporting to the steering committee and assisting line agen- · Revision of a law should be avoided, if pos- cies in processing outcomes of reform. The sible, unless it can be scheduled through task force should also manage the public BUILDING POLICIES AND INCENTIVES consultation process, prepare the SEA, and the task force and government provided hire NGOs to conduct SEA consultations. that they are consistent with the LoDP. The Bank's task team (and the task force) · Reform outcome processing. According to should be vigilant against unilateral last- national law and public administration reg- minute "changes" to accommodate specific ulations, the responsible line agencies will agency views without steering committee implement the outcomes within their man- approval, which could jeopardize tranche date (for example, issue of regulations and completion. reorganization). In preparing their legal instruments, the line agencies would use the draft documents prepared by the task REFERENCES CITED force and cleared by the steering and inter- World Bank. 2004. "From Adjustment Lending ministerial committees and submit them to to Development Policy Lending: Update of any formal interagency review process World Bank Policy." August, World Bank, required by law. Operations Policy and Country Services, Washington, DC. · Funding implementation. For a major reform program, funding is needed for task force expenses (examples include in-coun- WORLD BANK PROJECTS DISCUSSED try travel, lodging for working meetings, Indonesia. 1999. "Sectoral Environmental and conduct of public consultations). This Assessment--Water Sector Adjustment Loan budget may be derived from ongoing sector (WATSAL)." Inter-Agency Task Force on projects, donor contributions, or a parallel Water Policy Reform, Jakarta, March. Online Technical Assistance Loan that comple- at http://www-wds.worldbank.org/servlet/ ments adjustment operations by supporting WDS_IBank_Servlet?pcont=details&eid=000 specific tasks related to their preparation or 094946_9908040537116. implementation. Indonesia. "Water Resources Sector Adjustment · Consultants. Since reform "ownership" is Loan Project." Closed. Project ID: P064118. crucial, preparation of reform deliverables Approved: 1999. Within World Bank, avail- (such as draft laws and regulations) by expa- able at http://projportal.worldbank.org. triate consultants should be avoided because 36 it does not build domestic policy analysis Indonesia. 1999. "Report and Recommendation capacity. Expatriate resource persons should of the President of the IBRD to the Execu- be used sparingly to advise on subjects for tive Directors on a Proposed Water which little country experience exists (for Resources Sector Adjustment Loan in the example, a tradable water rights framework). Amount of USD300 Million to the Republic Outcomes that are "owned," that can be of Indonesia." Report No. P 730 4-IND. April implemented, and that will achieve their pur- 23, World Bank, Washington, DC. Available pose are preferable to "cutting edge" perfec- online at http://www-wds.worldbank.org/ tion in international theories or practice that servlet/WDSServlet?pcont=details&eid=0000 will be shelved or disregarded. 94946_99051205341366. · Bank supervision. A local expert Bank task Jordan. 2003. "Performance Assessment team would be desirable, composed of staff Report--Jordan--Agriculture Sector Adjust- and consultants fluent in the local language. ment (Loan No. 3817-JO) and Agriculture This team would serve as resource persons Sector Technical Support Project (Credit No. and advisers on questions about the task 3818-JO)." January 31, World Bank, OED, force's ideas and proposals. However, final Washington, DC. Available online at decisions regarding Bank inputs rest with http://www.wds.worldbank.org/servlet/ A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT WDS_IBank_Servlet?pcont=details&eid=000 matic Structural Adjustment Loans/Credits 094946_03031804015520. (PSALs/PSACs). 2. In a water-scarce economy such as Jordan's, SELECTED READINGS the linkage of adjustments in agricultural World Bank. 2004a. "OP/BP 8.60--Develop- policy to adjustments in water sector policy ment Policy Lending." World Bank Opera- is an essential one. This linkage has, how- tional Manual. Washington, DC: World ever, not only positive aspects (for example, Bank. December. Available online at http:// market liberalization permitting and encour- wbln0018.worldbank.org/Institutional/ aging water conservation measures) but Manuals/OpManual.nsf/tocall/3371A4146FA also less positive ones (for example, where B65F985256EEF0066C54F?OpenDocument. market outlets fail to develop, it may be dif- ficult to pursue demand management for ______. 2004b. "Good Practice Note for Develop- water conservation through increases in ment Policy Lending." January 6, World Bank, water charges). Where demand manage- Operations Policy and Country Services, ment through water tariff increases is prob- Washington, DC. http://web.worldbank.org/ lematic, alternative measures that contribute servlets/ECR?contentMDK=20338364&sitePK= to the same objective can be used, such as 388759. handing over management responsibilities and costs to farmers (see Jordan in "World Bank Projects Discussed"). ENDNOTES 1. The new OP/BP 8.60 uniformly applies to This Note was prepared by Theodore Herman with inputs from Richard Reidinger and reviewed by Sarah Cline,Timothy DPL as a single lending instrument: the Sulser and Mark Rosegrant of IFPRI; and by Hagie Scherchand Bank has discontinued the use of special of Development Alternatives, Inc. Following the World Bank names and acronyms for Sector Adjustment new OP/BP 8.60 (Development Policy Lending) the Note Loans/Credits (SECALs/SECACs), Rehabilita- has been modified with inputs from Erick C. M. Fernandes, tion Investment Loans (RILs), and Program- Jan Bojo, and Nalin Kishor. 37 BUILDING POLICIES AND INCENTIVES INVESTMENT NOTE 1.3 agement reforms that increase the water use efficiency of existing systems. However, even with substantial increases in the efficiency and AGRICULTURALTRADE, productivity of water use, many countries will WATER, AND FOOD SECURITY not have enough water to satisfy minimum water requirements for domestic uses and at In coming decades, water-scarce countries will the same time meet industrial, environmental, need to increase the value added of produce and agricultural demands for water. Since agri- grown with irrigation water and achieve food secu- culture consumes by far the largest percentage rity through exports.This switch implies replacing of water, most countries will take water from irrigated cereals production with irrigated horticul- agriculture, allocate it to other sectors, and rely tural products. But client countries see the multi- on increased food imports to meet their lateral and bilateral trade agendas in agriculture as domestic needs. self-serving.They point to the lack of market access for agricultural commodities in high-income coun- Hence, agricultural trade is linked to food tries and the agricultural subsidies in developed security and to water management. Declining countries that depress world market prices and water availability in some regions may be off- provide a powerful rationale for maintaining sup- set by openness of agricultural markets. port for protected water-intensive activities. (Such Indeed, global trade liberalization by devel- activities include irrigated cereals production, live- oped and developing countries would encour- stock, sugar, and dairy.) Investment openings that age water-scarce countries to expand imports may exist despite these conditions are discussed in of agricultural water-intense products (such as this Investment Note. cereals), consequently ensuring them food security, and to pay for these imports with Within two decades, one-third of the world exports of less water-intense, higher value- population will live in countries afflicted by added cultivations (such as horticultural prod- water scarcity. In some areas, part of the ucts). By the same token, water-rich regions increased demand may be met through invest- could grow water-intense products (such as ments in irrigation and water supply systems rice and cereals) and sell them to water-scarce and in nontraditional sources of supply. In countries. This would lead to an increased other areas such as the arid Middle East and economic efficiency in the agricultural sector worldwide. This is often referred to as "trade 38 North Africa region, the economic and envi- ronmental costs of developing water resources in virtual water" (box 1.6). constrain expansion of supply. There, devel- opment of water supplies will not meet grow- The benefits of agricultural trade liberalization ing demands. There will be a push for in developing and developed countries have investments in water policy and water man- been widely documented in the literature. More open trade in agriculture smoothes out the bumps in the market, rather than aggravating them, as many believe. More open trade allows Box 1.6 TheVirtualWater Concept food to move from places where it is in surplus to deficit areas and enhances the capacity of Virtual water is the amount of water that is embedded in food deficit regions to feed themselves. In an analy- or other products needed for its production.Trade in virtual water allows water-scarce countries to import high water- sis of the impacts of a "pro-poor agreement"1 in consuming products while exporting low water-consuming trade implemented progressively through 2010, products and in this way making water available for other pur- the World Bank's Global Economic Prospects poses. 2004 report indicates that by 2015 likely gains Source: World Water Council. See http://www.worldwatercouncil.org/ will be on the order of US$350 billion for devel- virtual_water.shtml. oping countries and US$170 billion for rich countries (World Bank 2004). A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT AREA · Rainfed agriculture The linkages between agricultural trade, water, and food security have important implications · Crop diversification and creation of an for agricultural development and water enabling environment for high-value agri- resources management strategies. The issues culture are broad and complex and do not readily · Agricultural risk management--for example translate into investments. As water becomes rainfall-based contracts for cereals farmers increasingly scarce, ever more investment currently being piloted by IFC in Morocco resources are allocated to augmenting supply. (box 1.7) These investments (for instance in groundwa- ter mining, desalinization, irrigation scheme WATER RESOURCES MANAGEMENT. Enhancing water expansion, and transport of water through conservation in agriculture is already imperative long pipelines) are less productive than others, in many countries to meet demands from both at the national and at the household increasing urbanization and other sectors. Water level; they also have negative environmental resources development will continue to be implications. Trade will reduce this rising tide important in some regions (such as Africa) but of allocative inefficiency by switching incen- in other regions, increasing water use efficiency tives to less water-intensive crops in water- at the field and basin levels will be critical to short countries and by directing increasingly moving water to high-value uses. Key recom- costly investments to more cost-effective uses mendations follow: within the same sector. This reduction presup- poses an environment that enables rising pub- · Modernizing irrigation systems lic and private investment to switch from older water-intensive technologies to new knowl- · Inducing investment through public-private edge-intensive ones. Such a switch will be sharing (for example the Andhra Pradesh helped by building new R&D in skill-intensive micro-irrigation project in India, which responses in research and extension capaci- involves Netafim and the government in a ties, farming skills, infrastructure to develop alternative crops, water management tech- niques, marketing and supply enhancement, Box 1.7 Innovative Risk-Management Instruments: and agroprocessing. It entails shifting to a mar- A Rainfall-Based Contract for Cereals ket-based agriculture that is more water- and Farmers in Morocco 39 resource-efficient and that can therefore grow and absorb labor. With the advent of an international market for managing weather-related risk, the use of insurance products based on a Investment will ideally focus on enhancing agri- weather index is becoming a reality. In Alberta and Ontario, cultural productivity, improving water resources Canada, insurance programs based on weather and vegetative management, and facilitating trade. Because the indexes have become mainstream insurance products for range of investments in each area is enormous, farmers.In emerging markets,such as Mexico and SouthAfrica, the recommendations for investments in this risk insurance contracts based on the weather are also begin- ning to be used. Following a feasibility study and technical Investment Note are selective rather than assistance by the World Bank, a weather insurance project exhaustive or definitive. with the Moroccan insurance company MAMDA, sponsored by IFC, has developed weather insurance for cereals and sun- AGRICULTURAL PRODUCTIVITY. Meeting national flower production in Morocco that will be sold to farmers for and global food security needs will require sig- the 2003­4 season. Likewise, a pilot project has been launched nificant increases in water productivity. Key in collaboration with public and private partners in India, areas of investment will include the following: where small-scale farmers have purchased insurance contracts based on rainfall indexes. · Agricultural R&D (crop breeding for Source: Skees,Varangis, and Siegel 2002. drought and salinity resistance) BUILDING POLICIES AND INCENTIVES public-private partnership to supply micro- therefore drive growth and poverty reduction, irrigation equipment to at least 185,000 both directly and indirectly--because they may farmers working around 250,000 hectares) reduce food costs and supply uncertainties, improve the diets of the rural and urban poor, · Institutional and policy reforms (such as suc- raise and diversify incomes, provide employ- cessful regulatory reforms instituted by Jor- ment and entrepreneurial opportunities both dan to curb groundwater overexploitation) inside and outside cities, and induce small- holder farmers' productivity gains, which would · Promoting IWRM increase their opportunities for wealth creation TRADE FACILITATION. Trade facilitation will be and better integrate them into local, national, important for countries that need to increase and international markets. their competitiveness, as well as for water- scarce regions that need to ensure food secu- POLICY AND IMPLEMENTATION rity. This "behind-the-border agenda" includes AGRICULTURAL PRODUCTIVITY. Some of the core anything from institutional and regulatory areas to be addressed for increased water pro- reform to improving customs and port effi- ductivity are integrated farm resources manage- ciency. It is intricate and costly to implement. ment and agricultural research and extension. The World Bank attaches great importance to trade facilitation--as reflected by its portfolio of Research on cereals and legumes shows that sig- 80 active projects totaling US$4.6 billion. Box nificant and sustainable improvements in water 1.8 offers a sample of Bank-financed projects productivity are attainable only through inte- for trade development in agriculture. grated farm resources management. Water use- efficient on-farm techniques coupled with improved irrigation management options--such POTENTIAL BENEFITS as supplemental irrigation, deficit irrigation, and Improved water management practices and water harvesting; better crop selection and trade in "virtual water" can help alleviate water appropriate cultural practices; improved genetic scarcity, release water for other uses, increase make-up; and timely socioeconomic interven- productivity, and ultimately reduce food prices tions--can help achieve this objective. for consumers. Investments in these areas can Scientific research has allowed global food sup- 40 plies to outpace increases in demand. Evidence from China and India shows that public expen- Box 1.8 Trade-Related Lending ditures on agricultural research and extension have the largest impact of all possible rural The two largest categories of World Bank trade-related lend- investments on growth in agricultural produc- ing in 2002 were loans for (1) export development (such as tivity and generate large benefits for the rural the Foreign Investment and Export Facilitation Project in poor. However, investment in research usually Armenia) and competitiveness, and (2) trade financing. In Mau- pays dividends only years, if not decades, after ritania, the Bank will provide support through livestock and the decision. Some important research areas agricultural competitiveness projects (that address standards include crop breeding to improve adaptation to issues) as well as port modernization and airfreight projects to moisture and temperature stress, and promotion expedite trade. In addition, the Bank is leading the Standards and Trade Development Facility, an interagency partnership of effective risk management. A necessary com- with the World Trade Organization, Food and Agriculture plement to scientific research for increased food Organization, and World Health Organization, which will production is the development of a market for deliver technical assistance for food safety and related stan- the additional products and/or quantities, to dards. ensure that increased productivity is translated Source: Tang 2003. into increased income for farmers. Hence, agri- cultural trade is fundamental in ensuring the A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT dividends of research. Moreover, enhanced ments in selected countries. The IFC-supported investment in education, training, and rural Morocco Rainfall Insurance project is a good infrastructure to improve the adaptive ability of example of collaboration between IFC and the farmers and the rural economy generally is of International Bank for Reconstruction and paramount importance in complementing agri- Development (IBRD). cultural research and extension. Trade liberalization is likely to have impacts on WATER RESOURCES MANAGEMENT. In most regions, the environment and poverty intermediated only new conservation efforts, and new policies through its effects on water demand. A World promoting it, can send the signal that water is Wildlife Fund­World Bank program (World scarce. The appropriate combination of invest- Wildlife Fund 2004) would contribute to the ments in hardware and in policy reforms varies. international development community's under- Water policy reforms should balance improved standing of the economic, social, and environ- management at the river-basin level with mental impacts of trade liberalization. Its case decentralization to the private sector or commu- studies analyses will provide the basis to iden- nity-based user groups at the subbasin level. tify, with governments, policy and institutional The policies needed to improve water manage- reforms that strengthen trade's contribution to ment include making resource allocation in poverty alleviation and environmental sustain- agriculture more flexible by removing subsidies ability. For instance, the Vietnam case study and taxes that distort incentives and encourage examines the expansion of shrimp aquaculture misuse of resources, as well as by establishing in Truong Son Mountains and its impacts on secure property rights in land and water. (See social communities as well as land, forest, and IN 1.5 for a detailed discussion of economic water resources. In South Africa, global trade lib- incentives in agricultural water use.) eralization will present an opportunity to expand TRADE FACILITATION. The greatest benefits from agricultural trade will come from a tandem of Box 1.9 Linking Farmers to Markets: Exporting reduced policy distortions in domestic markets Malian Mangoes to Europe coupled with increased access to the developed countries' market, especially in the European In Mali, a pilot project to export fresh mangoes to Europe put Union, United States, and Japan. This will also in place an efficient supply chain managed by a not-for-profit necessitate reforms in marketing and market marketing agency and private business investors through the 41 organization. Box 1.9 presents an example of Agricultural Trading and Processing Promotion Pilot project (PAVCOPA--Projet d'Appui ŕ la Valorisation et Commercialisation how Mali has successfully exported mangoes to des Produits Agricoles--Cr. 2737 [US$6 million]). Upstream, the Europe, displacing traditional exporters such as pilot helped producers improve their production and their India, Israel, and Brazil. knowledge of the marketing channels. Downstream, it estab- lished a partnership with an export company and improved Trade facilitation may, on the other hand, pose export logistics. One innovation was setting up a multimodal new challenges. Meeting these challenges will shipping system directly linking the Malian production center involve, among other things, creating a frame- to the North European customer market; and coordinating work that encourages the private sector to offer efficiently the entire supply chain.The returns to the produc- ers make this successful pilot a good example of how to con- risk management tools such as microfinance nect farmers to ready markets, promote private investment in and insurance. Modernization of agriculture rural areas, and further promote multiple and cross-border may well require joint and collaborative efforts partnerships, while supporting diversification and improving with IFC, specifically with regard to industry export logistics. Moreover, the pilot demonstrates that invest- and sector competitiveness assessments; design ments can be profitable, and that constraints to marketing and and support of schemes that allow the integra- export of agricultural products can be overcome with cre- tion of smallholder farmers into commercial ative, adaptive, and professional approaches. supply chains; and the development of market- Source: Danielou, Labaste, and Voisard 2003. based financing and risk management instru- BUILDING POLICIES AND INCENTIVES the (water-intensive) sugar industry, with possi- RECOMMENDATIONS FOR PRACTITIONERS AND ble negative impacts for water resources and for INVESTMENT OPPORTUNITIES the poor, who do not have access to water serv- ices. Hence, investments in trade facilitation Recommendations on agricultural productivity should attentively consider impacts on both the · Invest in agricultural competitiveness, diver- rural poor and the environment. sification and technology, planning, and feasibility studies; support agricultural and agricultural water strategies such as China's LESSONS LEARNED Agricultural Technology Project and Mali's The social and political implications of food Agricultural Competitiveness and Diversifi- security and trade cannot be overstressed. Visi- cation Project. ble and effective opposition to global trade and investment liberalization from civil society has · Invest in improving market organization. mushroomed from Seattle (1999) to Prague (2000) and Genoa (2001). Perceptions of · Invest in agricultural reform through DPL national interest in food self-sufficiency too and Sector-Wide Approaches. often lead governments to hoard food stocks, artificially encourage production, and limit · Invest in research for value-added, efficient imports. Even where the international market agriculture (that is, SIL). Crop-breeding offers an alternative source of food, the idea of research on varieties that are drought and dependence on external sources is anathema to salinity resistant could have significant many politicians and their constituents in the impacts on rainfed agricultural production. North and South. Food self-reliance and inde- · Invest in increasing rainfed production pendence from foreign interference, even at (which comprises 80 percent of agriculture demonstrably higher costs to the nations worldwide) to compensate for lower irriga- involved, are popular forms of nationalism tion investments through crop-breeding (Runge et al. 2003). However, these attitudes are research (see above); encourage technolo- gradually giving way to the more enlightened gies that are inexpensive, gender sensitive, view that food insecurity is a problem caused and pro-poor. These technologies, which mainly by poverty and the consequent inability include supplementary irrigation, small- of the poor to buy food, not by insufficient scale micro-irrigation, household and in- national production. It follows that insecurity is 42 field rainwater harvesting, can be coupled increased by tariff and nontariff barriers to food with management strategies to enhance soil imports and therefore cannot be resolved with- infiltration and water-holding capacity. (SILs out an effective poverty reduction strategy. are recommended.) The distributional consequences of global agri- · Invest in vertical integration of agriculture cultural trade liberalization are complex and into processing and local industry. Because country specific. For example, if liberalization this can succeed only if adequate infrastruc- allows previously suppressed prices of agricul- ture (roads, energy, water, communication) is tural goods to rise to world levels, it will benefit available, investment in rural infrastructure is farmers who are net producers but will hurt con- key. (SILs are recommended.) sumers. If farmers are more likely to be poor, the liberalization will be, on average, pro-poor, but · Pilot weather-based insurance contracts in important distributional distortions may remain selected countries. (Learning and Innova- or be exacerbated. Agricultural trade liberaliza- tion Loans [LILs] are recommended.) tion will entail significant transition costs, and timing and sequence of reforms will be critical. · Improve collaboration with IFC on indus- In sum, managing the transition politically, eco- try/subsector competitiveness assessments; nomically, and socially is the main challenge. design and support schemes that allow the A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT integration of smallholder farmers into Series No. 60. October, World Bank, Wash- commercial supply chains; support the ington, DC. development of market-based financing and risk management instruments in IFC Projects Website. Online at http://www. selected countries. ifc.org/projects. Name of project: Société de Gestion des Risques et Intempéries (Project No. 10925). Recommendations on water resources management · Prefer Adaptable Program Loans (APLs) over Runge, C. Ford, Benjamin Senauer, Philip complex project loans in the irrigated agri- Pardey, and Mark Rosegrant. 2003. Ending culture sector. Plan Programmatic Lending to Hunger in Our Lifetime: Food Security and have a first phase on feasibility analysis; a Globalization. Baltimore: Johns Hopkins/ second phase on construction, construction International Food Policy Research Institute. supervision, and start-up; and a third phase on agricultural development and technical Skees, Jerry R., Panos Varangis, and Paul Siegel. assistance including agricultural credit pro- 2002. "Can Financial Markets Be Tapped to grams. This will avoid the tendency of bor- Help Poor People Cope with Weather Risks ?" rowers to emphasize the construction of World Bank Policy Research Working Papers infrastructure and to divert funding from later No. 2812. World Bank, Washington, DC. phases such as technical assistance and agri- cultural development to meet overruns in the Tang, H. 2003. "World Bank Activities on Trade." cost of infrastructure. Trade Note No. 1, May 29. World Bank, International Trade Department, Washing- · Promote a policy environment for adopting ton, DC. water conservation through pricing, modern technologies, and improvement of water World Bank. 2004. Global Economic Prospects quality (for example, DPL, APLs, Sector- 2004: Realizing the Development Promise of Wide Approaches). the Doha Agenda. Washington, DC: World Bank. · Improve irrigation system efficiencies through selective rehabilitation (using SILs). World Wildlife Fund (WWF). 2004. Macroeco- This will increasingly be driven by the need nomics Program Office and the World Bank. to tamp down rehabilitation costs and Program on Trade Liberalization, Rural 43 develop asset management strategies to Poverty, and the Environment. Online at enhance the life of existing hydraulic infra- http://lnweb18.worldbank.org/ESSD/ardext structure. .nsf/12ByDocName/ProjectSummary/$FILE/ WWFWBresearchsummary.pdf and http:// · Draw on Bank and non-Bank experiences www.panda.org/about_wwf/what_we_do/ on water trading and water rights (for policy/macro_economics/trade.cfm. instance, LILs, Chile, and Indonesia). Finally, on trade facilitation, investments using, among others, tools, technical assistance, and WORLD BANK PROJECTS DISCUSSED other types of loans are recommended. Armenia. "Foreign Investment and Export Facil- itation." LIL. Active. Project ID: P076543. Approved fiscal 2002. Within World Bank, REFERENCES CITED available at http://projportal.worldbank.org. Danielou, Morgane, Patrick Labaste, and Jean- Michel Voisard. 2003. "Linking Farmers to Mauritania. "Livestock Contribution to Poverty Markets: Exporting Malian Mangoes to Reduction and Economic Growth." Active. Europe." Africa Region Working Paper Project ID: P077270. Approved fiscal 2002. BUILDING POLICIES AND INCENTIVES Within World Bank, available at http://proj- World Bank. 2003. "Promoting Agro-Enterprise portal.worldbank.org. and Agro-Food Systems Development in Developing and Transition Countries: Towards an Operational Strategy for the SELECTED READINGS World Bank Group." Report No. 26032. May, Ingco, M., ed. 2003. Agriculture, Trade and the World Bank, Agriculture and Rural Develop- WTO: Creating a Trading Environment for ment Department, Washington, DC. Development. Washington, DC: World Bank. Kirton, John, and Virginia Maclaren, eds. 2002. ENDNOTE Linking Trade, Environment, and Social 1. Rich countries cut tariff peaks to 10 percent Cohesion: NAFTA Experiences, Global Chal- in agriculture and 5 percent in manufactur- lenges. Burlington, Vt.: Ashgate. ing, reciprocated by developing countries' cuts to 15 and 10 percent. Rosegrant, Mark, Ximing Cai, and Sarah Cline. 2002. World Water and Food to 2025: Deal- This Note was prepared by Shobha Shetty with inputs by ing with Scarcity. Washington, DC: Interna- John Nash, and reviewed by Sarah Cline,Timothy Sulser, and tional Food Policy Research Institute. Mark Rosegrant of IFPRI. 44 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 1.4 INVESTMENT AREA Performance in the irrigation sector can be improved through specific investments in reha- PRICING, CHARGING,AND bilitation and modernization of existing projects; RECOVERING FOR IRRIGATION institutional investments to improve organiza- tion, funding, and management of the sector; or SERVICES sector loans addressing all these components. Such investments should always assess the Many irrigation systems are deteriorating because potential role of irrigation service charges (ISCs) of poor management and inadequate funding for to contribute to project objectives. operation, maintenance, and replacement of facili- ties. Consequent poor performance leads to low Water resources managers face twin crises of water productivity--waste, low crop yields, and sustainability: misallocation--a common experience in World Bank­funded projects. Properly designed irrigation · Scarcity of the water resource itself (mani- service charges directly address the funding issue fested by falling water tables, ecological and can contribute to demand management, but damage to estuaries and wetlands, and limiting demand to the available supply is com- severe competition among users) monly addressed through the careful specification of water rights. Stakeholders (users, operating · Limited funds to manage, maintain, and agencies, planners, and politicians) have differing develop the facilities required to utilize interests that must be considered in designing a water (manifested by poor maintenance successful charging system. Political commitment is and operational performance and the of primary importance. repeated need for "rehabilitation") Irrigation development, combined with the Appropriate ISCs have the potential to address green revolution and increased fertilizer use, both issues simultaneously: higher charges has driven agricultural production and pro- should restrict demand, especially in low-value ductivity for the past 50 years. Continued uses, and generate revenues to fund the cost of increases in production (with more than 80 providing irrigation services. percent of irrigation potential already devel- oped) depend primarily on improving the Where water is scarce, ISCs cannot be sepa- operations of existing facilities to make more rated from the procedures for allocating 45 productive use of water resources that already water--water rights defined based on "senior- have been developed. ity" or as a proportion of available supply; rationing and quotas; or tradable water rights. Yet, as noted, many irrigation projects are in The various parameters (cost, charge, and decline. Increasing funding for irrigation serv- price) need careful specification. The cost ices is, however, extremely contentious. Gov- includes operation, maintenance, and replace- ernments are often unwilling to increase ment of facilities, plus capital costs in the form charges--for fear of political repercussions-- of amortization charges and the cost of collect- or to supplement current charges to meet the ing ISCs. The charge includes all fees payable full cost of service to a favored group. Farm- by the irrigator. These may be based on crops ers are unwilling to pay for poor service and irrigated or volume of water received--or they often believe that irrigation bureaucracies are may be fixed charges. The price is the marginal overpaid and inefficient. Bank-funded proj- price of water--how much extra the irrigator ects in the sector have frequently failed to pays per additional unit of water received. reach financial self-sufficiency goals, and Often, with crop-based or quota systems, the scarce irrigation water is often wasted marginal price is zero (even though the charge (Bosworth et al. 2002). may be high), and, after the farmer decides to BUILDING POLICIES AND INCENTIVES irrigate, there will be no marginal incentive to by a system that is easily administered and save water. encourages high productivity. In formulating appropriate ISCs, the charging No single universal water-pricing mechanism is mechanism (the type of ISC proposed) must be best for all systems. The pricing method matched to the objectives sought. Irrigators, selected will depend on specific government operating agencies, and resource planners have policies and institutions, local conditions, irri- legitimate but different objectives: irrigators gation type, irrigation infrastructure, and proj- want a reliable, affordable service; irrigation ect objectives. If O&M cost recovery is the agencies want a stable source of income and overriding objective, a wide range of pricing ease of administration; and resource planners methods is available, ranging from a charge per want to limit demand to the available supply hectare cultivated to a charge per unit of water and ensure that the resource is allocated to its delivered to the field. However, the range nar- most productive uses. Table 1.2 summarizes the rows significantly when water is scarce and most common means of charging for and allo- reducing water use per hectare is an important cating water and the potential of each to con- objective. Here the charge has to be related to tribute to the most common objectives. The something that encourages reduced water use farmers' interests will generally be best served such as a charge per cubic meter of water Table 1.2 CommonWater Charges and Allocation Methods Productivity Demand Stability of Ease of Type Detail impact impact agency revenues administration Area based A fixed rate per hectare of farm None None Excellent Excellent A tradable fixed charge per hectare irrigated None Small Fair Fair Crop based A variable rate per irrigated hectare of crop --in other words, different 46 charges for different crops Small Small Fair Fair Volumetric A fixed rate per unit water received Positive Positive Poor Poor An increasing rate per unit of water received --also known as rising block tariff Positive Positive Poor Poor Quotas or Entitlement to water defined rationing in volume terms Positive Ensured Not relevant Variable Tradable water Entitlement to water rights tradable to other users seasonally or in perpetuity High Ensured Not relevant Poor Two part Fixed charge to balance budget, volumetric for demand management High Positive Excellent Fair Source: Author. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT delivered. The Armenia Irrigation Rehabilita- were encouraged to base cost recovery on a tion Project (box 1.10) provides a good exam- proxy for water volume (for example pumping ple of how water measuring posts and meters time) rather than on a per feddan2 basis, since improved water monitoring and charging, as this would provide incentives to improve water well as users satisfaction. The assessment use efficiency (Seckler 1996). report by the World Bank's Operations Evalua- tion Department (OED) also provides more Nevertheless, analysis of the likely impact of general lessons of outstanding importance in proposed charges on demand for water--even the design and appraisal of irrigation projects. volumetric charges, set at high enough rates to recover operation, maintenance, and replace- As second-best solutions, if implementation ment costs, will often not be high enough to costs for volumetric water devices turn out to bring demand and supply into balance. In such be too high, a proxy for water volume can be cases, additional quota constraints will be used as a basis for pricing. Or, a crop- and area- needed to achieve balance, and the analyst based pricing with a higher price for water- must then evaluate the potential additional ben- intense cultivations can be considered.1 For efits against the substantial extra administration example, in the [Arab Republic of] Egypt Irriga- and infrastructure costs of complex charging tion Improvement project, water user groups mechanisms (box 1.11). Box 1.10 VolumetricWater Measuring Devices in the Armenia Irrigation Rehabilitation Project The Armenia Irrigation Rehabilitation Project, approved in 1994, focused primarily on helping to maintain irrigated agricultural production at pre-independence (from the former Soviet Union) and pre-macroeconomic crisis (1991­4) levels. The ability to monitor and bill water sales was improved after 1999 when project savings were used to purchase and install 2,145 water measuring posts and 1,545 water meters in open sections of canals and pipelines. Simultaneously, hydrometric communication system and water management were improved using specially designed software and computer equipment supplied under the World Bank's Structural Adjustment Technical Assistance II project.The project also introduced two-tariff electricity meters so that differential day and night tariffs could be introduced. In the four irrigation schemes inspected by the World Bank's OED assessment mission, water measuring devices were found to be in excellent working order, and all water 47 users expressed their satisfaction with the metering and billing procedures that were now seen as objective and fair, with measurements at the point of sale to water user groups being jointly carried out and agreed by the water user group and agency in charge of O&M. The OED project review in May 2004 highlighted the following main lessons: · Rehabilitation is only a partial solution for most irrigation projects because it is generally a symptom of inadequate man- agement and insufficient maintenance funding. This project clearly demonstrates that rehabilitation should be supple- mented by measures to foster creation of efficient institutions with the ability to measure and manage water and accurately cost O&M. · Some simple and effective investments can greatly improve irrigation project efficiency such as the installation of many water and electricity flow measuring devices; consultation with stakeholders about operating rules is also highly effective. · Adequate attention must be given during appraisal to linking investments in agricultural technology with measures to improve output production and marketing.The absence of such complementary investment may jeopardize the project beneficiaries' chances of covering O&M costs, thus undermining sustainability. · Social assessment and interventions are needed, especially in very poor rural areas. Such assessment will help to ensure that infrastructure investments give adequate attention to beneficiary ownership and their ability to contribute toward the new facilities' maintenance. In the project, such an approach could have created smallholders' cooperatives or micro- credit groups that could have moved landowners beyond subsistence agriculture. Source: Project Performance Assessment Report, Armenia Irrigation Rehabilitation Project 2004; Burt 2002. BUILDING POLICIES AND INCENTIVES Often a combination of interventions is As for the objective of cost recovery, the most required to limit demand, encourage productive important issue to consider is that farmers' will- use, and recover costs. The most sophisticated ingness to pay depends on good and reliable intervention is tradable water rights (box 1.12). service, as well as system transparency. Good (See also IN 2.2.) and reliable service can be ensured by financial autonomy. Without autonomy, collecting suffi- Both demand-management and cost-recovery cient funds from users does not guarantee objectives require that the nature of the service improved O&M services because most of the be specified: who is entitled to how much revenues from water charges do not go back to water, with what degree of priority, in condi- the project itself but are commingled in the cen- tions of normal, below-, and above-average tral treasury with revenue from other taxes. A water availability. prime example of this practice is India, where water charges and the quality of services are not directly related in many projects. Improved services will give farmers an incentive to pay Box 1.11 Irrigation Charges in Morocco their fees and increase their ability to pay because better services means higher farm Morocco has a clear policy for irrigation service charges in all incomes. Financial autonomy can be an impor- major schemes, requiring full recovery of operation, mainte- tant key to improved irrigation water manage- nance, and replacement costs, plus a large part of capital costs. ment by providing a positive feedback system Charges, levied volumetrically--at US$0.022/m3 or more through a clear financial link between farmers (equal to $100 to $200/ha)--are high by international stan- and water suppliers. dards for surface irrigation. Even at this price, demand for water would exceed supply, because returns on water are System transparency means farmers can see about 10 times the volumetric price. Demand management is therefore achieved through quotas specified and measured at how much water they receive, how their pay- farm level. Cost recovery is high, and most systems cover at ments are used, and how water charges are least O&M costs. determined. The integrated circuit machines case in Shandong, China (box 1.13), illustrates Source: Cornish and Perry 2003. good system transparency in terms of water delivery and payments. Farmers interviewed said that they were satisfied because they receive a precise, electronically printed state- 48 Box 1.12 Australia:TradableWater Rights in the ment each time they use the card. Murray Darling Basin The case in Sindh, Pakistan, is a counter-exam- In the Murray Darling Basin, water use is constrained to equal the sustainable supply through a complex system of water ple. Farmers there are not willing to pay rights, defined in terms of volumes and security of supply. For- because the financial system is not transparent, mally codifying these property rights--in systems that were and owing to the corruption of irrigation offi- already well managed and orderly--took decades. Once this cials, the farmers do not think that the charges process was complete, a system of trading was introduced, paid are used in their system. allowing managers the flexibility to better manage their enter- prises (in some areas 80 percent of water delivered was Moreover, for successful cost recovery, good traded). The water rights system also provides the basis for practice requires clear objectives and political improved environmental management because water can be "purchased" by the state and assigned to environmentally commitment: desirable uses.The parallel system of charging for water serv- ices in the basin is separate from the sale and purchase of · What costs are to be recovered from which water rights and exists to ensure that the income of water beneficiaries? Domestic supplies drawn supply agencies covers ongoing maintenance and projected from irrigation system facilities may pay dif- major capital replacements. ferent rates; commercial farmers or orchard Source: Don Blackmore, personal communication. owners may get preferential services at higher rates. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT · Who will recover ISCs? the water charges they will pay. Farmers should not only agree on the fees but also realize that · Who will administer ISC revenues? the fees collected remain within the system for maintenance and improvements. Parallel to · For what purposes can ISC revenues be used? farmer empowerment, water suppliers should · What actions will be taken in case of also be given incentives such as the possibility of default in provision of service or payment becoming financially autonomous. This incentive for service? works to encourage water providers to improve infrastructure, service, and collection rates. In case of default, some suppliers strictly Implementation is relatively straightforward enforce penalties. In Bayi Irrigation District, when a fee structure is simple to administer and China, defaulters receive no more irrigation easy for users to understand because it reflects water until they pay their debts. In Shandong, local conditions and needs. China (box 1.13), the problem of defaults does not arise because users must pay as they go to obtain irrigation water. Box 1.13 An Automated Irrigation Charge POTENTIAL BENEFITS Collection System in Shandong, China Well-designed ISCs will accomplish the following: Shandong is one of the biggest agricultural provinces in north China. Irrigation water accounts for 70­80 percent of the total water use, but water is scarce. Consequently, to improve · Ensure the sustainability of irrigation facili- water use an automated system was adopted, where irriga- ties through proper maintenance tors buy prepaid integrated circuit cards. The card must be inserted into an automated server before water is released, · Reduce the pressure on governments for and the flow stops when the card is removed.After each irri- subsidies and repeated "rehabilitation" of gation, the farmer receives a receipt, stating the amount of infrastructure water used, the price paid per unit of water, and the total deducted from the card. All servers are connected via the · Provide incentives for improved manage- Internet, so they are easy to control and monitor, and admin- ment and increased productivity of water istrative costs are low. Each irrigation costs 1,000 yuan (US$120), which is equal in value to the water saved annually · Transparently link the payment for service under this new system. With more than 200,000 integrated 49 and its cost circuit card servers across the province, Shandong saves about 5 billion m3 of water annually. · Encourage financial efficiency in operating Highlights: agencies because operation costs will be transparent and comparable over time and · This method enables a 100 percent collection rate. If the pricing structure is designed appropriately, full cost recov- between systems ery will be achieved, assuming no stealing. · Administrative costs (personnel costs) are greatly · Discourage wasteful use of water reduced. No one has to collect fees or open and close gates, and users are charged directly, thus reducing trans- actions among farmers and intermediate bureaucrats. POLICY AND IMPLEMENTATION · The amount of water used is accurately recorded, and the For an effective cost recovery/pricing scheme, a charges are transparent, greatly reducing the chance of combination of approaches could be recom- arguments over possible measurement errors. mended. As seen from many pricing reforms in · Farmers have full control over when, how, and how much the irrigation sector, farmers should have more water they use. authority and responsibility over water manage- The water charge is on a volumetric basis, which encourages ment, usually through WUAs. In a transparent reduced water use. consultation process, farmers should help to Source: Easter and Liu (2005), citing Wang and Lu (1999). decide which costs should be recovered through BUILDING POLICIES AND INCENTIVES LESSONS LEARNED demand), defining and enforcing sustain- · Failure to negotiate ISC systems that are able water rights is an enormous political acceptable to governments, irrigation agen- and social challenge that must precede the cies, and farmers has led to a vicious circle establishment of an ISC system. of physical deterioration, declining perform- ance, and unwillingness to pay in many irri- · Water pricing in irrigation may equate sup- gation projects. ply and demand, but this is more difficult than addressing the financial sustainability · Irrigation service charges often have impli- of the irrigation system. cations beyond the project level, requiring political endorsement and support for · The primary means of balancing supply and implementation. This, in the context of a demand for water resources is administer- typical Bank project, requires careful analy- ing water rights in a manner that is consis- sis beyond the framework of the investment tent with available supply. package. · Tradable water rights offer the best oppor- · Linking World Bank funding to the bor- tunity to encourage productive use of water rower's obligations to recover ISCs--and at sustainable levels, but the demanding make good any shortfalls at the expense legal, administrative, and managerial investment funds--is one approach to ensur- requirements make the approach a long- ing commitment to ISC objectives (box 1.14). term possibility in the conditions prevailing in most developing countries. · In designing ISCs, the procedures for allo- cating water must be in place and opera- · Simplistic interventions designed to serve a tional. Defining water rights is contentious single objective rarely succeed and may and difficult at the best of times. Where introduce unexpected complications. Suc- water is already overallocated (and "tail- cessful ISC reforms must be evaluated over enders" often get no water, or fresh aquifers the wide range of hydrological circum- are consistently overdrawn to meet current stances that inevitably occur (box 1.15). RECOMMENDATIONS FOR PRACTITIONERS Box 1.14 India: HaryanaWater Resources · Assemble the basic information. Is the spec- 50 Consolidation Project ified irrigation service consistent with the sustainable use of surface and groundwater This project, appraised in the mid-1990s, was Haryana state's resources? What level of expenditure is third major irrigation project, the first two having failed to achieve objectives related to the reform of irrigation charges. needed to finance sustainable operation of During project formulation detailed discussions with the govern- the system in accordance with existing or ment identified and specified the total expenditures required for proposed government policy? operation, maintenance, and replacement; the limited areas where subsidies would continue; the policy for differential · Define and prioritize the objectives of the pro- charges between sectors;and the linkage between cost recovery posed ISC system. Evaluate alternative charg- and the investment components to be financed by the project. ing mechanisms in terms of the objectives By project-end,water services in the state were fully self-funding. and the impact on various stakeholders; This success hinged on clear definitions of service and priori- evaluate the proposed system under differ- ties for water allocation (formulated as part of a State Water ent scenarios (such as drought, unexpected Plan under the project), a well-managed irrigation system, and failure of a major structure, and inflation). an effective, legally enforced revenue collection system. Source: India, "Haryana Water Resources Consolidation Project, " · Specify responsibilities in the implementation World Bank Project Appraisal Report 1994. of the selected system, including assessing and recovering costs, setting charges, accounting, A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT allocating funds, enforcing penalties in case Burt C. 2002. "Volumetric Water Pricing." Draft of failure of an agency to supply or users to prepared for the Irrigation Institutions Win- pay, and reassessing water availability and dow of the World Bank, Washington, DC. water rights. Cornish, G. A., and C. J. Perry. 2003. "Water Charging in Irrigated Agriculture: Lessons INVESTMENT OPPORTUNITIES from the Field." OD150. HR Wallingford, · Support to hydrological services for long- Wallingford, U.K. term (planning) and short-term (opera- tional) purposes Easter, K. W. and Y. Liu. 2005. "Cost Recovery and Water Pricing for Irrigation and · Infrastructure to measure hydrological data Drainage Projects." Background Paper. World Bank, Washington, DC. In press. · Local and national institutional capacity to analyze hydrological data Kloezen, W. H. 2002. "Accounting for Water: Institutional Viability and Impacts of Mar- · Facilities to disseminate information to ket-Oriented Irrigation Interventions in Cen- planners, managers, and operators tral Mexico." Ph.D. dissertation. University of Wageningen, The Netherlands. Formalization of water rights Seckler, David. 1996. "Egypt: Irrigation · Development of legal framework for sur- Improvement Project." Appraisal Report face and groundwater rights (1995) and "The New Era of Water Resources Management: From `Dry' to `Wet' · Institutional capacity to record rights Water Savings." International Irrigation Man- · Institutional capacity to administer and agement Institute Research Report No. 1. resolve disputes Colombo, Sri Lanka. Wang, Xudong, and Jun Lu. 1999. "The Applica- Institutional capacity to provide specialist tion of IC (Integrated Circuit) Cards in Effi- technical services cient Irrigation Management System." China Water Resources 46 (October) (in Chinese). · Pollution management and control 51 · Advice on measurement of water diversion and consumption Box 1.15 Irrigation Management Reform in Mexico · Training in new techniques, especially remote sensing to monitor water use In the 1990s, Mexico launched a radical program of irrigation reform--essentially transferring responsibility for system man- · Evaluation of options in water rights admin- agement to both local and federated farmer organizations. Some donors advocated pricing systems narrowly based on istration, such as water markets and water volumetric charges to encourage efficient use and limit "banks" demand. Some farmer groups based charges entirely on volu- metric deliveries.When drought occurred, deliveries (and con- sequently revenues) fell dramatically, requiring layoffs of REFERENCES CITED operators and putting severe financial stress on the farmer Bosworth, B., G. A. Cornish, C. J. Perry, F. van organization. Subsequently, more traditional bases for charg- Steenbergen. 2002. "Water Charging in Irri- ing--combining an area-based charge to ensure income stabil- gated Agriculture; Lessons from the Litera- ity with a volume-based charge--were adopted. ture." OD145. HR Wallingford, Wallingford, Source: Kloezen 2002. U.K. BUILDING POLICIES AND INCENTIVES WORLD BANK PROJECTS DISCUSSED World Bank. 1986. "World Bank Lending Condi- Armenia. "Irrigation Rehabilitation Project." OED tionality: A Review of Cost Recovery in Irri- Project Performance Assessment Report. gation Projects." June 25, World Bank, Report No.: 28847. May 2004. Washington, DC. Egypt. "Irrigation Improvement Project." Closed. Project ID: P005173. Approved fiscal 1996 ENDNOTES 1. An ample discussion of the performance of India. "Haryana Water Resources Consolidation different water pricing methods is provided Project." Closed. ID P009964. Approved fis- in Easter and Liu (2005). cal 1994. Within World Bank, available at http://projportal.worldbank.org. 2. The Egyptian area measurement unit, fed- dan, equals 0.42 hectare. SELECTED READINGS This Note was prepared by Chris Perry and reviewed by FAO (Food and Agriculture Organization). In Sarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI. press. "Water Charging in Irrigated Agricul- ture: An Analysis of International Experi- ence." FAO, Rome. 52 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 1.5 Improved WUE and "internalizing externalities" can be achieved via economic, institutional, agronomic, and engineering means. Economic ECONOMIC INCENTIVES IN incentives, which will be explored in this AGRICULTURALWATER USE Investment Note, are increasingly used to pro- mote WUE, improve allocation, promote envi- Economic incentives are one way to improve agri- ronmentally friendly practices, and reduce costs cultural water use efficiency, increase cost recovery, to government. Implementation is relatively and "internalize" costs imposed on third parties and simple and cheap, and the impact is sustainable the environment. A broad range of both positive (Tiwari and Dinar 2000). and negative instruments is available. Best practice is to analyze country needs and to develop a balanced INVESTMENT AREA set of efficiency incentives, emphasizing decentral- ized and market-based mechanisms. Economic incentives are signals that affect decisions. They can motivate water suppliers Agriculture consumes three-quarters of the and users to manage water in line with policy world's fresh water, yet less than half the water delivered is actually used (box 1.16). Now, as water is becoming scarce and its cost is rising, it Box 1.16 Irrigation Can Be aWastefulWater User is important to improve the efficiency (returns per unit of water) and sustainability of agricul- In China, in-field irrigation efficiency (percentage of water reach- tural water use. Improving water use efficiency ing the field that is beneficially used by plant roots) is 30­40 (WUE) is often the cheapest way to increase the percent, and conveyance efficiency (percentage of water from availability of water for agriculture (box 1.17); it source reaching the field) is 40­50 percent. Thus, as little as could meet half of the projected increase in 12­20 percent of water captured may reach plant roots. In water demand to 2025 (Dinar 2001). India, seepage loss from irrigation canals is 45 percent and in Pakistan as much as 70 percent. Agricultural subsidies pose a second problem. Sources: Qian and Xu 1994;Yoduleman 1989. Governments frequently shoulder the cost of developing and operating irrigation schemes. Without an exit strategy, the fiscal burden Box 1.17 What DoWe Mean byWater mounts. Many subsidies are not only inefficient Use Efficiency? 53 but also inequitable. In Punjab, India, larger farmers (those with holdings greater than 6 Economic incentives encourage delivery agencies and farmers hectares) capture 55 percent of the electricity to adopt water-conserving and efficient practices.The benefits and canal water subsidies (Singh 2003). Trade ofWUE can be analyzed in three stages.The first benefit is end reforms, combined with reform of economic use efficiency--meaning that the user will achieve "more crop incentives in agricultural water use such as per drop," an increase in the economic return per unit of water-pricing reforms or promotion of water water. If mechanisms for transferring water between users markets, improve welfare more than do subsi- exist, additional allocative efficiency may be achieved--water dies (Diao and Roe 2000). will be transferred to the user who can achieve the best returns.This could be, but rarely is, done outside the agricul- tural sector. Finally, if the environmental "externalities" can be The third issue with agricultural water use is the "internalized" into the incentives structure, environmental effi- externalities generated during the production ciency can be achieved.Then water use will be consistent with process--costs or benefits that affect third par- overall "societal benefit"--farmers, for example, might cease ties, intentionally or not. For example, excess mining groundwater or would pay to clean up pollution. The pumping lowers the water table, or abstraction combination of these three efficiencies is the ultimate goal, from a river reduces water available to maintain overall water use efficiency. ecosystems, or drainage contaminates down- Source: Author. stream uses. BUILDING POLICIES AND INCENTIVES objectives. Experience has shown that the most water issues. Evidence from Taiwan (China) important incentives are the following: (Wade 1995), India (Nagaraj 1999), and Nepal-- where 75 percent of irrigation systems are man- WATER PRICING.Water pricing is the most com- aged by farmers (Tiwari 1987)--shows high monly promoted incentive in World efficiencies and cost effectiveness. Bank­financed projects (box 1.18). Water charges are justified on the "user pays" principle, WATER RIGHTS. Assignment of water rights cre- which states that individuals who benefit from ates strong incentives to efficient use and can public investment and scarce resources should underpin water markets that increase agricul- pay. The advantage is twofold, because water tural efficiency and, in some cases, permit inter- charges not only signal opportunity cost but sectoral exchanges of water. Water rights may bring in revenue. Various approaches are in use. be a share or a fixed quantum. Assignment of Water pricing is a political issue, and getting the transparent and stable rights, together with a price right is hard--in Jordan the price has been measure of accountability and transferability, the object of endless debate and study for requires a workable property regime, the right decades. There is always the fear of a negative ecological characteristics, and clear definition of impact on poverty, although there is little empir- the resource, which is particularly hard with ical evidence in support of this possibility. groundwater. USER PARTICIPATION. Associating users in manage- ASSET TRANSFER. Farmer ownership of assets ment and decisions in various forms (for increases incentives, reduces transaction costs, instance, WUAs managing the retail delivery of and increases farmers' willingness to invest (FAO water) is the second most commonly used incen- 1996). It requires a strong institutional base. tive in Bank projects (box 1.18). It reduces public costs and gives incentives for responsible man- REGULATION. Regulatory instruments include agement and conservation. Where user participa- bans, quotas, and permits. Regulation is typi- tion works well, it has reduced politicization of cally used where market or monetary measures cannot take full account of social, environmen- tal, and intergenerational costs of water use. For example, common property and intergenera- Box 1.18 Bank Projects Promote a Broad tional interests in groundwater can rarely be Range of Incentives, ButThere Is Room for managed through market mechanisms. 54 Improvement SUBSIDIES. Capital and recurrent subsidies for In a review of the World Bank irrigation and drainage portfo- irrigation have been almost universal, yet their lio covering 68 projects, all but 9 promoted at least one eco- nomic incentive measure. Twenty-six projects covered three efficiency is questionable (see above), they are or more instruments, usually associated with one another to hard to eliminate, and the fiscal cost is often increase impact. exorbitant--the annual irrigation subsidy in Egypt is US$5.0 billion (Rosengrant 1997). Input Water pricing was most common (52 of the 68 projects), though usually aimed at cost recovery rather than changing subsidies on agricultural water include subsi- behavior. Second was user participation, employed in half the dies on diesel fuel, electricity, or equipment. sample (34 projects). Capacity building, water rights, and asset They are hard to target and usually do not pro- transfers to users were also common. Few projects included mote water conservation. However, subsidies direct incentives such as new technology, or indirect economic on efficiency-improving technology such as incentives such as diesel price, water quotas, or water markets. drip irrigation are increasingly being used. The review concluded that Bank projects miss a chance to Though justified on grounds of encouraging harness well-designed packages of incentive measures to innovation and compensating for externalities investment projects. involved in water conservation, these bring Source: Dinar 2001. their own distortions (such as capital bias, fiscal cost, crowding out, and locking in). A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Best practice starts with a review of policy both to give incentives to water conservation objectives and of the existing incentive struc- and to achieve full and equitable cost recovery, ture, which is often complex and conveys while providing "positive" incentives through countervailing "distortions." The review goes technology transfer and investment subsidies to well beyond irrigation water charges. It will irrigation efficiency. cover irrigation development policy. Often objectives beyond optimizing economic returns are behind the existing incentive structure for POTENTIAL BENEFITS irrigation--for example resettlement, poverty Economic incentives should encourage delivery alleviation, and food security. The objectives agencies and farmers to adopt resource-con- and the related incentives have to be "unbun- serving and sustainable agricultural practices. dled" to understand what a country is trying to Benefits to individuals and society are the achieve, its relation to WUE, and the optimal increased efficiency of water use within agricul- mix of incentives to achieve those objectives. In ture, possibly increased allocative efficiency, addition, the review examines the agricultural and "environmental efficiency," including third- incentive and trade policy framework, which party and intergenerational benefits (box 1.21). sends water users strong messages that need to be analyzed (box 1.19). Irrigation incentive pol- icy needs to be linked to national and interna- tional market conditions, taking account of Box 1.19 The Influence of the Overall Agricultural rigidities encountered in market development. Incentive Framework on Agricultural Finally, fiscal policy needs to be examined. Water Use Governments have specific revenue or spend- In Jordan, agricultural pricing policy in the 1990s made banana ing goals or constraints such as cost recovery growing profitable, even though bananas used a stunning for O&M or for capital costs. 20,000 m3 of water per hectare in a dry country. In the Repub- lic of Yemen, diesel for pumping at prices a quarter of border The review then examines the optimal match of parity and cheap credit on pumps and engines drive the possible instruments with policy objectives and groundwater overdraft. In Morocco, border protection of 100 with physical, social, economic, political, and percent on cereals helps explain why 40 percent of expensive institutional feasibility. This should result in an modern irrigation schemes are planted to low-value wheat. "integrated" set of measures. Some will increase Source: Ward 1997. costs of current behavior and provide a push 55 for change. Others will facilitate that change toward a more efficient, sustainable use of water. For example, changes in water prices Box 1.20 Every Situation Demands a Different could be linked to the allocation of water rights. Mix of Incentives--The Case of the This could make the package easier to pass and JordanValley implement. Though aware that water use was inefficient, the Jordanian For all "packages," the practicalities, political government was reluctant in the 1990s to increase prices for economy, and likely timescale require careful political reasons. An integrated approach was adopted whereby every farmer had a quota of water at a relatively low study; pricing changes may encounter political price, and a step-tariff system obliged bigger users to pay opposition, and water rights changes may take more. The tariff system was calibrated to cover the costs of time. Rigidities built up over years need to be operating and maintaining the system. A parallel program pro- overcome. Sequencing thus takes thought. vided incentives for more efficient water use through technol- Transfers of assets, management by users, and ogy transfer and lower-priced irrigation improvement capacity building form another powerful pack- equipment.Thus, local physical, economic, and political factors age. Incentives to use more efficient technology contributed to an integrated incentive package. are a useful complement to all approaches. Box Source: Ward 1997. 1.20 shows how Jordan used the tariff system BUILDING POLICIES AND INCENTIVES POLICY AND IMPLEMENTATION ISSUES NOT ONLY FARMERS NEED TO IMPROVE EFFICIENCY. WATER PRICE INCREASES MAY NEED TO BE PHASED IN Losses of water through seepage from public SLOWLY. Governments often fear that with canals undermine arguments for improving in- higher tariffs, agriculture will lose its competi- field efficiency. Changes in tariffs should be tiveness. Therefore, price increases may be accompanied by improvements in service. Irri- phased in gradually while other incentives, gation rehabilitation often has to precede the improved services, and technology transfers use of the price instrument to promote on- allow farmers to regain competitiveness. farm efficiency. ECONOMIC INCENTIVES SHOULD BE SEPARATED FROM DEPOLITICIZING PRICES. Water charges are often POLICIES TO REDISTRIBUTE TO THE POOR. Policy "political." There is an advantage in "privatizing" makers often resist changing incentives, believ- the debate by creating water rights and transfer- ing that the poor will suffer. Most empirical evi- ring ownership or management to user groups dence shows the opposite. In Morocco, or other private entities. better-off farmers gain most from low water charges and high border protection. Studies INDIRECT MEASURES ARE EASIER TO AGREE AND should be conducted to predict the impacts of IMPLEMENT. Water pricing is a contentious-- economic incentives on the poor and ensure often blunt--instrument. Countries may prefer that their needs are considered without distort- indirect price incentives (such as deprotection, ing pro-efficiency and pro-growth impacts. A as is now the case in Mexico) together with study on who gained from water tariffs in Jor- "positive" incentives such as irrigation-manage- dan led to the introduction of a progressive step ment transfer. tariff, with a low "lifeline" starting rate (box 1.20). While "economically suboptimal," it TIMING AND POLITICS ARE IMPORTANT. Reforms accounted gracefully and practically for con- have to come at the right moment, after an elec- cerns about the poor. tion, perhaps, or a drought. They can be locked in, or ratcheted up. Box 1.21 Evidence for the Benefits of an Efficiency-- LESSONS LEARNED Promoting Incentive Structure RAISING WATER CHARGES SHOULD BE ONLY A PART OF THE INCENTIVES PACKAGE. Water charge 56 The use of pricing in Germany has been effective in raising rev- increases help improve efficiency and cost enue and reducing pollution, but charges remain too low to recovery, but the political cost of water price curtail demand. In Israel, where irrigation water is priced close to the marginal-value product and where extensive public sup- changes can be high. Price changes should be port on technology and markets is provided, efficiency gains part of a range of incentives that also improves have been evident as agricultural water use fell by half in the farmer returns over time (box 1.22). 1980s, agriculture surrendered water to urban use, and prod- uct per unit of land doubled. CHANGING INCENTIVE STRUCTURES HAS POLITICAL In China and Jordan, the use of irrigation improvement subsidies AND TRANSACTION COSTS AND MUST THEREFORE combined with technology transfer has been quite effective. In BE BASED ON PRIOR RATE ANALYSIS. Altering China, drip and sprinklers are now used on one-sixth of culti- incentive structures carries political and trans- vated land. In Jordan, a combination of incentives to adopt action costs. Each situation needs evaluation improved technology and rising water prices have led to invest- to identify objectives and assess the feasibility ment and innovation (for example, plasticulture, and fertigation). and efficiency of each instrument. The analy- Experience shows that a combination of instruments is more sis should evaluate the political and technical effective than a single instrument and that careful design and feasibility of each instrument relative to policy implementation are needed to achieve objectives. objectives; the relative impact to be expected Source: Saleth and Dinar 1999. from each instrument; and the transaction costs involved in implementing the reform. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT PACKAGES SHOULD BE MUTUALLY REINFORCING AND making and increase the sustainability of INCLUDE "POSITIVE" INCENTIVES. Incentives should WUE improvements. be grouped and complement one another. "Negative" incentives such as price increases · Factor product markets into thinking about should be supported by "positive" incentives economic incentives for agricultural water such as the assignment of property rights or use, because they are often determinants of transfer of irrigation management. farmers' capacity to respond. PACKAGES SHOULD PROVIDE INCENTIVES TO ALL · Pilot any untested incentive before going ACTORS. Government can be motivated by full scale. reduced fiscal charges and by the prospect of · Monitor and evaluate outcomes and impacts private sector­led growth and consequent throughout in order to show participants the poverty alleviation. Water suppliers can be results--and to allow for corrections. motivated by the prospect of improving their performance and reducing friction with clients. Users can be motivated by ownership of assets, INVESTMENT OPPORTUNITIES water, or institutions, and by having means of · Technical assistance inputs to reviewing improving productivity and incomes. Incentive policy objectives, the existing incentive packages may be different at the local level structure, irrigation and agricultural policy, (encouraging end-use efficiency) and at the and fiscal and trade policy regional or basin level (where they could also promote allocative efficiency). · Dialogue and iterative shared analysis to match possible instruments to policy objec- tives, assess feasibility, develop balanced RECOMMENDATIONS FOR PRACTITIONERS and integrated packages combining positive · Base project design on careful analysis of and negative incentives, and win support objectives, political and technical feasibility, from stakeholders likely impact of instruments, and the trans- action costs of implementing the reform. · Pilot investments to test incentive packages Evaluate the best sequence of reforms, given their likely different time scale. Eco- · Full-scale investment projects in irrigation nomic analysis should precede investment. improvement or water resources manage- ment, linked to an improved economic 57 · Educate policy makers, managers, and users incentive structure on the incentives available, how they work, and what methods can be used to imple- ment them. Box 1.22 Requirements for a Good · Combine different "positive" and "negative" Incentives Package instruments to win the support of stakehold- ers. Adapt packages to the scheme, basin, Good incentives will have the following characteristics: and national levels. · Be focused on objectives of WUE, environmental sustain- ability, and fiscal affordability. · Increase the use of economic incentives · Contain an integrated set of measures that both increase associated with Bank projects and country costs of inefficient behavior and facilitate change toward programs. Experience shows that Bank proj- more efficient and sustainable water use. ects and programs can be a powerful vector · Take account of agricultural policy and markets. for change, underexploited in the past. · Reflect political economy and socioeconomic realities and be feasible and effective in the country situation. · Move toward decentralized, market-based Source: Author. mechanisms in order to depoliticize decision BUILDING POLICIES AND INCENTIVES REFERENCES CITED Singh, K. 2003. "Punjab Agricultural Policy Diao, X., and T. Roe. 2000. "The Win-Win Effect Review." Draft report for the World Bank. of Joint Water Market and Trade Reforms on World Bank, Washington, DC. Interest Groups in Irrigated Agriculture in Mexico." In A. Dinar, ed., The Political Econ- Tiwari, D. N. 1987. Irrigation Development and omy of Water Pricing Reforms. New York: Farm Level Infrastructures. Proceedings of Oxford University Press. the Workshop on Efficacy of On-Farm Development Works. Madras, India: Anna Dinar, Ariel. 2001. "Review of Active Bank Irriga- University, College of Engineering, Centre tion and Drainage Portfolio: Use of Economic for Water Resources. Incentives." In F. J. Gonzalez and S. M. A. Salman, eds., World Bank Technical Paper Tiwari, D. N., and A. Dinar. 2000. "Role and Use No. 524. World Bank, Washington, DC. of Economic Incentives in Irrigated Agricul- ture." Paper prepared for Irrigation Reform FAO (Food and Agriculture Organization). 1996. Workshop, December 2001, World Bank, "Food Production: The Critical Role of Washington, DC. Water." Technical Background Paper, World Food Summit 1996. FAO, Rome. Wade, R. 1995. "The Ecological Basis of Irriga- tion Institutions: East and West Asia." World Nagaraj, N. 1999. "Institutional Management Development 2041­49. Regimes for Pricing of Irrigation Water." Agricultural Systems 61: 191­205. Ward, C. 1997. "Jordan Agricultural Sector Adjustment Loan, Implementation Comple- Qian, L. C., and D. Xu. 1994. "Sustaining Irri- tion Report." World Bank, Washington, DC. gated Agriculture in China." In Sustainable Irrigated Agriculture. Dordrecht, Nether- Yoduleman, M. 1989. "Sustainable and Equitable lands: Kluwer Academic Press. Development in Irrigated Environments." In H. Jeffrey, ed., Environment and the Poor: Rosengrant, M. W. 1997. "Water Resources in Development Strategies for a Common the 21st Century: Challenges and Implica- Agenda, U.S. Third World Policy Perspec- tions for Action." IFPRI 2020 Vision Dis- tives, No. 11. Washington, DC: Overseas cussion Paper No. 20. Online at http:// 58 Development Council. www.ifpri.org. This Note was prepared by Chris Ward and reviewed by Saleth, R. M., and A. Dinar. 1999. Water Chal- Sarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI. lenge and Institutional Response. Policy Research Paper No. 2045. World Bank, Rural Development Department, Washington, DC. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 1.1 OBJECTIVES AND DESCRIPTION The core objective of CWRAS is to produce an operational plan for Bank involvement in the AGRICULTURALWATER IN water sector. Preparation involves analysis, dia- THE NEW COUNTRYWATER logue, and decisions that pinpoint a country's water challenges and opportunities; set those RESOURCES ASSISTANCE challenges and opportunities within a framework STRATEGIES in which long-term objectives, together with political, social, and economic constraints; Dublin What is new? This Innovation Profile summarizes Principles; and CAS/PRSP are reconciled in a a World Bank water assistance program matched strategy; and set out the action plan agreed to by with a CAS/PRSP, integrating all sectors, recognizing the government in question and the Bank. The both principles and pragmatism, and agreed to by resulting CWRAS is a Bank strategy, but set the government. Agricultural water strategies can within the national strategy. CWRAS is a "water be well articulated through this new instrument. CAS, making the Bank/Government water con- tract explicit and tailored." Water sector planning is difficult because sus- tainable resources management has to be rec- Given the predominance of agricultural water onciled with the interests of the water-using use in overall water use and the role of irriga- "sectors"--agriculture, urban and rural supply, tion in food production, income creation, and and hydropower. As described in the World poverty eradication, agricultural water will be Bank's Water Resources Sector Strategy (WRSS; an important component of CWRAS. World Bank 2004), the Dublin Principle of "subsidiarity"--devolving decisions to the The CWRAS Equation lowest possible level--has to be reconciled with the principle of "integrated management" National Policy + Bank Water Resources Strategy of the resource. Within the Bank, the overall + CAS/PRSP + Sectoral Strategies = CWRAS water resources strategy has to be reconciled with the strategies and business plans of the In January 2003, the Bank's Water Resources water-using sectors. On the whole, the Bank Management Group (WRMG) developed some has not handled this integration well. Sectoral interim CWRAS guidelines for practitioners. The strategies have not been coordinated or inte- guidelines describe a CWRAS process in three grated, and at the country level, the CAS/PRSP parts: internal Bank consultation and review, 59 process has dealt summarily with the com- engaging all Sector Directors and Country plexities of integrated water resource issues Directors working on water; a consultative and tended to focus on selected sectoral process with country stakeholders, focusing on issues. Therefore the WRSS identified a need Bank role and choices; and agreement with for a cross-sectoral CWRAS to integrate the government on the CWRAS as a framework for range of Bank programs that have an impact Bank water interventions. on or are affected by water resources. Describing CWRAS as a "a rolling ten year plan The problem of irrigation, drainage, and agri- for the Bank in water, linked to CAS goals," the cultural water management within the WRSS is guidelines set out the recommended content of an acute example of this problem of "matrix a CWRAS: analysis of critical water challenges, management." In addition to the need to align goals, policies, and strategy in the country; eval- agricultural water policy with overall resource uation of the Bank's comparative advantage as a management policy, agricultural water typically development partner; assessment of the rele- comes under several different institutions and vance to the country water situation of the can even be treated as several different "sec- Bank's "overarching" contract through the CAS; tors"--such as basin planning, dams, irrigation, assessment of the impact of Bank water inter- agriculture, and watershed management. ventions on growth and poverty reduction; a BUILDING POLICIES AND INCENTIVES reconciliation of the country situation with Bank where there has been previous dialogue, as in global water principles; an assessment of the China and the Philippines. In the Republic of political economy of reform and a sequenced Yemen, with a long and sustained dialogue, prioritized set of Bank activities supporting the CWRAS team has adopted a more ambi- reform; and a program of Bank lending and tious approach (box 1.24). nonlending activities. Agricultural water use has figured prominently The guidelines are well reflected in the 2002 in CWRASs produced to date. In the China Philippines CWRAS (box 1.23). CWRAS, agriculture water issues include groundwater management, irrigated agriculture, During fiscal 2004, financing of US$200,000 per basin management, watershed management, region was provided through the Bank-Nether- environmental flows, water pollution control, lands Water Partnership Program to support the hydropower linkages, and flood control and Philippines CWRAS. protection. The Republic of Yemen's CWRAS has a major focus on groundwater and surface irrigation, groundwater management, and water ASSESSMENT quality issues. CWRAS imposes a more integrated approach on water programs. It links principles, oppor- tunities, and action, and leads directly to OUTPUT AND IMPACTS investments. CWRAS also links parallel objec- The CWRAS output is a program of Bank lend- tives to water, particularly poverty reduction, ing and nonlending support for water schemes, through its obligatory link to PRSP and the Mil- agreed with the government, set within a lennium Development Goals. It works best strategic framework, and broken down by sec- tor (box 1.25). It explicitly addresses the range and consistency of Bank activities as a mecha- nism of poverty reduction (table 1.3). It is an Box 1.23 Objectives of the Philippines Country input to--or at least consistent with--the CAS Water Resources Assistance Strategy and the PRSP. The objectives of the Philippines' CWRAS were to define a The Philippines CWRAS (box 1.25) is expected framework and overall strategy for theWorld Bank's water pro- gram,including a review,prioritization,and recommendations for to have impacts on Bank water work, including 60 changes in existing and planned water- related activities in light of improved coherence between sectors (requiring the new Bank strategy, Bank corporate goals, and foreseen close work across sector directors), better fit of national challenges in water. The CWRAS was prepared by a water work with the CAS (requiring close work Bank team, in consultation with the government. with the country director), and improved quality Source: Philippines CWRAS. (for example, by bringing the Water Resources Management Group into country work). Table 1.3 CountryWater Resources Assistance Strategy: Analytic Framework for Poverty Impacts throughWater Programs Area of action Broad social impacts Poverty-targeted impacts Resource management and development Regionwide water resource interventions Targeted water resource interventions Service delivery Broad water service delivery reforms Targeted improved water services Source:World Bank 2004. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT LESSONS AND ISSUES FOR REPLICABILITY integrated approach and monitorable indicators The Bank teams have grasped the CWRAS of success, together with a related monitoring instrument in some very different ways, ranging and feedback process. Best results will proba- from a focused Bank-only strategy (Philip- bly come where monitoring and dialogue are pines), through a broader, issues-oriented sustained by annual Bank budgets for follow- approach (China), to what is essentially an up (essentially a Programmatic Economic and update of the national water strategy (the Sector Work approach). Republic of Yemen). Although variety and flex- ibility are good, teams would welcome an eval- Finally, all the early efforts suggest the need for uation and some clearer guidelines. flexibility and country adaptation of the CWRAS approach within the common objective of a Early examples have been able to mobilize cooperation framework over a short- and intersectorally within the Bank quite effectively, medium-term horizon. but the process is still led by one "sector" or another. In the Republic of Yemen, water resources and agriculture lead, and water sup- REFERENCE CITED ply and sanitation take a back seat. The "inte- World Bank. Water Resources Sector Strategy: gration" between water resources management Strategic Directions for World Bank Engage- and the sectors is still imperfect, especially in ment. 2004. Washington, DC: World Bank. very large countries such as China, where the CWRAS is essentially a list of issues rather than a comprehensive framework. Most teams have stuck to the "Bank-only" Box 1.24 A Broader Approach:The 2004 Republic of approach, which is in line with the concept. Yemen CountryWater Resources Including more stakeholders and other donors Assistance Strategy becomes very ambitious and is probably realis- tic only in smaller countries with a history of The 2004 the Republic of Yemen CWRAS can be summarized good dialogue (for example Jordan or the as follows: Republic of Yemen). · It is a joint exercise among government, donors, and the World Bank. In China, the approach has historically been · It updates a national strategy and investment plan. 61 fragmented (regionally, sectorally, and within · It adopts a fully participatory approach through stake- the Bank, where seven different units handle holder working groups and workshops. water). The CWRAS has been seen as a chance · Its objectives include deepening relationships with local actors, and building local capacity. to bring the strands together in an issues-ori- ented, problem-solving approach. Agricultural Source: Author. water issues figure prominently. For the first time, the China CWRAS covers water resources management as the "missing" theme that brings the analysis together. The lesson is that CWRAS Box 1.25 The Chapters of the Philippines Country is a good opportunity for agricultural water Water Resources Assistance Strategy analysis and for integrating agricultural water 1. Water resources base, uses, and challenges into the big picture. 2. Government institutional, legal, and policy framework 3. Implications for the CAS, including review of Bank and CWRAS requires a good partnership among other donor programs and lessons learned Country Directors and Sector Directors, sus- 4. Evaluation and priorities for the CWRAS--what the tained dialogue with government, and a good Bank should do more, less, or better appreciation of the political economy of reform. Source: Philippines CWRAS. Other factors include a good intersectoral and BUILDING POLICIES AND INCENTIVES WORLD BANK PROJECTS DISCUSSED Yemen, Republic of. "CWRAS." Author's per- sonal communication. Scheduled for deliv- ery and external dissemination in the third quarter 2005. USEFUL LINKS Country Water Resource Assistance Strategies Web page: http://lnweb18.worldbank.org/ ESSD/ardext.nsf/18ByDocName/Strategy CountryWaterResourceAssistanceStrategies. This Profile was prepared by Chris Ward and reviewed by Sarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI. 62 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 1.2 innovatively in a more commercially oriented environment has deprived smallholder farmers of improved livelihoods and saddled them with ENABLING SMALLHOLDER food and income insecurities. Not surprisingly, PROSPERITY: IRRIGATION Zambians live on one of the lowest per capita incomes of the continent (US$350). INVESTMENTS FOR READY MARKETS OBJECTIVES AND DESCRIPTION What is new? Now that irrigation technologies In August 1999, a bilateral donor created the are affordable, individual, and modular, linking Zambia Agribusiness Technical Assistance Cen- African smallholders to markets is the next chal- ter (ZATAC). Its aim is to help break the cycle of lenge. How can the production of a dispersed pop- persistent rural poverty and food insecurity and ulation of small producers be channeled toward increase smallholder household income by domestic and foreign markets? A successful case of applying commercial approaches. bilateral donor support to agribusiness companies that link up with smallholders is discussed in this ZATAC focuses on wealth creation through Innovation Profile. commercialization of smallholder production. Its market-based and demand-driven approach Agriculture holds the greatest promise for Zam- to smallholder production, combined with bia's prosperity. The country's vast tracts of fer- economies of scale through outgrower schemes tile soil, tropical climate tempered by altitude, directly linked to ready markets, has increased good rainfall, and access to more than 45 per- household incomes for smallholders. ZATAC's cent of Southern Africa's water resources strategy involves evaluating the commercial endow its farmers with considerable compara- potential of smallholder production, then lifting tive advantages. Zambia's pursuit of economic constraints to commercialization by whatever liberalization and structural reform holds prom- means--for example, by helping smallholders ise for transforming the country into a more shift from bucket-watering to pump irrigation or open market economy. intercrop high-value crops to maximize returns on land and labor. ZATAC also aims at striking In the absence of appropriate irrigation strate- deals and establishing linkages between small- gies, an overwhelming proportion of Zambian holder outgrower schemes and agribusinesses 63 farmers still depend on rain for production, and seeking to enhance their supply volume and produce one crop of maize a year. When rain- competitiveness in domestic and export mar- water is not sufficient, smallholder farmers in kets. This strategy gives small growers an this water-rich nation irrigate their crops using opportunity to increase household cash flow small cans or buckets to fetch water from quickly while becoming partners in the value nearby streams or wells. It takes 6 to 8 hours to chain. It offers agribusinesses a chance to irrigate a quarter-hectare plot using this increase their supply base and benefit from method. This technique is practiced by 85 per- economies of scale without the associated capi- cent of Zambia's farmers, of whom 600,000 are tal investment. smallholders. Central to the strategy is the identification of Acknowledgment that Zambia's great water affordable, appropriate, and efficient systems that endowment offers high potential for economic add value so that smallholders can work them- growth led to the formation of the Water selves out of poverty. For example, in export Resources Action Program (WRAP). But what vegetables, ZATAC helped override the water hinders the advancement of irrigated agriculture constraint by providing credit for irrigation equip- is primarily the lack of appropriate investments. ment to make water work for smallholders. The Reluctance to address irrigation directly and access to credit for irrigation equipment that BUILDING POLICIES AND INCENTIVES ZATAC provided enabled smallholders to better the farm and company levels. It does so directly utilize the resources they own: land and labor. As and through alliances with other donors, a result, smallholders are producing more cycles research institutions, the ministries, as well as of crops, growing higher-value crops, and spend- the agribusinesses themselves. ing less time watering while expanding produc- tion. Some smallholders earn as much as US$8,000 a year on a 2-hectare plot, producing OUTPUT AND IMPACT export vegetables. Participating smallholders now earn more and grow more cycles of crops and more varieties The simple provision of irrigation credit, tied of products than ever before. Smallholder agri- with ready buyers, has unleashed the farmers' cultural practices are changing, and in the potential. This type of market linkage not only process, farmers feel encouraged to upgrade increases real income for smallholders but also themselves by using improved technologies, provides an avenue for repayment of the credit. better-variety seeds, and labor-saving mecha- With ZATAC assistance, the equipment credit is nization that all help them break free from their channeled to smallholders through their pro- dependence on rain and from poverty. ducer groups, and further guaranteed by the ready markets or agribusinesses that ultimately For the first time in the history of Zambia, purchase the product. As part of the relation- smallholders are growing fresh vegetables for ship, the agribusinesses help remit repayments European markets, thanks to the alliance to ZATAC for producer groups and their mem- between smallholder producers and agribusi- ber producers. nesses. In 2003, 300 smallholder farm families exported close to 300 tons of fresh vegetables Under the ZATAC Integrated Coffee Program, to the United Kingdom. This example shows smallholder farmers intercrop specialty coffee how this type of linkage not only increases with vegetables for the local market and income for smallholders but also contributes to paprika for the export market. Paprika produc- the nation's economic growth. tion is linked to a local processor and exporters, while coffee is exported through the local cof- fee growers association. ZATAC also provides ISSUES FORWIDER APPLICABILITY irrigation credit to these smallholders through Because of the success of the programs, the their cooperative enterprise for the purchase of model has been replicated across other subsec- 64 treadle pumps, which has enabled smallholders tors and provinces. ZATAC now operates in 5 to tap Zambia's water resource more effectively out of 9 provinces and manages smallholder than they would have with the bucket tech- outgrower schemes in dairy, coffee, paprika, nique. The switch to treadle pumps has meant honey, cashew, and essential oils. To date, that farmers now need an hour or less to water ZATAC has worked with 10,000 smallholders an area that used to take 6 to 8 hours. Treadle and rural entrepreneurs linked to more than 15 pumps cost less than US$100 on average. agribusinesses. ZATAC applies interest and a service fee on these kinds of credit but adjusts the terms to With less than 15 percent of Zambia's arable help smallholders manage their debt burden. As land under agricultural production and not with export vegetables, ZATAC rallies agribusi- more than 12 percent of the nation's irrigable ness assistance in establishing a repayment sys- area under irrigation, the potential is enormous tem to reimburse ZATAC for credits disbursed. to expand food production for domestic and foreign consumption. Constraining fuller utiliza- In addition to credit, ZATAC provides technical tion of this opportunity is access to credit, or assistance, business development services, and lack thereof, particularly for smallholder farm- training in production and processing, both at ers without the collateral to secure loans from A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT financial institutions. For irrigation credit to USEFUL LINKS work, production activities must be tied to The ZATAC Web site: http://www.zatac.org/ ready markets that ensure a reasonable return. The ZATAC approach provides that linkage. This Profile was prepared by Bagie Sherchand of Develop- ment Alternatives, Inc., and reviewed by Sarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI. 65 BUILDING POLICIES AND INCENTIVES 2 DESIGNING INSTITUTIONAL REFORMS · Investment Note 2.1 Investing in Participatory Irrigation Management · Investment Note 2.2 Investing in Water Rights,Water Markets, and Water Trade · Investment Note 2.3 Investing in Building Capacity in Agricultural Water Management · Innovation Profile 2.1 Drivers of Public Irrigation Reform in Australia · Innovation Profile 2.2 Investing in Farmer Networks for Inclusive Irrigation Policy Processes in South India 67 OVERVIEW Together with public policy (chapter 1), institutions create the enabling environment in which markets guide the allocation of resources for efficient outcomes.This chapter examines key institutional reforms that can improve the pro-poor enabling environment and increase the efficiency of water resource use. WATER SECTOR REFORM SOMETIMES DEMANDS HIGH POLITICAL TRANSACTION COSTS OF MANAGEMENT. Water sector reform is a complex, multisectoral challenge, with many stakeholders and sometimes high associated political transaction costs. The process requires investment--of time, political capital, and financial resources (for studies, capacity building, and institutional development). Reform champions are needed, and experience shows that participatory approaches, though sometimes risky, strengthen ownership. Irrigation management transfer in Australia is an example of success achieved under conditions of well-developed governance, political commitment, skilled and devoted stakeholders, and extensive investment at every level in learning and participation. Another example (from South India) shows investments are more efficient when accompa- how farmer irrigators were brought into the nied by decentralization, demand drive, and policy reform process and made it more farmer participation (see IN 2.1). Other chapters discuss oriented. (See IN 1.4 on stakeholder interests, the power of participation in private irrigation IN 1.1 and IN 1.2 on the political economy of improvement (IN 3.3); multipurpose operations reform, IP 2.1 on coalition building in Australia, such as dams and groundwater management (IP and IP 2.2 for the South India case. See also 4.1); community-driven approaches to small- "Strengthening Farmer Organizational Capacity scale irrigation and watershed management (IN to Influence Agriculture Policy," in Agriculture 7.1); and supplemental irrigation, watershed Investment Sourcebook (AIS), Module 1.) management, and drought and flood manage- ment (IN 6.1, IN 6.2, IN 8.1, IN 8.2). FOR DIFFICULT REFORMS, ADJUSTMENT LENDING MAY BE SUITABLE. Policy-based loans can provide an WATER USER ASSOCIATIONS ARE AN IMPORTANT incentive for governments to undertake com- INVESTMENT AREA. WUAs in irrigation can play prehensive, multisectoral policy and institu- many roles along a sequence from the most tional reforms despite their high political basic cooperation at the turnout (tertiary, qua- transaction cost. Using a policy-based lending ternary) right up to managing irrigation instrument focuses attention on a specific high- schemes. As the degree of transfer of responsi- profile reform agenda and musters a con- bility grows along the sequence, investments stituency within government and civil society to will be needed to build institutions and capac- implement it. It also has a democratic and ity. The approach has proven successful and "inclusive" nature, because program publicity popular. WUAs can also help the inclusion of stirs public debate throughout the nation. (See women and the poor in discussion and deci- IN 1.2. See also "Adjustment Lending for Agri- sion making, and even in leadership, on water culture Policy Reform," in AIS Module 1.) rights and management. Participatory irrigation management (PIM) has been adopted in more IN AGRICULTURAL WATER INVESTMENT, DECENTRAL- than 50 countries since the 1980s. Investment IZATION, DEMAND DRIVE, AND PARTICIPATION ARE in a well-designed PIM strategy can bring many ROUTES TO IMPROVE EFFICIENCY. About half of the benefits: reduced cost to government, irrigated area in the world has been developed increased cost recovery and farmer investment, and managed by governments, but inherent improved maintenance, more equitable and structural problems have sent government- efficient water distribution, improved water 68 owned irrigation schemes into a spiral of degra- quality, fewer water conflicts, and improve- dation. On these schemes, irrigators do not ment in government services. Participatory generally have a sense of ownership and approaches and user associations are also now responsibility for the system or for efficient being introduced for drainage, for example in water use. Service is often poor, and the systems the Arab Republic of Egypt. But there are risks, cannot mobilize adequate resources to finance too. The cost of water to farmers may increase; costs. Governments have become increasingly water productivity may not rise quickly; local reluctant to pay subsidies. As a result, the condi- elites may capture control; and government tion of infrastructure and the quality of water may reduce its support too quickly. The most services have declined. This poor experience common causes of failure are inadequate has led to a shift of emphasis away from gov- preparation of the enabling framework, weak ernment and toward a new public-private para- political and civil society support, and a hasty digm in recent years. The private sector--in the transfer without capacity building. (See IN 2.1 form of contractors, private investors, water user for WUAs and participatory irrigation manage- associations (WUAs), community organizations, ment. See IP 5.5 for participatory drainage in nongovernmental organizations (NGOs)--is tak- Egypt. See also "Investments to Empower ing on more responsibility for irrigation manage- Farmers to Manage Irrigation and Drainage Sys- ment and financing. The key message is that tems" in AIS, Module 8.) A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT AS AGRICULTURAL WATER MANAGEMENT MOVES capture and abuse of a common pool resource. FROM AN ENGINEERING PHASE TO A TECHNOLOGY- A system of rights has proven to be an efficient, AND MANAGEMENT-INTENSIVE PHASE, INVESTMENT IN equitable, and sustainable water management CAPACITY BUILDING BECOMES MORE AND MORE option, promoting efficient water use and ESSENTIAL. As the technical challenges of scarcity increasing cost recovery. Water rights are also a and environmental degradation grow, and as prerequisite for the development of water mar- stakeholder involvement becomes more impor- kets, which can allow intrasectoral and intersec- tant, skill needs change. Capacity building is toral transfers. However, introducing rights-based needed at all levels--from farmers to govern- systems can be politically contentious, particu- ment, covering the whole range from adaptive larly where there is cultural reticence and weak research to hands-on management coaching for governance. A long-term participatory approach WUAs. The cost of adequate capacity building is essential. (See IN 2.2.) worldwide has been estimated at US$1 billion a year, but actual investment does not come close to that amount. (See IN 2.3.) SOMETYPICAL INVESTMENTS Investments in technical assistance could include INVESTING IN A WATER RIGHTS SYSTEM CAN HELP the following: IMPROVE WATER MANAGEMENT, BUT ESTABLISHING A RIGHTS-BASED SYSTEM IS FAR FROM EASY. Where · Capacity building (for sector management, water rights are not secure, management is ineffi- farmer associations, and the like) cient. If water is treated as a public or common resource, incentives to efficient management and · Institutional development (water rights, allocation are dulled. Management will also be PIM, Irrigation Management Transfer, law, inequitable, because use of water without a for- water markets, and so on) mal rights system results in exploitation by the most politically and economically powerful. Project investments could focus on irrigation Finally, water management without a clear rights and drainage research. And finally, pilot invest- system is unsustainable: absence of rights pro- ments could include pilot projects for PIM and vokes irresponsible use through the law of water markets. 69 DESIGNING INSTITUTIONAL REFORMS INVESTMENT NOTE 2.1 tion Management (or PIM, as noted above), and they are generally implemented through WUAs. These associations can also be a fundamental INVESTING IN PARTICIPATORY means for empowering women, thus contribut- IRRIGATION MANAGEMENT ing to Millennium Development Goal 3 (pro- mote gender equality and empower women). In Unable to finance and manage the large irrigation varying degrees and ways, participatory irriga- schemes they built and now own, governments are tion management has been adopted in more seeking to transfer management authority to users. than 50 countries since the 1980s, including mul- Transfer shifts the government role mainly to regu- tiple states or provinces in India and China. lating operation and maintenance (O&M) by build- ing the capacities of WUAs, providing support services, and piloting the decentralization of man- INVESTMENT AREA agement of river basins and aquifers.WUAs may, in In the 1970s and 1980s, PIM was often viewed turn, contract private sector entities to provide as farmer contributions to management rather management services. Both levels of transfer than farmer empowerment and government require agreements, new incentives, and new meth- reorientation. Recent reforms in Mexico, ods to ensure inclusiveness and accountability Andhra Pradesh (India), and Indonesia, have among stakeholders. They require investments in updated the concept to mean the empower- building institutions and human capacity. Mature ment of WUAs to govern the management and networks of WUAs could enhance the prospects financing of public irrigation systems. The key for reforms such as volumetric allocation, water challenge is increasingly recognized as pricing, and conflict resolution. accountability: building incentives (rewards), sanctions, and transparency into water service Irrigation systems are a vital resource for food organizations to induce them to meet stan- production, rural livelihoods and income, and dards set by the governing body of users, the increasingly, fisheries and rural industry. representative of the owner government, and About half the world's irrigated area has been other stakeholders. developed and managed by government. In such systems, water users generally do not The following are the main potential investment have a sense of ownership and responsibility areas in PIM: 70 for the system or its water. Moreover, many irrigation systems cannot mobilize adequate · Policy, legal, and institutional framework resources to finance costs. As a result, the sys- for WUAs tems' infrastructure and the quality of water services rapidly decline. In addition, competi- · Restructuring government and building its tion for water and pressure on the environ- capacity in sector regulation, building ment are growing. WUAs, and providing support services · Creating and building governance and man- Under these circumstances, the key challenge agerial and financial capacity of WUAs becomes how to put the limited resources of farmers, governments, the private sector, and · Restructuring the water supply, irrigation, international development agencies to best use and agricultural agencies to improve the for optimal water productivity and sustainability way irrigation management, rehabilitation, of irrigation systems. Empowerment of water and upgrading are decided and financed, users is essential to meet this challenge because with greater cost sharing and incentives for strategies that promote active participation and farmers farmer investments show potential for increasing the returns on public investment. Collectively · Empowering women and the rural poor, these approaches are called Participatory Irriga- through membership rights and inclusion in A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT local water forums; introducing water rights issues, extension, and conflict resolution. In at the farm level; and enhancing leadership Shaanxi province in China, the private sector capacity for poor women and men in WUAs. has invested in irrigation rehabilitation. In some countries, PIM has expanded the area · Enabling the private sector to provide sup- served. PIM implies the creation of WUA feder- port services to WUAs for both irrigation ations, as well as partnerships with the private and agriculture sector, that offer farmers new options to organ- ize group input provisioning, agribusiness, and Future investments in PIM will need to be marketing. Hence, as PIM evolves to include linked to broader irrigation sector reform and WUA federations and the private sector, it efforts to increase the productivity of irrigated enables WUAs to interact more with the agriculture, especially for the rural poor, socioeconomic, environmental, and political through innovations in credit, technology, forces around them. demand-driven extension, and group-based agribusiness and marketing. Innovation and change to empower women is likely to have a strong impact on irrigation per- formance. In Africa alone, women provide daily POTENTIAL BENEFITS labor for irrigated production--especially in A well-designed PIM strategy has proven poten- woman-headed households, which account for tial to increase farmer investment in irrigation between 25 and 35 percent of smallholder irri- management, improve the productivity of water gators (Chancellor 1997). The experience used for agriculture, improve the sustainability reported in box 2.2 shows how female leader- of irrigation systems, promote development of ship can foster local economic development demand-driven support services, and improve and improved living conditions. the cost-effectiveness of government regulation and responsiveness of its services. POLICY AND IMPLEMENTATION Evaluations show that PIM yields a mixture of Key policy and institutional decisions to be positive and negative results. Box 2.1 summa- made in PIM programs are as follows: rizes the most commonly reported benefits-- and risks, if PIM is not designed properly. Most project and research documents report reduced government expenditures for irrigation, as in 71 Mexico and Andhra Pradesh, in keeping with the objective. Farmers' irrigation costs often Box 2.1 Benefits and Risks of Participatory rise, but this rise may eventually be offset by Irrigation Management increases in water productivity through more responsive management, improved support Benefits services, and better market access. Adoption of · Reduced cost of irrigation to government PIM in Mexico, Andhra Pradesh, and Mali · Increased cost recovery brought about an increase in investments, · Improved coverage and quality of maintenance including farmer investments, in maintenance · Better water distribution equity and efficiency and rehabilitation. · Fewer water conflicts Risks PIM also generates other benefits. The forma- · Cost of water to farmers may increase tion of WUA federations in Indonesia and Mex- · Water productivity may not rise quickly ico has enabled farmers to participate in river · Local elites may capture control basin forums, which deal with water competi- · Government may reduce support too much tion and environmental concerns. In Mexico, · Rehabilitation financing remains unresolved Colombia, and Nepal, WUA federations and Source: Author. national networks provide support for political DESIGNING INSTITUTIONAL REFORMS · How should the roles, services, and author- · How should such changes be phased in and ity for irrigation management be realigned implemented? between farmers, government, and the pri- vate sector? Such questions normally require strategic plan- ning exercises that include key stakeholders; · What organizational arrangements and they may also require research and pilots. A modes of farmer participation are appropri- comprehensive strategy should emerge that ate for irrigation system governance, man- includes building and maintaining political sup- agement, financing, and sector regulation? port, incentives, and accountability mechanisms to maintain and increase stakeholder support. · What type of capacity building is needed The strategy should also target sustained capac- for effective functioning of WUAs, espe- ity building and financing. cially their women members? In parallel with the legal and institutional · What should farmers' responsibility be in arrangements for creating PIM, most irrigation financing different aspects of irrigation, and agricultural services providers need to including management, rehabilitation, mod- undertake major institutional reforms to meet the ernization, and construction? new demands posed by these newly dynamic customer relationships. Without that, WUAs' · What incentives and accountability mecha- expectations may be raised while the govern- nisms are needed to make stakeholders fol- mental agencies remain inadequate to respond low irrigation-related agreements and at the basin, district, or branch canal level. The regulations? challenge lies in getting irrigation and agricul- · What legal, regulatory, and institutional tural institutions to work together with WUAs changes are needed for PIM to work? and the private sector, when in most cases there is no history of cooperation. On institutional reforms, a lesson that comes out of recent expe- rience in Sri Lanka is that WUAs significantly Box 2.2 WhatWomen Can Do: change the dynamics among farmers, water sup- An Indian Experience ply services, and agricultural service providers (box 2.3). Farmers organized into groups offer In 1995, in Gujarat, India, the Self-Employed Women's Associa- many opportunities that did not exist before the 72 tion, a trade union of 215,000 poor, self-employed women, formation of WUAs. One of the lessons from Sri launched a 10-year water campaign in nine districts of Gujarat. Watershed committees were set up at meetings where every Lanka is that, once this new dynamic is estab- villager from user and self-help groups was present. Out of a lished, the private sector becomes interested in total of 11 members, 7 were women. dealing with farmer groups. Under the program, the committees constructed 15 farm ponds,recharging 120 tubewells.Through soil and moisture con- Approaches and division of responsibilities servation work, the salinity of the land decreased. With more productive land,the women began earning higher and more sus- Experience suggests that reform requires a com- tainable incomes.About 3,662 hectares were thus treated. Now prehensive, strategic, and participatory process of they grow cash crops using organic farming. On panchayat stakeholder consultations, dialogue, participatory wasteland, community pasture land, and private land, about decision making, awareness campaigns, imple- 5,000 trees have been grown and grass planted on 3,500 square meters of field bunding for better retention of water.This has mentation, monitoring, and adjustment. In the created a green belt in the area and generated employment past, investments have focused mainly on infra- opportunities for about 240 women. About 2,500 hectares of structure and modestly on institutions, with inad- land that once supported only rainfed agriculture have been irri- equate attention to incentives and accountability gated, and the supply of drinking water is also ensured. arrangements that would ensure stakeholder sup- Source: Maharaj et al. 1999. port and compliance with new institutions and rules. In the future, more attention should be A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT given to incentives and accountability measures providers, and WUAs' own rules. PIM may such as farmer empowerment, irrigation service involve an increase in investment or expendi- plans and agreements, management audits, sec- tures by water users. This is often offset eventu- tor regulation, and linkage of support and assis- ally by increases in the profitability of irrigated tance to audit results. agriculture caused by both improvements in the management of irrigation systems and innova- The debate between "big bang" versus incre- tions in cropping, marketing, and agribusiness mental approaches should be recast in terms of (the lattermost may require parallel invest- concern about which changes need to be ments). It may be beneficial to design loan pro- designed and adopted rapidly (such as strategy grams to include tranche-based benchmarking and legal framework) and which aspects need of essential but sensitive aspects of reform such an incremental approach (such as developing as indicators of political support, management optimal levels of management transfer and transfer, and empowerment of WUA federations accountability mechanisms). Experiences in and networks. Mexico, Turkey, and Andhra Pradesh suggest that the big bang approach generated basic support for reform. But they also indicate that WHEN IS INVESTMENT APPROPRIATE? the initial reforms are incomplete and further Investment in PIM is appropriate when a coun- changes are needed: service plans, audits, asset try has both a policy need for such investment management, financing, and support services. Proponents of PIM should expect and encour- age the original PIM policies and arrangements Box 2.3 The Mahaweli Restructuring and to evolve in a long-term process of monitoring Rehabilitation Project in Sri Lanka and evaluation through stakeholder workshops. WUAs were formed and fostered under the Mahaweli Restruc- turing and Rehabilitation project (MRRP) in Sri Lanka. Usually Risks and implications only 1.0 hectare of land is allocated to each farmer. Farmers in the project area, subject to the Mahaweli Authority of Sri There are risks related to the way irrigation sec- Lanka, had little say in the decision. However, after 330 to 400 tor reform is designed and implemented. An farmers formed a"community of common concern" with some example is rapid implementation of physical management authority over irrigation water, they were able to construction works without proper capacity concentrate on increasing agricultural productivity and diversi- building in institutional and managerial aspects. fication. As a group, they decided what and when to grow. 73 Vested interests may limit development of new Under this farmer management, water use decreased, and pro- ductivity in the cropped area increased. Private sector involve- accountability mechanisms and adequate ment unleashed a new dynamic and brought economies of financing between service provider, governing scale.What happened next was remarkable.The WUAs organ- authority, and sector regulator. Resistant ized bulk purchases of fertilizer, high-quality seed, and other bureaucracies may slow down or sabotage inputs at competitive prices. On the output side, agro-indus- transfer of responsibilities. They may refuse to tries dealing in soybean, chili, chicken meat, and fresh vegetables downsize or relocate staff. If management trans- found that they could talk with groups of farmers controlling fer is too rapid, WUAs may not yet be capable hundreds of hectares. In the soybean industry, for instance, the of taking over management. Local elites may industry reached agreement with groups of farmers to grow soybeans under contract.The industry wanted quality and high assume undue influence in new WUAs. As gov- volume; the farmers were interested in price and quantity.The ernment increases its role in regulating WUAs industry supplied them with high-quality seed and the exten- and service providers, underpaid employees sion expertise to ensure quality and high volume, and farmers may become vulnerable to bribes. entered into forward contacts for their crop.The partnerships started modestly with about 70 farmers and 70 hectares but A key challenge is to include incentives and soon grew to thousands of hectares. accountability mechanisms that ensure WUA Source: Geoffrey Spencer (personal communication); MRRP Imple- compliance with government regulations, serv- mentation Completion Report (n. 28927/LK). ice agreements between WUAs and service DESIGNING INSTITUTIONAL REFORMS and the political capacity to make such invest- MEASURES FOR AVOIDING FAILURE. Failures of PIM ments effectively. Key signs of need for PIM programs can be avoided, minimized, or cor- investments are governmental inability to either rected if the World Bank and its partners pursue finance irrigation O&M or collect fees from a process that involves all significant stakehold- farmers; poorly managed irrigation systems ers, each at its own level, in strategic planning, dominated by ineffective, inefficient, and/or consultations, and negotiation; tests arrange- unaccountable government bureaucracies; ments and pays attention to incentives and heavy dependence by rural society on revitaliz- accountability challenges; and monitors ing irrigated agriculture for livelihoods and progress and allows course correction. poverty alleviation; and potential for significant improvements in agricultural water productivity CONDITIONS FOR SUCCESSFUL INVESTMENTS. The and irrigation sustainability through increased most important conditions for successful PIM participation and empowerment of water users. programs are listed here by priority: high-level political commitment backed up by a strategy A country and donors have the optimum capac- to maintain a solid stakeholder coalition; farmer ity to effectively invest in PIM and irrigation dissatisfaction with present management per- sector reform when high-level political commit- formance and a PIM strategy that enables WUAs ment to it makes them feasible, when farmers to make desired adjustments; a comprehensive stand to benefit economically, and when key proposal from the Bank and its partners for stakeholders are willing to work together in a reform that includes reforms in irrigation serv- process of strategic change. So far, such condi- ice planning, government agencies, and a pri- tions have often been lacking in PIM-related vate sector role in service provision and investments. They may be facilitated through support services; building capacity and support linking up with pro-reform constituency services; and significant potential to increase groups, conducting pilot experiments, holding the profitability of irrigated agriculture. public consultations, and combining investment and adjustment loans. Financial options are dis- EFFECTIVE CHANGE PROCESSES. Experience with cussed in the Investment Note on Development Bank-supported programs for PIM suggests that Policy Lending to support Irrigation and the most important elements of an effective Drainage Sector Reforms (IN 1.2). change process (listed by priority) are compre- hensive, strategic, and participatory planning, monitoring, and adjustment; facilitation of 74 LESSONS LEARNED change through participatory dialogues about CAUSES OF FAILURE. The most common causes of agricultural and irrigation improvement strate- failure in PIM programs are listed here roughly in gies; WUA involvement in making investments order of frequency of occurrence across coun- jointly with the government; parallel assistance tries: inadequate policy, legal, and regulatory to revitalize irrigated agriculture (through mod- frameworks and political support; lack of a last- ernizing extension, marketing, and agribusi- ing coalition of pro-reform constituency groups ness); and, where needed, modernization of capable of overcoming resistance to reform by land and water rights (that is, water rights at the some government agencies; insufficient attention farm level, including rights for women and the to capacity building of WUAs and reorientation rural poor) paralleling PIM reforms. of government agencies; attempts to transfer responsibilities to WUAs without necessary legal power or financial resources, restricting the RECOMMENDATIONS FOR PRACTITIONERS scope for reform so narrowly, such as only creat- Seven elements should be in place for PIM to ing WUAs, that it fails to address significant result in sustainable and productive irrigation: incentive and accountability problems between WUAs, government, and other stakeholders; and · Functional infrastructure that is compatible finally, unprofitable agricultural conditions. with accepted water use rights and local A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT management capacity. Approaches to reha- gation system construction, management, bilitation toward supply-driven design and rehabilitation, and modernization. These operations (as in India) suggest that bring- will usually include farmer financing of ing system design, water use rights, and routine management and other cost shar- management capacity into harmony is ing by users. (See IN 1.4 on Pricing, essential for sustainable PIM reforms. Charging, and Recovering for Irrigation Services.) Public financial assistance · Empowerment of farmers to share authority should be designed to support adequate over system policies, rules, selection of lead- investment in irrigation. ers and staff, service plans, and fees. Such empowerment in PIM programs in the United · Responsive governmental and private sector States, Mexico, Andhra Pradesh, Madagascar, support services for WUAs. As WUAs take the Dominican Republic, and Indonesia have over responsibility for irrigation management been a powerful incentive for farmers to sup- and financing, they need institutional, mana- port PIM and improve the performance of gerial, and financial capacity building for irrigated agriculture. Early efforts that did not both irrigation system management and agri- include significant farmer empowerment, as cultural development. Setting up a support in the Philippines, Sri Lanka, and Thailand, system for locally managed irrigation is were not sustainable. essential to make PIM viable and sustainable. · Gender-sensitive irrigation design. It is cru- · Parallel efforts to make agriculture more cial that irrigation development take into profitable and environmentally sustainable account the prominent part that women for farmers. Without economically and envi- play in producing irrigated crops, appreci- ronmentally viable crop production, PIM ate their needs, and enable them to select will not be sustainable. Efforts to make agri- appropriate technology to improve produc- culture more profitable for farmers--and to tivity. Additionally, it should be appreciated protect watersheds--will be essential to that returns on investment in women, in make PIM work. terms of social and economic objectives, are potentially enormous (Chancellor, Hasnip, and O'Neill 1999). INVESTMENT OPPORTUNITIES PIM reforms offer opportunities to invest in · Institutional mechanisms to ensure account- the following: 75 ability to regulations and agreements among farmers, WUA leaders, water supply · Capacity building for board members, WUAs, and agricultural services agencies, and gov- WUA personnel, and agency staff members ernment officials. Institutional tools such as performance contracts among government, · Testing formulas for management and gov- agency, and users should be used to create ernance improvement effective individual and group accountabil- ity and incentives for meeting agreed objec- · Strong economic and agronomic programs tives. Though central to institutional design, to raise water productivity such tools have often been overlooked. · Building high-level political commitment · Capacity to mobilize sufficient resources to cover management and capital replace- · Preparing the agency for new roles in user ment costs. Reform programs should pro- capacity building, support services, and reg- vide the basis for ensuring the physical ulation integrity of irrigation systems. This can be achieved only if reform design addresses · Developing new cost-sharing arrangements the means of financing every aspect of irri- for O&M, rehabilitation, and modernization DESIGNING INSTITUTIONAL REFORMS · Hardware improvement following adoption WORLD BANK PROJECTS DISCUSSED of new policies for farmer co-investment Sri Lanka. "Mahaweli Restructuring and Rehabil- itation Project." Active. Project ID P034212. · Defining a clear and strong legal status for Approved: April 1998. Within World Bank, WUAs available at http://projportal.worldbank.org. · Codification of water rights for WUAs and individual users SELECTED READINGS These elements should be designed in partici- International Water Management Institute patory forums to fit local conditions and be (IWMI). 2003. Gender Analysis and Reform incorporated into policies, legislation, regula- of Irrigation Management: Concepts, Cases tions, WUA constitutions and by-laws, criteria and Gaps in Knowledge. Edited by Douglas for cost sharing and assistance, and irrigation Merrey and Shirish Baviskar. Available service plans and agreements. online at http://www.iwmi.cgiar.org/policy/ gender_pubs.htm. Ostrom, Elinor. 1992. Crafting Institutions for Self- REFERENCES CITED Governing Irrigation Systems. San Francisco: Chancellor, F. 1997. "Developing the Skills and Institute for Contemporary Studies Press. Participation of Women Irrigators." U.K. Department for International Development Subramanian, Ashok, N. Vijay Jagannathan, and (DFID), Report OD 135. Available online at Ruth Meinzen-Dick, eds. 1997. "User Orga- http://www.dfid-kar-water.net/w5outputs/ nizations for Sustainable Water Services." electronic_outputs/od135.pdf. World Bank Technical Paper No. 354, World Bank, Washington, DC. Chancellor, F., N. Hasnip, and D. O'Neill. 1999. "Gender-Sensitive Irrigation Design--Guid- Vermillion, Douglas L. 1997. "Impacts of Irriga- ance for Smallholder Irrigation Development." tion Management Transfer: A Review of Evi- U.K. Department for International Develop- dence to Date." IIMI Research Report 11. ment (DFID), Report OD 143(Part 1). Avail- International Irrigation Management Insti- able online at http://www.dfid-kar-water.net/ tute, Colombo, Sri Lanka. w5outputs/electronic_outputs/od143pt1.pdf. 76 Vermillion, Douglas L., and Juan A. Sagardoy. Maharaj, N., K. Athukorala, M. Garcia Vargas, and 1999. "Transfer of Irrigation Management G. Richardson. 1999. "Mainstreaming Gender Services: Guidelines." FAO Irrigation and in Water Resources Management--Why and Drainage Paper No. 48. Food and Agricul- How." Background Paper for the World ture Organization, Rome. Vision Process. IRC International Water and Sanitation Centre, United Nations Develop- ment Fund for Women (UNIFEM), Interna- USEFUL LINKS tional Information Centre and Archives for the International Network on Participatory Irriga- Women's Movement (IIAV), International tion Management: http://www.inpim.org/ Water Management Institute (IWMI). Available online at http://www.un.org/womenwatch/ International Water Management Institute (IWMI): daw/forum-sustdev/francis%20paper.pdf. http://www.iwmi.cgiar.org/ A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Training Kit on Gender and Irrigation: http://web. This Note was prepared by DougVermillion and Joop Stout- idrc.ca/en/ev-5427-201-1-DO_TOPIC.html jesdijk, with inputs from Arunima Dahr, Eija Pehu, and Wendy E. Wakeman of the Gender and Rural Development The- World Bank Electronic Learning Guidebook on matic Group, David Groenfeldt of the Indigenous Water Ini- tiative, and Geoffrey Spencer. It was reviewed by Maria Saleth Participatory Irrigation Management: http:// of IWMI. www.worldbank.org/wbi/pimelg/ 77 DESIGNING INSTITUTIONAL REFORMS INVESTMENT NOTE 2.2 for the issuance of water entitlements. Often, issuance requires changes in the legal and insti- tutional framework, the cultural and political INVESTING INWATER RIGHTS, attitudes toward water, and the role of the gov- WATER MARKETS,ANDWATER ernment in its allocation and management. TRADE Inclusion of water entitlements and a well- designed legal and institutional framework in This Investment Note discusses investment in the lending for water sector infrastructure are neces- development of a legal framework for water enti- sary to make the investment sustainable and to tlements, in the issuance of such entitlements, and target the poor inhabitants of the borrower coun- in the use of market-based mechanisms that permit try. Implementation requires strong long-term voluntary adjustment by owners and users to meet commitment from both lender and borrower. A temporary or permanent changes in demand. Cul- system of entitlements and market-based transfer tural and political attitudes toward water, and the does not, by itself, guarantee good water role of the government in its allocation and man- resource management. It is only one component agement, must be taken into account when consid- in an entire program. It presupposes an already ering such investments. By itself, such a system of sound water allocation and water entitlements entitlements and market-based transfer does not system. Without solid legal protection, lack of guarantee good water resources management, but confidence will prevent a market in those entitle- it is an important component of improved water ments from developing. system management. Use of water without a formal framework for POTENTIAL BENEFITS entitlements may result in the exploitation of A system of water entitlements, defined volu- this resource by the most politically and eco- metrically, enforced through measurement and nomically powerful users. A legally recognized monitoring, and coupled with market-based and regulated entitlements system has proven mechanisms for transfer or trade may produce an equitable and sustainable water manage- the following benefits: ment option. · Equitable distribution of water resources After the initial issuance, entitlements need to be among users and among sectors of use 78 able to be adjusted to deal with changing demand, particularly where water supplies are · An equitable base for the collection of water limited or subject to droughts. Such adjustments use charges that reflect actual O&M costs may be for the short or the long term. Histori- cally, readjustment was frequently based on gov- · A base for measuring use efficiency and for ernment fiat, prompted by political pressures or creating incentives to install new technolo- as an improvised response to a crisis. The cost of gies that maximize the use of the resource such readjustments usually fell on poor small farmers. Experience in both donor and client · An equitable method of adjusting entitle- countries shows that market-based, voluntary ments to meet changing demand and short- temporary, or long-term adjustments yield more ages in a voluntary manner that compensates equitable outcomes, because they compensate those giving up water supplies and shifts the those giving up water supplies or entitlements. opportunity cost of additional water to those acquiring it INVESTMENT AREA · Elimination of ad hoc water allocation deci- Investments in new or existing hydraulic infra- sions by government in reaction to political structure and irrigation projects provide a or emotional pressures or short-term eco- chance to introduce the basic concepts needed nomic expediency A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT · Registration of the allocation and use of where the institutional environment is not con- water supplies that provides a foundation sidered mature enough to implement a water for water sector planning and conservation market, nontradable water rights can be an on a river basin or regional level effective first step in that direction. The legal provision and application of water rights do not guarantee success in solving problems of over- POLICY AND IMPLEMENTATION exploitation, inefficient water use, or water con- Many countries regard water as a free good to flicts. The design of the water rights framework which all citizens are entitled and one that has to be based on sound hydrological, eco- should be allocated and managed by the govern- nomic, and social impact analyses. The lack of ment. This view and the government authority sound background studies can cause the system that it implies are jealously guarded by the man- to fail, as was the case in Mexico until 2003 agement agency. Its personnel tend to believe when the Water Rights Adjustment Program that users are not competent to participate in (WRAP) was initiated, with the Bank's assis- water allocation or management. This view has tance (box 2.4). produced inefficient management and uncom- pensated expropriation of low-priority users dur- Water markets have many advantages for water ing drought or periods of changed demands. It reallocation with respect to nontradable permits, has also resulted in poor planning, unrestricted but the property rights structure has to be use, and infrastructure deterioration. designed specifically for water transactions. Oth- erwise these markets are unlikely to work effi- Assigning water rights can effectively address ciently (Matthews 2004). Water markets can better these problems. They can be used either as address the issue of water resources sustainability nontradable or as tradable entitlements to water when the traded rights are volumetric entitle- abstraction and use. If tradable water rights can ments. Volumetric entitlements encourage users to achieve higher levels of economic efficiency on manage the resource and to maintain the infra- one hand, their application implies major social structure in a sustainable manner. In combination and institutional changes on the other. Hence, with access to market-based, voluntary exchange Box 2.4 The Role of theWater Rights Adjustment Program inWater Sustainability in Mexico 79 In Mexico's arid and semi-arid zones, a large part of the Irrigation Districts and Irrigation Units for Rural Development, sup- plied both by surface and groundwater, face serious problems. In many cases, irrigation areas, in general designed originally to meet the needs of their era and with the hydrological information then available, are now redesigned.The problem is worse in the case of groundwater because over the years the storage of many aquifers has been compromised. Excessive concession of water use rights, owing to a malfunctioning concession system, has compounded this problem. In 1992,the NationalWater Law was approved to formalize water rights entitlements and record them in theWater Rights Public Registry.The application of the law caused the issuance of concession entitlements that far exceeded national water availability.The reason was that concessions were granted for 10 years, for the volumes that users said they were using, without any calculations made on the basis of water availability.Indeed,the objective of the norm was not to give concessions that would be sustainable but to enforce the registration of all water users in order to collect information for future planning and water allocation. TheWater Rights Adjustment Program (WRAP, or PADUA as it is known in Spanish) was launched in August 2003 to recover excessive concessions of water by means of economic incentives--and to contribute to refining water rights and turning them into a true instrument for integrated, sustainable management of water resources.The program has been initially applied in Sonora state. Useful lessons learned have been identified in a World Bank­funded study.The main recommendation of the study is to integrate theWRAP with other (already existing) regulatory measures, as well as social participation and economic incentives, so that it will be able to reconcile water user rights in Mexico with the actual availability of water resources. Source: Author. DESIGNING INSTITUTIONAL REFORMS of water entitlements, volumetric entitlements During shortages and periods of changing give users economic incentives to use their enti- demand, high-priority users can compete in the tlements and supplies efficiently. On the other water market, and those who voluntarily give hand, volumetric entitlements imply the setup of up their entitlements are compensated at a rate costly equipment (that is, measurement devices determined by the market value of those sup- for pumped groundwater or abstracted surface plies. This process automatically factors in the water) for water measurement at each user costs of modifying delivery and distribution sys- abstraction node. When this is not possible (for tems and the higher value of the resource to the technical or economic reasons), a proxy of the buyers. Two case studies in South Africa (Nieu- volume of groundwater used can be calculated by woudt and Armitage 2004) show that water applying formulas based on the energy con- markets are effective in transferring water from sumed (as in Mexico) or on pumping time. A dif- farmers with lower return per unit of water to ferent approach that does not need volumetric farmers with higher return--for instance, large- measurements at each consumption node is scale table grape growers. Where crop prof- based on a priori allocation of water rights to itability in the area is similar for potential water user groups. In Chile, an annual distribution buyers and sellers, water trade is unlikely to of water is made to WUAs based on historical cri- take place, because there are no willing sellers teria. Most WUAs maintain their own registries in of water rights. order to distribute water to rights owners effec- tively, even if these rights do not imply legal title, Water markets can be an effective way for allo- and hence do not permit water trade by an indi- cating water not only within the agricultural vidual user (Hearne and Donoso 2005). sector, but also among different sectors, namely from the agricultural sector to the urban, indus- trial, and even environmental sectors. Applica- tions of intersectoral water trade are still rare, even in developed countries. Recent experi- Box 2.5 Australia COAGWater Reform: ences are those of South Africa and Australia. Key Elements Concerning Environmental Allocations An important aspect to be considered in inter- sectoral water allocations through water trading · States, in formally allocating entitlements to water, have to is how to ensure that environmental require- include allocations for the environment as a legitimate ments are met, guaranteeing, for example, a user of water. minimum flow to preserve endangered species 80 · Environmental requirements are to be determined using or protect wetlands. A pioneering attempt can the best scientific information available and with regard to be found in the Council of Australian Govern- intertemporal and interspatial water needs. ments (COAG) Water Reform Framework. This · In the case of overallocated or stressed rivers, substantial framework dictates that not all water is avail- progress has to be made in achieving a better balance in resource use and allocating water to the environment in able for transfer, since enough water for envi- order to restore the health of the river system. ronmental needs has to be preserved, according · Jurisdictions would consider establishing environmental to the principles listed in box 2.5. contingency allocations that provide for a review of the allocations five years after their determination. Market-based opportunities to improve environ- · Where significant future irrigation activity or dam con- mental flows are also being considered in some struction is contemplated, environmental requirements developed countries but they are still at the level have to be adequately met before any harvesting of the of feasibility studies (Siebert, Young, and Young water resource occurs. 2000; Burke, Adams, and Wallender 2004). · Give high priority to research necessary to advance the implementation of the strategic framework, including con- sistent methodologies for determining environmental The existence of water markets does not neces- flow requirements. sarily mean that equity and social impacts have Source: High Level Steering Group on Water, Australia 1999. been adequately addressed. The privatization of water resources, without management and A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT monitoring by appropriate institutions, can turn should be the implementation of a legal frame- out to empower a few rich groundwater owners work that provides for issuance of volumetric at the expense of poor farmers. Evidence from entitlements to the users as usufructuary rights. Pakistan's Punjab state indicates that monopoly The legislation should specify the role of govern- power in the groundwater market resulted in a ment in issuing, enforcing, and protecting the substantial misallocation of resources (Jacoby, use rights represented by the entitlements, Rehman, and Murgai 2001). However, poor adjustment that may be instituted during periods farmers would rather pay a higher price for a of scarcity, use priorities, and compensation for secure groundwater supply, even if it is monop- loss of supplies during water shortages. olized by rich landlords, than pay minimal fees for an unreliable supply of canal water regu- Any system of permanent market-based water lated by government agencies (Saleth 1998 and transfer mechanisms should be designed to min- Meinzen-Dick 1998). imize or mitigate third-party impacts. Each coun- try requires a custom-tailored approach, because Moreover, market-based transfer mechanisms do cultural, political, and social situations differ. not necessarily consider the impact of transfers Reforming the water sector involves political on third parties, including the local economy. As tradeoffs, institutional tradeoffs, and accommo- an example, losses incurred by the providers of dations to historic precedents and philosophical agricultural inputs and products may not be rigidity. Development of a strong governmental considered when water is transferred from agri- policy requires a long-term program of educa- cultural use to a different use. In addition, one tion, marketing of ideas, and a strong champion area's tax base may grow at the expense of that within the governmental structure. of another area that loses the water. In the U.S. state of California, community resistance in the Boxes 2.6, 2.7, and 2.8 illustrate the diversity in selling regions has soured a number of water- the implementation of water sector reform. trading deals over the late 1990s and early 2000s and has likely prevented others from being pro- posed. In addition, many of California's rural LESSONS LEARNED counties have introduced ordinances that The major lessons learned from Bank and non- directly restrict groundwater exports and indi- Bank projects are as follows: rectly restrict the sale of surface water (Hanak 2003). Hence, any system of market-based per- · A legally and operationally solid water enti- 81 manent transfers needs a regulatory authority tlement program is the foundation for that ensures that third-party impacts are consid- sound water management and for water ered and that the purchaser of the water entitle- charges to support sustainable management ment bears at least a portion of the third-party and maintenance of water resources. impacts or losses. In addition, institutional mechanisms for preventing and resolving social · Such an entitlement program is a precursor conflicts need to be put in place. for a system of voluntary transfer of water entitlements to meet temporary and perma- Flexibility must be built into the law to allow nent changes in demand. adjustments and provide for a system of market- based transfers and trades. Borrowers are usually · Water rights and markets by themselves are more comfortable with the concepts of annual not sufficient to guarantee beneficial effects temporary transfers and rental of entitlements on water allocation, economic efficiency, than with provisions permitting permanent trans- and poverty reduction. Only well-conceived fers. Confidence can grow only as the system institutional mechanisms can avoid unin- develops. It would be rare to be able to imple- tended negative distributional and social ment every desired aspect of a water entitlement effects from the application of sound eco- legal framework at the outset. The primary goal nomic principles. DESIGNING INSTITUTIONAL REFORMS Box 2.6 India: Maharashtra Restructuring and Policy Reform Maharashtra state in India took bold and innovative action in 2002 and 2003.The World Bank was a knowledge partner when the Maharashtra government initiated a program to restructure water resources management functions. The program included the development and adoption of a State Water Policy; introduction of an act for the establishment of the Maha- rashtra Water Resources Regulatory Authority (MWRRA); introduction of an act (Farmers-Managed Irrigation Systems-- FMIS) empowering the formation of WUAs and upper level associations (ULAs); and the drafting of an amendment act transforming the irrigation development corporations into river basin agencies.The FMIS Act mandated the transfer of O&M of minor canals and facilities to users, the transfer of upper level canals and reservoirs to the ULAs where rational, and the issuance of bulk water entitlements to the WUAs. The MWRRA Act provides for the establishment of a system of water entitlements for every use sector, the regulation and administration of those entitlements, dispute resolution, and the future adaptation of market-based transfers of water entitle- ments, both on a temporary annual basis and on a permanent basis.This draft act is far reaching in that this new authority will have regulatory jurisdiction over entitlements for both surface and groundwater and will be responsible for promulgating cri- teria for sustainable water tariffs, water quality criteria and standards, and wastewater discharge permits. This advance in water resources management policy was possible because of the strong support by the chief minister, the minister of irrigation, and the secretary of irrigation.With inputs from the Bank and its consultants, Maharashtra state crafted an act that satisfied the most important principles of water entitlements, market-based transfers, water tariffs, and water qual- ity criteria.This act provides the basis for the evolution of a water entitlement program and the adoption of market-based transfers.A draft act is also being considered to transform five irrigation development corporations into river basin manage- ment agencies responsible for water resources management, issuance of entitlements, enforcement of water charges, and operation of key river basin management infrastructure. Salient points in this important development are summarized below: · A strong need to modify the water sector, created in part by the sector's financial crisis · Recognition by state government leaders that changes were needed in the entrenched status quo in water resources management · Early identification of key legislative action needed to facilitate the implementation of modern water resources manage- ment principles · The World Bank's ability to provide technical assistance and guidance in these processes · A task team leader who commanded respect and was dedicated to helping government reformulate its water policy and to restructuring the water resources sector along internationally recognized frameworks and principles · Funding of technical assistance, iterative drafting process, and water sector education · Open discussions with all related agencies and users regarding the potential benefits and impacts of the policy and insti- 82 tutional changes · The tenacity of key government leaders in advocating these changes, while remaining receptive to major policy changes suggested by the Bank team · Stability in the government and in the key state personnel during the lengthy period required to develop,refine,and intro- duce the key legislative actions Source: Author. · Initial issuance of entitlements should be strong political opposition. If intense social or based on rational beneficial need and his- political conflicts occur, specific measures are toric use or carefully identified near-term needed to build confidence among stake- development. Initial issuance should not holders. Because it cannot be assumed that permit monopolies on future entitlements such legislation will pass, lending requiring or entitlements for largely speculative pur- such legislation should not be appraised until poses.1 It should also guarantee a minimum the laws have tacit governmental approval, flow for environmental purposes. and passage is imminent.2 · Adoption of a legal framework and imple- · Implementation of water entitlements, par- mentation of a system of water entitlements ticularly if coupled with the introduction of can threaten entrenched interests and evoke market-based transfer mechanisms, is an A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 2.7 Chile: Market-BasedTransfer System forWater Rights To contribute to the knowledge of water markets in developing countries, the Limarí Basin in Chile's Fourth Region was stud- ied by the World Bank in 2000.This basin has two closely related markets for irrigation water: a spot market for volumetric water transactions and a permanent transactions market for buying and selling water rights. In the spot market, volumes of water are traded. In the permanent market, the purchases and sales of water rights take place over time. In the spot market during the 1999­2000 season, about 14 percent of the allocated water was reallocated through trades. In the dry 1995­6 sea- son, that figure reached 21 percent. In the permanent market, from 1981 through 2000, more than 27 percent of water rights were exchanged independently of land transfers. These figures support the hypothesis that, when efficient legislation allows private decision making, a water market can be an active mechanism for water reallocation.These facts should provide policy makers with strong incentives for considering the adoption of market mechanisms as effective tools for reallocating entitlements. In Chile, a water code that allows transfers of water rights, independent of land titles, has contributed to the development of an active market for water entitlements.The Limarí Basin in areas downstream of storage facilities has an active water market in which the annual spot market and a per- manent transaction market coexist. Key considerations are as follows: · An annual distribution of water is made to WUAs based on historical criteria. · Differences in the marginal return of water exist among farmers. · Many farmers with nonperennial crops can, with relative ease, modify their water consumption by changing their planted area or crops. If the price of the spot market is greater than their anticipated net income from their own production, they are willing to sell their annual allocation on that market. · Sufficient in-system storage capacity, the use of flexible floodgates, and the proper functioning of WUAs allow the exchanges to be accomplished administratively and physically. Spot market Because the distribution of water among WUAs does not coincide with the water demands of each WUA, large volumes of water are transferred among associations.This generates a significant flow of internal water transfers from farmers with lower marginal water returns to those with higher marginal returns. Between 1995 and 2000, 24 percent and 13 percent, respec- tively, of the total amount of water assigned to each of the two associations was transferred. The area studied also has a fairly well-developed permanent market of water entitlements initially assigned by the state. Sub- sequently, these entitlements have been reallocated through the market. The percentage of reallocated water rights, inde- pendent from land transactions, during 1980­2000 fluctuated between almost 20 percent and almost 50 percent per WUA. Transactions began slowly and accelerated in 2000 toward the end of the study period.This reflects the maturation period required by a permanent transactions market, in this case almost 10 years. In the spot market, what is exchanged is a known volume of water during a specific season. A permanent market transaction transfers an asset that delivers variable volumes of water over time. 83 Conclusion Both the spot market for temporary transfer or rental of water allocations and the permanent market for the transfer of water entitlements evolved after the enabling legislation was adopted.These still-evolving markets have become key tools in adjusting water allocations to changing demands and changing climatic conditions. Source: Azevedo et al. 2000. evolutionary process that may take many further the acceptability of entitlements and years. Long-term follow-through should be market-based transfer mechanisms. anticipated, with strong technical assistance and capacity building to continue after the · Analyze the existing legal framework to loan ends. ascertain the least change needed to accom- modate the desired sector restructuring. RECOMMENDATIONS FOR PRACTITIONERS · Discuss the concept of water entitlements · Explore the historic system and identify key with leaders in the public and private sec- areas that may be retained or modified to tors to gauge acceptability and to identify DESIGNING INSTITUTIONAL REFORMS Box 2.8 Brazil: CearáWater Entitlements Program In the early 1990s, Ceará state in Brazil embarked on a program to transform its system of water resources management into a rational and modern program.This still-evolving program has become one of the more successful experiences. Water resources were primarily seasonally oriented, with water in the rivers only during the rainy season. Prior to 1992, anar- chy reigned. Users upstream and close to storage structures received most, if not all, of the water. River water was available on a first-come, first-served basis with no limit on the volume or timing of use. In the late 1980s and early 1990s, the state began a reform to eliminate corruption and to rationalize water resources management. It established a legal basis for reform- ing the water sector for which an integrated Water Resource Management Plan laid the foundation.This innovative plan and accompanying legislation were the work of experts in water resources management and water law from the state, the federal university, and outside consultants. Evolution The plan was developed under pressure from growing industrial and tourism sectors demanding a stable and reliable water supply. First, state water resources had to be stabilized. Ceará began by educating the political leaders and the stakeholders, then followed up with legislative changes.The state was experiencing a severe drought, and the water supplies for the Fortaleza Metropolitan Region, the state's economic center, were insufficient. Major reservoirs were nearly depleted, and the entire eco- nomic and political system was focused on resolving this problem.A Secretariat of Water Resources (SRH) was formed, and negotiations with the World Bank were started to finance a water resources sector reform.The state's political and water resources management leadership had participated in an intensive Bank-funded study tour of water resources systems in the United States in 1993.The tour instilled an appreciation of the potential outcomes of reform.The reform process was fortunate to have political stability under two governors who were staunch reform advocates and together served for about 16 years. Kept informed of aims and implementation progress, these governors were strong driving forces for the reforms. Legal and water rights framework SRH was also charged with the establishment of a system of water entitlements.This system was key to the development of a rational program of allocation of the available water resources. SRH developed rules and regulations for the issuance of water rights and criteria for the incorporation of traditional and grandfathered rights.The initial water law was amended sev- eral times to reflect a growing knowledge and confidence within the political leadership and legislative body of the water rights process--and the development of awareness, along with the users and stakeholders, of the value of the concept.The state is now considering a pilot program for the use of market-based water entitlement transfers as a tool to allow water allo- cations to be adjusted to meet changing demands. Source: Simpson 2003. 84 stakeholders, potential opponents, and a time frame that allows numerous iterations potential advocates. and discussions. · Identify ways to win over opponents (for example, confidence building programs) INVESTMENT OPPORTUNITIES and enroll advocates to improve chances Any investment in the supply side of water for acceptance of changes in the legal and resources offers an opportunity to invest in institutional framework. the development of the legal and institutional · Begin a long-term program of education, aspects of the management of the supply- negotiation, diplomacy, and public relations side development and for the evolution of to sell these concepts to the key players in sound demand management. These include a the public and private sectors. strong system of water entitlements, the administration and enforcement of those · Support the drafting of key legislation and entitlements, and a mechanism to allow that regulatory provisions with inputs by experi- system of entitlements to adjust to meet enced and knowledgeable consultants over changing demand patterns. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Any supply-side investment also offers a chance and Productivity Impacts." In K. W. Easter, to develop entitlements and market-based M. Rosegrant, and A. Dinar, eds., Markets mechanisms as a part of that investment. for Water--Potential and Performance. Boston: Kluwer Academic Publishers. REFERENCES CITED Nieuwoudt, W. L., and R. M. Armitage. 2004. Azevedo, L. G. T., A. Baltar, O. Cristi, and S. "Water Market Transfers in South Africa: Two Vicuna. 2000. "Markets for Water Used for Case Studies." Water Resources Research 40 (9). Irrigation: An Application to the Paloma Saleth, Maria R. 1998. "Water Markets in India: System of the Limarí Water Basin, Chile." Economic and Institutional Aspects." In K. W. Note prepared for the World Bank Training Easter, M. Rosegrant, and A. Dinar, eds. Mar- Seminar on Water Rights, March 27­28, kets for Water--Potential and Performance. Washington, DC. Boston: Kluwer Academic Publishers. Burke S. M., R. M. Adams, and W. W. Wallender. Siebert, E., D. Young, and M. Young. 2000. 2004. "Water Banks and Environmental Water "Market-Based Opportunities to Improve Demands: The Case of Klamath Project." Environmental Flows: A Scoping Paper. 2004. Water Resources Research 40(9). Report to Environment Australia." Available online at http://www.deh.gov.au/water/ Hanak E., 2003. "Who Should Be Allowed to policy/envflows.html#1. Sell Water in California? Third-Party Issues and the Water Market." Public Policy Insti- Simpson, L. 2003. Integrated Water Resources tute of California, San Francisco. Available Management, Ceará. Brazil. Fortaleza: SRH, online at http://www.ppic.org/content/ State of Ceará. pubs/R_703EHR.pdf. World Bank. 2003. "Sri Lanka Mahaweli Restruc- Hearne R. R., and G. Donoso. 2005. "Water turing and Rehabilitation Project." Imple- Institutional Reforms in Chile." In R. M. mentation Completion Report, Draft. World Saleth, A. Dinar, and M. Samad, Water Insti- Bank, Washington, DC. tutional Reforms: Theory and Practice. (Water Policy, special issue on Institutional Reforms). SELECTED READINGS Grantham, J., and S. Lautenschlager. 1999. Syn- 85 High Level Steering Group on Water, Australia. opsis of Colorado Water Law, Colorado Divi- 1999. "Progress in Implementation of the sion of Water Resources. Denver: State of COAG Water Reform Framework." Available Colorado, March. online at http://www.affa.gov.au/content/ output.cfm?ObjectID=D2C48F86-BA1A-11A1- Haisman, B. 2003. "Impacts of Water Rights A2200060B0A05637. Reform in Australia." International Working Conference on Water Rights: Institutional Jacoby, H. G., U. S. Rehman, and R. Murgai. Options for Improving Water Allocation. 2001. "Monopoly Power and Distribution in Hanoi, Vietnam, February 12­15. Available Fragmented Markets: The Case of Ground- online at http://theme5.waterforfood.org/ water." Research Working Paper No. 2628. pubs/200302conf/papers/35australia.pdf. World Bank, Washington, DC. Marino M., and K. Kemper. 1993. "Pre-requisites Matthews, O. P. 2004. "Fundamental Questions for Market-Based Entitlement Transfers." Tech- about Water Rights and Market Realloca- nical paper presented at Loveland, Northern tion." Water Resources Research 40(9). Colorado Water Conservancy District. Meinzen-Dick, R. S. 1998. "Groundwater Mar- ------. 1999. "Institutional Frameworks in Suc- kets in Pakistan: Institutional Development cessful Water Markets: Brazil, Spain and DESIGNING INSTITUTIONAL REFORMS Colorado, USA." World Bank Technical http://www-esd.worldbank.org/bnwpp/ Paper No. 427. World Bank, Washington, index.cfm?display=display_activity&AID=47 DC. &Item=7. ------. 2001. Market-Based Water Rights Trans- Mexico. "Water Rights Law and Regulatory fer, Angat Basin, Philippines. Manila: Bank- Technical Assistance." Bank-Netherlands Netherlands Water Partnership Program. Water Partnership Program. Available online Available online at http://www-esd.world- at http://www-esd.worldbank.org/bnwpp/ bank.org/bnwpp/index.cfm?display=dis- index.cfm?display=display_activity&AID=39 play_activity&AID=1&Item=17. 6&Item=17. ------. 2002. Legal Framework for Water Mar- ENDNOTES kets. Washington, DC: World Bank. 1. In Chile, water entitlements were initially Simpson, L., and K. Ringskog. 1997. "Water issued based on beneficial need and historic Markets in the Americas." Directions in use. Subsequently, an auction was held for Development report. World Bank Group, the future use of surplus water resources. Washington, DC, December. The main winners of this auction were the wealthy mining and energy sectors, which now hold a virtual monopoly in some WORLD BANK PROJECTS DISCUSSED basins on the future water supplies that can Brazil. "Ceará Urban Development and Water be developed. Resources Management Project." Project ID 2. See the Implementation Completion Report P006436. Implementation Completion Report, for the "Sri Lanka Mahaweli Authority 2001. Restructuring and Rehabilitation Project" (World Bank 2003). India. "Maharashtra Water Resources Regulatory Authority Act." Bank-Netherlands Water This Note was prepared by Larry Simpson and reviewed by Partnership Program. Available online at Maria Saleth of IWMI. 86 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 2.3 Investment Note argues in favor of investment in the development of agricultural water man- agement capacity. Capacity building should be INVESTING IN BUILDING part of an overall reform program with full pol- CAPACITY IN AGRICULTURAL icy support. Only a strong commitment by pol- icy makers can create the conditions for WATER MANAGEMENT trainees to use their new knowledge once they return to work. Many borrowing countries are located in arid and semi-arid areas where the productivity of the agri- cultural sector is highly dependent on the provision POTENTIAL BENEFITS of water for irrigation.A key investment target for developing this sector is therefore building capacity The benefits of capacity-building programs in in agricultural water management. agricultural water management are outlined below: With agriculture using more than 80 percent of the world's available water, improvement in the · Higher irrigation efficiency and productivity efficiency of water use is urgently needed. for irrigated agricultural production ("more Growing populations around the world in the crop per drop") next 20 years will greatly increase demand on · Enhanced sustainable livelihoods for peo- water for crops (SIWI/IWMI 2004). A great deal ple involved in irrigated agriculture of water is being misused or mismanaged owing to weak institutions and poor water poli- · Protection for soils and reduction of water- cies. The solution entails taking human and logging and salinization institutional processes and capacities more into account in the design and operation of · Protection for people and land against hydraulic devices and infrastructure. water damage through flood mitigation · Collection of runoff through water harvesting INVESTMENT AREA The solution involves providing the right know- · Better water resources management to con- how to the stakeholders and improving institu- serve water supplies and quality tions (IPTRID 2003). It requires capacity building 87 at every level--from farmers to government. An POLICY AND IMPLEMENTATION ISSUES integrated approach is needed that goes beyond training and brings wider issues into the picture: Building capacity should always start by identi- applied research and demonstration, technology fying needs and gaps in current capacity so that transfer, community participation, effective gov- the best responses for specific needs can be ernance, technical assistance, and institutional selected. A brief description of possible development. Capacity-building programs to responses for effective capacity building fol- assist developing countries in formulating sus- lows. The strategy will be most effective if it tainable agricultural water management strate- combines the right mix of interventions at dif- gies are a most important strategic investment ferent levels, according to the identified needs. need for international funding agencies because they act as seed funding for stable and sustain- Training able economic growth. Building capacity involves "in-depth" invest- Current thinking in most international financing ment in graduate and postgraduate education in agencies is that investment in a programmatic water resources management, focused on tech- approach will lead to strong domestic drivers nical aspects (box 2.9) as well as on institu- for investment. In line with this reasoning, this tional issues (box 2.10). DESIGNING INSTITUTIONAL REFORMS Box 2.9 EIER-ETSHER Schools inWest Box 2.10 Indonesia:Water Sector and Central Africa Management The EIER-ETSHER Group (schools for agricultural Some of Indonesia's capacity-building activities engineering and water) was established in have focused on the development of capable Ougadougou, Burkina Faso, to support development institutions for sustainable water resources and in 14 countries in West and Central Africa. Nearly irrigation management. This is a consequence of 2,500 technicians and graduates have passed present government policy to transfer water through their training courses, and the group is a management to farmers. The initiative has successful example of integrated cooperation focused on the following: between countries to support capacity building. A · Socializing the consequences of decentralization principal local constraint is insufficient capacity policies, of introducing water resources manage- building, which limits the development and manage- ment at the level of new river basin organiza- ment of irrigation systems.Thus the development of tions, and of transferring management to WUAs human resources, as provided by this group, is a key · Defining new roles for government organizations component in projects to improve food production to be more service oriented, and for better and to reduce poverty. This initiative is a good coordination of stakeholders through improved response to the problems in training and education management mechanisms such as limited curricula, high operation costs, · Strengthening the new organizations to be more restrictions on the needs addressed (especially for effective in their new roles (provision of nonscientific courses), and shortage of jobs suitable accountability mechanisms and management for new graduates. transfer tools). Source: Compaore 2003. Source: Hofwegen 2003; Dedja 2003. Knowledge transfer for water management Research Multilateral and bilateral projects may create Better linkages are needed between research national capacity-building networks between and development (R&D) organizations and donor and client countries. These networks can farmer groups. An example is the "Water Saving help match growing demand for capability with in Irrigation" research program implemented in initiatives to build capacity, to develop educa- Tunisia to respond to the challenges of overex- tional services, and to promote knowledge ploitation of shallow groundwater and irrigation 88 about reforms needed in the water sector. with marginal quality water (box 2.11). The program has achieved research results but, more important, has built capacity in the broad sense and forged partnerships among Tunisian institutions. This has resulted in training for pro- Box 2.11 Tunisia:The "Water Saving in Irrigation" gram staff and improved linkages between Research Program research and extension. Research initially financed as a World Bank investment project (using an Agricultural Sector Investment Loan during 1992­7) Institutional strengthening was supplemented by a Water Sector Investment Loan Transferring irrigation management responsibil- (PISEAU). Seventeen R&D projects were selected and ranked by priority during a joint mission to Tunisia by the World Bank ity from government to WUAs demands the and the International Programme forTechnology and Research provision of sufficient support, and a compre- in Irrigation and Drainage (IPTRID).The research results were hensively prepared capacity-building program to be integrated with the national research program, linked (box 2.12). with international research, and integrated with the main gov- ernment agency.To facilitate uptake, an integrated management system was created and multidisciplinary teams formed. Gender mainstreaming Source: Bahri 2003. Giving women a voice in the management of irrigation systems leads to more sustainable A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT livelihoods in irrigated agricultural regions. By Box 2.12 Peru: Subsectoral Irrigation Project integrating irrigation, gender, and nutrition as issues, improvements can be made in house- Insufficient provision for the transfer of irrigation administration hold food security, vulnerability of poor fami- from the Ministry of Agriculture to user organizations in Peru lies can be reduced, and capacity can be built resulted in inadequate organization of user groups, lack of up in rural areas (box 2.13). knowledge about water use regulations, demise of systematic irrigation planning, and failure to collect fees. The immediate result was deterioration of schemes for lack of money to pay for maintenance. The Subsectoral Irrigation project (SIP) was LESSONS LEARNED launched in 1997 to solve these problems. It involved improving Capacity development means much more the irrigation infrastructure, strengtheningWUAs, improving fee than "training." Unless farmers are given collection, assisting with modernization, and ensuring safety at enough back-up, handing irrigation systems four upstream dams. The SIP was funded by loan agreements over to them will not work. When looking for with theWorld Bank and Japanese Bank for International Coop- the best opportunities in this sector, investors eration.The investment area of the SIP covered 10 provinces,45 must take this and other key considerations valleys, 64 user boards, 622 WUAs, more than 300,000 water users, and an irrigation area of about 900,000 hectares in Peru's into account. coastal provinces. Successful training exercises for user boards, WUAs, and users resulted in the start of effective irrigation Capacity-building strategy management and the collection of fees that now enable the sys- tem to be self-financing.The training programs were carried out Capacity building must address the needs of, and by SIP Coordination Centers in conjunction with the users. be "owned" by, the beneficiaries. It is strongly Source: Ledesma 2003. influenced by the policy environment and should always be in the center of development strategies. Identifying needs and gaps in capacity is difficult, especially if there is a local shortage Box 2.13 Zambia:Women Irrigation Network of experts. Hence, this is a job for interdiscipli- nary experts who can work at a high level and The Women Irrigation Network (WIN) project used problem identification through participatory constraints analysis, com- with the full participation of stakeholders. The munity action planning, district stakeholders workshops, mul- first step should be targeting priorities, based on tisectoral WIN teams, participatory training and extension, analysis of the needs of the beneficiary govern- and district-based monitoring frameworks. Outcomes were ment, authority, or community. To facilitate such as follows: analysis and priority setting, IPTRID and the · Increased capacity in government and community Food and Agriculture Organization (FAO) are 89 · Synergy from partnering with NGOs developing a generic methodology applicable to · Strengthening of local community groups the agricultural water management sector. · Rural women's participation in water resources management · Preparedness for drought, flood, and critical food insecurity. Donor-recipient partnership Source: Phiri 2003. The role of donors in capacity building is to broaden thinking and to stimulate positive impact management change over a long-term, difficult over the long term. Capacity building within process. People working on these projects need, existing institutions calls for improvements in in addition to their own specific expertise, a par- local managerial capability and skills. Managerial ticipatory-minded outlook. The local organization capacity building should be a long-term activity acts as the point of contact for the donor and with gradual, sustained change, especially in gov- avoids the creation of new institutions (Walbeek ernmental settings. Making institutional changes and Vlotman 2003). is difficult because of low salaries, inappropriate recruitment policies, and slow organizational cul- Education ture. For project success, international consultants sent to work on institutional modernization proj- Education is essential to develop the skills of ects should have sufficient ability to implement the professionals who will become the future DESIGNING INSTITUTIONAL REFORMS managers, leaders, and capacity builders. This RECOMMENDATIONS FOR PRACTITIONERS process should start with universities and Table 2.1 summarizes the activities that can be higher education establishments. tailored into capacity-development projects. Research INVESTMENT OPPORTUNITIES Research to solve the problems of irrigation and drainage can be most successful when linked to Investment in capacity development investment projects and can show its value Investment in capacity development has to build directly. A good example of this has been the on water management strategies that go beyond research project in Pakistan between the Inter- training and construction. Such strategies will national Waterlogging and Salinity Research help governments tackle poverty in rural areas Institute (IWASRI) and the International Institute by strengthening technology transfer and help for Land Reclamation and Improvement (ILRI) build capacity to increase the technical and (IPTRID 1997), addressing the functioning of managerial know-how of farmers, farmer associ- farmer organizations and of horizontal and ver- ations, and service providers. Identifying capac- tical land drainage. This research was shown to ity constraints and helping governments and the have saved millions of dollars in investment private sector lift them is one effective way through improved advice on the technologies development institutions can help. Capacity has to be adopted. to be developed to measure, research, and understand; educate and create awareness; leg- Enabling environment islate and regulate; and provide appropriate Farmer management of large-scale irrigation infrastructure, services, and products. systems is unrealistic. Water management has to be structured so that governments are Investment in responsible water management responsible for the main infrastructure, and Providing the knowledge and skills to use and farmers are responsible to local bodies such as manage water responsibly and efficiently to WUAs and distributary boards. In this perspec- farmers, farmer associations, service providers, tive, training farmers for water management is and government bodies, is essential to reduce essential (box 2.14). wastage and increase water productivity. The problems in meeting growing water needs stem 90 not only from water scarcity, but also from thin Box 2.14 ParticipatoryTraining and water management capacity. Extension Program The participatory training and extension approach is based on Public aid investment in capacity building analysis by the farmers themselves of their constraints and Large areas in developing countries still suffer opportunities. The approach involves group-based extension, severely from poor water management; ineffi- training to enhance farmers' skills and capacities, and capacity cient irrigation and drainage practices and tech- building of extension staff. It is a tool to improve farmer water management that involves and supports farmers. To achieve nologies; lack of knowledge and know-how on this, farmers need training and support in introducing the part of farmers, farmer associations, and improvements and new technologies. service providers; and institutional weaknesses. As a response, integrated capacity-building The approach was developed within FAO's Food Security Spe- cial Program and was tested in Zambia, Nepal, Cambodia, and projects are needed, instigated either by com- Bangladesh.The tools used include farmer field schools, staff- munities through self-generated realization and training methodologies (such as the Farmer Water Training desire for betterment or by outside actors. Both Program in Indonesia), and farmer water management at the are valid, and both feed into local government farm level (such as organizing water control). decision making. However, neither will succeed Source: van Keulen, Smith, and Renault 2003. if the government departments from which sup- port is needed do not have sufficient capability. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Table 2.1 Capacity-Development Project Activities Trainers and Government and Activity Local groups academia policy makers Training sessions and workshops Enhancement of research capacities Implementation of demonstration sites Production of field guides and training material Development of monitoring systems Development of data processing and data management systems Development of models and decision support systems Development of planning capacities and management tools Assistance for institutional development Organization of national and regional networks Source: IPTRID 2003. A good example is the water management difficulty in achieving the high standards in proj- transfer in Peru. ect proposal preparation demanded by invest- ment institutions--particularly to ensure that The types of project urgently required include projects are technically feasible, economically the establishment of more training centers, and financially viable, designed and planned experimental fields, demonstration sites, field according to professional standards, and guides, monitoring systems, water management intended to produce visible and sustainable out- 91 units, and planning units, as well as the enhanc- puts. They should fit into coordinated programs, ing of local research, producing of training mate- follow a sector strategy, and contribute to poverty rial, development of systems for monitoring and reduction and environmental conservation. decision support, and strengthening of capacities for water management and planning. Without Developing countries need support in preparing any exaggeration, capacity building in agricul- national agricultural water management strate- tural water management will require more than gies, but they also need assistance in project an estimated US$1 billion a year in investments. planning and fundraising negotiations. Investment in capacity building of local institutions Development institutions also need local advice on needs assessment for capacity building and on As public development assistance moves toward appropriate investment strategies in the sector. a program approach and budget aid, bottlenecks will arise owing to gaps in local institutional capacity. These institutions are key players and need support in needs assessment, research, REFERENCES CITED strategic planning, project identification, project Bahri, A. 2003. "Strengthening Capacity for Irri- design, project management, and evaluation. gation and Drainage Research in Tunisia." Without such support, they face considerable Food and Agriculture Organization (FAO)/ DESIGNING INSTITUTIONAL REFORMS International Commission on Irrigation and Ledesma, A. 2003. "Institutional Strengthening Drainage (ICID), International Workshop on of Users Associations in Peruvian Coastal Capacity Building, September 16, Montpel- Valleys." Food and Agriculture Organization lier, France. (FAO)/ International Commission on Irriga- tion and Drainage (ICID), International Compaore, L. 2003. "The Role of Training and Workshop on Capacity Building, September Education in Capacity Building, EIER- 16, Montpellier, France. ETSHER." Food and Agriculture Organiza- tion (FAO)/ International Commission on Phiri, M. 2003. "Gender Mainstreaming in Water Irrigation and Drainage (ICID), Interna- Management--Chipapa Irrigation Scheme, tional Workshop on Capacity Building, Sep- Zambia." Food and Agriculture Organiza- tember 16, Montpellier, France. tion (FAO)/ International Commission on Irrigation and Drainage (ICID), Interna- Dedja, Y. 2003. "Capacity Building for Water User tional Workshop on Capacity Building, Sep- Associations in Albania." Food and Agricul- tember 16, Montpellier, France. ture Organization(FAO)/ International Com- mission on Irrigation and Drainage (ICID), SIWI/IWMI (Stockholm International Water International Workshop on Capacity Build- Institute/International Water Management ing, September 16, Montpellier, France. Institute). 2004. "Water--More Nutrition per Drop." 12th Session, UN Commission on Hofwegen, P. 2003. "Capacity Building for Water Sustainable Development Special Event, and Irrigation Sector Management in Indone- April 20, New York. SIWI, Stockholm. sia." Food and Agriculture Organization (FAO)/ International Commission on Irriga- van Keulen, A., M. Smith, and D. Renault. 2003. tion and Drainage (ICID), International "Capacity Building in Farmers' Water Man- Workshop on Capacity Building, September agement: The FAO Experience." ICID 9th 16, Montpellier, France. International Drainage Workshop, September 10­13, Alterra-ILRI, Utrecht, The Netherlands. IPTRID (International Programme for Technology and Research in Irrigation and Drainage). Walbeek, M., and W. F. Vlotman. 2003. "Institu- 1997. GRID Newsletter No. 9. "IWASRI tional Strengthening in Egyptian Develop- Research--Value for Money." ment Aid Projects." ICID 9th International 92 Drainage Workshop, September 10­13, ______. 2003. IPTRID Partnership Programme-- Alterra-ILRI, Utrecht, The Netherlands. An International Programme on Capacity Building for Sustainable Agricultural Water This Note was prepared by Geoff Pearce, with inputs by Adel Management. Rome: IPTRID/FAO. Bichara, and reviewed by Maria Saleth of IWMI. . A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 2.1 OBJECTIVES AND DESCRIPTION About 1980, three challenges arose. Massive expenses loomed for the renewal of the aging DRIVERS OF PUBLIC infrastructure. The quality of land and water was IRRIGATION REFORM IN deteriorating because of rising water tables and salinity, and aquatic environments lacked suffi- AUSTRALIA cient water inflow owing to intake by irrigation. What is new? The policy rationale for reform of At that time, too, Australia traded its economic the public irrigation sector is rarely sufficient to policy of protectionism and subsidization for a implement it. Rather, implementation usually needs policy of openness and economic rationalism. impetus from powerful domestic stakeholder To compete on global markets, the business groups in society at large that pursue goals requir- community needed a reduction in the govern- ing reform of the governance and management of ment's share in the economy, and consequently government-owned schemes. a reduction of the sizable hidden subsidies that went to public irrigation schemes. Before its reforms, the government of New South Wales, like other Australian state gov- As evidence emerged that irrigation land use ernments, built schemes, allotted landholdings practices were ecologically unsustainable, an and water rights, set water prices, and man- environmental lobby arose that promoted aged water distribution. In earlier times, the awareness of the deteriorating water situation government even told farmers what and how among state and local governments, irrigators, much to plant. The two main social goals that and voters. The lobby advocated changes to drove scheme building were to increase make more water available for environmental inland settlement and reintegrate soldiers uses by restricting water for irrigation. decommissioned after major wars. Most farms were sized to maintain a family but only with Irrigators and industrial and environmental intensive irrigation. This type of scheme takes users were finding that the reliability of the in around 30 percent of all irrigation water in water supply, critical for the profitability of live- Australia. The departments responsible for the stock and production, decreased as irrigation schemes had a monopoly on service provision development increased. and little compulsion to put their customers first. The department in New South Wales The combined impact of the business commu- 93 serviced more than 400,000 hectares through nity, environmental groups, and expansion works that today would cost more than US$1 forced government and irrigators to seek a new billion to build. institutional paradigm. The nonirrigation stake- holders shaped the new institutional framework, The government and the irrigation-scheme which revolved about irrigation corporations communities were uncomfortably settled in an with licenses defining environment targets. antagonistic relationship. Officials perceived the irrigators as recipients of government largesse in the form of sizable but hidden subsidies for OUTPUTS AND IMPACTS O&M. The irrigation communities perceived the Water management in New South Wales government as using yesterday's costly methods changed in response to these drivers. In the and resented the paternalism of agency offi- early 1980s, the government introduced tempo- cials. There was little meaningful communica- rary and permanent trading in water allocations. tion: the irrigators opposed price increases In the late 1980s, it established irrigator-driven because they believed efficiencies could be management boards for the irrigation schemes. found--and fearing a price war, the agency did In the early 1990s, it corporatized its metropoli- not introduce new technologies. tan water utilities. DESIGNING INSTITUTIONAL REFORMS A suite of agreements entered into by COAG ISSUES FORWIDER APPLICABILITY reflects the direction of reform in Australia. The By dealing with each irrigation scheme as the 1995 agreement included the following commit- bulk entity, the New South Wales government ments: could keep the regulatory regime simple, giving each irrigation corporation flexibility on how to · Full cost recovery for water services achieve its supply, drainage, and environmental targets. Communities have greater trust in com- · Water allocations and property rights panies they own and managements they elect than in government agencies. Irrigators are · Promotion of water trading more accepting of the rules set in an environ- · Introduction of environmental water alloca- ment they can influence than in rules set where tions and assurance that all new projects their views count for little. would be environmentally sustainable As a result, policies supporting sustainability are · Institutional reform promoting integrated much tougher than government regulation natural resources management, separation would achieve. Examples are the ceiling on of services from water resources manage- average water application of 4,000 cubic meters ment, and promotion of local management per hectare per year, and compulsory testing of responsibility soil suitability for rice growing. Before the reforms, an "us and them" attitude meant that The Commonwealth government offered sub- irrigators made a sport of breaching government stantial tranche payments to each state that rules. Now irrigators see abusers as "ripping us demonstrated sufficient and timely reforms in off." Peer pressure among farmers, help with terms of the agreements. These agreements emergencies, and companionship obtain com- enshrined the initial concerns of the business pliance more easily than government enforce- community and the environmental groups and ment but are available only to governments that are powerful drivers for change. Similar insti- form healthy coalitions with local communities. tutionalization of new stakeholder positions can be observed in Mali and Mexico (boxes Several factors contributed to these negotiated 2.15 and 2.16). outcomes. The process was not rushed, and 94 Box 2.15 Mali: Coalition Building for Reform In 1978, the government of Mali requested the World Bank to expand its 45,000-hectare rice scheme.The Bank and bilateral donors responded that reform should precede expansion.The agency lacked financial transparency and accountability to the users, and the users lacked incentives to produce, because they were forced to sell their paddy to the agency.The government opposed reform.The donors built support by trading funding for canal rehabilitation against small reform steps such as the creation of canal and credit associations. One donor also entered into a temporary alliance with the single political party to introduce movable threshers, which made the farmers independent of the agency's industrial threshers, and movable dehullers, which reduced the workload of women and further increased farmer autonomy. These steps helped liberalize the rice market and raise producer prices, which encouraged farmers to raise production by lev- eling their fields and buying inputs. Another donor negotiated joint farmer-agency committees to manage O&M spending. These and other actions made the scheme financially sustainable and transformed the farming population, from the resource- poor group it was in 1978, and lacking professional organizations, into an assertive and informed stakeholder. In 1992, the group helped a new government decide to consolidate these reforms into law. Now farmers have performance contracts, and donors fund expansion. Source: Aw and Diemer 2005. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 2.16 Mexico: Drivers Shaping Irrigation Reforms Mexico's irrigation transfer program has attracted much attention, but the forces shaping it have stayed in the background. In 1976, the Secretariat for Hydraulic Resources, which ran the government's 3.6 million hectares of irrigation systems, was merged with the Ministry of Agriculture.The bureaucracy lost its financial and administrative autonomy, and the service fees were incorporated into rural development district programs. Farmers realized that they no longer had an incentive to pay, and the systems deteriorated. The dilapidation of the infrastructure helped the agency argue for the restoration of its authority with the president-elect, who sought to transform the long-ruling Institutional Revolutionary Party's (PRI) economically inefficient patronage structures by encouraging private investment and economic liberalization. In 1989, the agency convinced the president-to-be to direct the water bureaucracy to create and run an innovative fiscal system for integrated water resources management to respond to Mexico's water woes.The agency also sought authority to operate and maintain the irrigation systems again but, in line with his objectives, the president limited the agency's role to oversight and opted to transfer irrigation management authority to user associations. All in all, the water bureaucracy's new mandate restored its final authority over the irrigation systems. Main drivers of the reform thus were the domestic nonirrigation interests that pushed the president to pursue economic lib- eralization and political modernization and the agency's quest for renewal of its mandate. Sources: Manuel Contijoch, personal communication,Washington, DC, 2004; Rap,Wester, and Perez-Prado 2004. public participation in planning for change was · Joint committees made up of farmers and well managed. Despite initial antagonisms, the agency representatives to manage O&M of dialogue among key players was meaningful and irrigation systems led to commitments for change. Government efforts to build trust at every level fostered coop- · Coalitions of water agencies with ranking eration over time because trust and cooperation political leaders in an effort to reach broad were reciprocated and not misused or exploited. economic and political objectives through improved water management A general message that can be derived from the Australia, Mali, and Mexico cases concerns the importance of building coalitions among stake- REFERENCES CITED holders to drive policy reforms in the irrigation Aw, Djibril, and Geert Diemer. 2005. "Making a sector. Donors can have a major role in the Large Irrigation Scheme Work: A Case Study 95 coalition-formation process by facilitating dia- from Mali." Directions in Development logue and participation of stakeholders in the Paper. World Bank, Washington, DC. negotiation phase. These coalitions can take various forms and involve parties with different Rap, Edwin, Philippus Wester, and Luz Nereida objectives but common means. For example: Perez-Prado. 2004. "The Politics of Creating Commitment: Irrigation Reforms and the · Coalitions of different nonirrigator stakehold- Reconstitution of the Hydraulic Bureaucracy ers (such as industrial and environmental lob- in Mexico." In Peter Mollinga and Alex bies), using their political pressure to induce Bolding, eds. The Politics of Irrigation the government to implement reforms Reform, 57­95. London and Burlington, Vt.: Ashgate. · Coalitions of donor(s) and political parties or other lobbies for the introduction of step- This Profile was prepared by Tony McGlynn, with input from by-step reforms Philip Keefer. DESIGNING INSTITUTIONAL REFORMS INNOVATION PROFILE 2.2 would be interested in taking action, the farmer-irrigators responded affirmatively--and enthusiastically. Quickly, system-level federa- INVESTING IN FARMER tions of WUAs were formed in eight major irri- NETWORKS FOR INCLUSIVE gation systems.1 Interactions with government and ministers started around specific issues IRRIGATION POLICY such as whether to register WUAs as societies PROCESSES IN SOUTH INDIA or cooperatives subject to some government control and the implementation of mainte- What is new? By forming state-level networks nance contracts. registered as societies or NGOs,representatives of WUAs attempt to play a larger, structural role in Sahayoga succeeded in placing a farmer who was irrigation policy formulation and implementation. well versed in tank systems on the technical com- By getting themselves included in these policy mittee of the Society for Water Resource Develop- processes from which they are normally excluded, ment, Karnataka's implementing agency of a farmer-irrigators hope to accelerate reform, make World Bank­supported project for community- it more pro-farmer, and increase the accountability based tank restoration. of government. The idea of an "intermediary organization of water professionals," which also had farmer Irrigation reform and larger participation of members, worked for several years, but the farmers in irrigation management has been on organization ran into disagreements among the the Indian policy agenda since the 1970s, but water professionals. The farmer members progress has been slow, and reform design con- decided that they wanted their own organiza- fined to a narrow circle of senior bureaucrats tion to allow them to interact directly with the and some water academics and professionals. government. In 2002, they formed Pragathi The lack of a broad-based consultation of all [Farmers' Society for Rural Studies and Devel- relevant stakeholders has made the reform opment], which continued the activities, with process vulnerable to personnel changes. Also, one nonfarmer executive director based in the the content of the reforms scarcely questions state capital acting as facilitator. Pragathi pub- the exclusive government control over alloca- lishes a newsletter in English and Kannada that tion and distribution of water and other reports on its activities and in which members 96 resources--a questioning that is necessary for report their experiences. management practices to improve. The strategic analysis of the actors in this innovation profile Karnataka's ministers for water resources and was that, unless farmer-irrigators actively agriculture acknowledge and appreciate the demanded and shaped the reform, progress active involvement of Pragathi members in pol- would be slow and haphazard. icy matters. The chairperson and secretary of Pragathi are nominated members of the Kar- nataka State Agriculturalist Society. Negotiations OBJECTIVES AND DESCRIPTION are also on to include farmer-irrigators as In 1997, some water professionals set up an resource persons to train farmers at the Water organization called Sahayoga [work together]. and Land Management Institute. As a regular They planned to act as brokers between course of action, Pragathi attempts to ensure farmer-irrigators and government using their farmer participation in workshops and confer- wide experience and varied networks. The ences at all levels in water- and agriculture- group held meetings with farmer-irrigators in related issues. the large irrigation systems of the South Indian state of Karnataka, where they presented Karnataka adopted a dual approach in imple- Sahayoga's analysis. Asked whether they menting the community-based tank restoration A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT program--the state department implements it in reform in their state; new issues in water man- a different way from the World Bank­supported agement such as environment and gender; and project. Pragathi is mobilizing district-level tank the possible role of farmers in interstate water federations to address issues such as structure, dispute resolution. Again, the response was functions, and sustainability of tank user soci- enthusiastic. Formation of farmer networks in eties, which the irrigation law does not define Andhra Pradesh and Tamil Nadu is ongoing, well (table 2.2). and a South Indian federation called Jala Span- dana [South India Farmers Organisation for In 2003, farmers from Andhra Pradesh and Water Management] has been formed and reg- Tamil Nadu discussed the possibility of forming istered. The International Network on Partici- similar networks in their states, each with its patory Irrigation Management supports own obstacles in the irrigation and water strengthening (as of 2004). The objective is to resources reform process. Farmer-irrigators formulate state-level farmer water policies by presented papers on the status of irrigation the end of the project. Table 2.2 Projects Implemented by Pragathi Year(s) Project title and activities Budget(s)a (Indian Rs.) 1997­2002 Sahayoga (NGO-initiated activities; Pragathi formed in 2003; Sahayoga continues independently) 315,000 Supported under Collaborative Work Programme between Irrigation and Water Engineering group,Wageningen University, the Netherlands, and Water Cluster at the Agricultural Research Department,World Bank (funded from Dutch trust funds) 2002­ Pragathi members contributed cash and organized meetings at own expense (ongoing) 125,000 2002­3 Farmers,Water and Political Process of Policy Reforms--Role of Farmers' NGO inWater Resource Development in Karnataka 192,937 Supported by Technology, Labor Organization and Development, The Netherlands (completed) 97 2003­ Information Framework forWater Management 79,500 Supported by Management Studies Department, Indian Institute of Science, Bangalore (ongoing) 2004­ Compendium ofWater Disputes in South 182,200 In collaboration with World Wildlife Fund and International Center for Research in the Semi-Arid Tropics, Hyderabad (ongoing) 2004­ Farmers Network forWater Sector Reform in South India b 1,677,000c Supported by the International Network for Participatory Irrigation Management,Washington, DC (ongoing) a. Early 2004 US$1 = Rs. 45. b. Project formally comes to Jala Spandana (South India Farmers Organisation for Water Management) and Jala Spandana allocates equally to three state organizations in Andhra Pradesh, Karnataka, and Tamil Nadu. c. Budget for 12 months, January 2004 to December 2004, for activities in three states. Source: Authors. DESIGNING INSTITUTIONAL REFORMS APPROACH An open question still is the institutionalization · The networks are farmer organizations, of such interaction. In Karnataka, WUA federa- with only farmer-irrigators as members. The tions at system and state levels are now part of members decide the agenda, priorities, and the new policy, which may be the beginning of the pace of activities. more inclusive policy processes. However, a change from a fully government-controlled pol- · Facilitation is provided by individuals with icy system to a multistakeholder situation is a substantive field research experience in irri- conceptual, institutional, and political leap that gation and water management, as well as in will take years to consolidate. social mobilization and advocacy. The network and federations are now players to · The organizational infrastructure of the net- be reckoned with in the state of Karnataka, but works is light, and partly uses existing this achievement requires continuous reproduc- farmer and water user organizations. tion and harbors several contradictions. The for- mulation of water policies will be an interesting · The perspective is long term, even when test of the ability of the system to work with pol- concrete activities center on immediate icy processes that include the irrigator-farmers. issues. · The networks started with large irrigation systems, then moved to cover tanks, lift irri- WIDER APPLICABILITY gation, and watershed and farmer-managed If it is true that irrigation and water sector systems, with the scope broadened to reforms are hampered by the exclusion of include land and water management issues. direct stakeholders from policy formulation, The social constituency of the networks will there is wide scope for farmer organizations to also be broadened. Everybody knows that participate in policy reform. So far, programs reforming the governance and management for participatory irrigation management have of water resources will be a long, perhaps been largely government focused and have neverending, process. viewed water users and irrigators as recipients of policy, not as agents in the policy process. If · The idea is that taking NGO-style initiatives political will for reform has to be generated, for improved local water management is direct stakeholders would logically have to be a not enough. Local issues have to be raised primary constituency, generating, in coalition 98 to the policy level to accomplish the with others, momentum for change. (See also changes in policy that will allow local initia- box 2.15 in IP 2.1 on reform drivers.) tives to work and last. An important device for network building is the establishment of a communication device for OUTPUT AND IMPACT the members--a newsletter, in this case. The main focus has been to get government to acknowledge the need for and feasibility of a Farmer networks for water sector reform have larger role for farmer-irrigators in policy formu- to be rooted in the farmer-irrigator community, lation and implementation. This effort has cen- not externally imposed. This requires small- tered around issues such as the legal status of scale, strategic, and patient support of emerging WUAs in government policy (societies with full initiatives, rather than time-bound, project-wise, farmer control versus cooperatives with more external approaches dominated by "experts." possibilities to influence government) and who should implement local maintenance contracts Intensive field research leading to detailed (contractors identified by the government knowledge of field situations is an essential ele- agency or WUAs). Extensive direct interaction ment in the preparation of initiatives and sup- has been triggered between farmer-irrigators port and in building credibility in the and water resource ministers. farmer-irrigator community. A logical step in A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT the empowerment of the networks would be to ENDNOTE create a facility for research defined by farmer 1. The systems are Krishnaraja Sagar, Harangi, water users (a water users' research facility) to Hemavathy (Cauvery Basin), Upper Krishna generate the knowledge base for engagement Project, Tungabhadra, Bhadra, Malaprabha, in the policy process. and Ghataprabha (Krishna Basin). This Profile was prepared by R. Doraiswamy and Peter Mollinga, and reviewed by Maria Saleth of IWMI. 99 DESIGNING INSTITUTIONAL REFORMS 3 INVESTING INTHE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS · Investment Note 3.1 Lending for On-Farm Water-Saving Technologies · Investment Note 3.2 Investing in Irrigation for Crop Diversification · Investment Note 3.3 Investing in Smallholder Irrigation · Investment Note 3.4 Selecting Technologies for the Operation and Maintenance of Irrigation Systems · Investment Note 3.5 Cost-Effective Operation and Maintenance of Irrigation and Drainage Projects · Investment Note 3.6 Using Satellites toAssess and Monitor Irrigation and Drainage Investments · Investment Note 3.7 Prioritizing Lending for Public Irrigation Schemes with the Rapid Appraisal Method · Innovation Profile 3.1 Investing in Automation and Centrally Operated Irrigation Systems 101 OVERVIEW In this chapter, the focus is on investing in irrigation management and service delivery, illustrating improve- ments that give farmers reliable service and thus enable them to increase their incomes.The chapter also covers technologies and management systems available to encourage water saving, ranging from micro- irrigation installations on farms to an innovative system of regulation through the assignment of "evapo- transpiration (ET) quotas." IRRIGATION MODERNIZATION HAS SO FAR PRODUCED DISAPPOINTING RESULTS. With most of the world's irrigation already developed, and with very high costs for new development, the challenge is to get more out of existing systems. The scope is enormous for efficiency gains in large-scale irrigation. Irrigation efficiencies worldwide are well below technical maxima, water-efficient technology is used on only a small area, and intensification and diversification are happening but slowly. Yet "irrigation modernization" has been disappointing: a recent study could not find a single example of a successful modernization package in a rules, budgetary processes, and hydraulic struc- World Bank­financed irrigation project (Burt tures. It then benchmarks those internal and Styles 1999). Successful modernization processes along external indicators such as irri- investment requires attention to economic, tech- gation efficiency, crop yield, and the environ- nical, managerial, and market considerations-- ment. The last step is to prioritize the internal within an integrated approach. Only after a clear processes that must be improved through vision has been established for developing an investment to affect the external indicators. (See area's agricultural potential can investment IN 3.7 and IP 9.4.) objectives be set. The diagnostic phase using the Rapid Appraisal Procedure (RAP) can then be INTEGRATED INVESTMENTS STAND THE BEST CHANCE approached with the real future objectives of OF SUCCESS. Many factors affect water use pro- irrigation systems in mind. (See IN 3.2, IN 3.5, ductivity. These include soil characteristics (soil and IN 3.7. Other chapters cover the incentive fertility, fertilization, drainage, soil salinity and framework [IN 1.5, IN 1.4] and the market envi- sodicity, breeding); agronomic factors (plant ronment [IN 1.3]. For on-farm improvements, variety, cropping patterns); crop management see IN 3.1 and IN 3.3. For irrigation moderniza- practices (tillage, weed control, soil moisture tion technology, see IP 3.1.) management); irrigation practices (irrigation scheduling, deficit irrigation, irrigation technol- THE GOAL IS TO IMPROVE WATER USE AND FARMER ogy and technique); and inputs, credit, markets, INCOMES, THUS CREATING A "VIRTUOUS CIRCLE." and prices. Investment packages should inte- Investment in irrigation improvement is justi- grate "hardware" improvements with improved fied--and risks for farmers reduced--only if the irrigation management, better crop selection system delivers the high and reliable level of and management, and access to profitable mar- service that allows users to optimize water use ket outlets. (See IN 3.1, IN 3.3, and IN 3.6.) and diversify into higher-value production. Farmers well-served by irrigation systems can PHYSICAL SYSTEMS MAY NEED TO BE ADAPTED. As improve efficiency and incomes and can afford farmers diversify, they are confronted with the water charges. This is the "virtuous circle," the technical challenge of adapting a rigid and uni- opposite of the old downward spiral of poor form irrigation system to a more varied crop- service, low cost recovery, system degradation, ping pattern. Higher-value crops need low-risk and low-value cropping, and ultimate guaranteed, controlled-flow water delivery need for rehabilitation. (See IN 3.2 and IN 3.7. directly to the plot, together with good 102 See also "Investments in Irrigation for Crop drainage. Soil management and land consolida- Diversification," in Agriculture Investment tion may be necessary, too. Physical systems Sourcebook [AIS], Module 8.) may have to be adapted, for example from open channel to pressurized pipes. Investments IRRIGATION MODERNIZATION HAS TO FOCUS ON need to incorporate an integrated approach. DELIVERING COST-EFFECTIVE SERVICE TO FARMERS. (See IN 3.7 for diagnosing the problem, IN 3.2 The recent focus in large-scale irrigation invest- and IN 3.4 for technical solutions, and IN 3.5 for ment has been (correctly) on improved gover- management approaches.) nance and on system upgrading to improve water control. Yet these investments have USERS HAVE TO BE PARTNERS IN MODERNIZATION focused on major capital projects such as canal PROGRAMS. The cooperation of users is critical to lining and on computer modeling, rather than successful outcomes from modernization invest- stepping back and looking at the problem to be ments. There should be a clear up-front agree- solved--poor service to farmers and its eco- ment on service levels, technology, and roles nomic and environmental consequences. A and responsibilities. For example, where farmers new benchmarking tool using RAP has been install field irrigation system improvements such developed to help select investments. RAP first as micro-irrigation, they have to work with analyzes internal processes such as operating scheme management to agree on technology A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT and on subsequent management of the inlet Diversification," in AIS, Module 4, and "Sup- structures. Already farmers on many schemes porting Market and Supply Chain Develop- finance all their own on-farm investments in ment," in AIS, Module 6.) micro-irrigation and the like. As diversification continues, driven by market forces, farmer IRRIGATION INVESTMENT, COMBINED WITH OTHER investment will grow. And as farmers share more FACTORS, SHOULD BRING MORE INCOME FOR LESS of the costs and take on more of the responsibil- WATER. Better control of irrigation water, com- ity, their share in driving change will grow. This bined with the other factors listed above, should participation underlines the value of the water result in higher cropping intensities, higher-value user associations (WUAs) discussed in chapter 2. crops, and higher farmer incomes. One project (See IN 3.4. On participatory irrigation manage- described in this Sourcebook specifically targets ment and user associations, see IN 2.1.) more income for less water as its objective (the Hai Basin project), using ET quotas to assign MANY INVESTMENTS CAN CONTRIBUTE TO ON-FARM rights and working with farmers not only on irri- WATER SAVING--BUT IN THE END IT WILL ONLY HAP- gation, but also on a broad range of improve- PEN IF THE FARMERS THEMSELVES ARE BOTH MOTI- ments in agronomy, crop husbandry, and VATED AND ENABLED. On-farm technologies such general management practices. The project uses as piped distribution, drip, and bubbler are satellite imagery to determine quotas and to widely available, and can cost as little as monitor use. Output in the area is likely to be US$250­$500/hectare. Treadle pumps that can maintained, and expanded after completion. irrigate up to 0.5 hectare using family labor cost This is an optimal investment outcome of more only $50­$100. A wide range of water manage- income for less water--and it is sustainable. (See ment and crop management improvements is IN 3.1 on the benefits of water control, and IN known. Yet adoption of water-saving technolo- 3.6 and IP 8.1 on ET quotas and the use of satel- gies has been slow and performance below lite imagery, including the Hai Basin project.) potential. Investment in water saving will be optimal in the private and public interest only CARE IS NEEDED TO ENSURE A PRO-POOR ELEMENT where both available technology and favorable IN MODERNIZATION INVESTMENTS, BECAUSE A incentive and institutional structures are pres- PURELY MARKET-DRIVEN APPROACH WILL FAVOR THE ent. In the end, the incentive structure is the BETTER-OFF. An element of inequity pervades all key: if water is too cheap, markets are dysfunc- irrigation, because the very poor do not control tional, or water rights are insecure, and farmers water resources. Diversification does create 103 will not save water. In the end, only the employment, but the better-off farmers benefit prospect of higher farmer net income and lower most, because they can finance on-farm invest- risk will drive investment and water saving. ments, assume risk, and access knowledge and (See IN 3.1 and IN 3.3. On the role of markets information services. To offset this, investments and incentives in general, see IN 1.5.) can be targeted toward the poor. For example, priority can be given to small-scale irrigation COMPLEMENTARY INVESTMENT IN MARKET DEVELOP- and water conservation investments, which are MENT MAY BE NEEDED. The objective is a sustain- pro-poor, highly flexible, and rapidly imple- able increase in farmer incomes. Thus, the mented. Conversion of public surface irrigation availability of profitable crops and markets is an schemes may also be a pro-poor investment. important element in the success of moderniza- For the very poor, investment in treadle pumps tion. Some complementary investments may be has allowed farmers in Africa and Asia to more needed to develop product markets, financial than double their income. (See IN 3.1 and IN markets, and market information and to build 3.3. Other chapters cover inequitable resource infrastructure (for example postharvest invest- distribution [IN 7.1] and innovative ways to ments, or rural and farm access roads). (See IN bring irrigation to the poor [IP 1.2]. See also 3.2. See IP 1.2 on linking smallholders to inter- "Targeting Agricultural Investments to Maximize national markets. See also "Market-Driven Poverty Impacts," in AIS, Module 11.) INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS SOMETYPICAL INVESTMENTS · Canal lining Investments in technical assistance projects include the following: · On-farm development · Micro-irrigation, greenhouses, tunnels, and · Performance-oriented rapid appraisals for mulching public irrigation · Technical benchmarking · Pressurized irrigation and protected agricul- ture: sprinklers, localized and piped, and drip · Customer satisfaction surveys Finally, possible pilot investments include pro- · Development of operation and mainte- poor smallholder irrigation programs, and other nance (O&M) plans related investments include extension, and financial and credit service development. · Data collection and ET measurement Individual investment projects include the fol- lowing: REFERENCE CITED Burt, C. M., and S. W. Styles. 1999. "Modern · Modernization of water distribution systems Water Control and Management Practices in Irrigation. Impact on Performance." Water · Water measuring devices Report 19. Food and Agriculture Organiza- · Advanced technologies for water control tion (FAO), Rome. Available online at http://www.watercontrol.org/publica- · Desilting works tions/publications.htm. 104 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 3.1 surface irrigation methods and sprinkler and localized piped systems that come in a multitude of versions. The management tools comprise all LENDING FOR ON-FARM the ingredients necessary to ensure that the sys- WATER-SAVING tems are adequately operated and maintained. TECHNOLOGIES The adoption of such water-saving technologies and practices has been slow. The initial capital Water saving on farms located on public irrigation investments for these systems vary according to schemes has lagged behind saving on private farms the method of irrigation and type of installation, with their own source of water.The few programs in addition to regional variations. The average introducing field-level modern water-saving irriga- costs of piped irrigation systems range from less tion technology and management practices on pub- than US$500 to more than US$6,000 per hectare. lic irrigation systems have had limited success. These costs are lower for piped surface meth- Experience in Tunisia, the Republic of Yemen, and ods, followed by conventional hand sprinklers, elsewhere demonstrates that a mix of farmer and higher for micro-irrigation fixed installa- investment with government subsidies has the tions. Capital costs are generally recovered from greatest impact on both water saving and incomes the benefits within two to seven years. through switches to more rewarding crops and reduced pumping costs (FAO 2003). Affordable micro-irrigation technologies have also proven cost effective and competitive. Government-owned irrigation systems perform They are adapted to smallholdings, raise poorly in terms of water productivity. This is incomes, and stimulate the development of due to poor irrigation water management on local markets, particularly in Sub-Saharan both the scheme and the farm (FAO 2001a). Africa and mountainous regions in Asia and Inefficient surface irrigation methods still pre- Latin America. In semi-arid regions, the cou- vail (box 3.1). Overall irrigation efficiency in 93 pling of low-cost irrigation technologies with developing countries was estimated at 45 per- water conservation and harvesting technolo- cent in the late 1990s, which means a loss of gies allows better control of limited water more than half the water mobilized for irriga- resources and results in much higher returns tion. Part of this loss returns to the system; the to farmers. Small-scale, low-cost irrigation is rest is captured uselessly. The best opportuni- simple and can be supported and easily man- ties for producing more with less water require aged by farmers in an efficient and sustainable 105 shifting to demand-driven water management manner. Investment costs in small-scale, low- and using improved on-farm water manage- cost irrigation range between US$200 and ment hardware and software. US$500 per hectare. The rates of return can be substantial (see IN 3.3). INVESTMENT AREA The amount of water that could be saved by 2025 by achieving 70 percent irrigation effi- Box 3.1 Old-StyleWater Investments ciency on the world's gross irrigated area could Public investment in irrigation used to mean building water meet about half the demand for additional conveyance and distribution networks to deliver water to the water supplies (FAO 2001b). Such savings are farmgate, not promoting on-farm water-saving technology. the main option for addressing water shortage Moreover, investment focused only on infrastructure and challenges in many developing countries. equipment at the expense of farm-level management. These investments now constitute sunk funds that can generate prof- Irrigation technologies and management tools its by upgrading the technology, improving management, and that permit high water use efficiency open involving the private sector. avenues for water saving. On-farm irrigation Source: Author. infrastructure and equipment include improved INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS POTENTIAL BENEFITS and institutional reforms that encourage private The main expectations from investment in sector involvement and prompt farmers to improved on-farm irrigation techniques are the invest in improved technologies and better agri- benefits derived from saving large amounts of culture water management practices. water, lower operational costs, higher crop yields, and better produce quality. The benefits often Investments in irrigation have a better chance also include substantial savings in irrigation labor, of success if they are integrated with a wide better weed control, reduced risk of waterlogging array of elements such as sound agricultural and salinization, less drainage effluent, less mobi- practices, crop and food diversification, human lization of contaminating salts and nutrients, and resource development, infrastructure improve- longer life expectancy for pumping equipment. ments, and marketing. On-farm irrigation tech- Moreover, better control of irrigation water usu- nology investments should be integrated with ally results in higher cropping intensities and these elements, and not just focused on water more rewarding cropping patterns. If farmers are management inputs. well connected to markets, these benefits trans- late into economic returns to farmers, and bene- Projects to improve on-farm water management fits for regional and national economies. When should be demand driven, based on the needs of irrigation projects for improved on-farm irrigation beneficiaries who should be committed to oper- technologies are well designed, properly imple- ating efficient production systems. Participants mented, and adequately managed, the invest- should be trained in the O&M of their irrigation ment returns are comparable to investments in systems and be willing to help pay the related sectors such as industry (FAO 2004). These bene- costs. To this end, institutional arrangements, fits stem from the many advantages that including the establishment of WUAs on public improved irrigation techniques offer over tradi- schemes, should be an integral part of the invest- tional irrigation methods (box 3.2). ment. The public sector has proven unable to sustain the O&M of the installed on-farm irriga- tion systems or provide the necessary support POLICY AND IMPLEMENTATION services. Strengthening the capacity of the pri- Important policy and implementation measures vate sector to provide services such as spare include technical support services for farmers parts and skilled maintenance and advisory serv- ices is necessary to lift this limitation (box 3.3). 106 Box 3.2 Main Advantages of On-Farm Modern IrrigationTechnology Incentives including subsidies (box 3.4) to pro- mote on-farm water conservation technology · Control of the amount of applied water and irrigation tim- have been effective in enhancing the adoption of ing. Piped systems allow the application of small amounts this technology. However, several measures are of water in a timely manner to fit crop needs.This facility needed to ensure the achievement of water con- in system manipulation allows a potential crop yield servation and sustainability goals. A demand- increase of 10­45 percent and improved produce quality. · Operation and maintenance. Improved systems need driven approach is necessary with active farmer only a tenth to a quarter as much labor as used for open participation in O&M and in capital-cost financ- canals.The complete system requires annual maintenance ing. Introducing the economic cost of water in that costs only about 5 percent of the initial investment. any form encourages water saving and increases · Cost. The use of thermoplastic pipes and fittings, made demand on water-saving equipment. from unplasticized polyvinyl chloride (better known as rigid PVC), low-density polyethylene, high-density poly- The capacity of existing institutions to provide ethylene, and polypropylene, which are manufactured in most countries, has drastically cut the cost of piped irriga- adequate services for project implementation, tion installations, while open canal networks are becom- management, and O&M should be assessed ing increasingly expensive to maintain. during the project appraisal and study phases. If Source: Phocaides 2001. possible, a monitoring mechanism with quan- tifiable indicators should be set up. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT An important benefit of improved on-farm tech- Box 3.3 Irrigation Advisory Services nologies is their ability to reduce on-farm water losses and thus reduce the salinization that Irrigation advisory services relate to all information and sup- inevitably accompanies waterlogging in semi- port provided by governmental, nongovernmental, and com- arid and arid regions. But adequate drainage, mercial services to introduce techniques and technologies and natural or human-made, remains a key to sus- improve capacity, leading to more efficient and better-per- tainable irrigation. forming irrigated crop production. Traditionally, governments have supported farmers through Controlled drainage also saves water and reduces agricultural extension services, but they have concentrated on leaching of nutrients from the soil (see IP 5.2). crops, fertilizer, and pesticides rather than water.Where gov- ernments have focused on water management, they have looked at the engineering and management of the main distri- bution systems, not at what happens on the farm. Where an LESSONS LEARNED attempt has been made to provide water management serv- Evaluation of projects intended to save water by ices, resources have often been inadequate to do the job introducing irrigation technology reveals multi- properly.Water management services are usually underfunded ple causes of failure. Often the failures stem and staffed with inexperienced people and do not have the from the way these projects were designed and resources to reach farmers. Any successes have usually been managed. Fortunately, most if not all of these supported by external aid, and their sustainability, once the causes can be avoided. support ends, is not certain. Source: FAO 2002. Project success also hinges on the extent to which irrigation professionals, equipment deal- ers, and public and private extension agents have Box 3.4 Subsidies to Promote On-Farm sufficient incentives to work closely with farmers Modern Irrigation to ensure proper O&M. It is important for irriga- tion projects to have quantifiable objectives that To overcome the drawbacks of past policies, many countries facilitate evaluation of their success or failure by subsidize part of the cost of water-saving irrigation technology measuring results against pre- or no-project situa- to promote use on their irrigated lands. This is the case, for tions. Switching to performance-oriented scheme instance, in the following countries: management and modernization generates more · Tunisia--between 30 and 40 percent of modern irrigation gains than do new schemes, if the lessons systems' capital cost learned from the degradation of the schemes are · Morocco--between 40 and 60 percent of modern irriga- 107 taken fully into account in the process (see also tion systems' capital cost IP 9.4). · Syrian Arab Republic--free studies and interest-free soft loans for 1 hectare per farmer · Republic of Yemen--free studies for between 30 and 40 Hardware improvement on government-owned percent of piped conveyance network, 70 percent of irrigation schemes should reward farmers for booster pumps and modern irrigation systems, for the use of water-saving irrigation technology. selected projects But the billing rules may have to be changed. Source: Author. In Morocco, for instance, the replacement of collective water-measuring devices by individ- ual water meters for each farm induced greater water conservation under the same water tariffs (box 3.5). can accrue from more efficient use of water in crop production (box 3.6). Such investments should therefore be promoted. Where the poten- RECOMMENDATIONS FOR PRACTITIONERS tial exists, investment programs should give pri- Investments in on-farm water-saving technologies ority to small-scale irrigation and water can be highly productive owing to the multiple conservation, because these increase flexibility economic, social, and environmental benefits that and can be rapidly implemented. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS Box 3.5 Water-SavingTechnologies in a Group Context When a group of farmers using sprinklers on a scheme in Morocco were billed as a group, they responded to a 21 percent hike in water rates by using more water--perhaps to get their "money's worth." The same 21 percent rise triggered a water- saving by farmers who were billed individually. Billing Water rate Absolute Crop Water demand relative method increase water demand intensification to aggregate crop demand Group billing +21% + 6% + 15% ­7.8% Individual billing +21% ­ 5% + 38% ­ 32% In another large scheme, a 5 percent price increase resulted in a 10 percent reduction in water demand where water was billed individually. Here again, where water was allocated and billed to a group, demand increased in response to the price increase. Source: Bazza and Ahmad 2002. Box 3.6 Water Conservation and Income Generation in the Republic of Yemen In the mid 1990s, the government of the Republic of Yemen launched a program to raise the productivity of irrigation from groundwater.The most important part of the program was the Land and Water Conservation project financed by the Inter- national Development Association and theWorld Bank.The irrigation component of this project was based on the promotion of irrigation technologies consisting of PVC and galvanized-iron pipes for transport and distribution, and drip, sprinkler, and bubbler systems in pilot farms, for demonstration purposes.A participatory, cost-sharing approach was followed. Farm-level water-saving measurements varied between 10 percent and more than 50 percent, depending on, for example, the accuracy of the system design and installation, the capacity of farmers to operate and maintain their systems, the soil type, and the crop.At the regional level, the average water savings represented no less than 20 percent and nearly 35 percent in the northwest of the country where most farms were equipped with bubbler irrigation systems. Farmers recovered their 50 per- cent investment share within two to four years from water savings alone, in part because diesel was subsidized. But the ben- efits went beyond water savings, because the technologies improved produce yield and quality and allowed farmers to switch to more rewarding crops or increase their irrigated area. At project completion, the savings resulting from all participating farms, covering 10,670 hectares, represented around 38 mil- lion cubic meters a year. Farmers used 15­20 percent of this volume to expand their irrigated area, and the rest remained in 108 the aquifer.The total volume of water savings corresponded to that of 475 dams each with an 80,000 cubic meter capacity, the same capacity as the average small dam in the Republic ofYemen, if filled to capacity.The annual water savings from farms par- ticipating in the project were equivalent to more than US$1.8 million. Source: Bazza 2001. RECOMMENDATIONS FOR PRACTITIONERS enable private investment and capacity to In formulating new projects, the following actions introduce and manage adapted on-farm irri- are recommended: gation systems. Promote hardware improve- ment on government-owned surface · Assess the enabling environment for the schemes so as to enable and facilitate their successful introduction of on-farm irrigation conversion to modern water-saving irriga- technologies, particularly country policies tion methods. on agricultural water use, existing regula- tions and institutional capacities, and the · Where groundwater is used for irrigation, potential benefits from the technologies. develop mechanisms for the sustainable management of aquifers to encourage the · Assist in reviewing policy and regulatory use of modern technologies to manage frameworks and reforming institutions to demand. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT · Build capacity in government and private at the World Bank Conference on Irrigation agencies to provide technical support and Water Policies: Micro and Macro Considera- advisory services to farmers on irrigation tions, Agadir, Morocco, June 15­17. technology. FAO (Food and Agriculture Organization). · Develop public sector capacity to establish 2001a. Crops and Drops: Making the Best national standards and control mechanisms Use of Water for Irrigation. Rome: FAO. of irrigation equipment and water allocation. ------. 2001b. "Proceedings, Regional Consul- · Build capacity in the private sector to man- tation on Investment in Land and Water in ufacture, import, and market irrigation the Near East." FAO Regional Office for the equipment and to provide reliable services Near East, Cairo. for users. ------. 2002. "Proceedings, Workshop on Irri- · Support farmer investments in water-saving gation Advisory and Training Services in the technologies through the careful use of sub- Near East." FAO Regional Office for the sidies and soft loans. Near East, Cairo. ------. 2003. "Investir dans la maîtrise de l'eau REFERENCES CITED pour l'agriculture et le développement Bazza, M. 2001. "Improved On-Farm Participa- rural." Preliminary report. FAO, Rome, June. tory Water Management to Reduce Mining of Groundwater in Yemen." Contribution to a ------. 2004. "Impacts macro-économiques de study on Farming Systems conducted by the l'agriculture irriguée au Maroc." Preliminary Food and Agriculture Organization for the report. FAO, Rome. World Bank. FAO Regional Office for the Near East, Cairo, Arab Republic of Egypt. Phocaides, A. 2001. Handbook on Pressurized Irrigation Techniques. Rome: FAO. Bazza, M., and M. Ahmad. 2002. "A Compara- tive Assessment of Links between Irrigation Water Pricing and Irrigation Performance in This Note was prepared by M. Bazza of FAO, and reviewed by the Near East." Paper prepared for delivery Jack Keller of International Development Enterprises (IDE). 109 INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS INVESTMENT NOTE 3.2 Delivery of irrigation water to nonpaddy crops at discrete, variable intervals with precise flows is more complex than continuous delivery for INVESTING IN IRRIGATION rice. Flow rates must be carefully controlled to FOR CROP DIVERSIFICATION irrigate nonpaddy crops whether surface or pressure systems are used. Farmers' efforts to grow crops other than cereals are frequently hampered by their surface irrigation ON-FARM IRRIGATION AND DRAINAGE NETWORKS. system. Diversification in irrigated agriculture often Many irrigation projects designed for rice pro- requires new or improved technologies for surface duction have a low density of irrigation ditches water delivery and drainage that allow flexible and farm drains because they were supposed to water application and drainage. be used for field-to-field irrigation. Nonpaddy crops, in contrast, require direct plot access to The green revolution and the rapid expansion irrigation and drainage that provide intermittent of irrigated areas between 1960 and 1980 cre- water supply and prevent soil saturation from ated grain surpluses that depressed prices in inhibiting crop production. domestic and world markets. Market-oriented farmers responded by seeking alternatives to DRAINAGE. Improved drainage reduces water- the cultivation of cereals. They were encour- logging and salinization, allowing a wider aged by the availability of advanced irrigation choice of crops and encouraging crop diversifi- technology; the development of improved high- cation. Complementary on-farm drainage facili- value crops; the increased domestic and ties for removing excess water fast and regional demand for fruits, vegetables, and live- lowering the water table may need to be stock products; the growth of private agribusi- installed and integrated with the main drainage ness in processing and marketing; and the system. Some farmers provide these facilities removal of distorting policies. with rudimentary but costly systems of dual- purpose field ditches and raised beds, a tech- However, many farmers in rice-based systems nique widely used in delta areas in Southeast were constrained by the irrigation infrastruc- Asia. These systems, though effective, take up ture, management practices at the farm level, an considerable productive land area. adverse policy environment, and a lack of sup- SOIL MANAGEMENT. Often, land can be converted 110 port services. Because of the importance of rice, many issues in this Investment Note deal with from rice to nonpaddy cultivation only at great the diversification of rice-based cropping sys- cost because the high clay content of heavy tems but apply also to the increasing productiv- soils that are excellent for rice cultivation result ity of other irrigated agricultural systems. in low infiltration rates and poor suitability for other crops and hence impose large power requirements for land preparation. Diversifica- INVESTMENT AREA tion from rice to other crops therefore has WATER DELIVERY. Paddy and nonpaddy crops greatest potential on lighter soils. require different irrigation management. Both excess water and deficits curtail nonpaddy LAND CONSOLIDATION. Construction of the dense crop yields, whereas rice does well with con- surface irrigation and drainage system needed tinuous irrigation and/or field-to-field irriga- for crop diversification cannot reasonably be tion, the dominant method of irrigation in most implemented where randomly shaped farm of South and Southeast Asia. Basin irrigation, plots are scattered throughout the irrigated the method used for irrigated rice, is also used area. A land consolidation program is often for crops such as groundnuts, maize, and soy- needed as a basis for a cost-effective layout for beans, but it is not suited to crops sensitive to an on-farm irrigation system suited to efficient wet soil conditions or to soils that form crusts. water management. Farm plots should be A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT rearranged in a geometric grid that determines Box 3.7 A Successful Project in Brazil the layout of irrigation and drainage systems and farm roads. In Japan, the Republic of In Brazil, the Upper and Middle Săo Francisco Irrigation Project, Korea, China, and Taiwan (China), economies appraised in 1985, consisted of the rehabilitation of seven public where diversification is common, irrigation sys- schemes and construction of a new scheme,"Formosa." Irriga- tems were systematically developed in conjunc- tion systems were designed to provide high-quality service to tion with land reform, providing irrigation and each user,with the possibility of adopting sophisticated,pressur- ized on-farm applications.The expected area of crop diversifica- drainage access for each plot and crop. Failure tion was greatly underestimated at 13 percent as the area now of land consolidation programs has been com- devoted to fruit crops (mainly banana and mango) averages 61 mon, and political commitment (sometimes percent in the rehabilitation sites and 32 percent in the new supported by external stimuli (has been impor- scheme. Improved market access via a new highway to Brasília tant in driving land reform. greatly enhanced prospects for output growth in Formosa, and the project has generated considerable off-farm employment. Source: Brazil, "Upper and Middle Săo Francisco Irrigation Project,"1986. POTENTIAL BENEFITS Agricultural diversification creates opportunities for higher and more stable rural incomes through more efficient use of resources and the Box 3.8 An Unsuccessful Project inThailand exploitation of comparative advantage in crop production. Diversification generally implies a In Thailand in 1977 at project appraisal, it was expected that shift from cereals to other field crops or high- during the dry season about half of the Lam Pao Scheme under the Northeast Irrigation Project II would be cropped value horticultural crops. These may require with high-yielding rice varieties, with the rest under peanuts less water but offer opportunities for greater and mung bean. More than 20 years later, cropping intensity employment, higher incomes, and more value- during the dry season averages about 32 percent. Dry season added processing. vegetables are grown mostly near the larger canals. Expansion of diversified irrigated agriculture is constrained by the lack of Two World Bank­supported projects--a suc- tertiary canal service to individual fields and the unreliability of cess story in Brazil (box 3.7) and an unsatisfac- canal water, in addition to seasonal migration of rural labor to tory result in Thailand (box 3.8)--illustrate the urban centers and poorly organized markets in the area. importance of irrigation system design, access Source: Burt and Styles 1999. to markets, and farmer training in enhancing crop diversification. 111 Box 3.9 Groundwater and Crop Diversification: POLICY AND IMPLEMENTATION "FarmersVote by Drilling" GROUNDWATER DEVELOPMENT. Deficiencies in water delivery from surface irrigation systems During the last 20 years, with low development costs, the use of groundwater resources for irrigation has increased dramat- have spurred farmers to tap other sources of ically. Canal water distribution is often erratic or rigidly sched- water, primarily from drains and groundwater uled, and large variations between planned and actual (box 3.9). This has sometimes led to overex- allocation of water hamper the cultivation of nonpaddy crops. ploitation of groundwater resources, posing a Farmers quickly realize the potential operational advantage of major threat to health and the environment. A groundwater over surface water. decline in groundwater levels increases pump- Groundwater development in Thailand has largely solved ing costs, affecting the sustainability of ground- water supply problems. In a project in Phitsanulok, access to water supplies and the profitability of new groundwater gives farmers freedom over crop calendars and cropping systems. choice of crops because they choose the best time to plant for their own situations and markets and can give their crops and COMPLEMENTARY INVESTMENTS. Agricultural diver- soil all the water they need. sification is an evolving process that requires Source: Mainuddin, Loof, and Abernethy 2000. appropriate policies, technologies, road and INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS transport infrastructure, and services (Bargh- by land consolidation and improvements in outi, Garbus, and Umali 1992). main drainage and flood control systems. Improvement of irrigation and drainage facilities LESSONS LEARNED is a prerequisite to crop diversification, but The pace of crop diversification in irrigated rice should be complemented by other support serv- systems is determined by markets and policies. ices. Governments should encourage investments Private investment usually grows gradually, as for modernizing marketing facilities as well as for farmers gain experience with new markets and improving roads, communication systems, and production systems. Market information sys- storage. Extension programs with information on tems and market access are critical to promot- irrigation, agronomic practices, and economics ing diversified cropping. Diversification is most help farmers decide which crops to grow. A guar- advanced where farmers have easy access to anteed and stable market, and readily available reliable water in river delta and alluvial areas, inputs and credit, are also essential to sustain where explosive development has occurred in crop diversification, as demonstrated in the Mid- groundwater resources. In other surface irriga- dle East and North Africa (box 3.10). tion systems, diversification will remain con- strained if investments support only urgently Before initiating a crop diversification program, needed rehabilitation without upgrading irriga- detailed studies should be done to determine the tion infrastructure to meet the requirements of quality of irrigation service and its suitability for diversified agriculture. diversified crops and to assess the potential mar- kets and the available level of services and tech- nology. The in-depth diagnosis of the irrigation RECOMMENDATIONS FOR PRACTITIONERS systems should go beyond an evaluation of the Diversification in irrigated areas may require indicators of hydraulic, financial, agricultural, the improvement of main canals and distribu- and environmental performance; it should evalu- tion systems and construction of a tertiary (on- ate the potential for participation by women and farm) irrigation and drainage system to meet poor people in their efforts to diversify, espe- precise water delivery requirements of diversi- cially their access to credit and markets. fied crops. This may need to be complemented INVESTMENT OPPORTUNITIES 112 · Modernization of the water distribution sys- tem to provide reliable and flexible delivery Box 3.10 Diversification in the Middle East · Tertiary and on-farm development (includ- and North Africa ing irrigation, drainage system, and farm roads) serving each farm plot The agricultural sector in countries in the Middle East and North Africa region has witnessed remarkable change and · Micro-irrigation modernization.This has been especially remarkable in the irri- gation subsector, which has benefited from a variety of · Greenhouses, tunnels, and mulching advances in water management, crop improvement, marketing, and processing. Changes were often led by private companies · Marketing and food processing facilities that introduced modern production technology such as plastic greenhouses, tunnels, mulches, improved hybrid varieties, drip · Extension and financial services irrigation systems, soluble fertilizers and herbicides, modern market information systems, and refrigerated transport equip- ment for long hauls. REFERENCES CITED Source: Author. Barghouti, S., L. Garbus, and D. Umali, eds. 1992. "Trends in Agricultural Diversification: A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Regional Perspectives." Technical Paper SELECTED READINGS 180. World Bank, Washington, DC. Plusquellec, H. 1987. "Crop Diversification in Irri- gated Agriculture: Water Management Con- Burt, C. M., and S. W. Styles. 1999. "Modern straints." In T. J. Davis, and I. A. Schirmer, Water Control and Management Practices in eds. Sustainability Issues in Agriculture Irrigation. Impact on Performance." Water Development: Proceedings of the Seventh Report 19. Food and Agriculture Organiza- Agriculture Sector Symposium. Washington, tion (FAO), Rome. Available online at DC: World Bank. http://www.watercontrol.org/publications/ publications.htm. ------.2002. How Design, Management and Policy Affect the Performance of Irrigation Mainuddin, M., R. Loof, and C. L. Abernethy. Projects: Emerging Modernization Proce- 2000. "Operational Plans and Performance dures and Design Standards. Bangkok, in the Phitsanulok Irrigation System, Thai- Thailand: FAO. land." International Journal of Water Resources 16(3): 321­42. World Bank. 2002. "Implementing the New Rural Development Strategy in a Country Driven Process: Agriculture and Rural WORLD BANK PROJECTS DISCUSSED Development Project Profiles." Presentation Brazil. "Upper and Middle Săo Francisco Irriga- at the Country Director/Rural Sector Board tion Project." Closed. Project ID: P006362. Learning Event, September 8­10, sponsored Approved: 1986. Within World Bank, avail- by the World Bank, Antalya, Turkey. able at http://projportal.worldbank.org. This Note was prepared by Hervé Plusquellec with inputs Thailand. "North Irrigation Improvement Pro- from Walter Ochs, and other irrigation and drainage special- ject." (02). Closed. Project ID: P004699. ists in the Irrigation and Drainage Network of the World Approved: 1977. Bank. It was reviewed by Jan Bron of Royal Haskoning. 113 INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS INVESTMENT NOTE 3.3 surveys have shown that garden size rarely exceeds 0.1 hectares and is often less than 0.05 hectares (500 square meters). With nonmecha- INVESTING IN SMALLHOLDER nized systems using ropes, buckets, and water- IRRIGATION ing cans, irrigation of even such small areas can be extremely labor intensive. The labor con- Smallholder irrigated horticulture has proven a straint often limits increased production simply viable and attractive option for poor farmers in because the farm family lacks the time and developing countries. Returns from intensive irri- energy to provide sufficient water for the crops. gated horticulture, even on tiny plots, can greatly Moreover, the distance to water points has been exceed returns from rainfed cereals production. shown to decrease the likelihood of girls' attend- Private ownership of simple pumping technologies ing school because they are often responsible for has avoided collective action problems related to collecting water (WHO 2003). larger public or communal schemes. To promote expansion of smallholder irrigation, poor farmers The first hurdle to expanded smallholder irri- must have access to cost-effective technologies gation, therefore, is to demonstrate and pro- that provide a rapid return on investment, a reli- vide access to labor-saving technologies for able and quality supply of water and other inputs, pumping and distributing water. Mechanized land for expansion, and markets to absorb technologies such as small gasoline or diesel increased production. pumpsets often exceed the means of poor farmers--both in terms of investment cost ($300 to $500) and of operating costs of fuel, In many developing countries, irrigation is oil, and spare parts. Moreover, the small size counted on to increase production, reduce of many gardens may preclude economical reliance on unpredictable rainfall, and provide use of a motorized pump. The treadle pump, food security, income, and employment to poor on the other hand, has been shown to provide farmers. Large schemes, which the World Bank an economically viable solution for water lift- financed for decades, have often lacked sustain- ing that is within the financial means of small- ability; frequently used to produce uncompeti- holders in Africa and Asia and may allow a tive cereals for import substitution, such large farmer to irrigate 0.5 hectares using only fam- schemes typically suffer from the inability of ily labor and investing US$50­$100. Scaling up from traditional systems to treadle pumps and 114 government or parastatals to maintain the infra- structure. Smaller, communal schemes work further to motorized irrigation systems requires well in many countries but can be plagued by careful thought and an incremental approach collective action problems, although the basic (box 3.11). rules for success are well documented (Ostrom 1992). Elsewhere, there is considerable scope for the expansion of small, privately owned BENEFITS pumping technologies that benefit small farm- Smallholder irrigated horticulture can provide ers, particularly for production of high-value significant returns to farmers and increase local crops such as horticulture. manufacturing capacity while creating employ- ment. Surveys have shown that many farmers increase their land under cultivation by three INVESTMENT AREA: FOCUSING ON times within two years after the purchase of a THE PRIVATE SMALLHOLDER treadle pump, more than doubling their annual Throughout the developing world, many small- incomes (boxes 3.12 and 3.13). holders produce vegetables on irrigated plots during the dry season as a hedge against a rainy Benefits do not stop at the farmgate. When season crop failure and as a source of cash locally made treadle pumps are used, the arti- income and food. These plots may be very small: san sector may be stimulated. Small metal shops A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 3.11 Scaling Up with ImprovedTechnologyTakesTime Economic analysis in Niger has found that for plot sizes less than 0.69 hectares, treadle pumps are more profitable than small- motorized pumps, but for larger plot sizes the motorized option becomes economically superior (World Bank 2001).To make best use of a motorized pump, an average farmer would need immediately to increase the size of his or her garden by 14 times (for example, from 0.05 hectares to 0.7 hectares) to ensure viability.This transition may easily surpass the technical and management capacity of the farmer, who will require more labor, inputs, and markets for the produce, which helps explain why many credit-based motorized pump-promotion projects for smallholders fail. Instead, by starting small and increasing incre- mentally, some treadle pump adopters have managed to graduate to mechanized technologies.The following scenario for scal- ing up has proven successful, minimizing risk for smallholders: · Year 0: A farmer has a hand-dug well with a rudimentary rope-and-bucket gravity irrigation distribution system.This may be marginally profitable but is highly labor intensive. · Year 1: The farmer buys a treadle pump but keeps the hand-dug well.The gardener realizes productivity gains but may observe that the water-lifting capacity now exceeds the well capacity and decides to improve the well. · Year 2:The drilled tubewell, treadle pump, and rudimentary gravity irrigation distribution system permit a large expansion in the size of the garden, because neither the amount of water nor the time to lift it is a constraint. · Year 3: As garden size expands and the length of the distribution canals increase, the gardener improves the distribution system with buried PVC pipes. · Years 4­6: Extension of the PVC system again allows an increase in garden size.With a second well and pump, the distri- bution system is again expanded. · Year 7:A motorized pump is added to the system, and manual pumps provide reliable back-up during fuel shortages or breakdowns.The farmer may later want to explore the micro-irrigation systems discussed in IN 3.1, the Investment Note on on-farm water saving. Source: Author. Box 3.12 The Benefits of Smallholder Box 3.13 Experience with Pro-Poor Irrigation inWest Africa Irrigation in Asia In West Africa, projects implemented by Enterprise- Treadle pump technology can be a powerful tool for poverty Works Worldwide in Senegal, Mali, Niger, Benin, reduction in Asia. It self-selects the poor, puts to productive Burkina Faso, Côte d'Ivoire, and Ghana have pro- use the region's vast surplus family labor, and is claimed to moted private sector sales of more than 8,000 trea- raise the annual net household income by US$100 on average. dle pumps and more than 1,000 low-cost tubewells. For a marginal farmer with $12 to $15 to spare in this region, 115 More important, these technologies have resulted in there could hardly be a better investment than a treadle pump, higher incomes for more than 80 small fabrication which has a benefit-cost ratio of 5, internal rate of return of workshops and thousands of small-scale gardeners. 100 percent, and payback period of a year. It thus ideally fills The annual increase in income for gardeners varies the needs of marginal farmers.The challenge lies in its market- widely between countries and within countries, but it ing; exceptional ingenuity seems to be required to put the ranges from $290 in Niger to $584 in Senegal. treadle pump in the hands of millions of rural poor. Source: Author. Source: Shah et al. 2000. learn new skills and develop their ability to food security concerns. Many of these benefits solve local problems. Local products may be are perceived by women farmers, who are preferred to externally produced pumps, as the able to augment garden production. House- artisans are closer and more accountable for hold drip irrigation systems, supplied from quality and repair. periodically filled buckets or drums, often with a treadle pump, to water household gar- The quality and quantity of food for local and dens or small plots of vegetables or fruit trees household consumption is also important, and are particularly important for women as well irrigated horticulture addresses household as men. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS POLICY AND IMPLEMENTATION mechanized water lifting, piped distribution Several policy and resources conditions must systems, and improved surface irrigation or drip be met for successful implementation of small- irrigation systems. holder irrigated horticulture. Availability of nonirrigation inputs Access to adequate irrigable land Fertilizer, seed, and pesticides need to be ade- Improved water-lifting technologies have a quately supplied by the commercial sector on higher discharge than traditional methods, and the basis of market prices. If not, farmers pro- time saved in irrigating may be used to expand duce their own seed, leading to reduction in surface area if suitable land is available. Land yields as seed quality deteriorates. Vegetable tenure systems are a potential impediment to the seeds adapted to the prevailing environmental expansion of irrigated horticulture because, if conditions are an important input that is fre- farmers do not own the land, they will be reluc- quently lacking. Subsidized inputs, typically fer- tant to invest in permanent improvements such tilizer, have been shown to make these items as tubewells. Conflicting land use can also be a less accessible to smallholders, because these problem, especially when dry season irrigation benefits tend to be captured by larger farmers, encroaches on land traditionally used by herders. creating scarcity. Existence of sufficient water of suitable quality Market conditions Expanded irrigated horticulture requires ade- Market outlets for irrigated production are quate supplies of ground- or surface water to imperative for a successful smallholder irrigation meet the requirements of the crops being subsector. Proximity to markets or reliable trans- grown because the most productive small- portation linkages must be present, particularly holder irrigation is performed during the dry since horticultural products are perishable. Price season (when insects and plant diseases are cycles often accompany horticultural produc- scarce and when rainfed cereals production tion, which may require additional investment in does not compete for labor). Irrigation water is value-added production (such as drying) or bet- most economical if subsurface water supplies ter storage to smooth out supply. Of course, are within 7 meters of the surface or if surface access to market information is also important. water supplies are within 50 meters of the 116 plants. Water quality is also important because salinity can become a major problem, especially LESSONS LEARNED in arid climates, even when concentrations of Two important lessons are reviewed here: salts in irrigation water are relatively low. Tech- development of supply chains for sustainable nical advisory services would then be needed impact and the importance of a market-led to advise on selecting salt-tolerant crop varieties approach for financing technology acquisition. and saline irrigation practices. (For groundwa- ter governance issues, see IN 4.4.) Supply chain development Low-cost productive technologies must be Availability of ample labor supply available to smallholders in terms of both loca- Although rural household labor is frequently in tion and price and must correspond to their short supply during the rainy season, when needs. A variety of ways of providing small- farmers focus on staple crops, it is usually rela- holders with access to these technologies have tively abundant during the dry season when been used, ranging from importing treadle irrigated horticultural activities are performed. pumps to manufacturing items locally (box Labor productivity can be increased signifi- 3.14). For market-driven sustainable develop- cantly through higher yields and expanded irri- ment to occur, all parties in the supply chain gated surface areas through the use of must make a profit. In the case of treadle A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT pumps, tubewells, and improved piped water · Ensure that a minimum set of resource and distribution systems, the manufacturers, market conditions are satisfied before pro- installers, and the gardeners all benefit. Treadle moting irrigation. pump manufacturers earn $15 to $25 profit per pump, tubewell installers earn $12 to $18 per · Develop supply chains that are dominated well, and the plumbers installing buried PVC by private entrepreneurs such as pump pipe distribution systems earn roughly $0.20 manufacturers and repair shops. per meter of pipe installed. · Rethink the definition of smallholder-irrigated agriculture in view of market gardening. Financing technology for a market-led approach Many farmers, particularly the poorest, irri- In many countries, the uptake of technologies by gate plots smaller than one-tenth of a hectare. subsistence gardeners is hindered by the lack of institutions that provide rural finance. Although · Recognize that rapid introduction of mecha- the development of low-cost technologies has nized technologies can easily overwhelm a reduced up-front costs, farmers typically require poor smallholder in terms of capacity. Scaling financial assistance, ideally through a pump sup- up to mechanized pumps has been demon- plier credit or other commercially viable credit strated successfully but may take time. mechanisms. Subsidized programs are risky · Make sure there are markets for the outputs, because of market distortions, and should be or help create them, to ensure that investigated only if there are no rural finance increased production is profitable. institutions or it is felt that cost reduction is required for a "demonstration effect" where pumps are unknown. Therefore, coordination REFERENCES CITED among donors in the irrigation sector is essential Ostrom, Elinor. 1992. Crafting Institutions for Self- for mutual understanding of the long-term bene- Governing Irrigation Systems. San Francisco: fits of encouraging farmers to invest in a technol- Institute for Contemporary Studies Press. ogy that will pay for itself in its first season of use. Poorly managed credit programs hurt the very people they are designed to help in the long term. Instead of developing sustainable Box 3.14 Developing a Supply Chain for Pumps local capacity, these programs leave smallhold- ers dependent on foreign aid and waiting for a 117 Certain principles are generally accepted as key to establishing gift rather than investing in their own future. a viable supply chain, including the following: However, the smallholder market approach only works well when the technology being pro- · Private sector actors, motivated by profit, are more suc- cessful than public sector entities. moted has a short payback period (one or two · Extremely judicious use of subsidies can promote initial seasons), and the initial cash payment is within introduction. the smallholders' reach. · All actors in the chain need to make a profit. · The development agent must play a facilitator's role in developing a viable supply chain but must not compro- RECOMMENDATIONS FOR PRACTITIONERS mise future sustainability by performing functions that the · Use privately owned technologies to avoid main actors in the chain cannot assume. collective action problems and reliance on There are two schools of thought for the best design of a supply government assistance. This increases the chain: decentralized manufacture (small workshops close to the likelihood that irrigation assets will be markets) and centralized mass manufacture (several large manu- maintained. facturers with a distribution network). Both methods have advantages and disadvantages.The choice will depend both on · Consider simple technologies such as trea- the project planners' goals and on the available infrastructure. dle pumps and drip irrigation kits. These Source: World Bank 2003. self-select for poor households. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS Shah, T., M. Alam, M. D. Kumar, R. K. Nagar, SELECTED READINGS and M. Singh. 2000. "Pedaling Out of Enterprise Works, Association Nigérienne de Poverty: Social Impact of a Manual Irriga- Promotion de l'Irrigation Privée, Association tion Technology in South Asia." Interna- Française de Volontaires de la Paix. 2001. tional Water Management Institute Research "Irrigation Guide: Guide for the Selection of Report No. 45, 2000, Colombo, Sri Lanka. Appropriate Smallholder Irrigation Tech- nologies." Niamey, Niger. WHO (World Health Organization). 2003. Right to Water. Health and Human Rights Publica- Kay, Melvyn, and Tom Brabben. 2000. "Treadle tion series, No. 3. Geneva. Pumps for Irrigation in Africa." IPTRID Knowledge Synthesis Report No. 1. Octo- World Bank. 2001. "Implementation Completion ber, International Programme for Technol- Report for Private Irrigation Promotion Pilot ogy and Research in Irrigation and Project (IDA 2707 NIR)." July, World Bank, Drainage, Rome. Washington, DC. This Note was prepared by Jon Naugle of Enterprise Works ------. 2003. "Treadle Pump Supply Chain and Daniel Sellen, and reviewed by Jack Keller of International Workshop Report." Water and Sanitation Development Enterprises. Program-Africa. In French. Available online at http://wsp.org/08_Region_output.asp? Region=Africa. 118 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 3.4 INVESTMENT AREA Responsibilities and funding sources must be identified for each of three actors involved in SELECTINGTECHNOLOGIES irrigation O&M: FORTHE OPERATION AND · Government. Government's responsibilities MAINTENANCE OF are defined by policy and legislation. They IRRIGATION SYSTEMS usually encompass oversight and mainte- nance of nationally important water bodies Appropriate technologies for the O&M of irriga- and major structures such as dams. Expendi- tion systems are essential for the service delivery tures are covered from the national budget. expected of them. Technologies for operation (which are related to the structures in a system) · Agencies. Public, semi-public, and private have to be distinguished from technologies for agencies (and sometimes WUAs) are usually maintenance (which are related to all components responsible for the main and distributary of a system, that is, all the structures, canals, and systems. Expenditures are funded through fields). Some key issues in the selection of the right fees charged to farmers and paid from their technologies for the job are reviewed in this own resources. Subsidies paid from the Investment Note. government's recurrent budget may supple- ment this funding. System modernization will be a focal point of · Water user associations and farmers. WUAs irrigation debate in coming years, especially in and individual farmers are usually responsi- developing countries. The construction of new ble for field systems. Operation and main- irrigation systems may also be expected in tenance is funded by farmers with their some of the least developed and emerging own money or labor (see IN 1.4 and IN 2.1) economies and in quite a few areas with rain- and may be financed through loans from fed cultivation. As an integral part of the inves- private banks. tigation and design processes, appropriate technologies for O&M will have to be selected For system operation, all kinds of technologies to be able to use these systems properly. It are on the market. They run the gamut from takes several years after installation of an irri- simple tools for manual operation to fully auto- gation system for the benefits to show up: mated systems. Availability of technology is gen- 119 improved yields, crop diversification, and erally not the problem, but rather the selection higher farmer income. At that point, good of the most appropriate technology for the job. O&M becomes crucial, if improvements are to The selection of the control system (upstream or be retained. downstream) and the definition of operating rules are crucial. This is true at every level of the Three main considerations should govern the irrigation system, from the inlet to the main and selection of O&M technologies. First of all, they distributary system, and to the field. The choice must fit the type of service that irrigation users of appropriate technologies at each level should expect. Second, the technologies have to be in by made by whichever actor is in charge of balance over the system components: inlet, O&M at point of service. Overall agreement is main and distributary system, and field system. important, however, because there is strong For balanced performance, appropriate O&M interaction among the levels of the system. Such technologies must be selected for each compo- an agreement should be reached during the nent. Third, the most cost-effective solution design phase for new installations or the should be selected (see IN 3.5). preparatory phase for system modernizations. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS Canal maintenance activities focus on shape, its design. Only when an irrigation system is dimensions, and flow resistance. In most cases, operated and maintained properly does it ben- aquatic vegetation is the predominant mainte- efit farmers by enabling them to get a good nance factor. For lined irrigation canals, the lin- yield from their crops. ing has to be kept up. An unlined irrigation canal is, by definition, in a very young phase in When groundwater is the source, the irrigation the vegetation succession and has to stay free system is generally smaller. It consists of a well of vegetation to retain its hydraulic function. that abstracts groundwater from the aquifer and The best time for canal maintenance is usually pumps it into open irrigation canals or a piped just before the start or during the irrigation sea- system. In a tubewell, the well itself, the filter, son. Irrigation water is supplied in more or less and the pump need maintenance. After mainte- known volumes, so maintenance can be nance, the operation of the pump has to be planned around releases. Irrigation frequencies carefully planned and monitored. Farmers often also have an impact on maintenance, of which do this themselves. there are four types: In traditional irrigation systems, water rights · Routine maintenance--vegetation control became established over years in certain areas, (once or a few times per year) so that each user had some idea of how much water to expect. The operation of modern sur- · Periodic maintenance--cross-sectional con- face irrigation systems, however, is more com- trol and maintenance of structures (once plex. Their size and layout preclude the every 5 to 25 years) application of traditional water rights. The resultant tensions often culminate in bunds and · Emergency maintenance dike cutting and other activities that impair sys- · Modernization tem functioning. The first two are the focus of this Investment Groundwater irrigation poses lesser manage- Note. The third, effective emergency mainte- ment problems, because farmers can clearly nance, depends on a clear decision-making see the relation between the system and the procedure and the financial wherewithal to benefit, although this perception does not allow more than one choice of technology. The always prevent groundwater mining or excess solution chosen depends on the nature of the energy consumption. The introduction of vol- 120 emergency. Modernization is outside the scope umetric water measurement devices, when of this note. economically and technically feasible, can be an appropriate response to this problem (see O&M of the inlets has always received close IN 1.4). The joint benchmarking initiative by attention, and a body of experience has accu- the World Bank, the International Water Man- mulated from around the world. After the agement Institute (IWMI), the IPTRID, the hydraulic properties of the inlet structure, the International Commission on Irrigation and sediment control function is crucial to prevent Drainage (ICID), and the FAO can help iden- sediment from choking off the irrigation canals. tify adequate indicators of system perform- Regarding the main and distributary systems, ance, which may help in choosing the best some less successful developments need to be improvement options and technologies for mentioned. All the necessary tools are available O&M. to design, construct, operate, and maintain such systems and can very well result in sound Most lined canals need inspection and minor canal networks. However, the word "sound" routine maintenance work (local cleaning) should be interpreted carefully. It refers to the annually. Aquatic vegetation in unlined canals level of service that can be realized within a can be controlled mechanically, chemically, and system, not just to the technical soundness of biologically. Mechanical control can be manual A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT or mechanized. Manual reshaping of canals because they can easily damage the vegetation means heavy work and a low output per growing along canals just above the water level; worker. Mechanized control may be done by and because they do not kill weeds immedi- cutting or dredging. Cutting leaves stubble and ately, which means that half-dead vegetation weed regrowth, but the stubble protects the may clutter the canal after application. bottom or bank of the canal from erosion. Dredging removes a portion of the plants, As long as desirable and unwanted effects are buried in mud at the bottom. When there is a kept in balance, chemical control of aquatic risk of erosion, aquatic plants should be mown weeds can be applied on a limited scale. or cut. A further distinction can be made between harvesting and nonharvesting mechan- Aside from the widely used traditional field irri- ical control, using different kinds of equipment gation methods, such as basin and furrow irri- for different purposes. Much of the equipment gation, there have been some important can be tractor mounted. For other types of spe- innovations in field irrigation systems. All kinds cialized equipment, mowing and sweeping of micro-irrigation systems have been devel- boats have been developed, but they cannot be oped. Farmers are usually completely responsi- used in narrow or shallow canals and have to ble for the O&M of field irrigation systems. This pass obstructions (bridges, culverts, weirs) in implies that O&M technologies selected for use larger canals. Much of the equipment devel- in the inlet structure and the main system have oped for vegetation control can also be used for to be attuned to the technology that farmers desilting and reshaping activities. Special equip- select for their field system. ment is available for maintenance dredging of silt and vegetation. POTENTIAL BENEFITS For biological control, selective agents or A wise choice of O&M technologies should polyphagous organisms can be used. Selective result in a well-operated and well-maintained agents attack one or only a few weed species. irrigation system. The services delivered by the Their effects are similar to those of selectively system should enable farmers to improve their applied herbicides: one weed species decreases crop yields or obtain other benefits. and other plant species take its place. Polyphagous organisms reduce the growth of POLICY AND IMPLEMENTATION nearly every species present to acceptable lev- The key policy decisions are the following: 121 els. Examples of biological control include Chi- nese grass carp, which consume all species of · Selecting the type of control approach aquatic plant, although they prefer submerged (downstream, upstream) plants; goats and sheep, which keep down the weed growth if they are allowed to graze on the · Determining the level of service to be banks and maintenance paths; and shade, expected from the irrigation system which can be provided by allowing broad- leaved plants to grow in the water and by plant- · Determining the O&M activities required ing suitable trees along canals. to keep the system in the envisaged con- dition and allocating responsibility for To reduce the deposit of silt, the canal can be those activities fitted with sediment traps. · Selecting O&M technologies that are appro- priate for the O&M activities Chemical control implies the use of herbicides, some more selective in killing vegetation than · Monitoring implementation others. The application of herbicides should be limited, however, because they can have seri- · Devising a mechanism for corrective action ous negative effects on the environment; if a party reneges on its responsibilities INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS O&M technologies should be selected during · Select technologies that fit the type of serv- the preparatory or the design phase. At the ice that irrigation users expect. Make sure same time, the willingness of all parties to do that these technologies are in balance over their share in O&M must be established. the system components (main, distributary system, and field system) and are the most Before an irrigation project starts, all parties cost-effective solutions. must understand the following: · Make sure that all parties agree on who is in · What is to be operated and maintained, charge of the O&M technologies selected how this has to be done, and when for each part of the system. · Who is to operate and maintain which part · Make sure that the farmers will be willing to of the system (in other words, the division pay their share of O&M costs to maintain of O&M responsibilities between farmers the envisaged level of service. and the agency should be clear) · Have ready for use a mechanism to resolve · How, in case of a transfer, financial respon- disputes concerning responsibilities and sibility will be shifted from the government payments. to the agency or the farmers Reaching such an understanding requires delin- SELECTED READINGS eation of the parts for which government will Fowler, L. C. 1996. Operation and Maintenance be responsible, clear guidelines for the agency of Groundwater Facilities. American Society or WUAs and individual farmers on standards to of Civil Engineering Manuals and Reports be maintained, and adequate legislation speci- on Engineering Practice No. 86. New York: fying executable control and sanctions. ASCE. INCID (Indian National Committee on Irrigation LESSONS LEARNED and Drainage). 1994. Guide for Preparation Parties at every level must make a commitment of Plans of Operation and Maintenance of to fulfill their O&M responsibilities. When such Irrigation Systems. New Delhi: INCID. a commitment is present, irrigation systems will Johnston, W. R., and J. B. Robertson. 1991. 122 be operated and maintained adequately. Rou- tine O&M inspection practices may prove cost Management, Operation and Maintenance effective in identifying early deterioration. of Irrigation and Drainage Systems. Ameri- can Society of Civil Engineering Manuals Transparency in decision making is important and Reports on Engineering Practice No. 57. to achieve overall agreement on O&M tech- New York: ASCE. nologies, which should be proposed at each level by whichever actor is in charge of O&M at Malano, H., and M. Burton. 2001. Guidelines for a specified point of service. Only technologies Benchmarking Performance in the Irriga- that can be operated and maintained under tion and Drainage Sector. Rome: IPTRID local conditions should be selected. Secretariat. This note was prepared by Bart Schultz with inputs from Joop Stoutjesdijk and was reviewed by Jan Bron of Royal Haskoning. RECOMMENDATIONS FOR PRACTITIONERS The following recommendations for a success- ful selection of technologies for the O&M of irrigation systems may be useful: A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 3.5 Irrigation projects require planning, implemen- tation, and monitoring of O&M. Therefore, managers should propose a rolling O&M plan. COST-EFFECTIVE OPERATION AND MAINTENANCE OF OPERATION. Seasonal or short-term planning of the operation of large irrigation systems to match IRRIGATION AND DRAINAGE expected supply with demand can be a complex PROJECTS and laborious process, requiring the collection and tabulation of climatic and crop data. Differ- High-quality design, planning, and construction min- ent methods can be used for the actual distribu- imize O&M costs. Rehabilitation projects designed tion of water: proportional, rotation, arranged to "fix the bad spots" without addressing the demand, canal rotation and free demand (as in causes of poor performance may not have long- the Arab Republic of Egypt), and centralized term effects. Rehabilitation and modernization-- scheduling. A water delivery method does not based on performance monitoring and in-depth necessarily imply a specific design and technol- diagnosis of operational and management prac- ogy. But technologies such as nonadjustable tices--have high potential to improve the cost structures (flow dividers) limit the flexibility of effectiveness of O&M. water distribution. Some other technologies require frequent adjustments of control struc- tures, up to two or three times daily, to meet the O&M is a postconstruction activity--but should stated objectives of reliability and flexibility of not be an afterthought. It is at the core of plan- delivery. Additional evaluations are needed on ning and design, particularly in hardware the possible impacts of operation on related fac- upgrades intended to lower management cost tors such as potential salinity, waterlogging, and and improve irrigation services. Such projects environmental and social conditions. should be based on in-depth analysis of actual operation practices, comprising both hardware A wide range of technologies is available to features and staff incentives. They must incor- improve the quality of service to users (flexibil- porate the goals and requirements of desired ity, reliability, equity) and to reduce the cost of future O&M, and the appropriate technologies operation. Some technologies use simple prin- should be selected based on considerations of ciples of hydraulics (long-crest weirs) or system balance and expectations of irrigation hydraulically operated automatic equipment. users (see IN 3.4). Design understood only as 123 Progress in communications and electronics has structural design fails to address essential oper- made possible the development of modern ational questions. equipment for the operation of canal irrigation systems. New technology includes local auto- mated controllers, supervisory control mecha- INVESTMENT AREA nisms combining local automation under Ideally, the preparation of a rehabilitation or master supervisory control, remote control sys- modernization project is based on a multiyear tems, and, ultimately, central automated control assessment of the hydraulic, agronomic, finan- systems for large and complex water projects. cial, and environmental performance. In-depth diagnosis of infrastructure and operational and These modern systems allow reductions in the administrative procedures helps to identify the frequency of field visits for visual observations physical and administrative changes that must and eventual adjustments. Some of them (down- be included in the project. A methodology for stream control, dynamic, central control) elimi- rapid appraisal has been developed (Burt and nate the need for a complex planning process. Styles 1999; see also IN 3.7) and has been used to plan a World Bank irrigation project in MAINTENANCE. There are many examples of tra- Vietnam. ditional irrigation systems, built and managed INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS by users, that have been operating for cen- · Battling weed infestation: Chemical and turies. These systems illustrate the point that, if biological methods (used in developed properly maintained, irrigation schemes can countries and tested in Egypt and Sudan) benefit many generations. A maintenance serv- ice needs good planning of the different types · Canal cleaning: Mechanical methods using of maintenance: specialized equipment--not construction equipment left over after completion of · Routine and preventive maintenance, nor- construction (Mexico irrigation districts) mally done annually, includes all the work required to keep the irrigation and drainage Reduction of maintenance cost is one of the system in satisfactory condition. reasons for lining earth canals. · Renewal work includes the replacement of Lined canals should need little maintenance, if infrastructure that has reached the end of its they have been properly constructed and ade- expected life span. quate solutions have been provided for any potential problems studied (gypsum, swelling · Special maintenance includes the repair of soils, subpressure, permafrost). However, the damage caused by major disasters such as costs of repairing poorly constructed concrete floods, typhoons, and earthquakes, which panels that crack a few years after construction are unforeseeable. are beyond the financial capacity of many agen- cies. The effectiveness of canal lining to control The O&M plan should be based on an inven- seepage losses depends on the lining technol- tory of all the infrastructure work and include ogy used and the age of the lining. There is an asset management plan defining the fre- now strong evidence that hard surface linings quency of routine maintenance and life of the can deteriorate in a few years to the point work. This plan should be the base for assess- where there is as much seepage as from an ing the annual maintenance budget. unlined canal. Silt deposition, weed infestation, and malfunc- tioning structures make it practically impossi- The geosynthetics industry (geomembranes, ble to operate irrigation systems to deliver geotextiles, geocells, geomats) offers many water equitably and reliably. These same fac- opportunities to improve the effectiveness of tors affect the drainage system and can result in canal lining by using geomembranes to control 124 additional salinity, waterlogging, and other the erosion of canal slopes. New materials have environmental problems. potential for savings in installation costs and time, an important consideration for canals Four main problems are associated with under operation. Irrigation districts in the unlined canals: weed infestation, silting, slope United States claim that the cost of a recently erosion, and water leakage. These problems are developed technology, installation of field-fab- indicative of poor design, inefficient mainte- ricated material, can be as little as one-third that nance, or improper operation. Corrective meas- of concrete lining. ures may be costly and sometimes severely disrupt irrigation service. Engineering solutions exist to alleviate or solve these problems: POLICY AND IMPLEMENTATION Borrowing countries frequently limit mainte- · Eliminating silting: Special canal intakes to nance activities to essential works to keep gov- skim the upper, less loaded waters from ernment-managed systems operating and rivers (Coello, Colombia); silt and sand perform rehabilitation works only every 15­20 extruders (Nara Canal in Sindh, Pakistan); years, mostly through external financing. This desilting basins (Saldana in Colombia; practice should be strongly discouraged, because Guilan in the Islamic Republic of Iran) it requires massive injections of money, several A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT times more than what is needed with well- Box 3.15 Australia: NewTechnology Improves designed asset management plans. Financial Performance Adoption of high or advanced technology would Major reforms in the agricultural and water sector were car- reduce the labor requirements for the O&M of ried out to improve the sustainability and profitability of irriga- irrigation schemes. However, high technology tion in the state of Victoria, Australia. The renewal of the requires higher labor skills. Cost-effective O&M irrigation infrastructure, dating to the 1930s, provided the through rehabilitation and modernization may opportunity to redesign the irrigation systems by introducing new technologies. require the retrenchment of unskilled staff, inten- sive training, or both (box 3.15). The shortfall of revenues was reduced from US$66 million to $13 million over a period of 10 years (1984­94). Some 62 per- Modern water control technologies can be cent of the improvement in financial performance came from introduced in steps starting with simple modifi- efficiency gains in O&M and 22 percent from price increases from the irrigators. The number of staff was substantially cations of cross-regulators, adoption of local reduced and staff productivity increased by replacing unskilled controllers on a pilot basis, and simple informa- personnel with young graduates familiar with new technologies. tion technology. Once users are comfortable Source: Langford, Forster, and Malcolm 1999. with the new systems, they can scale up to more sophisticated control systems, including remote control. Most irrigation districts in the U.S. state of California are engaged in a long- term process of modernization using their own techniques that they consider too costly and too financial resources sophisticated. They are unaware that their cur- rent standards are deficient and that some advanced technologies could be appropriate for POTENTIAL BENEFITS their irrigation projects. Changing practices is a The benefits expected from the above actions long-term process. Operational staff should for effective O&M include the following: encourage potential borrowers for irrigation to organize eye-opening training and to carry out · Better irrigation service to users, which some time-consuming surveys of canal condi- encourages crop diversification; cultivation tions long before starting project preparation of high-value, water-sensitive crops; and (box 3.16). higher use of nonwater inputs Most borrowers propose that earth irrigation 125 · Substantial water savings, and positive canals be lined under development assistance impacts on the environment and on saline projects. Lining costs may account for more and waterlogged land than 50 percent of the total investment. Given budget limitations, borrowers should be · Increased life of irrigation infrastructure and encouraged to limit lining to sections where postponement of the need for major project necessary and to further invest in moderniza- overhaul tion work that could improve the effectiveness · Higher motivation of the management enti- of O&M activities. This work accounts for a ties' personnel small percentage of total costs. · Less conflict between users and the man- High quality standards are required at every agement entities phase of project implementation: planning, design, and construction. Project consultants should have in-depth experience in advanced RECOMMENDATIONS FOR PRACTITIONERS techniques to improve O&M. Budget and human Irrigation agencies often strictly adhere to their resources for supervision by the Bank should be old design standards and are reluctant to adopt adjusted to the complexity of such projects. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS SELECTED READINGS Box 3.16 Checklist for Irrigation Project Planners ICID (International Commission on Irrigation Before starting project preparation and Drainage). 1997. "Planning the Manage- ment, Operation, and Maintenance of Irriga- · Make an in-depth diagnosis of the performance of each tion and Drainage Projects. A Guide for the subproject, using RAP. · Conduct short training seminars on RAP and irrigation Preparation of Strategies and Manuals." modernization concepts for key personnel in the agencies World Bank Technical Paper No. 389. World involved. Bank, Washington, DC. · Measure seepage rates from lined and unlined canals. Plusquellec, H. 2002. How Design, Manage- Potential investments ment and Policy Affect the Performance of · Adopt, selectively, advanced technologies for water control. Irrigation Projects. Bangkok: FAO, · Construct works (basins, extruders) to reduce the cost Bangkok Regional Office. of desilting canals. · Develop a conservation program to reduce erosion and ______. 2004. "Application of Geosynthetics in sediment transport. Irrigation and Drainage Projects." ICID, · Consider using advanced techniques to reduce installa- New Delhi, India. tion costs and disruptions of irrigation, and adopt long-life solutions employing geosynthetics, if canals have to be relined or renovated. Sagardoy, J. 1982. Organization, Operation and · Purchase specialized maintenance equipment. Maintenance of Irrigation Schemes. Rome: · Buy modern office and communication equipment. FAO. · Build all-weather roads. · Seek technical assistance to upgrade the skills of local This Note was prepared by Hervé Plusquellec with inputs consultants, construction industry, and O&M personnel at from Hassan Lamrani and reviewed by Jan Bron of Royal the irrigation entities. Haskoning. · Seek technical assistance for the preparation of O&M plans for each subproject; an action plan for retrenchment and staff training; an action plan and schedule for gradual increases in irrigation service fees, collections, and cover- age; and reforms in the allocation of collected water fees. Source: Author. 126 REFERENCES CITED Burt, C. M., and S. W. Styles. 1999. "Modern Water Control and Management Practices in Irrigation. Impact on Performance." Water Report 19. Food and Agriculture Organiza- tion (FAO), Rome. Available online at http://www.watercontrol.org/publications/ publications.htm. Langford, K., C. Forster, and C. Malcolm. 1999. "Towards a Financially Sustainable Irrigation System. Lessons from the State of Victoria, Australia, 1984­1994." World Bank Technical Paper No. 413. World Bank, Washington, DC. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 3.6 available data. Satellites measure spectral radi- ances that can be converted into processes in the soil-water-vegetation-atmosphere continuum. A USING SATELLITESTO ASSESS 2001 Wageningen expert consultation concluded AND MONITOR IRRIGATION that remote-sensing technologies have pro- gressed far enough to offer products that can be AND DRAINAGE INVESTMENTS implemented. The IWMI recognized that "remotely sensed data remain underutilized by Recent research breakthroughs in remote sensing practicing water resource managers" (Basti- enable the quantification of water consumption aanssen, Molden, and Makin 2000, 1). and crop production without agrohydrological ground data. These measurements provide a vehi- cle for assessing farm management in terms of land INVESTMENT AREA productivity, water productivity, irrigation effi- Satellites measure hydrological systems in detail ciency, environmental degradation, and farmer (spatial resolution of 1 to 30 meters) across vast income. Nonmanipulated information from satel- areas (millions of hectares) at regular intervals lites has the power to reveal the real need for (half daily to monthly repeat cycles). An analyst World Bank loans, monitor the progress of project may survey the spatial variation of the parame- execution using the "eye in the sky," and evaluate ters (box 3.17) across secondary and tertiary irri- quantitatively the impact of previous or current gation and drainage systems using just one water management improvement projects. satellite image. Satellites provide consistent, unbiased, and politically neutral information that Appraisal of investment in public irrigation sys- is accessible to all through the public domain tems has faced at least four key challenges: satellite data archives. Users can be ensured that data are not manipulated and reflect real land 1. Indisputable data are often lacking to surface processes (Bos et al. 2001). assess the validity and reliability of hydraulic performance data presented to Irrigation and drainage performance indicators justify rehabilitation funding or to assess can be computed by combining remote-sensing the sustainability of the performance parameters with field measurements such as improvement resulting from earlier flow-through irrigation and drainage canals rehabilitation investment on other parts of (Bastiaanssen and Bos 1999; Menenti 2000). 127 the system. Groundwater extraction and recharge can be similarly determined by combining ground and 2. Numerical data are lacking to assess the scope for raising the productivity of a water scheme. Box 3.17 Basic Remote-SensingTechnology 3. Numerical data are lacking to assess the Outcomes Useful for Irrigation and scope for raising basinwide beneficial Drainage Projects transpiration in order to release water for underallocated uses. Remote sensing Remote sensing application applied to technology outcome 4. Data may be lacking to calculate the size of Irrigated area Soil moisture salinized areas that could be reclaimed and Crop types Soil salinity the total area that may subsequently be irri- Land use Crop water needs gated if farmers change cropping patterns. Waterlogging Crop water use Crop growth Crop yield World Bank projects in the Indus, Ganges, Tarim, Hai, Nile, and Amu Darya Basins recently utilized Source: Author. remote-sensing data to enrich the customarily INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS satellite data, thus avoiding labor-intensive field POLICY AND IMPLEMENTATION surveys of tubewell operations (Ahmad 2003). CROP WATER PRODUCTIVITY. The advantage of expressing productivity per unit of water con- sumed is that it comprises all water resources, POTENTIAL BENEFITS thus including water originating from precipita- Remote-sensing yields data that complement tion, irrigation, groundwater, and soil mois- field interviews and conventional hydrometeo- ture­storage changes. Moreover, evaporated rological point measurements. These data water cannot be recycled for downstream users, allow retrospective studies, because satellite so the depletion should be associated with pro- data are archived from the early 1980s on. For ductive use. Satellite images have been used to instance, the impact of management transfer compute crop water productivity in World Bank and institutional reforms over a 10-year time- projects in India, Pakistan, China, and Egypt on line could be studied. The other examples, in a scale that is not feasible with traditional field table 3.1, were selected from recent Bank and surveys and field campaigns (box 3.18). non-Bank remote-sensing projects in agricul- tural water management. They show how INTEGRATED WATER AND ENVIRONMENTAL MANAGE- satellites help obtain strategic data on changes MENT PLANS. These plans strive toward a desir- and trends that may help confirm or contest able water balance that meets the environmental certain views. flow requirements. Such an ideal water balance can be achieved if the comprehensive ET from catchments and basins (including ET depletion from irrigated crops, soils, forests, and cities) is less than the rainfall, leaving the rainfall surplus Box 3.18 India and Pakistan: Using Satellites to available to feed natural streams. Irrigation fields Assess CropWater Productivity may have to go out of production through an early land retirement program or undergo a The Indo-Gangetic plain may be considered a single agro-ecolog- "real water saving" program that reduces ET. ical zone.The surface energy balance remote-sensing algorithm was used to assess the full spectrum of wheat yield­ET combina- tions and to quantify the variations in crop water productivity A satellite study determined comprehensive ET (yield/ET) on a pixel-by-pixel basis.The average difference in pro- in the North China Plain in 2002. It was the only ductivity between India (Punjab and Haryana) and Pakistan (Pun- way to quantify the amount of water resources jab and Sindh) for an 18-year period is 65 percent, in favor of depleted because all earlier water balance stud- 128 India. The data show that sound agricultural policy positively ies had a field scale. It allowed policy makers to affects water productivity and that water productivity can be identify all counties with severe overexploita- raised through manageable factors such as seed quality, pesti- tion of groundwater (box 3.19) and single them cides, and fertilizers. The conclusion is that Pakistan may save huge amounts of water by increasing crop water productivity. out for maximum attention to reduce water depletion during the Hai Basin Integrated Water Water productivity of wheat (kg/m3) and Environment Management project. An in India (Punjab and Haryana) and Pakistan example is presented in figure 3.1. Outcomes of (Punjab and Sindh) remote-sensing technologies allow the identifi- Period Pakistan India Difference cation of huge water consumers and discussion 1984­5 0.76 1.15 51 percent of options with water user groups to temper 1994­5 0.64 -- n.a. groundwater pumping. 1995­6 0.57 1.23 116 percent LAND RECLAMATION AND CROPPING PATTERN ADJUST- 2001­2 1.00 1.28 28 percent MENTS. Granting user groups water rights and Source:WaterWatch 2002. water quotas is a way to deal with water scarcity --. Not available. in agriculture. Fixed river diversions provide a n.a. Not applicable. guarantee for user groups to plan their longer- term allocations and shares. The Tarim Basin A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Table 3.1 Some Remote-Sensing Applications Land use In India's Indus Basin, 6 percent more land is under irrigation and 27 percent less land is irrigated during kharif season than suggested by 1994 census data for Pakistan. Owing to shift from rotational to continuous flow (4 percent in unimproved areas), 15 percent more rice is being grown in Egypt's northwestern Nile Delta. Waterlogging Waterlogging in the Chasma Right Bank Canal (Pakistan) varies from 1.1 percent to 6.1 percent of the total irrigable area, depending on the year selected. In Awati County (Tarim Basin), 3.2 percent of the land surface is waterlogged. Water use Owing to reuse of drainage water, no significant difference in ET between head and tail end of irrigation systems in the northwestern Nile Delta could be detected (in either 1995 or 2002). Volumetric water depletion varies little by irrigated and rainfed agriculture (7 percent and 8 percent, respectively) in Sri Lanka, and is significantly less than the depletion caused by natural heritages (23 percent), homesteads (7 percent), and rangelands (21 percent). Water consumption of cotton in the Harran Plain,Turkey, is 650 millimeters per season. This can be used to assess Euphrates diversions. Irrigation efficiency Classical irrigation efficiency (consumptive use/supply) is 40 percent in the 70,000-hectare Awati County (Tarim Basin). Classical irrigation efficiency in the Indus Basin (16 million hectares) is 95 percent; hence, recycling is a key phenomenon in large-scale irrigation systems. Crop yield Rice and cotton yield are hardly affected by rotational versus continuous flow in the northwestern Nile Delta. Significant differences in cotton and rice yield are found in Kazakhstan's Aral Sea Basin owing to salinity and irrigation water availability. Water productivity Wheat productivity in the Punjab/Haryana states of India is 65 percent more than in the Punjab/Sindh provinces of Pakistan. Water productivity of rice in theYellow River Basin (2001) in China can be as high as 1.51 kilograms per cubic meter (std 0.16 kg/m3); the Nile Delta shows 0.95 kg/m3 (1995) to 1.45 kg/m3 (2002) for rice; and the figure for Pakistan is 0.49 kg/m3 (1984) and 0.42 kg/m3 (2001). 129 Soil salinity In Awati County (Tarim Basin), 12 percent of the soil is saline. Total salts in the Russian Federation's Karakalpakstan (Amu Darya Delta) increase little but head-tail effects are pronounced during dry years. Source: Authors. project of the World Bank East Asia and Pacific AID TO APPRAISAL AND EVALUATION STUDIES. Reha- Program involves managers and water user bilitation projects for irrigation and drainage are groups in adapting land use and cropping pat- often appraised with limited field data or data terns to maximize profit from their water quotas. selected by the recipient country to support the The project encourages land reclamation by request. Not infrequently, these data are biased leaching saline land. Key questions were what and stem from an unrepresentative sample areas could be reclaimed and what impact crop- designed to curry favor with Bank decision ping pattern adjustments would have on water makers. A more comprehensive and truthful resources management (box 3.20). These could impression can be obtained from satellite data be answered only with remote-sensing data. during the preappraisal and appraisal phases, INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS Box 3.19 Counties in the Hai Basin with Significant has shown that local validation ("check first in Overexploitation of Groundwater your own backyard") is essential for acceptance Resources, 2002 of the technology. This phase must be executed with local agricultural research institutes and Beijing Province Shenzhoushi County universities that have expertise and their own field data on agricultural water management. Hebei Province Jingxian County These local institutes should lead the confi- Hebei Province Hengshuishi County dence-building phase and therefore be Hebei Province Jizhoushi County equipped with appropriate field devices. Source: WaterWatch 2003a. Timely involvement of local stakeholders is Note: Overuse is defined as greater than 450 mm/year. essential to guide solutions to the irrigation and drainage problems, in other words, a bottom-up approach. Satellite data can help local manage- FIGURE 3.1 ANNUAL EVAPOTRANSPIRATION ment authorities explain to WUAs and agencies FOR FEIXIANG DISTRICT, HEBEI responsible for water distribution why certain PROVINCE, NORTH CHINA PLAIN features identified on the images occur and how shortcomings can be improved. Project benefits rely on stakeholder awareness, commitment, and timely action to remedy problems. Task managers should invest a little extra in the appraisal studies on data collection through remote-sensing technologies (approximately US$20,000 to $100,000, depending on the detail required and the scope of the investigation) before a loan is approved. A similar satellite- based assessment can be made during the mid- term or evaluation phase of agricultural water management projects. These costs are only a small fraction of the total loan and can signifi- Source: WaterWatch 2003a. Note: The map, with a 30-meter spatial resolution, is based on 24 cantly facilitate the identification of the problem 130 Moderate Resolution Imaging Spectroradiometer (MODIS) images and the solutions chosen to mitigate adverse and 3 Landsat images captured during 2002. Groundwater overex- field conditions. ploitation is a serious concern in this area. Areas shown by pixels corresponding to overexploitation exceeding 700 millimeters will be selected for a water-saving program. RECOMMENDATIONS FOR PRACTITIONERS · Verify the conditions in the project area and often without extensive field surveys. A descrip- appraise the hypotheses and needs of a tion of a mid-term evaluation study in the Mid- new Bank irrigation and drainage project dle East and North Africa region is presented in through remote-sensing techniques. box 3.21. · Define the type of outcome of using remote- sensing technologies such as real water sav- LESSONS LEARNED ings, uniformity in crop water consumption, Water professionals who favor technological water productivity, irrigation performance, advances may accept remote sensing faster than groundwater extraction, or environmental engineers who demand convincing evidence. degradation. Going through a trust-building phase at the very beginning of any new agricultural water man- · Agree with the recipient organization on the agement project is recommended. Experience required time (daily, monthly, seasonally, A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 3.20 Impact of Land Reclamation and Crop Selection on Depletion of AerialWater Quota The Aksu River is the main contributor of water to the Tarim Basin in the Xinjiang Uygur autonomous region of northwest- ern China.To ensure delivery of adequate amounts of water to the middle and lower reaches of the Tarim River, a green cor- ridor in the Taklamakan Desert, a maximum river diversion entitlement was negotiated. A remote-sensing study was conducted to estimate the ET of all land use and crop classes for the summer season.The study was based on high-resolution Landsat data, combined with low-resolution data from a satellite operated by the National Oceanic and Atmospheric Admin- istration.The conversion from saline soil (ET=76 mm) via reclaimed wasteland (ET=226 mm) to irrigated cotton (ET=721 mm) requires an additional 645 mm (6,450 m3/ha) of water. The reclaimed area could be 9.2 percent larger if trees and orchards were planted instead of cotton, since cotton's ET is 9.2 percent higher than that of perennial trees. 800 700 (mm) 600 500 consumption 400 water 300 200 Seasonal 100 0 Irrigated Water Trees Wet- Sparsely Natural Reclaimed Bush- Water- Saline Bare Sand crops bodies and lands vegetated grass- waste land logged soil soil dunes orchards grassland land land soil Source: WaterWatch 2002. 131 annually) and spatial scales (1 m, 5 m, 30 m, · Devise early on an appropriate strategy to 250 m, 1,000 m) of the remote-sensing data disseminate the results to targeted users. outcomes. · Design the link between remote-sensing INVESTMENT OPPORTUNITIES data outcomes and auxiliary data sources · Acquire additional information on current irri- such as land use maps, geographic informa- gation and drainage practices from satellites tion system (GIS) databases on applied through the execution of quick scan studies. water, soil maps, and slope maps. · Discuss with local agencies the need for irri- · Define the level of capacity building required gation and drainage projects using unbiased to interpret and process satellite images. satellite data. · Include a local university or agricultural · Launch capacity-building programs to research institution in the process for inde- endow recipient countries with geographi- pendent validation of the remote-sensing cal data and information systems that results. enhance the local knowledge base. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS Box 3.21 Egypt: Project Impact Evaluation The World Bank and the Kreditanstalt für Wiederaufbau (KfW) have jointly funded a multimillion dollar irrigation improve- ment project in the Nile Delta, Egypt, to transfer the on-demand irrigation systems into continuous flow at the tertiary level. This is part of the country's modernization of water management and is meant to reduce water use, enhance equity, and increase crop (kg/ha) and water productivity (kg/m3)--all of which indirectly affect farmer income.The first phase of the proj- ect started in 1995, and the execution is ongoing. A midway project evaluation was made on the basis of satellite data in 2002. A diagnosis has been carried out using Landsat images in areas for which at least 25 percent of the project interventions are operational.Though it is too early for a full midterm evaluation, some interesting trends are evident, as shown in the table. Project dates Improved area Unimproved area Start, 1995 49.8 percent rice 42.7 percent rice 30.1 percent cotton 31.7 percent cotton 5,454 kg/ha rice yield 5,642 kg/ha rice yield 1,993 kg/ha cotton yield 2,017 kg/ha cotton yield 582 mm rice ET 587 mm rice ET 777 mm cotton ET 771 mm cotton ET Midterm, 2002 57.3 percent rice 44.7 percent rice 28.5 percent cotton 29.1 percent cotton 8,516 kg/ha rice yield 8,563 kg/ha rice yield 2,920 kg/ha cotton yield 2,921 kg/ha cotton yield 586 mm rice ET 583 mm rice ET 873 mm cotton ET 866 mm cotton ET Source: WaterWatch 2003b. · Use satellite data by involving local insti- Agriculture: Examples from Research of tutes in monitoring the progress and impact Possible Applications." Agricultural Water of the water management interventions. Management 46(2): 137­55. · Identify subregions with good and bad agri- Bos, M. G., S. Abdel-Dayem, W. G. M. Basti- 132 cultural water management practices and initiate farmers-train-farmers programs.1 aanssen, and A. Vidal. 2001. "Remote Sens- ing for Water Management: The Drainage Component." World Bank Expert Consulta- REFERENCES CITED tion, organized by ICID, IPTRID, Interna- Ahmad, M. D. 2003. "Estimation of Net Ground- tional Institute for Land Reclamation and water Use in Irrigated River Basins Using Improvement (ILRI), and WaterWatch, in Geo-Information Techniques." Ph.D. disser- Ede-Wageningen, The Netherlands, May tation. Department of Water Resources, 15­16. Wageningen University, The Netherlands. Menenti, M. 2000. "Irrigation and Drainage." In Bastiaanssen, W. G. M., and M. G. Bos. 1999. G. A. Schulz and E. T. Engman, eds. Remote "Irrigation Performance Indicators Based on Sensing in Hydrology and Water Manage- Remotely Sensed Data: A Review of Litera- ment, 377­400. Berlin: Springer Verlag. ture." Irrigation and Drainage Systems 13: 291­311. WaterWatch. 2002. "Remote Sensing Monitoring Bastiaanssen, W. G. M., D. J. Molden, and I. W. in the Awati Pilot Area." Technical Report, Makin. 2000. "Remote Sensing for Irrigated Wageningen, The Netherlands. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT ------. 2003a. "SEBAL-Based ET Analysis for SELECTED READINGS 2002 in Hai Basin." Technical Report, Kijne, J. W., R. Barker, and D. J. Molden. 2003. Wageningen, The Netherlands. Water Productivity in Agriculture: Limits and Opportunities for Improvement. Walling- ------. 2003b. "Monitoring Summer Crops under ford, U.K.: CABI Publishing. Changing Irrigation Practices--A Remote Sensing Study in the Northwestern Nile Delta for the Irrigation Improvement Project ENDNOTE 1995­2002." Technical Report, Wageningen, 1. This information comes from WaterWatch The Netherlands. (2003a, 2003b). This Note was prepared by Wim Bastiaanssen and Edwin Noordman of WaterWatch. Input was received from Shawki Barghouti. The note was reviewed by Aly M. Shady of the Canadian International Development Agency. 133 INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS INVESTMENT NOTE 3.7 irrigation arena: they controlled the budget and had the best access to the government. Their favorite choices were canal lining and rehabili- PRIORITIZING LENDING FOR tation to put structures back to design shape. PUBLIC IRRIGATION SCHEMES Once a government-owned irrigation system WITHTHE RAPID APPRAISAL achieves, or begins to achieve, sustainability METHOD and autonomy, the basic question becomes how to select investments that improve the con- A rapid, performance-focused appraisal of irriga- trollability of water and give users the best tion systems can give a pragmatic description of value for their money. This Note discusses the the status of both the internal process and the usefulness in client countries of a procedure external input/output indicators of a system or that evolved on 60 public irrigation schemes in sector. It allows identification of investments that the western United States where users self- can quickly improve water delivery service and finance O&M. This procedure has been adapted financial stability, and mitigate environmental to client-country conditions and incorporated in impacts. It presupposes an environment that the holistic benchmarking toolkit developed by rewards improvement. IWMI. It has been applied in Mexico, Nepal, the Philippines, Thailand, Vietnam, and elsewhere. Most public irrigation investments are directed toward improving existing schemes rather than INVESTMENT AREA building new ones. Such investments are diffi- The procedure is known as rapid appraisal cult to prioritize, and their results have histori- (RAP, as noted above). Consisting of office and cally fallen well short of the impact predicted field work and taking several weeks, RAP has by feasibility studies. During the 1990s, most three components: World Bank projects looked to governance reform to achieve fiscal sustainability and · Several hundred questions, framed in a stan- administrative autonomy (for example irrigation dardized Excel format, address topics such management transfer to WUAs, cost recovery). as water supply, personnel management, They were generally accompanied by hardware canal structures, and level of water delivery investments assumed to improve the controlla- service throughout the system. Evaluators 134 bility of water. The irrigation agency or ministry must personally travel from the dam to the of irrigation generally gave priority to hardware ends of main, secondary, and tertiary canals, investments, and they had the most clout in the until they reach the farmer turnouts. · The values of a large set of external and internal indicators are computed (box 3.22). Box 3.22 Indicators Used in a Rapid · Objectives are defined, and results of the Appraisal Procedure procedure are used to target investments to accomplish those objectives (boxes 3.23 External indicators express forms of efficiency.They may relate to budgets, water, or crop yields.They require only knowledge and 3.24). of project inputs and outputs--but by themselves provide no insight into what to do to improve performance. They have One goal of investment is to break, or stay out often provided the basis for conventional public irrigation of, the rehabilitation-deterioration cycle. Invest- investment decisions. Internal indicators examine the hard- ing only in rehabilitation is therefore illogical. ware and processes that move, sell, and schedule water Instead, a modern approach to investment is throughout the system hourly, daily, and seasonally. needed. Or rather, what is needed is a total rev- Source: Burt and Styles 1999. olution in irrigation agriculture with much more focus on improving the performance of existing A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 3.23 Morocco:The Rapid Appraisal Box 3.24 Vietnam: Impact of Performance-Oriented Procedure Can PreventWaste Rapid Appraisal Procedure on an of Investment Money Investment Program Plans had been made to conserve water within the The Cau Son­Cam Son irrigation scheme in Vietnam under- Beni Amir project, Morocco, to expand the irrigated went an RAP in March 2002, conducted by the Food and Agri- area. A simple water balance conducted as part of culture Organization (FAO), the Irrigation and Training RAP showed that all inefficiencies were being recy- Research Center (ITRC), and local irrigation specialists. Ini- cled in the form of groundwater pumping for irriga- tially, the local participants believed that canal lining was the tion, either within the project or outside the project best investment of World Bank funds. After the procedure boundaries.Therefore, there was little or no water to they drafted detailed--and quite different--investment rec- "conserve." It was determined that improving first- ommendations ($1US = 15,500 VN dong), and also distin- time usage of irrigation water in this case could offer guished between immediate and long-term investments. benefits in terms of reduced groundwater pumping Short term (US$2.6 million) bills, higher crop yields (owing to better flexibility), and improved fertilizer usage, but investment would · Repair and rehabilitate turnout gates (10 billion dong) not result in an increased supply for expanding irri- · Rehabilitate destroyed secondary canal, including regula- gated acreage. Proper application of RAP in this case tors (5.5 billion dong) avoided a waste of investment money. · Establish WUAs (1 billion dong) · Improve communication (initially, telephones) Source: Burt and Styles 1999. (1 billion dong) · Improve control of secondary and cross-regulator-oper- ated canals and change main cross-regulators to compos- ites (15 billion dong) · Treat canal sections for seepage (8 billion dong) irrigation facilities and providing client-focused Long term (US$7.1 million) irrigation service (World Bank 1998). · Complete planning for entire system (2 billion dong) This view emphasizes that investment is about · Upgrade reinforcement of two weirs: Cau Son and Quang technical, managerial, and organizational upgrad- Hien (8 billion dong) · Upgrade secondary and tertiary canals with better cross- ing--not merely physical rehabilitation--of irri- regulators (70 billion dong) gation schemes, to improve resource utilization · Redevelop system operating procedures (0.5 billion dong) (labor, water, economics, environmental) and · Upgrade pump stations for irrigation and drainage, dredge water delivery service to farms (Wolter and Burt drains (20 billion dong) 1997). Such modernization investment focuses on · Construct small and medium-size regulating reservoirs 135 the details of the inner workings of an irrigation (10 billion dong) project--in contrast to traditional, simple, and Source: ITRC 2002. broad-brush investments in canal lining or reha- bilitation. Modernization is a process that sets specific objectives and selects specific actions and tools to achieve them. Planners and engi- which water passes. Each layer has an obliga- neers for irrigation projects frequently equate tion and needs incentives to provide good serv- modernization with practices such as canal lining ice to the layer immediately below (Burt and and computerization. If improved performance is Styles 1999). the objective, such investments should often be assigned the lowest priority. POTENTIAL BENEFITS Modernization pivots around service to the Public irrigation systems account for about half farm. Irrigation systems must serve the farmers of the world's irrigation. Adopting a radically well enough so that they attain high on-farm different approach to irrigation investment will production and irrigation efficiencies and can help secure the world's food supply and pro- afford to pay the water service fee. An irrigation mote social stability as well as help mitigate the system is typically a series of layers through systems' impact on the environment. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS A successful modernization approach consoli- borrowers should not entertain high expec- dates WUAs by reducing risk factors such as tations from investment if it is minimal and inequitable and unreliable water deliveries. It therefore quickly implemented. also creates the conditions for higher water pro- ductivity. Water saving becomes possible only when farmers feel secure about water delivery. LESSONS LEARNED As long as they do not, they will store water in The greatest impediment to successful applica- the soil as back-up and allow it to percolate or tion of RAP is the lack of qualified irrigation spe- evaporate when their crops do not need it. cialists to conduct the procedure. Few irrigation experts adequately understand the concepts of water balance, efficiency, and water control to POLICY AND IMPLEMENTATION both conduct RAP and develop realistic recom- One of the bigger challenges to implementation mendations. Intensive training and follow-up by is the scarcity of specialists who understand the experienced professionals are mandatory. The service concept and the hydraulic principles limited training that has occurred has not been involved in managing unsteady water flow. followed up. Local participants must thoroughly understand the concepts and buy into the A second major challenge resides in the nature investment program if it is to be sustainable. of loans and grants, as outlined below. An RAP was done on the Yaqui Irrigation proj- · Technical details are often dismissed as "mat- ect in Obregon, Mexico, in November 2002 as a ters to deal with later" and considered unim- prelude to a large investment (table 3.2). The portant compared to the broad goals. Yet we project depends on both surface water and now know that the lack of attention to inter- wellwater. During 2002­3, no surface water was nal details is a major cause of poor perform- delivered--creating an emergency but also ance. Many internal details must be defined opening a window for construction. early in a project--which requires a shift in the way loans and grants are administered. The initial choice of project personnel was to spend about 80 percent of the budget on canal · A large human element is involved in lining. The water-balance analysis done in the changing internal processes. Local irrigation course of the procedure showed that net canal engineers and managers will not immedi- seepage losses were relatively small. Local par- 136 ately understand how to design and man- ticipants in the two-week RAP training pro- age new processes and structures. Farmers gram, run by ITRC and the World Bank, may object to higher fees and delivery prac- developed the following set of investment pri- tices they may experience as less reliable. orities within budget. Loan and grant programs have short lives, which leaves staff and farmers little or no time to field-test new ideas. RECOMMENDATIONS FOR PRACTITIONERS · Become acquainted with RAP concepts. · Modernization costs more than most people think. As an example, the 200,000 hectare · Contact the few individuals at the World Imperial Irrigation District in California, Bank and FAO who have been personally United States, recently spent more than trained and involved in RAPs. US$100 million on modernization. It already had excellent communications, roads, · Assign a significant training budget for local canals, training, attitude, and irrigation individuals to study and learn to conduct scheduling. Yet the total investment in mod- and follow up RAP. This will take time, but ernization will probably approach US$500 it will improve the investments' probability million. This demonstrates that lenders and of success. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Table 3.2 Outcomes of a Rapid Appraisal Procedure in Mexico US$ US$ US$ Cumulative Priority Project Units Cost/unit Cost cost 1 Deep wells and pumps 140 178,000 24,920,000 24,920,000 2 Flow measurement flumes at canal entrances 35 44,500 1,557,500 26,477,500 3 Modernization of the upper canal beyond Km 105 26,477,500 Regulating reservoir 1 1,800,000 1,800,000 28,277,500 Long crested weirs 8 67,000 536,000 28,813,500 Pumps for outlets above the command area 29 39,000 1,131,000 29,944,500 Elimination of a flow restriction 1 450,000 450,000 30,394,500 4 Modernization of the lower canal 30,394,500 Improved structures 7 390,000 2,730,000 33,124,500 Regulating reservoir 1 200,000 200,000 33,324,500 Pumps for outlets above the command area 20 39,000 780,000 34,104,500 5 Modernization of structures in the upper canal downstream of the reservoir--two or three ITRC flap gates per structure and one sluice gate per structure 8 22,000 176,000 34,280,500 6 Modernization of lateral canals 34,280,500 Long crested weirs 250 13,000 3,250,000 37,530,500 Flap gates 250 13,000 3,250,000 40,780,500 Inter-ties of the tail ends to the lower canal, or terminal regulating reservoirs 50 56,000 2,800,000 43,580,500 Small regulating reservoirs 10 56,000 560,000 44,140,500 7 Lining of lateral canals (km) 100 24,000 2,400,000 46,540,500 8 Modernization of canals 4 and 4P 46,540,500 137 Structures 8 200,000 1,600,000 48,140,500 Regulating reservoir 1 100,000 100,000 48,240,500 Pumps for outlets above the command area 6 39,000 234,000 48,474,500 9 Improvement of farm turnouts 2,000 2,000 4,000,000 52,474,500 10 Miscellaneous actions 52,474,500 Gated pipe systems (ha) 24,265 64 1,552,960 54,027,460 Handheld data recorder system 20 3,300 66,000 54,093,460 SCADA (remote monitoring system)-- office and 12 field sites 1 2,000,000 2,000,000 56,093,460 * Engineering, office, and contingencies 1 3,200,000 3,200,000 59,293,460 Source: ITRC 2002. INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS · The project definition must incorporate rec- Appraisal Process and Modernization Train- ommendations from RAP--rather than ing, Final Report." ITRC, San Luis Obispo, assuming that the procedure should be con- Calif. ducted after initial designs have been made. Wolter, H. W., and C. M. Burt. 1997. "Concepts for · Local experts trained in RAP must be given Irrigation System Modernization." Proceedings authority to conduct a stringent review of of the Expert Consultation on Modernization designs provided by consultants--at several of Irrigation Schemes: Past Experiences and stages throughout the design process. This Future Options." Bangkok, Thailand, Novem- will add time to the design process, and a ber 26­29, 1996. Water Report 12, RAP Publi- change in consultants may be required if cation 1997/22. FAO, Rome. satisfactory plans cannot be developed. World Bank. 1998. "India--Water Resources · All hardware designs must be accompanied Management Sector Review. Report on the by a description of the overall water manage- Irrigation Sector.": World Bank, Rural Devel- ment and operation strategy for the complete opment Unit, South Asia Region, New system, not just for specific structures. Spe- Delhi. Ministry of Water Resources, India. cific descriptions must be provided for man- aging structures as part of the overall strategy, for correcting problems, and for modifying SELECTED ADDITIONAL SOURCES designs if problems are encountered. Facon, T. 2001. "Performance Evaluation of · Implementation should be staged over five Makhamthao-Uthong Project with a Rapid to six years after completion of designs. The Appraisal Procedure." Water and Energy project must have sufficient flexibility to International 58(2). shift designs, locations, and tasks to make course adjustments. FAO Web page related to the RAP. Online at http://www.watercontrol.org/news/news.htm. REFERENCES CITED ITRC Web site. Based in San Luis Obispo, Cali- Burt, C. M., and S. W. Styles. 1999. "Modern fornia, ITRC presents technical information Water Control and Management Practices in on RAP in the form of reports and papers, Irrigation. Impact on Performance." Water 138 as well as dates of scheduled training pro- Report 19. FAO, Rome. Available online at grams. Online at http://www.itrc.org. http://www.watercontrol.org/publica- tions/publications.htm. This Note was prepared by Charles M. Burt of California ITRC (Irrigation Training and Research Center). Polytechnic State University and reviewed by Jan Bron of 2002. "Cau Son-Cam Son, Vietnam, Rapid Royal Haskoning. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 3.1 and a manual undershot (orifice) gate on the side to provide a constant flow rate to users. INVESTING IN AUTOMATION In successful modernization of dozens of west- AND CENTRALLY OPERATED ern U.S. irrigation districts by ITRC and the U.S. Bureau of Reclamation, canals of 10 cubic IRRIGATION SYSTEMS meters per second are almost "automated" with this simple and appropriate hydraulic combina- What is new? Appropriate automation helps proj- tion that requires no electricity or computers. ect managers provide water to users flexibly,reliably, and equitably. If appropriate structures and remote An example of an inappropriate Level 1 struc- monitoring are used, project efficiency and water ture widely used in international projects is the delivery service can improve simultaneously. Canal "distributor" or "flow rate module" that was suc- breaks, lining damage, and spills can be reduced, and cessfully used on the elevated canal systems in better service enhances social harmony. North Africa in the 1950s. After examining scores of projects that have used distributor Modernization of centralized irrigation systems is modules for automated flow control on canal a process of technical and management turnouts (off-takes), the author has concluded improvements in measurable goals related to that virtually none of them functions satisfacto- project efficiency, crop yields, water delivery rily--even though these are a cornerstone of service to farmers, economics, and the environ- many automation projects. They worked well ment. A key tool is automation. Automation historically on elevated aqueducts, but they are implies that, once set, structures maintain desired inappropriate for typical canal systems because flow rates or water levels in canals without man- of installation problems, high expense, suscep- ual intervention. tibility to submergence on the downstream side, and improper control of canal water levels Burt and Styles (1999) found that the quality of (Burt and Styles 1999). water delivery service in irrigation projects is inversely proportional to the number of field LEVEL 2--HYDRAULIC GATES. These are gates employees per delivery point. Regardless of placed in the canal to maintain a desired what performance might be theoretically attain- water level--thereby protecting the canal able with a large staff and minimal hardware, banks and providing steady flow rates to off- the evidence shows that properly designed, takes. The Neyrtec float gates are the classic 139 located, and installed structures greatly enhance design used throughout the world. For smaller staff performance with fewer personnel. This is canals with sufficient drops in the western especially important during the night and United States, the inexpensive, locally fabri- where communications are poor. cated ITRC Flap Gate has been installed in several hundred structures. OBJECTIVES AND DESCRIPTION LEVEL 3--REMOTE MONITORING. This involves Irrigation projects (described simply) have five monitoring water levels or flow rates at key levels of automation, which should function points throughout a project, and archiving and continuously. displaying that information at a central office. The information should be designed to improve man- LEVEL 1--APPROPRIATE combinations/designs of agement decisions on a real-time basis. Typical structures that do not move automatically, but monitoring points are at the heads of key canals that control water levels or flows well despite for flow rates and tail ends for water levels as constantly changing flows. The most common well as flows. Flow rate monitoring requires successful example is a combination of long- excellent flow meters. Remote monitoring is a crested weir (which controls canal water level) precursor to successful Level 4 computerized INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS automation. It involves electronic sensors, com- underestimate the requirements for success and munications (usually radio), and office hardware the long learning curve it takes. Numerous irri- and software. gation projects in Mexico, including the World Bank­funded Cupatitzio (Apatzingan) district LEVEL 4--COMPUTERIZED GATE MOVEMENT. This were intended to demonstrate PLC-based con- type of automation can be effective on large trol. Irrigation experts in Mexico now recognize structures to maintain a water level in a canal or that almost all PLC-based automation in Mexico a desired flow rate into a canal. It is generally has failed. accompanied by both Level 1 and Level 3 investment. LEVEL 5--CENTRALIZED AUTOMATION. This comes in various forms, but all of them depend on a Hundreds of electromechanical (precomputer- central computer to calculate required gate ized) automatic gates installed in the western movements and automatically send those values United States before 1995 are being converted to the field. While the literature has ample dis- to PLC (programmable logic controller) automa- cussion of such control logics, there are only a tion, which uses electronics rather than elec- few successful, sustained projects of this type in tric/mechanical mechanisms. However, the the world. In the western United States, there are failure rate of PLC-controlled canal systems has no successful examples of this type of automa- been extremely high in the United States and tion in irrigation projects, although research is in internationally. A checklist of prerequisites for progress in a few irrigation districts. Level 4 automation is presented in box 3.25. If all of the prerequisites in box 3.25 cannot be ISSUES FORWIDER APPLICABILITY met, PLCs should not be used. One of the Irrigation projects are plagued by a recurring biggest mistakes for PLC-based automation is to cycle of investment and deterioration. In addi- tion to the repeated need for rehabilitation, other impacts include lower-than-expected crop yields jeopardizing investment yield and user ability to pay fees, haphazard collection of Box 3.25 Prerequisites for Level 4 Automation user fees, and degraded river water quality and volume. Typical "modernization" projects often · Excellent electricity availability focus only on institutional issues or canal lining. 140 · Protection from vandalism · Availability of high-quality electrical sensors, actuators, Those are important, but in the end, the water PLCs (developing "local" electronics is a common mistake in a project must be physically manageable-- that almost always guarantees failure) simply and easily. · Existence of a permanent, well-trained staff that can trou- bleshoot and repair all components Appropriate automation to make water more · Availability of an experienced integrator company with a manageable can be simple (as described track record of installing such systems in irrigation projects above)--and it is essential. Appropriate automa- · Dedicated well-trained local staff with excellent mobility tion removes the "art" and uncertainty from canal in all weather, night and day · An adequate, guaranteed long-term maintenance budget operation and allows the institutions to respond for labor and parts to conditions that change hourly. Today's irriga- If numerous structures are to work automatically in series (that tion projects do not have that capability. is, a whole canal), proper simultaneous modeling of the canal pools and gates with the appropriate algorithms must be done The question, then, is not "Why automate?" but by experienced persons who can give the correct and com- "Which types of automation are appropriate for plete information to integrators for the PLC programming. this project?" The cost of improved water con- Source: Author. trol is not small, but it is typically a small frac- tion (10 percent or so) of the total project cost. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT REFERENCE CITED WORLD BANK PROJECT DISCUSSED Burt, C. M., and S. W. Styles. 1999. "Modern Mexico. "Irrigation Apatzingan Project." Closed. Water Control and Management Practices in Project ID: P007557. Approved: 1980. Within Irrigation. Impact on Performance." Water World Bank, available at http://projportal. Report 19. FAO, Rome. Available online at worldbank.org. http://www.watercontrol.org/publications/ publications.htm. This Profile was prepared by Charles M. Burt of California Polytechnic State University, with input by Shawki Barghouti. The Profile was reviewed by Aly M. Shady of the Canadian International Development Agency. 141 INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS 4 INVESTING IN GROUNDWATER IRRIGATION · Investment Note 4.1 Investing in Shallow Tubewells for Small-Scale Irrigation · Investment Note 4.2 Deep Tubewell Irrigation · Investment Note 4.3 Conjunctive Use of Groundwater and Surface Water · Investment Note 4.4 Groundwater Governance and Management · Innovation Profile 4.1 The Republic ofYemen's Sana'a Basin Water Management Project 143 OVERVIEW The advantages of groundwater investment for irrigation, both as a main source of water and as a supple- ment, are examined in this chapter. Driven by technological advances, groundwater use has spread rapidly, bringing more reliable water supply, encouraging crop diversification, and improving incomes, including for the poor.The biggest problems are overabstraction and water-quality deterioration. GROUNDWATER INVESTMENT BRINGS MANY ADVANTAGES. With improved pump technologies, groundwa- ter has become a key resource for farmers, used either as a sole source or as a complementary source to surface water or rainfall. Groundwater irrigation can be developed through shallow wells (drilled or hand-dug wells less than 30­50 meters deep) or with deeper tubewells. Groundwater irri- gation is attractive to farmers because they can control it to irrigate virtually "on demand." Water is often of good quality and is available close to the point of use. Groundwater offers natural storage capacity, reduced evaporation losses, improved related water quality problems. The poor are par- drainage, and secure supply, even during ticularly vulnerable, because the richer farmers droughts. Economically, groundwater irrigation can pump out deeper and faster. Experience is generally more productive than surface water shows that the only workable groundwater man- irrigation, with crop yield per cubic meter up to agement systems are those with intensive user three times as high. Even the higher cost brings involvement and user-government partnerships. an advantage in incentives to efficient use. A governance system is needed that establishes Groundwater investment, particularly in lower- clear and monitorable entitlements and allows cost shallow wells, can have poverty reduction self-management by user groups supported by impacts, providing improved water supply for government in resources assessment, regulation, domestic use as well as for gardens and crops. and dispute resolution. Energy prices have to be (See IN 4.1, IN 4.2, and IN 4.4. On poverty set at unsubsidized levels, or they will encourage reduction benefits, see also IN 3.1 and IN 3.3. depletion. Groundwater management is likely to See also "Investments in Shallow Tubewells for be a significant investment area as resource min- Small-Scale Irrigation," in Agriculture Invest- ing problems grow worse. (See IN 4.4. On the ment Sourcebook (AIS), Module 8.) incentive structure, see IN 1.5.) CONJUNCTIVE USE INVESTMENTS PAY HIGH RETURNS. Conjunctive use is the simultaneous use of sur- SOMETYPICAL INVESTMENTS face water and groundwater. For example, Typical investments in technical assistance farmers with access to canal water may also use include the following: groundwater. Investment in conjunctive use raises the overall productivity of irrigation sys- · Building capacity of irrigation system man- tems, extends the area effectively commanded, agers for improving main system manage- helps prevent waterlogging, and can reduce ment for better conjunctive use drainage needs. Conjunctive use is growing as water becomes scarcer. Ideally, this type of use · Evaluating groundwater and monitoring is a component of an overall basin-level inte- systems grated water resource investment and manage- ment plan. It is institutionally challenging · Developing groundwater governance struc- because it requires coordination among various tures and user associations public institutions, and usually a "public-private 144 Project investments include the following: partnership" because tubewells are usually pri- vate. Retrofitting planned conjunctive manage- ment on existing schemes entails changing the · Improving hydraulic infrastructure for opti- hydraulic structures and operating systems to fit mal conjunctive use new water use patterns. Other forms of con- · Enhancing recharge from precipitation and junctive use investment include conjunctive use surface water imports to sustain groundwa- with saline groundwater to maintain water and ter use salt balances, conjunctive use with poor quality water such as urban wastewater, and ground- · Investing in wells and efficient conveyance water recharge from surface water for later and on-farm irrigation systems for smaller abstraction. (See IN 4.3.) farmers THE CHIEF PROBLEMS OF GROUNDWATER ARE OVERAB- · Investing in extension and training STRACTION AND DECLINE IN QUALITY. Despite the advantages of groundwater investment, the Other related investments include the develop- biggest problems are overabstraction and the ing of credit systems. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 4.1 drilling, or with a drilling method called "jet- ting" or "washboarding." Tubewells are an inex- pensive way of supplying water for drinking INVESTING IN SHALLOW and irrigation. In Bangladesh, wells are typi- TUBEWELLS FOR SMALL- cally hand drilled, even to depths of 60 meters, and cased with galvanized iron or plastic pipe SCALE IRRIGATION that is slotted to allow water to enter while keeping the aquifer material out of the well. Small tubewells, also called shallow tubewells or Wells are normally equipped with centrifugal shallow wells, pumping shallow groundwater, satisfy surface-mounted pumps with 5­10 horsepower both domestic and irrigation needs. Their small diesel engines. engines also power boats, hand tractors, and other farm machinery. Shallow wells offer new choices in In the semi-arid Sahelian Zone of southern cropping and improve economic and social condi- Niger, groundwater depth is 6 to 8 meters. tions.They cause conflict if owners overexploit the Annual rainfall of 400­800 millimeters provides supply or contribute to salinization of groundwa- groundwater replenishment of about 500 million ter. Investments in the assessment of the supply cubic meters. Most villages have at least one dug and quality of groundwater, in the regulation of well well for domestic water supply and some irriga- building, and in technical support to farmers are tion. Some tubewells have been installed with therefore vital to allow shallow wells to go on 3­5 horsepower portable gasoline-powered reducing poverty. pumps, hand-operated pumps, or bucket and rope bailer systems (see also IN 3.3). The area Tubewells are a cost-effective source of irriga- irrigated by these tubewells is 0.3­0.5 hectares, tion water for many small farmers where depending on the lift needed and the water groundwater is available at less than 20 meters losses during transport to the field. below the surface. They can irrigate up to 5 hectares, depending on the soil, crop, and water conveyance losses. The technology is not BENEFITS complicated, and acceptance by farmers and Shallow tubewells provide substantial poverty poor rural communities is rapid. Tubewells can reduction benefits owing to improved water sup- be one of the better investments for poverty ply for domestic use as well as gardens and reduction where groundwater levels are close crops. Increased production and family incomes to the surface and soils are productive. Shallow 145 lead to improved diets and better health. Engines tubewells are already common in Asia, Africa, used to pump tubewells represent about two- and many other parts of the world. thirds of the cost of the tubewell. Because these are also used to power boats, hand tractors, and Shallow tubewell irrigation generally results in some form of crop diversification for home or local consumption or for export. Niger, for exam- ple, has developed a good export market for Box 4.1 India: GroundwaterWells green beans shipped by air to Europe, with much of the crop water from shallow tubewells. Con- About half of India's total irrigated area depends on groundwa- ter wells, and about 60 percent of irrigated food production is junctive use of mostly shallow tubewell water to based on groundwater. In 1994, of the 10.5 million wells dug in supplement supplies of surface water to optimize India, 6.7 million were shallow tubewells.The number of shal- crop production is also common in Pakistan, low tubewells roughly doubled every 3.7 years between 1951 India, and many other countries (box 4.1). and 1991. Groundwater irrigation at least doubles yield com- pared to surface-watered crops. However, some states in India are facing severe problems of declining water level because of INVESTMENTS overexploitation. Shallow tubewells can be drilled by hand with Source: Singh and Singh 2002. simple soil auger-type tools, by power rotary INVESTING IN GROUNDWATER IRRIGATION other farm machinery, they improve the quality Increased production from tubewells also of life in rural communities and are a low-cost reduces pressure on marginal lands and way of providing economic benefits in poor increases land values, thus providing incentives areas with high groundwater levels (box 4.2). for conservation. Benefits from tubewells can influence water markets as well. In Pakistan, for Box 4.2 Nigeria: National Fadama example, tubewell owners are sometimes active Development Project water sellers to neighbors. Well productivity, delivery potential, and the cost of operation Nigeria's Fadama project was centered on developing small- and maintenance (O&M) have a significant scale irrigation through extraction of shallow groundwater impact on the price of water. with low-cost gasoline-driven pumps for tubewells. About 30,000 hectares were irrigated using the complete tubewell- pump package, and 30,500 pumps were distributed to farmers. POLICY AND IMPLEMENTATION ISSUES This resulted in a boost to farmer income and significant SUSTAINABILITY. In the past, the issue of ground- poverty reduction.The economic rate of return was estimated water resource sustainability was ignored. at 40 percent. Additional benefits were the development of a Insufficient investments (sometimes none at all) simplified well-drilling technology, training of farmers to help other farmers construct wells, infrastructure for transporta- were made in groundwater resource assess- tion and storage of products, establishment of the Fadama ments and local management institutions. User Association, and development of an extensive monitoring Pumping from shallow aquifers by many wells, and evaluation system. Today's improved welfare of Fadama in an attempt to irrigate a larger area than pos- farmers can be traced directly to this project. sible given the average groundwater recharge, Source: World Bank 2002. can reduce the water supply of neighboring tubewells, lower water tables, diminish eco- nomic returns, degrade water quality, compact Box 4.3 China:Water Overexploitation in the soil, and increase soil salinity (box 4.3). Ningjin County Policies to calibrate the spread of wells to the groundwater recharge potential are critical to Groundwater has become the major source of irrigation in sustainability. It is normally the responsibility of Ningjin county, China, since the reduction in the volume ofYel- governments to monitor and evaluate ground- low River water.A rapid increase in irrigated areas has resulted water and develop rules that control wells. The in overexploitation of the groundwater resource, causing seri- simplest regulation consists of promoting and ous environmental problems. Tubewell density has reached enforcing a socially accepted compact for mini- more than one per 5 hectares, and average depth to water 146 level in the wells has increased from 3.7 to 7.5 meters over the mum spacing and maximum pump capacity, last 30 years. About a tenth of the wells go dry in summer. rather than a full-fledged groundwater use Farmers have reduced on-farm losses by using plastic tube to rights and obligations system separated from carry water to their farms, but they still use an inefficient land ownership rights. method of basin irrigation.Application of water is about twice the standard volume for north China, and irrigation accounts WATER QUALITY. Groundwater quality is impor- for 30 percent of all production costs. tant because deterioration from salt or mineral Overexploitation of groundwater has resulted in a progressive buildup can affect the water's usefulness. Gov- decline in profitability owing to an increase in suction lift; it has ernment policies should require evaluation of also led to less, and poorer quality, water. Salt in groundwater groundwater quality and the likelihood of is raising soil salinity. Wheat, a major crop, is moderately salt changes in quality over time--before well tolerant, but the other major crop is maize, which is moder- installation. Water quality evaluation is also ately salt-sensitive and can fail if irrigated twice using saline groundwater. The area thus faces a critical groundwater important to minimize future maintenance costs recharge problem, and the present situation is unsustainable. since poor-quality water can increase encrusta- Reversing this trend will require adopting water saving tech- tion and corrosion. In dry climates, tubewells nologies, changing cropping patterns, and enforcing laws and tend to recycle irrigation water, and in more regulations, or reducing the number of wells. arid climates, salts leached from crop root Source: Zhen and Routray 2002. zones degrade the water. Over time, dissolved salts and nutrients build up, and the extracted A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT water gradually declines in quality and con- Legislation and regulations are generally tributes to soil salinization. This is what is hap- needed to control groundwater exploitation pening in large portions of the Indus River (box 4.4). However, lack of political will and Basin in Pakistan. lack of awareness among some farmers, but also active farmer opposition and lobbying, have been major constraints to implementing LESSONS LEARNED this type of legislation in many countries. Public-private division of responsibility is impor- Important issues to consider for national or tant in formulating policy for shallow tubewell regional legislation are the following: development. Tubewell investments are a pri- vate good that should be the responsibility of the · A system of licensing for extracting and beneficiaries of the investment. The public sector using groundwater role should generally be limited to establishing a policy and institutional environment conducive · Registration of current groundwater users to investment. Direct subsidies for tubewell and penalties for noncompliance with drilling and operation are best avoided unless licensing provisions there is a compelling poverty reduction argu- · Arrangements to protect the rights of shal- ment for the subsidies. One-off matching grants low tubewell users from more influential may be useful in situations of great poverty and farmers who can drill and power deep wells poorly functioning financial markets. that lower the water table and deprive these Water user associations (WUAs) in areas where tubewell users of access to water groundwater irrigation predominates are valu- Training and extension are critical to facilitate able for organizing hardware and infrastructure good installation, operation, and maintenance maintenance; they can represent users, for exam- of tubewells and for the development of local ple, by holding a community water right and capacity for maintaining and repairing wells overviewing water use. For resource manage- and pumping equipment. To optimize the ben- ment, by contrast, appropriately scaled aquifer efits of tubewell investments, extension and management organizations are needed on which training will be needed for irrigation water irrigation WUAs should be represented. In areas management, improved agricultural technology, where surface water irrigation predominates and and marketing systems. canal WUAs are established, WUAs are often unwilling to address the interests of groundwa- 147 ter-only irrigators, because these irrigators do not Box 4.4 Groundwater Regulation want to pay the WUA a fee without receiving any surface water supply benefits. In this case The Punjab Private Sector Groundwater Development pro- also, aquifer management organizations under ject's experience with introducing groundwater regulation the umbrella of the river basin committee or offers these lessons: authority is probably the best way forward on · A public awareness program must precede groundwater groundwater resource management. regulation. · Where groundwater is a significant source of poor farm- Surveying, drilling test wells, water sampling, ers' livelihoods, a regulatory framework must address the and water level monitoring are useful for build- linkage of groundwater to surface water rights and actual ing a database and tracking long-term trends. surface water deliveries and the involvement of ground- water users in groundwater monitoring and "social The rational management of the groundwater recharge" (voluntary self-regulation). resource is difficult without a basic understand- · When groundwater abstraction will be curtailed as a ing of the distribution and yields of aquifers and result of regulation, poverty alleviation interventions must their vulnerability to pollution and overdraft. accompany regulation to help identify and create alterna- These monitoring activities are usually a gov- tive means of income for the affected communities. ernment responsibility, but local authorities or Source: Usman Qamar (personal communication). communities can carry out some of the work. INVESTING IN GROUNDWATER IRRIGATION RECOMMENDATIONS FOR PRACTITIONERS small canals or pipe to distribute water to Successful shallow tubewell systems require fields; and micro-irrigation (such as drip or government promotion and regulation to minisprinkler set-ups) if justified by the crop ensure that tubewell investments are legally value. protected from overexploitation by excessive drilling or by other users of the same aquifer · Provide training and extension to help (see Investment Opportunities below). farmers install, operate, and maintain shal- low tubewell systems. Experience with shallow tubewell projects · Provide guidance in irrigation water man- emphasizes the need for investments to address agement, agronomy, and marketing through the following: extension and training. · Evaluate the groundwater hydrology and management to be certain that the ground- REFERENCES CITED water recharge potential is in balance with Singh, D. K., and A. K. Singh. 2002. "Ground- projected water use. water Situation in India: Problems and Per- · Monitor groundwater quality to ensure suit- spectives." International Journal of Water ability for irrigation, and make realistic pro- Resources Development 18(4): 563­80. jections on water quality change with time. World Bank. 2002. "Implementing the New · Establish monitoring systems and laws and Rural Development Strategy in a Country- regulations to ensure sustainable develop- Driven Process: Agriculture and Rural ment and operation of tubewell irrigation Development Project Profiles." Presentation systems. at the Country Director/Rural Sector Board Learning Event, September 8­10, sponsored · Ensure provision of technical assistance, by the World Bank, Antalya, Turkey. training, and extension services to help farmers properly install, operate, and main- Zhen, L., and J. K. Routray. 2002. "Groundwater tain the systems to optimize agronomic ben- Resource Use Practices and Implications for efits. Marketing products that are new or Sustainable Agricultural Development in the more abundant in the area may also require North China Plain: A Case Study in Ningjin 148 advisory services. County of Shandong Province, PR China." International Journal of Water Resources Development 18(4): 581­93. INVESTMENT OPPORTUNITIES · Evaluate groundwater resources and quality. SELECTED READINGS · Reform policy and regulations to govern shal- Foster, S., and K. Kemper, eds. 2002­4. "Sus- low tubewell development and operation. tainable Groundwater Management: Con- cepts and Tools." World Bank GW-MATE · Strengthen water user organizations to man- Briefing Note Series. Available online at age shallow tubewell systems. http://www.worldbank.org/gwmate. · Develop systems for monitoring water table depth and groundwater quality. Foster, S., J. Chilton, M. Moench, F. Cardy, and M. Schiffler 2000., "Groundwater in Rural · Provide financial services to enable produc- Development: Facing the Challenge of Sup- ers to finance drilling tubewells by hand, ply and Resource Sustainability." World power rotary drilling, or jetting; pumpsets Bank Technical Paper 463. World Bank, with engines, hand pumps, or bailer systems; Washington, DC. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Kahnert, F., and G. Levine, eds. 1993. Ground- This Note was prepared by Walter Ochs, with inputs by water Irrigation and the Rural Poor: Hervé Plusquellec and Usman Qamar. It was reviewed by Options for Development in the Gangetic Ohn Myint, Ijsbrand de Jong, and Stephen Foster of Bank- Netherlands Water Partnership Program Groundwater Man- Basin. Washington, DC: World Bank. agement Advisory Team (BNWPP GW-MATE). Koegel, R. G. 1985. "Self-Help Wells." FAO Irri- gation and Drainage Paper 30. Food and Agriculture Organization, Rome. 149 INVESTING IN GROUNDWATER IRRIGATION INVESTMENT NOTE 4.2 INVESTMENT AREA Pumping wells abstract groundwater from an aquifer. They are called "shallow" when the drills DEEPTUBEWELL IRRIGATION or picks and spades do not excavate deeper than 50 meters. They are called "deep" when the well, This Investment Note summarizes the technical, in that case nearly always drilled, reaches a depth socioeconomic, and institutional factors that go of 40­200 meters and discharges 100­1,000 cubic into investment decisions for deep tubewell irri- meters a day. The pump engines are diesel or gation. Groundwater irrigation has some advan- electricity driven, and the well diameter may tages over surface water in ensuring good quality range from 200 to 600 millimeters. and reliable supply, but it also poses important challenges and risks, as past projects show. Cor- Farmers may apply groundwater where there is rect resources assessment and adequate institu- no surface water but also use groundwater to tional capacity are especially important for complement surface water (or as a back-up). sustainability. Depending on the number of hours of operation and the type of irrigation (full or supplementary), As pump technologies improve and costs drop, a deep tubewell may irrigate 10­200 hectares. millions of farmers have been deciding to irri- gate their crops with groundwater from wells. Groundwater from major aquifers is usually of Some countries rely very heavily on groundwa- good quality, available at the point of use, and ter for irrigation because of its many advantages offers the option to phase development of the over other irrigation water sources (table 4.1). irrigation infrastructure. Other advantages are the natural storage capacity and drought Deep tubewell irrigation has unique strong resilience of aquifers and the possibility for points where extensive aquifers with sufficient underground storage and reuse of excess water recharge allow for large-capacity wells. Avail- from surface water irrigation and irrigation ability at the point of use, drought resilience, return flow, a practice widespread in India. suitability for user O&M, rewards for efficient water use, and the possibility of switching to In a deep aquifer, drilling wells should always high-value crops make deep well irrigation an allow large short-term well yields, mainly attractive alternative or complement to surface because of large "available well drawdown." But water irrigation. But without government guid- drilling finds new or additional groundwater 150 ance on resources assessment and local man- resources only where regional sedimentary or agement, the risk of diminishing returns and volcanic aquifers have major unexploited negative environmental side effects is high. recharge areas, usually distant. Where the alluvial Table 4.1 Importance of Groundwater in Irrigation Country Period Irrigation water use (million m3/year) Groundwater (percent) Bangladesh 1990­5 12,600 69 China 1993­5 407,770 18 India 1990­3 460,000 53 Pakistan 1990­1 150,600 34 Mexico 1995­7 61,200 27 Source: United Nations­FAO Aquastat Database. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT aquifer systems are small, they will be intercon- against dry spells or unreliable delivery of nected with deep aquifers and depend on the surface water same recharge area. · As an alternative to, or extension of, shal- It is important to distinguish between the scales low dug well irrigation of groundwater irrigation, because the extent of · As a supplement to surface water irrigation external impacts is largely determined by scale: during reduced supply (tail-end users) to · A smallholder operating a low- or medium- grow an extra harvest during dry season or capacity tubewell, sometimes as an extension to mitigate the impact of changes in land in the bottom of a dug well using a centrifu- use or climate gal pump · As the original water source in new irri- · A group of 20­100 farmers sharing one high- gated agricultural projects such as land capacity deep tubewell and organized in a reclamation projects WUA Each case has specific requirements in address- · Large farmers or agricultural companies that ing such issues as knowledge and management own one or more high-capacity tubewells of the resource, reaching the main poverty goal, establishing WUAs, and raising incomes (prof- Deep tubewell irrigation can be applied under itability, markets, switches to high-value crops). different conditions. Some examples follow: The assessment and evaluation of these pre- tubewell conditions is an important starting · As a complement to rainfed agriculture or point in exploring the feasibility of investments protection of vulnerable high-yielding crops in deep tubewell irrigation (table 4.2). Table 4.2 Issues Related to Pre-Tubewell Conditions Pre-tubewell Social and conditions Resource issues institutional issues Agro-economic issues Rainfed agriculture Aquifer characteristics and Farmers may be organized Farmers will shift to sustainable yield to be but water management agency higher-value crops and 151 determined and WUA not yet in existence introduce water-saving irrigation techniques (drip, sprinkler) Shallow well irrigation Shallow groundwater is Farmers are used to irrigation Agro-economic (dug well, shallow available, but information through individual water supply conditions may not tubewell) to be extended for deeper provision;WUA may not yet exist match new situation aquifers Surface water Aquifer characteristics and WUA may exist but require Farmers will expand irrigation sustainable yield to be a change in tasks and agricultural production determined in relation to organizational structure changes in recharge) No irrigation, as in Aquifer characteristics and No social infrastructure. Agricultural production land reclamation in its sustainable yield to be Irrigation; water management will expand in the area (semi-)arid regions determined; irrigation system/agency and WUA are to include new crops and return flow still to be established new irrigation methods Source: Author. INVESTING IN GROUNDWATER IRRIGATION POTENTIAL BENEFITS · Reliability during drought and its lack of Groundwater is more productive than most sur- sediment allow use of water-efficient irriga- face water: it is abstracted at the point of use tion technology. and suffers few transport losses; it offers the individual farmer "on demand" irrigation that · Reliability opens access to new markets, for few surface systems can match; and it brings it protects high-value crops and inputs incentives to maximize application efficiency against dry spells. because of the cost of lift. · Groundwater allows tail-end users on sur- face systems to cope with shortages in irri- On groundwater-irrigated farms in India, crop gation water supply. yield per cubic meter is 1.2­3 times as high as on farms irrigated with surface water (Dhawan · Groundwater suffers little from evaporation 1989). Similar findings come from Spain. The losses. explanation is economic. In response to the high cost of groundwater lift, irrigators often use · Groundwater pumping can improve drainage. sparse, life-saving irrigation instead of aiming for the maximum production per unit area through · Investment risk can be reduced through full irrigation, which is at the basis of the irriga- phased construction of the hydraulic infra- tion practices of surface water irrigators, and of structure. the water requirement recommendations of agronomists. In so doing, groundwater irrigators Social benefits achieve more crop per drop than do their sur- · Groundwater management requires decen- face water colleagues and, at the same time, tralized aquifer management, and hence increase yields per unit area compared to rainfed institutional strengthening of farmers. cultivation. Some irrigators in South Asia pur- chase water from well owners at US$0.10­$0.14 · Groundwater enables small farmers to per cubic meter, while their canal irrigator col- invest in irrigation, individually or as group leagues pay only a fraction of a cent. Even some members, through rural credit programs. of the poorest irrigators make a living paying these groundwater rates. Environmental benefits Groundwater development is more amenable · Groundwater pumping has mitigated and 152 than large surface systems to poverty targeting. prevented waterlogging and salinization on The design of large systems is driven by topog- surface systems in the Arab Republic of raphy and hydraulics. Groundwater develop- Egypt and Pakistan. ment has become the central component of livelihood creation programs for the poor in Africa and Asia (Shah 1993 for India; Kahnert POLICY AND IMPLEMENTATION and Levine 1993 for the GBM basin; Calow et Policies need to create enabling environments al. 1997 for Africa). to manage and use the resource. Management of the resource presupposes the following: The benefits of deep tubewell irrigation can be summarized as follows: · Knowledge of the aquifer and natural recharge and the amounts of water that can be safely withdrawn without undesired side Economic benefits effects · Energy costs give incentives to raise yield per unit of water, raising income through · Monitoring of abstraction rates and ground- switches to higher-value crops. water levels A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT · Regulations with sanctions for abstraction of from the introduction of mechanical pumps, in more groundwater than planned and agreed combination with energy subsidies and weak regulations concerning impact monitoring and · Institutions such as aquifer associations and demand management. Overabstraction has courts empowered to enforce regulations many consequences: water quality deteriorates because low-quality water fills the void; land · Controls on energy subsidies in order to subsides; small farmers' wells run dry because avoid overabstraction only rich farmers can deepen their wells; and · Licenses stipulating abstraction quotas the base flow to rivers and wetlands diminishes. · Registration and licensing of drilling con- Another main cause is poor standards of well tractors to prevent illegal drilling and to construction, impairing system reliability and ensure the quality of well construction increasing pumping costs when wells clog. Regenerating clogged wells is expensive and · Definition of technical standards for equip- may not lead to a full recovery. ment and infrastructure A third cause is recirculation when fertilizer- Use of groundwater resources presupposes the and pesticide-laden runoff reenters the aquifer, following: reducing groundwater quality. · Credit facilities to enable investments Customary water rights, local rivalries, and dis- putes over land may prevent the establishment · Local commercial services for supply and and operation of aquifer associations and repair of equipment WUAs. In the projects in Pakistan, government operation of deep tubewells was costlier but · Definition of social criteria for the formation less user responsive than private operation. of WUAs · Clarity of water rights Finally, the absence of markets and the lack of support structures to provide spare parts for · Extension and agricultural research insti- pumping equipment and interruptions in elec- tutes to test new cash crops tricity supply may cause failure. · Equal access and voting rights for male and 153 female farmers RECOMMENDATIONS FOR PRACTITIONERS Investments in deep tubewell irrigation must be accompanied by facilities to invest in water-sav- LESSONS LEARNED ing irrigation techniques and by effective Groundwater abstraction depends on a seam- aquifer management, based on a good under- less web of technologies and institutions. A standing of the resource base. Potential invest- break anywhere in this web causes the project ments in deep tubewell irrigation should to fail and the system to eventually shut down. strongly support this approach (box 4.5). Useful lessons can be learned from past, unsuc- cessful projects for groundwater development (box 4.5). INVESTMENT OPPORTUNITIES Potential investments in deep tubewell irriga- After construction, a main cause of failure is tion include the following: uncontrolled increase of abstraction, which causes water tables to drop, especially where · Evaluating groundwater resources, quality, recharge is limited. Overabstraction has resulted and sustainable yield INVESTING IN GROUNDWATER IRRIGATION Box 4.5 Lessons Learned from the Indonesia Groundwater Development Project The major objective of the Indonesia Groundwater Development project was to develop groundwater irrigation in less-developed regions in 11 provinces to help alleviate extreme poverty. Major components included the survey, investigation, and design; con- struction of deep tubewell and intermediate technology tubewell systems serving about 25,000 hectares; initial O&M support for two years after the commissioning of tubewell systems; provision of domestic water supply and home garden irrigation facilities; agricultural development activities, including strengthening of extension services; community support, including training and strengthening ofWUAs and activities related to the role of women; and institutional support for design, implementation, supervi- sion,and monitoring and evaluation of project performance.The project would also strengthen groundwater monitoring networks by constructing and equipping observation wells, providing water quality monitoring equipment, and training provincial water resources development service staff on groundwater resources monitoring. After a slow start, project performance rapidly deteriorated owing to a multitude of problems.The most important of these were significant cost overruns in groundwater exploration and the construction of wells, poor or untimely procurement of equipment, and development of wells with low water outputs.TheWorld Bank seriously considered closing down the project in 1996. After lengthy discussions with the government, the Bank agreed to restructure the project and continue drilling activ- ities in only two provinces (East Java and South Sulawesi) where project implementation had less serious problems--owing to significant upfront investment commitment, proven groundwater aquifers, and responsive farmers.As a result of the decision to concentrate on two provinces, the main focus of the project shifted to achieving economic and technical success, with diminished emphasis on helping to alleviate extreme poverty in less-developed regions. Because of the unsatisfactory per- formance during preparation and appraisal and poor project outcome, overall Bank performance was rated unsatisfactory. Some of the lessons outlined in the Implementation Completion Report follow. · Project design must be in line with the implementation capacities of the designated institutions. The original design was too ambitious and led to serious operational and implementation management difficulties including drastic restructuring. Intended stakeholders must be involved with the conceptualization, planning, design and implementation of the project, to ensure realistic programs and phasing. In this project, the lack of participatory approaches; lack of full assessment of capacities and roles of the government, private sector providers, and users; and lack of demand-driven implementation led to faulty siting of many wells, less than optimal adoption and utilization of the technology, and procurement of inferior quality equipment and installations. · Quality control and assurance of tubewells must be rigorously pursued by project management. Because critical structures of tubewells are underground, repairs and replacement are difficult after installation. Provision should be made for assessing implementation capacities and for requiring technical assistance to be structured to support capacity building so that client agencies and private sector service providers can meet industry standards. The pumps and engines selected should be the ones preferred by the farmer groups that will manage them if spare parts will be available locally. 154 · Government must transfer ownership of equipment and wells to WUAs, in addition to O&M responsibility, after providing adequate guidance and training, and consider the establishing of a locally administered asset replacement fund in order to prolong sustainable O&M of installed works beyond the expected project period.The transfer of management and assets to users is considered essential to establishing ownership and responsibility for longer-term operational sustainability. Source: Indonesia "Groundwater Development Project" Implementation Completion Report 2000. · Reforming policy and regulations governing and purchase of pumping equipment, con- deep tubewell irrigation systems struction of distribution canals, and installa- tion of micro-irrigation options such as drip · Strengthening WUAs to manage deep tube- and sprinkler well systems · Developing and implementing systems for · Training WUAs to operate and maintain the monitoring groundwater levels and ground- deep tubewell systems water quality · Providing guidance in irrigation water man- · Providing financial services to enable produc- agement, agronomy, and marketing through ers to finance the drilling of deep tubewells extension and training. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT REFERENCES CITED Supply and Resource Sustainability." World Calow, R. C., N. S. Robins, A. M. Macdonald, D. Bank Technical Paper No. 463. World M. J. Macdonald, B. R. Gibbs, W. R. G. Orpen, Bank, Washington, DC. P. Mtembezeka, A. J. Andrews, and S. O. Appioh. 1997. "Groundwater Management in Foster, S. 2000. "Sustainable Groundwater Drought Prone Areas of Africa." Interna- Exploitation for Agriculture: Current Issues tional Journal of Water Resources Develop- and Recent Initiatives in the Developing ment 13: 241­61. World." Papels Del Proyecto Aguas Subter- raneas, Serie A, No. 6. Fundación Marcelino Dhawan, B. D. 1989. Studies in Irrigation and Botín, Santander, Spain. Water Management. Delhi: Commonwealth Publishers. GW-MATE. 2003. "Economic Instruments for Groundwater Management: Using Incen- Kahnert, F., and G. Levine. 1993. "Groundwater tives to Ensure Sustainability." Briefing Note Irrigation and the Rural Poor--Options for No. 7. Bank-Netherlands Water Partnership Development in the Gangetic Basin." World Program, World Bank, Washington, DC. Bank Colloquium on Groundwater Irriga- tion, 1989. World Bank, Washington, DC. IWMI (International Water Management Institute). 2000. The Global Groundwater Situation: Shah, T. 1993. Groundwater Markets and Irri- Overview of Opportunities and Challenge. gation Development: Political Economy and Colombo, Sri Lanka: IWMI. Practical Policy. Oxford: Oxford University Press. ______. 2003. "Sustaining Asia's Groundwater Boom: An Overview of Issues and Evi- United Nations FAO (Food and Agriculture dence." Issues of Water Management in Organization). Aquastat Database Online at Agriculture: Compilation of Issues. Colombo, http://www.fao.org/ag/agl/aglw/aquastat/ Sri Lanka: IWMI. main/index.stm. Briefing Notes by GW-MATE are also useful refer- ences because they are written for Bank task WORLD BANK PROJECTS DISCUSSED managers and are only six pages long. PDF Indonesia. "Groundwater Development Project." files are available at http://www.world- Closed. Project ID: P003999. Approved: 1993. bank.org/gwmate. 155 Implementation Completion Report (2000). This Note was prepared by Albert Tuinhof with inputs from Usman Qamar. It was reviewed by Stephen Foster of BNWPP GW-MATE. SELECTED READINGS Foster, A. O. 2000. "Groundwater in Rural Development, Facing the Challenge of INVESTING IN GROUNDWATER IRRIGATION INVESTMENT NOTE 4.3 systems (box 4.6), extend the area served, and help prevent waterlogging. In some situations, they reduce public investment in drainage by CONJUNCTIVE USE OF providing vertical drainage. High-income GROUNDWATER AND countries have finely developed conjunctive management to even out spatial and temporal SURFACEWATER variations in regional water availability (Blomquist, Heikkila, and Schlager 2001). Conjunctive water use refers to simultaneous use of surface water and groundwater to meet crop Conjunctive management occurs when system demand. Each day, hundreds of thousands of farm- administrators control ground- and surface ers in canal, tank, and other surface irrigation sys- water simultaneously. It may be achieved by tems combine surface water with groundwater. modifying the configuration of the surface sys- They do so in an individual manner, uncontrolled by tem and its operating procedures (box 4.7). It is any scheme or basin-level entity. Conjunctive man- less widespread than conjunctive use because it agement, by contrast, refers to efforts planned at requires institutions and coordinating mecha- the scheme and basin levels to optimize productiv- nisms that few client countries yet have. Con- ity, equity, and environmental sustainability by junctive management is complex and can be simultaneously managing surface and groundwater controversial. Nevertheless, it can be para- resources. In many systems and basins, such plan- mount, particularly in water-scarce regions and ning is needed to raise crop water productivity. in times of drought, because failure to integrate conjunctive water resources can result in Users of surface irrigation systems install tube- groundwater overexploitation (see IN 4.4). wells as part of a strategy to avoid yield loss caused by unreliable water delivery. Tubewell Because surface irrigation practices directly irrigation water is costlier but offers control influence groundwater recharge, improved and helps save input investments. Farmer main system management is key to conjunctive tubewells raise the productivity of irrigation management of surface and groundwater resources. These improvements may require changes in the infrastructure but are more a Box 4.6 Conjunctive Use by Default: Punjab and Mula Command, Maharashtra, India question of building technical capacity, adapt- ing the organizational and institutional frame- 156 Mushrooming wells changed the profile of water use in Mula work for more efficiency, and improving command in Maharashtra, India. Indirect benefits of canal irri- information and communication systems. gation through groundwater recharge are even greater than direct benefits from flow irrigation. Dhawan and Satya Sai (1988) found that area irrigated per well rose from 1.4 INVESTMENT AREA hectares to 2.6 hectares; land productivity increased from 17 Five areas of investment opportunities appro- to 50 quintals of food grains per hectare; and the number of priate for different conditions need to be con- wells in the canal command rose from 6,000 to 9,000.The ben- efits of conjunctive use were also reflected in canal irrigation sidered; these are summarized below. in Punjab, as summarized in the table. RECONFIGURING SURFACE IRRIGATION PROJECTS. Direct land Indirect land Total land Many surface irrigation projects were designed productivity productivity productivity Command (qtl/ha) (qtl/ha) (qtl/ha) under a slew of antiquated assumptions about cropping patterns and hydraulic infrastructure in Mula command, the command. One such assumption concerns Maharashtra 21 33 54 the density of groundwater structures in the com- Punjab 35 51­72 86­107 mand area, which commonly is much higher Source: Dhawan and and Satya Sai 1988. than before the system was commissioned. Reconfiguring the main system, rationalizing the A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT operating rules and practices, and training system Box 4.7 Benefits of Conjunctive Management in managers to operate the modernized system in a Madhya Ganga Canal Project,Uttar conjunctive management mode offer a major Pradesh,India investment opportunity. River diversion systems often use lined canals to remove GROUNDWATER RECHARGE TO SUPPORT INTENSIVE excess floodwaters during monsoon. However, simple modifi- GROUNDWATER IRRIGATION. A new development cations in infrastructure and the operating system can trans- in densely populated areas of Asia is intensifica- form this waste into wealth. Uttar Pradesh had a network of tion of well irrigation in regions where rainfall disused earthen surface drains constructed in the 1950s to control waterlogging and floods. After the 1950s, intensifica- precipitation is the only source of groundwater tion of groundwater use created new opportunities for con- recharge. Western and southern India have junctive management by building check structures at suitable experienced this phenomenon on a significant intervals to promote groundwater recharge with monsoon scale. In those two regions the number of floodwaters. In course of a 10-year collaborative study, scien- groundwater wells has increased from fewer tists from IWMI, Roorkee University, theWater and Land Man- than 100,000 in 1960 to nearly 12 million today agement Institute, and the Uttar Pradesh Irrigation (Shah, Singh, and Mukherjee 2004). With falling Department found that using these modified drains for mon- soon flood irrigation produced the following benefits: aquifers and erratic rainfall, local communities and governments are turning to constructing · A 26 percent increase in net farmer income local water harvesting and recharge structures · A decrease in average depth of groundwater from 12 on a massive scale with the primary objective of meters in 1988 to 6.5 meters in 1998 · Annual energy savings of 75.6 million kilowatt hours and increasing groundwater availability for pumping cost savings of Rs. 180 million improved drinking-water security, drought · An increase in canal irrigation from 1,251 hectares in proofing, and protecting rural livelihoods. Evi- 1988 to 37,108 hectares in 1998 dence suggests that these community-based · A 15-fold increase in rice area investments significantly stabilize livelihoods in · A 50 percent reduction in conveyance losses in canals regions that may never benefit from large sur- Source: IWMI 2002. face irrigation projects (Shah 2003), especially if accompanied by investments in demand-side irrigation management through real water resources savings (Foster et al. 2002) . of rainfall, surface water, and groundwater cre- ates new opportunities to meet these threats CONJUNCTIVE USE WITH POOR-QUALITY WATER. Dif- (box 4.9). 157 ficulties and costs involved in disposing of wastewater often present new opportunities for CONJUNCTIVE USE WITH SALINE GROUNDWATER. In conjunctive use. Growing wastewater use in regions with primary salinity--such as the Indus periurban agriculture in cities around the world Basin in Pakistan and northwest India, the Nile are a case in point. Research by IWMI in several Basin, and the Yellow River Basin in North cities in India, Pakistan, and Mexico points to China--conjunctive use of surface and ground- ingenious practices developed by periurban water presents unique challenges and opportuni- farmers to use urban wastewater and ground- ties. In such places the objective of conjunctive water conjunctively for irrigation (Buechler and management is to maintain both water and salt Devi 2003). However, in water-scarce situa- balances. In this situation, system managers tions, some industrial wastewater also offers require great control and precision in canal opportunities for livelihood creation through water deliveries to different parts of the com- irrigation (box 4.8). mand to maintain an optimal ratio of fresh and saline water for irrigation (Murray Rust and Van- CONJUNCTIVE MANAGEMENT OPPORTUNITIES IN der Velde 1992). In many systems, it makes sense TOWNS. Rapid urbanization in many parts of the to divide the command areas into surface water world have created new threats for periurban irrigation zones and groundwater irrigation agriculture. However, conjunctive management zones, depending on the aquifer characteristics INVESTING IN GROUNDWATER IRRIGATION Box 4.8 Conjunctive Use with Poor-QualityWater: Box 4.9 Conjunctive Management Irrigation with MineWater in South Africa Challenge ofTowns and Cities Disposal of mine wastewater is a problem wherever there are Most Indian cities face massive urban groundwater coal and gold mines, as in South Africa. High concentrations of depletion because municipal authorities can neither salt make the wastewater unsuitable for direct discharge into keep pace with growing water demand nor check run- rivers except in periods of high rainfall.The potential for irri- away growth in urban groundwater structures.To meet gating with mine water in suitable soils is increasingly viewed growing demand, cities begin to compete for water favorably as a way of solving the twin problems of wastewater with periurban farmers. In the Indian state of Kar- disposal and shortage of irrigation water. How big the oppor- nataka,the government plugged the sluices of irrigation tunity is depends on the availability of suitable soils nearby, the tanks surrounding all towns and cities to counter resultant soil water and salt balance for different cropping sys- urban groundwater depletion. In this case, farmers lost tems, the choice of irrigation management strategies, and the their water rights without any compensation. How- impact of the irrigation drainage on local and regional water ever, informal water markets--in which periurban resources. The approach is inherently conjunctive, because farmers give up irrigated agriculture to become water polluted mine water is used to complement inputs from rain- sellers--create other negative externalities. Such fall and stream flows. water suppliers play an important role in bridging the demand-supply gap. In Chennai, for instance, they add In a field trial in South Africa during 1997­2000, three center 21 percent to the municipal supply; and in Indore and pivots were set up for irrigation with coal mine waste- Jaipur,they add 12 percent and 10 percent,respectively. water--one in virgin soil (unmined) and two in mine-rehabil- itated land. Several crops were successfully irrigated with Municipal authorities also draw water from periurban gypsiferous mine water on a commercial scale. Excellent well fields. Chennai's Metrowater draws water from yields were obtained for wheat on both virgin and rehabili- wells drilled on common or government land so that tated land, and also short-season maize grown on virgin land. it does not have to buy water rights from farmers, The yields of sugar beans were reasonable and higher than making them vulnerable to water resources deple- with dry land cropping. Problems that caused yield reduc- tion. In Panjetty village near Chennai, of the 69 wells, tions were not related to irrigation with gypsiferous mine 13 are leased out to Metrowater, which pumps them water and were recognized as surmountable with experience daily. As a result, water tables have fallen, and well in the management of the system. Research is continuing, yields have declined (Londhe et al. 2004). Since cities using catchment-scale computer modeling to assess the commonly have to import surface water to meet impact of scaling-up on the volume and quality of surface growing urban water demand, there are great oppor- water and groundwater. tunities for conjunctive management of imported sur- face water and urban and periurban groundwater. Source: Olufemi Idowu and Simon Lorentz, University of Kwa Zulu Natal, with inputs from IWMI, Africa. Source: Londhe et al. 2004; IWMI 2002. 158 and water quality parameters. In others, provid- needs later in the year. Conjunctive management ing recharge structures within a surface system is can also add to drought proofing. Surface water often a useful component of a rehabilitation and storage varies far more than groundwater storage modernization package. It is a risky business and in response to interyear variations in precipitation. requires a sound conceptual model of the fate of As a result, groundwater can play a powerful the salts mobilized, if it is not to cause more drought-mitigating role when surface and ground- problems than it solves (box 4.10). water are managed and used conjunctively. In the situations identified above, the key benefits POTENTIAL BENEFITS of investing in conjunctive use are the following: Conjunctive water management strategies help reduce evaporation losses from reservoirs, for · Enhanced yield of past investments in sur- their storage can be drawn down more quickly if face water irrigation projects through groundwater can be relied on to meet water increased irrigated area, improved water A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT productivity, and expanded production, Box 4.10 Conjunctive Management in Lerma employment, and incomes Chapala Basin, Mexico · Improved sustainability of groundwater irri- Rehabilitation and modernization programs to save water gation in regions of intensive groundwater often neglect the influence of surface water management on use with inadequate availability of runoff groundwater levels. During 1982­98, net aquifer extraction for recharge was predicted to result in an average static water level decline of 2.12 meters a year, compared to a 1.81 meters a year his- · Use of poor-quality water to increase agricul- torical average in 398 wells in six aquifers in the basin. Eight tural production, employment, and incomes alternative scenarios (producing average declines between 0.00 and 3.21 meters a year) were generated to show that fea- · Enhanced long-term environmental sustain- sible changes in grain and vegetable cropping patterns and ability of irrigated agriculture in salinity- water management are unlikely to bring static groundwater depths back to historical levels. Decreasing the relative water dominated environments by improving salt supply of surface irrigation (defined as the ratio of total sur- balances and sustaining the productivity of face water supply to crop demand) by 10 percent, as for irrigated agriculture instance through surface irrigation system rehabilitation, was simulated to result in an additional average decline of 0.91 meters a year (combined average 3.03 meters a year). Increas- POLICY AND INSTITUTIONAL ISSUES ing the relative surface water supply by 10 percent (equivalent CONJUNCTIVE MANAGEMENT REQUIRES A BASIN PER- to increasing reservoir releases by 25 percent) was simulated SPECTIVE. Where practiced, conjunctive manage- to reduce average decline to 1.21 meters a year. Increasing ment is often confined to the irrigation-system surface water supply by 23 percent (increasing reservoir releases by 57 percent, a level considered unfeasible [Scott and level. Overall gains from conjunctive use can be Garcés Restrepo 2001]) was simulated to produce zero aver- enhanced by managing resources at the river- age decline.The results indicate that, in water-short basins, the basin level, but this cannot be done until the sustainability of groundwater trends is inextricably linked to river basin becomes the unit of water and land the management of surface water--and is highly sensitive to management. the area and type of crops irrigated, as well as surface water management practices. REFORM OF WATER RESOURCES MANAGEMENT INSTI- Source: Scott and Garcés Restrepo 2001. TUTIONS. A major obstacle to conjunctive man- agement is the fragmented structure of governmental institutions entrusted with vari- ous water management roles. Typically, the 159 main system is managed by irrigation depart- and canal alignments would be a valuable aid to ments, groundwater by groundwater depart- understanding where canals contribute most ments, and energy supply for groundwater seepage to groundwater, where water-intensive pumping by an electricity utility. Seldom is perennial crops are grown, where soil salinity is there any coordination among these line inherent or due to waterlogging, where soil salin- departments. These roles must be coordinated ity could be controlled by leaching with irrigation if conjunctive water management is to succeed. water, and where waterlogging is caused by improper surface drainage. MONITORING AND INFORMATION SYSTEMS. Improv- ing monitoring of groundwater behavior and use PUBLIC-PRIVATE PARTNERSHIP. In many surface irri- patterns in the conjunctive management domain gation systems, public tubewells are used to is a priority. Most developing countries have poor arrest waterlogging and secondary salinization monitoring infrastructure. This precludes spatially due to surface irrigation. Experiments with the coordinated use of groundwater and surface Salinity Control and Reclamation project tube- water that is critical in a saline environment. wells in Pakistan and the Satjej-Yamuna Canal in Geographic databases with data on cropping pat- northwest India have shown, however, that pri- terns, evapotranspiration, groundwater levels, vate tubewells often do the same job as well or INVESTING IN GROUNDWATER IRRIGATION better. The problem is lack of coordination in A key challenge is to create strong incentives private tubewell development. Since surface sys- for conjunctive management among different tems are managed by government departments stakeholder groups. Typically, perverse incen- and tubewells are operated by independent tives through faulty pricing of surface irrigation, farmers, opportunities arise for mutually gainful electricity for pumping, and investment in public-private partnerships with better coordina- groundwater structures undermine gains from tion and an appropriate policy framework. conjunctive water management. REHABILITATION AND HARDWARE IMPROVEMENT. Reshaping the hydraulic infrastructure is criti- RECOMMENDATIONS FOR PRACTITIONERS cal where groundwater levels are shallow, · Even where river basin institutions are soils are saline but still favorable, soils are absent or underdeveloped, planning of con- coarse rather than fine, and canal seepage is junctive management seems best done abundant. Remote sensing can be used to within a river basin framework. identify such areas. Hardware improvement should improve control of water levels in main · The biggest new opportunities for improv- and branch canals; automate flow measure- ing food security and livelihoods arise in ment and control in distributaries, minors, and densely populated agricultural regions that water courses; and upgrade the distribution rely on intensive use of groundwater in agri- network and field channels. culture. In such cases, conjunctive manage- ment requires a paradigm shift. The need and pressures are for augmenting and con- LESSONS LEARNED centrating groundwater recharge--through · Conjunctive use of groundwater and surface recharge structures to increase percolation water often occurs by default. Big opportu- from rainfall and runoff as well as from nities to enhance its gains lie in introducing imported water--in pockets of groundwa- planned conjunctive management through ter-intensive use. coordinated strategies at various levels from · Conjunctive management investments river basin down. should strike a balance between improving · To achieve effective conjunctive manage- infrastructure and building conjunctive man- ment, planned investments are required in agement capacities--through improved 160 hardware (system modernization and monitoring systems, institutional reform, improved infrastructure), software (improved improved management practices, and greater database), planning and management capac- incentive compatibility. ities, and institutional reform. INVESTMENT OPPORTUNITIES · Improving main system management is cen- · Capacity building of irrigation system man- tral to better conjunctive management; and agers to improve main system management water level control is critical for better main for better conjunctive use system management. Often, level control can be greatly improved by replacing gates by · Reshaping hydraulic infrastructure of large- overshot weirs or duckbills. New technolo- and small-surface systems for optimal con- gies offer big opportunities. For instance, junctive use expensive communication infrastructure can be replaced by low-cost cell phones. · Enhancing recharge from precipitation and surface water imports to sustain intensive · Conjunctive management in a poor water- groundwater use in tubewell-irrigated areas quality environment presents more difficult, and often unique, technical and manage- · Institutional and organizational develop- ment challenges requiring higher investment. ment, including investment in the capacities A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT of local governments to lead on participa- and R. P. Mathew. 2004. "Urban-Hinterland tory groundwater management and inte- Water Transactions: A Scoping Study of Six grated water resources management. Class I Indian Cities." Paper presented at IWMI-Tata Annual Partners' Meeting, Anand, India, February 17­19. REFERENCES CITED Blomquist, W., T. Heikkila, and E. Schlager. Murray Rust, H., and E. Vander Velde. 1992. 2001. "Institutions and Conjunctive Water "Conjunctive Use of Canal and Groundwa- Management among Three Western States." ter in Punjab, Pakistan: Management and Natural Resources Journal 41(3): 653­84. Policy Options." Advancements in IIMI's Research 1992. A Selection of papers pre- Buechler, S., and G. M. Devi. 2003. "The Impact sented at the Internal Program Review. of Water Conservation and Reuse on the Colombo, Sri Lanka: International Irrigation Household Economy." Proceedings of the Management Institute. Eighth International Conference on Water Conservation and Reuse of Wastewater, Scott, C. A., and C. Garcés Restrepo. 2001. Mumbai, September 13­14. "Conjunctive Management of Surface Water Dhawan, B. D., and K. J. Satya Sai. 1988. "Eco- and Groundwater in the Middle Río Lerma nomic Linkages among Irrigation Sources: A Basin, Mexico." In A. K. Biswas and C. Tor- Study of Beneficial Role of Canal Seepage." tajada, eds. Integrated River Basin Manage- Indian Journal of Agricultural Economics ment. Oxford: Oxford University Press. 43(4): 569­79. Shah, T. 2003. "Decentralized Water Harvesting Foster, Stephen, Albert Tuinhof, Karin Kemper, and Groundwater Recharge: Can These Save Hector Garduno, and Marcella Nanni. 2002. Saurashtra and Kutch from Desiccation?" "Groundwater Management Strategies." GW- IWMI-Tata Water Policy Program, Colombo, MATE Briefing Note 3. Sustainable Ground- Sri Lanka. water Management: Concepts and Tools series. Online at http://www.worldbank.org/ Shah, T, O. P Singh, and A. Mukherjee. 2004. gwmate. "Groundwater Irrigation and South Asian Agriculture: Empirical Analyses from a Large- IWMI (International Water Management Insti- Scale Survey of India, Pakistan, Nepal Terai, tute). 2002. "Innovations in Groundwater and Bangladesh." Paper presented at IWMI- 161 Recharge." IWMI-Tata Water Policy Briefing, Tata Annual Partners' Meeting, Anand, India, No. 1. Available online at http://www.iwmi. February 17­19. cgiar.org/waterpolicybriefing/files/wpb01.pdf. This Note was prepared by Tushar Shah of IWMI with inputs Londhe, A., J. Talati, L. K. Singh, M. Vilayasseril, by Karin Kemper. It was reviewed by Stephen Foster of S. Dhaunta, B. Rawlley, K. K. Ganapathy, BNWPP GW-MATE. INVESTING IN GROUNDWATER IRRIGATION INVESTMENT NOTE 4.4 water governance is needed to manage this resource in a sustainable manner and to edu- cate users and governments about the need for GROUNDWATER GOVERNANCE a sound system of entitlements and allocation, AND MANAGEMENT based on a factual knowledge of the aquifers and systemic geohydrology. Groundwater management is becoming more and more a must in developing countries to forestall A recent Bank investment program in Mexico overexploitation and to foster sustainable use of (box 4.11) and a potential lending project in the the water resources. Nevertheless, sound manage- Republic of Yemen focus on the sustainable ment of groundwater requires an efficient institu- development and management of groundwater. tional and regulatory framework, which only the These programs are breaking new ground in full commitment of the government can ensure. investment for groundwater governance and This Investment Note deals with the laws, regula- will address entrenched exploitation of the tions, and institutions involved in the governance of resource. The continued overexploitation and groundwater resources and with management and pollution of critical groundwater resources in enforcement of these rights for the public good. many countries creates a critical need for multi- lateral investment in the legal and institutional A stored water resource available in most coun- framework for groundwater governance to tries, groundwater has long been treated as an ensure sustainable management over the long infinite resource that can be endlessly term for the public good. exploited. The idea that groundwater, though a common good, belongs to the overlying landowner has shaped thinking about water, POTENTIAL BENEFITS even in the developed world. Only after this The efficient use of groundwater, either con- resource has been overexploited and polluted junctively with surface water supplies or as a do governments and users begin to worry sole source, requires the development of aquifer about managing its use. Attempts to allocate parameters, modeling of hydrologic characteris- groundwater and manage these entitlements in tics, and development of a sound entitlement a sustainable manner have achieved only lim- and management system. Investment in these ited success and still pose a major challenge to management tools can result in a reliable and stable source of water for economic develop- 162 the water sector. ment, drought alleviation, and an effective and economic water supply complement to surface INVESTMENT AREA water. Little of the water stored in aquifers is lost The World Bank considers investments in through evaporation. Use of groundwater there- groundwater and its governance worthwhile. fore has significantly less impact on river sys- Because groundwater is invisible and erratically tems and riparian and lacustrine habitat than developed, many governments ignore the need does use of surface water. It provides a reliable for its regulation and management. As the con- buffer to cyclical or annual shortages of surface cept of integrated water resources management supplies; recharge during wet years and extrac- is now a primary policy, a detailed understand- tion during dry years can limit the impact of ing of groundwater within a river basin and its cyclical droughts. Groundwater can provide a interaction with surface resources becomes reliable source of water for small users to help imperative. Because the use of groundwater in alleviate rural poverty. most developing countries is largely unregu- lated, well digging and water abstraction from wells in those countries frequently overexploit POLICY AND IMPLEMENTATION the resource and cause hardships, especially for The governance of groundwater requires a strong small users and the poor. Investment in ground- policy decision at the highest governmental A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 4.11 Mexico: Groundwater Management Groundwater has historically been overexploited in Mexico. In the Mexico City area and many other regions, it has resulted in subsidence, lowered groundwater tables, increased pumping costs, shortages, and aquifer pollution.The country has been attempting to resolve overextraction for many years and has passed enabling legislation that provides the legal framework for dealing with the groundwater management problem, but overexploitation has continued.This can be partially attributed to a continuation of energy subsidies. In addition, the administration and enforcement of the groundwater entitlement system has been top-down rather than participatory. Control over well drillers and well-drilling equipment has been insufficient to cur- tail the construction of illegal wells. The World Bank­financed Programa de Modernización del Manejo de Agua (PROMMA) incorporated a groundwater manage- ment component and is establishing water entitlement management pilots in selected aquifers.This pilot program will test the concepts of decentralized aquifer management through volumetric entitlements, measurement of extractions, and extraction limitations based on the safe yield of the aquifer. It will utilize the local user-oriented technical commissions of water (Comite Tecnico de Aguas Subterraneas--COTAS) as a primary factor in the management of the aquifer, attempting to involve users through education, capacity building, and institutional development. Deterioration of groundwater quality poses another problem. Knowledge is insufficient about the long-term impacts of indus- trial waste discharges, petroleum leakage, and agricultural pesticides, fertilizers, and chemicals. Overexploitation of aquifers in coastal areas has caused saline intrusion. Subsidence, principally in the Mexico City urban area, has also caused grave eco- nomic damage and put both historic and modern structures at risk. Resolution of these problems requires strong political support, a public education and information program, and user involve- ment.They can be solved only basin by basin and aquifer by aquifer. Limitation of energy subsidies will help mitigate the prob- lem, but it must be resolved locally. The empowerment of local COTAS is being encouraged, in part through financial assistance, to create local rewards for the sustainable management of aquifers. The project benefits from a strong legal framework. It is designed to build the institutional capacity of user-level organizations in order to transfer groundwater administration and management in specific aquifers to those who have the greatest vested interest in sustainable use of the resource. Care must be taken to assure all users of the equal treatment of all, regardless of user size, political connections, or wealth. Failure to secure trust in the reciprocity of sacrifices made for the good of all will perpetuate unregulated overexploitation of the aquifers. Source: Garcés-Restrepo 2001; Garduno 1999; Mexico "Water Resources Management Project"; Foster and Garduńo 2002. levels to create the legal and institutional frame- organized and regulated groundwater gover- 163 work for sustainable use. Groundwater is nance, as in the U.S. states of California and viewed in most countries as belonging to the Colorado (boxes 4.12 and 4.13). overlying landowner, not to the sovereign, and resistance to regulation of its use can be strong. Management policy must deal with two major Adoption, monitoring, and enforcement of enti- categories: groundwater that is conjunctive with tlements will therefore require major policy the surface water (that is, tributary aquifers), and decisions, strong laws and regulations, and for- groundwater that is extracted from aquifers not mation of a participatory institutional framework connected to surface supplies (that is, nontribu- to carry out those policies. tary aquifers). Nontributary aquifers can be fur- ther split into aquifers that have reasonable A successful groundwater governance policy recharge from outlying recharge areas and depends on a country's physical, political, and aquifers that receive such limited recharge as to cultural setting. The physical parameters be considered nonrenewable, where water include hydrogeology, aquifer endowment, and extraction can be considered mining of an non- the use made of the water supply. Best practice renewable resource. Depending on the ground- in groundwater development, regulation, and water situation, the appropriate level of management is still evolving, but there are aggregation of water resources management has some excellent, time-tested examples of well- to be chosen. To monitor and manage quality, INVESTING IN GROUNDWATER IRRIGATION Box 4.12 Southern California: Groundwater Management Groundwater is still a key source of water for Southern California, although imported water supplies have become the main source.The state's procedures for the issuance, administration, and management of groundwater entitlements suggest some useful principles and ideas for groundwater governance. The state cannot administer entitlements or manage groundwater. Landowners have a correlative right to use all groundwa- ter they can extract and use beneficially from beneath their property.This approach has led to overexploitation and relative anarchy in many basins, and many users have taken their water rights disputes to court. Users in the Raymond Basin near Los Angeles filed a court action in 1937 and the court rendered a precedent-setting deci- sion in 1944, adjudicating the groundwater entitlements in the basin and establishing a court-appointed water master to enforce and manage them.The decision led to a practice whereby each well was entitled to a proportional annual volumetric extraction, as determined by the water master, who measured and recorded the extractions.The water master, or a desig- nated agency, also monitored the piezometric levels within the aquifer and maintained and published records. Extraction beyond an allocation was punishable by fines.Trading of annual allotments was permitted so that users needing more water could purchase or rent the allocations of others who did not use their annual allotment. Utilizing the powers of the courts to adjudicate groundwater entitlements in a basin became the norm, one used in the adjudi- cation of the Main San Gabriel River Basin near Los Angeles.That basin had a combination of tributary surface water use, dat- ing to the previous century, and underlying aquifers that were conjunctive with the surface system. Because of the region's hydrological seasonality, surface water was stored in the upper reaches of the San Gabriel River for later use, and groundwater use had minimal effect on the rights of surface users. However, groundwater overexploitation resulted in a major drawdown of the aquifer and caused saline intrusion along the Pacific Coast.The LosAngeles County Flood Control District developed major groundwater recharge basins in the main San Gabriel Basin to capture winter and spring runoff that would otherwise be lost to the ocean. Even with these facilities, overexploitation continued, and the users went to court in 1968. In 1973, the court allocated the entitlements to users, appointed a water master, and established a nine-member basin manage- ment board.This board is elected by the water districts and water purveyors in the basin. It is responsible for managing entitle- ments and extractions in the basin, administering and accounting for water augmentation plans including groundwater recharge, and administering exchanges, water transfers, and credits. During its 25 years of operation, the system has matured into a well- accepted,participatory groundwater management system.The board is now confronting continued and pervasive saline intrusion and pollution of the aquifer by urban chemicals, lawn and yard pesticides, and pollutants from petroleum and other industries. Source: DWR-CA 2000, 2003a, 2003b. 164 nontributary groundwater basins should be man- the groundwater and surface water are treated aged at the spatial level corresponding to hydro- as an integrated supply, and a safe yield of geological aquifer boundaries. The appropriate groundwater extraction is part of the integrated level of management for tributary groundwater is annual sustainable yield of water from the basin. not straightforward, because surface water resources are generally best managed at the river Groundwater management policy for nontribu- basin level, with authority aggregated to river tary aquifers requires a solid understanding of basin commissions or other administrative bod- the aquifers and their hydrogeologic characteris- ies. To avoid water management conflicts and tics. The management of these types of aquifers inconsistencies in policies addressing groundwa- necessitates a hydrologic model of the aquifer ter and surface water management, regulation for estimating the finite amount of extractable and agency reforms have to be coordinated. water that is available within the aquifer. This allows the determination of an annual safe yield Policy for managing these conjunctive resources from the aquifer, or the determination of the must also be coordinated. If it is not, a dispro- annual volume of water that may be extracted portionate share of the available water may over a preselected finite life for the aquifer. The come from wells, particularly during droughts. selection of the finite life is a combination of The allocation and management of entitlements economic and political policy decisions by users in a tributary system must be designed so that and government. Once this annual extractable A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 4.13 Colorado: Groundwater Administration Colorado has a highly organized system of governance for groundwater entitlements, divided into nondesignated (or tribu- tary) groundwater and designated (or nontributary) groundwater.The nondesignated groundwater entitlements are incorpo- rated in the surface water entitlement system and are conjunctively administered by the state engineer in order of priority along with surface water supplies. Entitlements are issued through the water court system in accordance with Colorado's pri- ority doctrine.To pump wells when those entitlements are not in priority, the well owner, or more frequently, an association of groundwater users, must develop an augmentation plan through the purchase or rental of surface entitlements or through groundwater recharge schemes that must be approved by the state engineer. During a recent drought, the Colorado Supreme Court decided that the use of annually rented water was not sufficient and that augmentation plans had to have assurance of a permanent water supply, as approved by the water court.This decision caused a major dilemma in the midst of the drought, as refusal of temporary augmentation plans resulted in political turmoil. In February 2004 it was still being debated in the leg- islature and the water community.The end result was the inefficient use of the conjunctive groundwater aquifers during the drought, right when the use of this valuable reserve water resource should have been maximized.This demonstrates how well-meant but rigid law may hinder good water management. In designated or nontributary groundwater basins,the issuance,administration,and regulation of entitlements are under the juris- diction of a groundwater commission. Its members are water users from within the basins and are appointed by the state gover- nor, subject to Colorado Senate approval.The Groundwater Commission has full jurisdiction over the basins it designates as nontributary, but uses the State Engineer's Office (SEO) to administer entitlements and regulations."Water available" for alloca- tion in each designated basin is based on yield determinations for withdrawals that would deplete the basin over 100 years.The allocations are reserved for overlying landholders in the designated basins,with consideration given to interaction between wells. These designated basins include the portion of the Ogallala aquifer underlying Colorado.Within these designated basins,the SEO conducts a hydrogeologic evaluation of the designated basin and develops a model or scenario for the annual permissible extrac- tion, based on a finite life of the supply as determined by the Groundwater Commission, and criteria for well spacing and per- missible well yield.This model is used by the SEO in the issuance and administration of groundwater entitlements. The SEO is also responsible for promulgating and enforcing the technical and physical criteria for well construction and for regulating licensed well drillers and the abandonment of wells, so that illegal wells do not threaten the integrity of the aquifers and public safety is protected. Finally, the SEO is responsible for maintaining a registry of all wells including extraction records, physical characteristics, and ownership. This system of groundwater governance has worked well for both designated and nondesignated groundwater, but the con- junctive management of the tributary groundwater and surface water systems has been hampered by judicial decisions.While any system of groundwater management must have a system of dispute resolution and last recourse appeal, care should be taken to minimize the ability of those unfamiliar with integrated management to upset the integrity of the management sys- tem in the interest of legal correctness. 165 Source: CRS 2003; SEO 2003. volume is determined and the finite life of the cies and by people who think water users can- aquifer is set, reliable investment decisions can not manage their own affairs. The most success- be made regarding use of the water supply. This ful examples of the management of allows a monitoring, measurement, and man- nonrenewable groundwater aquifers have been agement system to be designed to manage the those managed by a commission of elected available resource equitably and to provide for water users, operating under the guidance and reserves for future development. oversight of a state-level regulatory authority. This peer-level management is more acceptable Experience has shown that the most successful to the user community. An independent entity is management systems have strong, participatory needed to certify the hydrologic data regarding self-governance by user organizations, with reg- the aquifer and to assure users and the public ulatory oversight by the government or the court that the aquifer is being managed in accordance system (see IN 2.1). The policy decision to incor- with agreed criteria. If nonrenewable supply porate participatory management is frequently is to be relied on as the sole source of supply met with resistance from entrenched bureaucra- for a developing economic region, long-range INVESTING IN GROUNDWATER IRRIGATION planning for this development must consider that · To allocate and manage groundwater intelli- the finite life of the water supply may similarly gently, sound knowledge is needed about shorten the economic life of that region. Long- resources, reserves, recharge, and safe yield. range planning must give serious attention to the This knowledge should be coupled with development of alternative water sources if the reliable monitoring of extractions, water lev- regional economic base is to be maintained. els, and water quality, in that order. Invest- ments should include the development and maintenance of such an information system. LESSONS LEARNED · Groundwater has historically been consid- · Because of cultural bias and the complexi- ered a common good, but its use has not ties governing groundwater, attempts to been easily regulated by governing bodies develop and implement a program will or self-regulated by individual users. This require a strong governmental commit- dilemma has an impact on the management ment, a strong legal framework, supporting of many natural resources. regulations, a participatory process of gov- ernance, a well-designed and transparent · Only in the past century has there been education and public information program, some success in the formulation of legal, reg- an equitable allocation system with regis- ulatory, and institutional framework to man- tered entitlements, a sound hydrologic age groundwater. information system, and a dispute resolu- tion system with peer-level enforcement · A program of groundwater governance must that creates incentives, instead of just be tailored to each region's political, cul- penalizing infractions. tural, and geologic circumstances. · To control overexploitation, there must be a · Most users want to maximize their own strong program to regulate and license own- water extractions and have little confidence ership and use of well-drilling equipment, that other users will collectively limit their with criteria for new well construction. extractions to a theoretically safe yield. This "dog-eat-dog" attitude can be modified · The development of a successful program of only if all water users can have confidence groundwater governance will not be easy; it in the equity of the water allocation and will require extremely strong leadership within the government. The development 166 management system so that they are con- vinced that all users equally share scarcity and implementation of an effective water and limitations. system will be an evolutionary process that may take generations to become accepted · Experience in areas of water scarcity and and effective. Realistic expectations must overexploitation, such as Colorado and therefore be maintained concerning any California in the United States, Mexico, and water investments. the Middle East has shown that a strong legal framework, without a similarly strong · Any investment in this area must strongly institutional framework at the user level, emphasize the legal and institutional devel- cannot resolve the problem of overex- opment, as well as development of capacity ploitation. This job becomes even more at the user level, and should start in pilot difficult when dealing with a multitude of areas where scarcity has created sufficient users large and small. concern among users that they are ready to accept the new ideas. This will provide a · Peer-level management at the user level platform for testing the management con- with governmental oversight has the best cepts to show that they work in the political chance of success. and cultural context. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT RECOMMENDATIONS FOR PRACTITIONERS · Provide sufficient infrastructure investment The following recommendations are provided components in the investment package to for the consideration of planners attempting to create incentives for espousing the new prepare an investment project in the area of management ideas. However, tie the sched- groundwater management and governance. ule for building infrastructure to benchmarks of progress in the legal and institutional · Make sure that the development and imple- development components to ensure priority mentation of a governance system has strong for the institutional components. support from the political leadership of both the government and the water sector. Iden- · Identify and incorporate a pilot component tify champions in political, bureaucratic, and that provides a realistic test of the proposed private sectors who can ensure the necessary program and that also provides some national and local commitment. degree of optimism about achieving suc- cess. Provide a roadmap for using pilot · Analyze the region's historical and cultural results for expansion to the entire region. background to identify any strong biases or impediments to the implementation of · Maintain a strong and transparent informa- groundwater entitlement and management, tion, education, and participatory program and devise a strategy to deal with them. during project implementation to gain the confidence of the users and political lead- · Analyze the existing legal and institutional ership in the program's basic directions framework for groundwater use, entitle- and fairness. ments, and management, and recommend modifications to adapt modern management · Be realistic. The introduction of modern ideas for use in the particular situation. management ideas will represent a major change in the historic and cultural approach · Analyze knowledge about the aquifers' to groundwater governance and will meet physical parameters, sustainability, and with resistance from vested interests and degree of exploitation. Incorporate in the others that may feel threatened by any form investment project a plan to augment this of groundwater resources regulation. information with additional data collection, modeling, and studies in order to develop a strong estimate of the safe yield of each REFERENCES CITED 167 aquifer and a plan for sustainable exploita- CRS (Colorado Revised Statutes). 2003. CRS 37- tion. This process should have strong input 90-106, Denver. and participation from the user community. DWR-CA (Department of Water Resources, Cali- · Develop a participatory program of equi- fornia). 2000. "Water Masters for Adjudicated table entitlements that considers historic Basins." DWR, Sacramento, September. beneficial use, safe yield of the aquifer, the geologic parameters of well interaction, and ------. 2003a. "San Gabriel Basin Groundwater the cultural and socioeconomic impacts of Quality and Remediation Plan." DWR, Sacra- the entitlement program. mento, April. · Implement the basic legal, institutional, and ------. 2003b. "Groundwater Management in administrative frameworks to support the California." DWR Bulletin 118, Sacramento. proposed entitlement program in advance of the investment appraisal to make sure Foster, S., and H. Garduńo. 2002. "Mexico, that the proposed project does not die manejo sostenible de agua subterráneo." awaiting political action. GW-MATE, World Bank, Washington, DC. INVESTING IN GROUNDWATER IRRIGATION Garcés-Restrepo, C. 2001. Irrigation Manage- Note Series, World Bank; Washington, DC. ment Devolution in Mexico. Rome: Food and Online at http://www.worldbank.org/ Agriculture Organization. gwmate. (The GW-MATE Case Profile Col- lection on the same Web site provides more Garduno, H. 1999. Case Study, Mexico. Rome: readily accessible information on some spe- Food and Agriculture Organization. cific examples.) SEO (State Engineer's Office, Colorado). 2003. Foster, S., J. Chilton, M. Moench, F. Cardy, and Colorado, Files of the State Engineer's M. Schiffler. 2000. "Groundwater in Rural Office, Duties of the Groundwater Commis- Development: Facing the Challenge of Sup- sion, Denver. ply and Resource Sustainability." World Bank Technical Paper 463. World Bank, Washington, DC. WORLD BANK PROJECTS DISCUSSED Mexico. "Water Resources Management Project" Scott, C., and T. Shah. 2003. "Energy Pricing and (Project Programa de Modernización del Supply for Groundwater Demand Manage- Manejo de Agua Project). Active. Project ID: ment." IWMI Research Highlight. Colombo, P007713. Approved: 1996. Sri Lanka, International Water Management Yemen, Republic of. "Groundwater and Soil Institute. Conservation Project." Active. Project ID: Thompson, Barton H. 2000. "The Obstacles to P074413 . Approved: 2004. Governing the Commons." Working Paper 187. Stanford University Law School, Palo SELECTED READINGS Alto, Calif. Foster, S., and K. Kemper, eds. 2002­4. "Sustain- able Groundwater Management: Concepts This Note was prepared by Larry Simpson and reviewed by and Tools." World Bank GW-MATE Briefing Stephen Foster of BNWPP GW-MATE. 168 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 4.1 · Water abstraction is uncontrolled, unmetered, unlicensed, and unpaid for. THE REPUBLIC OFYEMEN'S · In August 2002, there were 13,000 wells in the Sana'a Basin, and this number was grow- SANA'A BASINWATER ing rapidly. Of these, only about 70 were MANAGEMENT PROJECT state owned for public water supply. What is new? The Republic of Yemen, at the · The simplified groundwater configuration southern tip of the Arabian Peninsula, faces consists of a shallow aquifer (alluvium and extreme water shortages.The Sana'a Basin Water volcanic), at depths of 30 to 80 meters and a Management project aims to both increase the deep aquifer, known as the Tawilah aquifer, volume and lengthen the useful life of the available at depths of less than 100 meters to more water resources within the Sana'a Basin, where than 1,000 meters. the country's capital city is located. To reach its goals, the project seeks to increase the efficiency · There is no perceptible recharge from the of agricultural water use, accelerate aquifer shallow to the deep aquifers. Horizontal recharge, and buy time for a gradual shift to a less transmissivity is minimal. The Tawilah water water-based economy. is practically a fossil aquifer. · The water resources database is poor. Water availability in Sana'a, the capital, is one of the lowest in the world. Bringing in water from · According to estimates derived from earlier outside the basin is highly uneconomical--the studies, the economically exploitable deep cost would exceed US$1 per cubic meter, and aquifer stock is between 2 billion cubic could go as high as $8 per cubic meter--and meters (BCM) and 3 BCM. socially controversial. The Sana'a wastewater treatment plant was The project has to contend with the following completed in mid-2000, but the quality of the hydrological facts: treated effluent has been variable. The plant is often bypassed, especially during peak flows, · There is no perennial surface water any- owing to energy blackouts, when oil and where in the Republic of Yemen. slaughterhouse waste arrives with sewage. The plant then releases untreated effluent into the 169 · Annual average precipitation in the Sana'a wadi. The effluent, treated or untreated, is used Basin is 700 to 800 million cubic meters by about 600 farmers to irrigate about 300 (MCM), and only 5 percent of it infiltrates in hectares of crops, including vegetables. This the soil. The remaining 95 percent evaporates. practice poses a high risk of aquifer contamina- tion and endangers the health of both farmers · Another 40 MCM to 80 MCM seeps into the and vegetable consumers. Infiltration from cess ground from irrigation and sewage return pits and inadequate treatment of urban sewage flows. result in heavy biological contamination in the shallow alluvial aquifer under Sana'a and often · Total recharge is estimated between 80 causes flooding in parts of the city. MCM and 120 MCM. · Total abstraction is about 250 MCM a year, The water law of August 2002 is a step in the which is 100 percent to 150 percent higher right direction but still allows water abstraction than recharge. without license up to 80 meters. It imposes nei- ther water abstraction metering nor a levy for · More than 80 percent goes to irrigation, and irrigation. At this writing, bylaws or regulations the balance to domestic and industrial use. were still pending. INVESTING IN GROUNDWATER IRRIGATION About half of the irrigation water and half of the APL, of which about 4,000 hectares are the first irrigated area in the basin are used to grow qat, targets for improved irrigation. a leaf from a tree or bush with stimulating effects when chewed. Qat chewing is socially The project aims at increasing the volume and controversial, because it devours up to half of lengthening the useful life of water within the an average family's income. Cultivation poses Sana'a Basin by raising the efficiency of agricul- severe health hazards linked to uncontrolled tural water use (demand management) and pesticide spraying. A qat pest-management plan accelerating aquifer recharge (supply manage- is foreseen under the project. The project does ment). These measures will buy time for the not support qat but cannot ignore it. Water sav- rural economy to gradually decrease its depend- ing from improved qat irrigation could make a ence on water. The project is demand driven and big difference in the basin's overall water bal- community based. ance. Qat cannot therefore be excluded from the project. Besides, next to selling water to the The project has four components, outlined city, no activity is as profitable for farmers. below. DEMAND MANAGEMENT--expose farmers to equip- ment and methods that may save up to 40 per- OBJECTIVES AND DESCRIPTION cent of water; change pumping and water use The government and the Bank have concluded behavior through a comprehensive information that tackling these complex issues requires an and public awareness campaign to reach every innovative and programmatic approach. They segment of the basin population. have agreed on an Adjustable Program Loan (APL) with three phases during a 12-year SUPPLY MANAGEMENT--accelerate recharge, and period. They do not pretend that this high-risk save precipitation runoff from evaporation by and high-reward operation will reinstate a building 5 small retention dams and rehabilitat- water balance. Many methods are untested in ing 11 dams; gain better understanding of the the Republic of Yemen and require close moni- hydraulic situation, through systematic monitor- toring. Their joint use amounts largely to a trial- ing of precipitation and water use, to improve and-error approach. water management. Key triggers for passage from phase one to INSTITUTIONAL DEVELOPMENT--build a strong and 170 phase two of the project include (1) a well- sustainable legal and regulatory base for central functioning O&M system for the demand and and local water basin management, including supply management components; (2) consider- water regulation and enforcement, planning, able reduction in the diesel subsidy that and water allocation that can be replicated in encourages unlimited pumping; (3) compliance other basins. with effluent standards by Sana'a's wastewater treatment plant; (4) conversion of two-thirds of ENVIRONMENTAL MANAGEMENT--the project falls the project-targeted areas to improved irrigation under environment category "A," which means systems by December 31, 2006; and (5) a halt to it requires a detailed environmental assessment expansion of irrigated zones. and mitigation plan; therefore, its implementa- tion and monitoring is a project component. Total program cost is estimated at US$120 mil- lion at 2002 prices, with a first phase of US$30 million and a first phase International Develop- OUTPUT AND IMPACT ment Association (IDA) credit of US$24 million. The main beneficiaries of this project would be the people in the project area, including the Out of about 110,000 hectares of arable land, inhabitants of Sana'a, where nearly all of the 24,000 hectares are irrigated. About 12,000 basin's 1.5 million people live. The expected hectares are in the project area of phase 1 of the results may be summarized as follows: A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Benefits abstraction through well registration, licens- · Extended useful life of groundwater resources ing, and metering. · Increased value of agricultural production per · Institutional partnership--the program unit of water pumped establishes a partnership between central and local authorities. · Decreased likelihood of human and socioe- conomic losses due to dam failure · Decentralized water resources management and self-regulation--the program marshals · A model for basin management applicable peer pressure through WUAs to achieve elsewhere in the Republic of Yemen and self-regulation of water use. the Middle East and North Africa region · Incentives and regulations--the program Risks wages an intensive information and pub- lic awareness campaign; it subsidizes · Government does not put adequate institu- water saving irrigation equipment (and tional arrangements in place or the eligibility means commitment to reduce approach fails. For example, staffing may pumping and not expand irrigation); and be inadequate in the participation section of water users are involved in regulation and the Sana'a branch of the National Water enforcement. Resources Authority; water management, regulation, and enforcement may not be delegated to stakeholders (delegation is LESSONS LEARNED essential because central enforcement is Implementation had just begun at the time of impossible owing to the absence of a regu- writing, so it is too soon to evaluate program latory system and sufficiently trained staff); success. Some lessons have, however, been the partnership approach to water manage- learned from the design stage. They include ment and self-regulation may not work. the following: · No water is saved from improved irrigation · Participation and ownership are essential at because farmers may use water saved to all levels. increase their irrigated area, or because farmers may not be interested in investing · Staff continuity and adequate staff remuner- 171 in water-saving irrigation technologies and ation are essential. Their absence in the stick to their tradition of unlimited free Republic of Yemen slowed and disrupted access to groundwater. project preparation. · Phase one of the program does not achieve · A realistic institutional and legal framework "triggers" for basinwide expansion. is important for this approach to work. In · Outsiders see the project as favoring qat the Republic of Yemen, it has to be built up production and attack it for that. from scratch. · A well-developed database on available ISSUES FORWIDER APPLICABILITY water resources and current uses is a must. The program is a fully integrated water The Republic of Yemen's database is resources management operation. In the mediocre and has to be improved during Yemeni context, it presents innovations in at project implementation. least four domains: This Profile was prepared by Peter Koenig and reviewed by · Water rights--the program recognizes exist- Keizrul Abdullah of the International Commission on Irriga- ing groundwater rights, and regulates future tion and Drainage. INVESTING IN GROUNDWATER IRRIGATION 5 INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT · Investment Note 5.1 Investing in Land Drainage · Investment Note 5.2 Investing in the Reuse of Agricultural Drainage Water · Investment Note 5.3 Investing in the Reuse of Treated Wastewater · Innovation Profile 5.1 Drainage Investments in the Context of Integrated Water Resources Management · Innovation Profile 5.2 Investing in Controlled Drainage · Innovation Profile 5.3 Investing in Evaporation Ponds · Innovation Profile 5.4 Investing in Biodrainage · Innovation Profile 5.5 Investing in User Operation and Maintenance of Drainage 173 OVERVIEW This chapter discusses how to get the best out of used water. INVESTMENT IN COUNTERING PROBLEMS OF WATERLOGGING, SALINITY, AND WASTEWATER CAN BRING ECO- NOMIC, ENVIRONMENTAL, AND SOCIAL BENEFITS, PARTICULARLY FOR POOR PEOPLE. To be able to do this, however, it needs an integrated approach. Waterlogging and salinity are reducing water productiv- ity over wide areas, yet investment in drainage is usually neglected in developing countries. Floods affect more people--140 million in an average year--than do all other disasters put together, and the risk is growing. Ever more water is being used in towns, reducing volumes available to agri- culture, and treated and untreated effluent poses a major threat to the environment and health. The costs of these problems fall mainly on the poor, whose farms are most vulnerable to water short- ages, waterlogging, and flooding. Yet these problems can be turned to good account, usually to the benefit of the poor. Drainage and urban wastewater flows represent precious extra resources, and floods can contribute to recharge and irrigation resources. The innovations described in this chapter have DRAINAGE IS A COMPLEX, MULTIFUNCTIONAL INVEST- been proven beneficial. An integrated approach MENT THAT HAS TO BE CONSIDERED WITHIN AN INTE- is needed for these investments because waste- GRATED WATER RESOURCE MANAGEMENT FRAMEWORK. water management involves several sectors and Drainage is a complex phenomenon with multi- their institutional structures: urban utilities, agri- ple impacts, positive and negative, on other culture, public health, environmental protection, functions of the resource system. Integrated and treatment and reuse must be agreed on and resource management requires a new focus on coordinated. Drainage water reuse requires also drainage, which has to be analyzed within the an integrated approach to irrigation design and context of a hydrological unit such as a basin, management. Flood management requires a using an integrated approach and addressing all basin approach and multisectoral investments. positive and negative impacts of drainage on and (See IN 5.1 and IP 5.2 on waterlogging and off site. A new methodology ("DRAINFRAME," salinity, IN 5.3 on urban wastewater, and IN 5.2 an acronym that stands for Drainage Integrated for reuse of agricultural drainage water. On Analytical Framework) is described in this chap- floods, see chapter 8, especially IN 8.2.) ter. It shows how a participatory planning methodology looking at every aspect of the WATERLOGGING AND SALINIZATION HAVE BECOME resource system and all the stakeholders can CRITICAL CONSTRAINTS, WITH AT LEAST 20 MILLION untangle the multiple impacts, costs, and bene- TO 30 MILLION HECTARES REQUIRING DRAINAGE fits; prioritize investments; and begin to locate INVESTMENTS. Irrigated land may become benefits and mitigate side effects. (See IP 5.1 on waterlogged and salinized as water tables rise drainage and on DRAINFRAME. See IP 9.1 on and salts build up. Most drainage projects assessing costs and benefits.) have produced good rates of return and improved farmer incomes, yet investment has THERE HAVE BEEN SIGNIFICANT INNOVATIONS IN dwindled as projects have concentrated on DRAINAGE TECHNOLOGY RECENTLY. Several entries upstream irrigation and farming. Investment in this chapter describe these innovations. One costs are generally low, ranging from on-farm discusses how controlled drainage can be used surface drainage systems at US$100 to $200 for water table management. Land drainage sys- per hectare up to US$1,000 per hectare for tems often allow water to move too quickly pipe drainage in arid areas. Beyond individual through the soil profile. Controlled drainage economic benefit, drainage can contribute to slows down the loss through the drainage sys- overall land and water management and the tem. A second innovation described is the use 174 environment. Drainage is a proven but of evaporation ponds. Costs are low, useful life demanding discipline and technology. Best can be up to a half century, and environmental investments are often highly case and site spe- problems are largely manageable. Finally, cific, and careful research and piloting are biodrainage can be used to remove excess required. Integrated approaches address all water by using the uptake capacity of vegeta- on-site and off-site impacts of drainage. tion, especially trees. (See IP 5.2 for controlled Although governments usually have to take drainage, IP 5.3 for evaporation ponds, and IP the initiative, investment sustainability 5.4 for biodrainage.) requires farmer involvement, as experience from pilots has shown, for example, in the INVESTMENT IN REUSE OF TREATED WASTE AND Arab Republic of Egypt. (See IP 5.1 and IN DRAINAGE WATER CAN OFFSET WATER SCARCITY. 5.1. For a case study on Egypt, see IP 5.5. See Investment in reuse of poor quality water in also "Investments in Waterlogging and Salinity agriculture can offset water scarcity and pre- Control," in Agriculture Investment Source- serve better-quality water for higher-value book (AIS), Module 8.) uses. Both wastewater reuse and drainage A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT water recycling represent an important agri- TYPICAL INVESTMENTS cultural water management investment For technical assistance investments, the follow- opportunity. Large and reliable volumes of ing should be considered: drainage water are available close to reuse sites, and investments to enable reuse are · Research, capacity building, and institu- low and can be added on to existing tional development for drainage schemes. In Egypt, reuse of agricultural drainage water became national policy in the · Flood mapping and flood management plans 1980s, and now reuse is practiced on 90 per- cent of the irrigated area. Investment in reuse · Research on reuse of both resources often disproportionately · DRAINFRAME for a participatory approach benefits the poor, contributing to livelihoods to drainage and household food security. (See IN 5.2 for treated wastewater and IN 5.2 for reuse of Project investments may include the following: agricultural drainage water.) · Drainage on the estimated 20 million to 30 A WIN-WIN SCENARIO IS ELUSIVE IN INVESTING IN million hectares of irrigated land in the NONCONVENTIONAL WATER, AND GOOD POLICY, developing countries badly affected by PLANNING, AND PARTICIPATORY APPROACHES ARE waterlogging INDICATED. Inevitably, some conflicts and down- side risks are connected with drainage and use · Wastewater treatment and storage of low-quality water in irrigation. Environmen- tal aspects need careful attention. Tradeoffs · Measures for water retention, flood mitiga- between different users may be essential, cost tion, and flood protection recovery is problematic, and technical innova- tions may be hard to accept culturally and diffi- Policy-based investments may include water cult to manage, all of which underlines the swap programs. need for good policy and planning and for inte- grated and participatory approaches. (See IP Finally, an option for pilot investment is con- 5.1, IN 5.3, and IN 5.2.) trolled drainage and biodrainage. 175 INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT INVESTMENT NOTE 5.1 poor drainage by selecting tolerant but low- yielding or low-value crops and by applying minimal inputs. Many developing countries INVESTING IN LAND DRAINAGE have, however, reached the stage in which lack of drainage is keeping ambitious farmers from In an arid zone, combating waterlogging and salin- achieving higher and more secure yields and ization of irrigated land remains a priority. Some from diversifying their crops. Where a lack of developing countries in the humid tropics are also drainage is a constraint, agricultural develop- ready for prudent investments in drainage for rain- ment risks stagnation and lack of competitive- fed agriculture. Without such investment, the ness. (See also IP 9.1.) growth of a more diversified and competitive type of farming in parts of Asia and Central and South America may stagnate. Drainage development can INVESTMENT AREA greatly enhance the well-being of the population Current drainage investment in the developing and further environmentally appropriate land use. countries is restricted mostly to the control of These three functions make drainage investment a waterlogging and salinization of irrigated land. highly suitable instrument for broad-based rural The backlog in unmet drainage needs here is development and integrated land and water conservatively estimated at 20 million to 30 mil- resources management. lion hectares and is growing by an estimated 0.25 million to 0.50 million hectares a year. The current rate of subsurface drainage develop- In Europe and North America, 30­40 percent of ment is estimated at only 0.1 million to 0.2 mil- the agricultural land has land drainage systems lion hectares a year. (box 5.1), but in the developing countries this share drops to 5­10 percent. This difference is Developing countries make hardly any invest- most plausibly explained by the fact that invest- ments in improving the drainage of rainfed land. ment in drainage is not warranted when the Whatever drainage they have or construct is productivity of the land is low. Farmers adapt to mostly main drainage. Viable investment oppor- tunities for drainage of rainfed land are esti- mated at 25 million to 50 million hectares, most of it in the advanced countries of Southeast Asia and Central and South America (box 5.2). 176 Box 5.1 DrainageTechnology Many countries in Eastern Europe and in the for- Drainage systems are composed of on-farm systems and main mer Soviet Union are in great need of drainage systems. The on-farm systems collect excess water from the farmers' fields and release it into the main systems.The main system rehabilitation and modernization. systems transport the drainage water to the outlet where it flows into a major element of the regional hydrological system (sea, river, or lake). On-farm systems can be either of the sur- POTENTIAL BENEFITS face drainage type (collecting excess water from the surface of The traditional purpose of drainage is to remove the land) or the subsurface drainage type (collecting excess excess water from waterlogged land to improve water deeper in the soil by controlling the depth of the water aeration of the root zone and the growth of table).Water tables may be controlled by parallel lines of deep ditches or buried pipe (horizontal drainage). In drainage for crops. Improved drainage therefore enhances waterlogging and salinity control of irrigated land, pumped the impact of fertilizers and other inputs, pro- wells (vertical drainage) are also widely used, particularly in vides better planting and harvesting conditions, fresh groundwater areas where they serve both the irrigation and allows farmers to grow more rewarding and drainage functions. crops. It also improves the workability of farm Source: Smedema, Abdel-Dayem, and Ochs 2000. machinery and the efficiency of farm operations. Drainage is no longer the food machine it was A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT during the nineteenth and early twentieth cen- Box 5.2 Drainage in the HumidTropics turies, when governments reclaimed large areas of waterlogged land for agricultural use. But its Drainage development could help the rice-growing countries contribution to food security is still quite signifi- in Southeast Asia and similar regions to intensify and diversify cant and carries a relatively low cost (box 5.3). their agricultural sectors. It would allow farmers to grow higher-yielding rice varieties and apply more advanced farm Irrigated land in the arid and semi-arid zones practices such as direct seeding and simple farm mechaniza- that is not adequately drained is at risk of tion. It would also allow them to grow a wider range of upland crops. Full control of the widespread monsoonal flooding and becoming waterlogged and salinized because waterlogging would require large-scale works and high invest- water tables rise and salts accumulate in the ments. Substantial progress can, however, be made with limited root zone. Toxic salts inhibit crop growth, even means at the local level. at low concentrations, while sodium salts may Source: Nedeco 1991. severely deteriorate soil structure and indirectly affect crop growth. Good drainage also con- tributes to rural development in areas unrelated to agriculture, reducing damage caused by the high water table to buildings and risk of water- borne diseases (box 5.4). Box 5.3 Cost The costs of drainage are low compared to irrigation. Simple types of on-farm surface drainage systems that do not require POLICY AND IMPLEMENTATION extensive earth movement can be installed for US$100 to Drainage development and management in $200 per hectare. Cost could be further reduced when farm- almost all developing countries relies on gov- ers participate in the work. On-farm subsurface drainage sys- ernment initiative and support, but strong tems are more costly with investments ranging from US$500 involvement and commitment of the users is per hectare in the temperate zones to US$1,000 per hectare essential for sustainability and maintenance. for salinity control of irrigated land in arid zones.The cost for The drainage development and management the main systems would be US$250 to $500 per hectare. Operation and maintenance (O&M) costs may be estimated at model that is generally most appropriate places 2­3 percent of the capital costs. Costs tend to drop as a the responsibility for the main system with the drainage industry gains experience. government or another public body and the responsibility for the on-farm system with the Source: Author. farmers. The role of the government in on-farm 177 investment is restricted mostly to creating the enabling conditions in terms of policy and legal framework, incentives, research, and technical assistance (box 5.5). So far, no institutional Box 5.4 Drainage as an Instrument for models for participatory drainage development Rural Development and public-private partnerships have been tested. Recent sector work advocates a new Drainage can improve public health and sanitary conditions in approach for participatory planning of multi- villages, lower maintenance costs of rural roads, enhance the durability of foundations and mud-based houses, and reduce purpose drainage interventions under the flooding-related infrastructural damage and disruption. acronym DRAINFRAME (see IP 5.1). It broadly Drainage investment can also target pockets of rural poverty addresses all costs and benefits of a drainage where caused by waterlogging, as has been established in Pak- system through functions-values analyses and istan. The total mix of benefits makes drainage a suitable optimizes the economic and social outcomes instrument for broad-based rural development, which is why while safeguarding ecological functions. Europe's rural development programs of the 1960s and 1970s almost always included a large drainage component. Drainage interconnects with the water control Source: Smedema, Abdel-Dayem, and Ochs 2000. system and may harm the environment (FAO INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT Box 5.5 Drainage Development in Europe and Many governments give too little attention to North America financing. Even in places with well-developed drainage infrastructure, O&M often receives low Much of the main and on-farm drainage infrastructure in budget priority. Inadequate O&M financing is Europe and in North America was developed in the course of the single biggest threat to drainage system sus- the nineteenth and twentieth centuries, almost always with tainability. Reversing this situation requires strong government involvement and support. Main systems exploring new ways to improve cost recovery were fully financed from public funds, while on-farm develop- and new sources of financing. Governments ment was substantially subsidized. Between 1950 and 1970, should share in the costs of drainage infrastruc- Europe's direct subsidies for on-farm drainage development ranged from 20 percent to 50 percent. ture and management because they produce public goods such as human and environmental Source: Smedema, Abdel-Dayem, and Ochs 2000. health and biodiversity. All users and beneficiar- ies who enjoy direct benefits should share in the investment costs and pay the full O&M costs of Box 5.6 Egypt's Drainage the tertiary and field systems. Nonagricultural beneficiaries should also share in the costs, and Egypt has invested about US$3 billion (in fiscal 2001 dollars) the "polluter pays" principle should be since the 1970s to provide drainage for 2 million hectares. enforced, particularly on those releasing Drainage has mitigated the effect of irrigation-induced water- logging and salinity despite year-round irrigation since the con- untreated wastewater into the drainage systems. struction of Aswan High Dam. The government and farmers Policies and measures to control and regulate have shown strong commitment to the program, adopting the use of agricultural chemicals should be appropriate technologies, improving irrigation systems, trans- adopted. The potential for private sector partici- ferring management to water user associations, and adopting a pation in drainage investment and provision of well-functioning system of cost recovery.The country has an O&M services should also be explored. intensive and diversified cropping system, and its wheat, rice, Drainage development is theoretically governed and cotton yields are among the highest in the world. by economic opportunities, but investments will Improved drainage accounts for 15­25 percent of recent crop- yield increases. Reuse of drainage water in irrigation con- generally be made only in a suitable environ- tributes to making overall water use efficiency in the lower ment. A most important component of such an Nile River Basin one of the world's highest. environment is a long-term, committed govern- ment policy (box 5.6). Source: Adapted from World Bank 2003. 178 LESSONS LEARNED 1995; Abdel-Dayem et al. 2004). The most seri- Of the drainage projects that did not meet ous threat is the degradation of water quality in expectations, many suffered from a faulty diag- downstream water bodies owing to the disposal nosis of the drainage problem and exaggerated of saline or polluted drainage water. Where expectations of the impact of the proposed farmers use many agrochemicals, aquatic life drainage system. Drainage is a proven--but may suffer from the disposal of nutrient-rich demanding--discipline and technology. The drainage water in lakes and estuaries that have best solutions are case and site specific, and insufficient assimilation capacity or through- the appropriateness and cost effectiveness of flow. Irrigation-induced river salinization is technical and institutional proposals depend on becoming a serious problem in an increasing the experience, diagnostic perception, and number of basins in the arid zone (FAO 1997). multidisciplinary skills of the investment prepa- (See also IN 5.3 and IN 8.2.) Therefore, environ- ration team. mental impact assessment procedures should be followed during project preparation. A func- Long-term partnerships between emerging tions-values analysis would add the social drainage countries and established drainage dimension and prove useful in preparing an countries have contributed to the expansion environmental management plan for the project. of drainage in some developing countries. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Outstanding examples are the partnerships other beneficiaries' commitments--that the between Canada and the Netherlands on the installed drainage systems will be properly one hand and Egypt and Pakistan on the maintained. If there are no such assurances, other. Similar successful experience comes the planned drainage investments should through the activities of the International Pro- be postponed. Instead, the focus should be gramme for Technology and Research in Irri- on advocacy and institutional and technical gation and Drainage (IPTRID) and its capacity building. networks for knowledge sharing and capacity building in several developing countries. · Drainage issues should be assessed through remote sensing, combined with geographic Drainage systems are the sinks of the land- information system (GIS) and modeling scape, collecting agricultural wastewater as well technologies that facilitate applying inte- as residential and industrial wastewater, the lat- grated approaches in drainage system plan- ter usually unplanned. Until regulatory meas- ning and management. These technologies ures are enforced, the unplanned pollution of are useful when assessing how drainage agricultural drainage systems will continue. Par- interventions will change the natural (agro) ticipatory approaches to planning and manag- hydrological conditions in the resource sys- ing drainage systems, in which all stakeholders tems, how the social and environmental val- are involved and share the benefits and costs, ues may change, and which benefits and could significantly help control misuse and losses may materialize. raise cost recovery. Egypt's new water boards · Research and studies should be encouraged showed great interest and took important initia- into quantifying in monetary terms the tives to control pollution in the irrigation and intangible drainage benefits (such as drainage canals. improving health, protecting buildings and rural infrastructure, enhancing biodiversity); Drainage systems operate mostly by uncon- developing models for cost sharing and cost trolled gravity. This sometimes leads to exces- recovery of nonagricultural drainage serv- sive drainage when water tables fall undesirably ices (such as disposal of domestic and deep and deprive crops and natural vegetation industrial wastewater); and the impact of of water to survive dry periods. Where a sensi- "with" and "without" drainage on rural tive balance between water removal and water poverty and livelihoods. conservation needs to be maintained, drainage 179 should be controlled. This endorses a new · Expert review of drainage plans almost understanding of drainage as a management always pays. tool to remove or retain water as desired (Abdel-Dayem et al. 2004). Controlled drainage can also help reduce undesirable mobilization INVESTMENT OPPORTUNITIES of solutes and protect downstream water quali- Between 20 million and 30 million hectares of ties (see IP 5.2). irrigated land in developing countries urgently await improved drainage. There is also a con- siderable viable need for drainage rehabilitation RECOMMENDATIONS FOR PRACTITIONERS in Eastern Europe and the former Soviet Union. · Drainage investment should be made when Time is also ripe for drainage development in natural drainage has become a critical con- some countries in the humid tropical zone of straint to further agricultural development. Southeast Asia and Central and South America. Investments should generally not be restricted · Absolute assurance should be established-- to the construction or rehabilitation of drainage based on careful analysis of the technical systems and related physical infrastructure; they and financial requirements, governance and should also strengthen research, capacity build- institutional capacities, and farmers and ing, and institutional developments. INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT REFERENCES CITED Programme Project VIE/87/031. Hanoi, Abdel-Dayem, S., H. Hoevenaars, P. Mollinga, UNDP. W. Scheuman, R. Slootweg, and F. van Steenbergen. 2004. "Reclaiming Drainage: Smedema, Lambert K., Safwat Abdel-Dayem, Toward an Integrated Approach." Agricul- and Walter J. Ochs. 2000. "Drainage and tural and Rural Development Report 1. Agricultural Development." Irrigation and World Bank, Agricultural and Rural Devel- Drainage Systems 14: 223­35. opment Department, Washington, DC. World Bank. 2003. Agricultural Investment FAO (Food and Agriculture Organization). 1995. Sourcebook. Washington, DC: World Bank. Environmental and Impact Assessment of Drainage Projects." Irrigation and Drainage SELECTED READING Paper No 53. FAO, Rome. Smedema, L. K., W. F. Vlotman, and D. W. ------. 1997. "Management of Agricultural Rycroft. 2004. Modern Land Drainage: Plan- Drainage Water." Water Report No 13. FAO, ning, Design and Management of Agricul- Rome. tural Drainage Systems. Rotterdam: Balkema. Nedeco (Netherlands Engineering Consultants). This Note was prepared by Bert Smedema and reviewed by 1991. "Mekong Delta Master Plan." Working Bart Snellen of the International Institute for Land Reclama- Paper No 3. United Nations Development tion and Improvement (ILRI). 180 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 5.2 Drainage water reuse requires low investments, and such investments are add-ons to already existing schemes. Typical add-ons are the con- INVESTING INTHE REUSE OF struction, operation, and maintenance of pump- AGRICULTURAL DRAINAGE ing facilities to lift water from drains to canals and, in some cases, civil works such as link WATER canals, culverts, and mixing basins. The type and size of the work needed is site specific and Mounting water scarcity has forced countries to depends largely on the volume of drainage include reuse of agricultural drainage water in water available and the layout of the irrigation their national water programs. Drainage water is and drainage systems. It may be a small pump often available in large volumes, and therefore operated by individuals or a group of farmers, could cover a significant part of total irrigation or a large project implemented and operated by demand, if adequately managed. Investment for the government (box 5.7). reuse is usually a small add-on component of irri- gation projects. Investments in reuse also require building sys- tems to monitor the volume and quality of drainage water and to build and manage With growing demands on freshwater resources information systems for decision making. in water-scarce countries, pressure is mounting Investment in research is needed to develop on the agricultural sector to give up part of its evaluation criteria and guidelines for the allocation to prime use sectors such as house- impact of reuse on the soil, crops, and the holds and industries. Meanwhile, agriculture has environment. Farmer awareness and training to continue producing food and fiber to satisfy for using and managing relatively saline water current and future demand for food security. on different crops is another important invest- Under such conditions, reuse of agricultural ment area. Examples of sensible ways to water in irrigation could become important to invest World Bank capital are given in the not only fill in a gap in supply, but also maxi- subsection on Investment Opportunities. mize water use efficiency. Reuse of agricultural water also offers a solution in situations where disposal of drainage water is a problem. INVESTMENT OPPORTUNITIES · Technical assistance to develop manage- 181 INVESTMENT AREA ment tools such as monitoring programs Agricultural drainage systems collect, evacuate, and guidelines for safe drainage water reuse and dispose of excess surface and subsurface · Research studies on different reuse options water from cropped fields. Farmers in water- and their implications, and for developing scarce countries may reuse this drainage water more salt-tolerant crop species for irrigation, if it is of sufficiently good quality, either as a sole source or as drainage water · Capacity-building and training programs mixed with fresh canal water or with rainwater, each applied separately. The choice of the · Reform policy and regulations to govern reuse option depends on the volume and qual- drainage water development and manage- ity of drainage water, soil type, crop tolerance ment to salinity, agroclimatic conditions, and avail- ability of freshwater resources. · Strengthening of water user organizations to develop local solutions that promote sus- Reuse of drainage water for irrigation requires a tainable management transformation in the drainage from a disposal- based linear system to a recovery-based loop · Hardware purchases and contracting of civil system conserving water and nutrient resources. works INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT Box 5.7 Egypt: Reuse of DrainageWater and environmental benefits. However, in many water-short areas, drainage water turns out to Egypt's freshwater supply is constant at 55.5 billion m3 a year, be an important resource with economic value. but the country faces a double challenge. It has to supply Policies for integrated water resources manage- water to newly reclaimed areas,which means it has to increase ment, therefore, give drainage water adequate crop production on all new and existing irrigated areas using attention, and many countries now include the same total water supply. In response, reuse of agricultural drainage water management and reuse in their drainage water became national policy during the 1980s. Cur- national plans. rently, 5 billion m3 of drainage water, with an average salinity of 1.8 dS/m, is reused each year.Another 3 billion m3 of drainage The main quality concern regarding reuse of water is committed for reuse in the new reclamation areas in drainage water for irrigation is its salt content the near future. and potential adverse impact on crop produc- This reuse strategy has not deteriorated the salt balance in the tivity. Agricultural chemical residues (nutrients Nile Delta.This favorable result was achieved with the help of and pesticides) become a concern when a World Bank­funded drainage program that implements drainage water is mixed with canal water that is drainage systems on 90 percent of the irrigated lands. Result- ing drainage water is reused after mixing with freshwater that used for drinking purposes. Moreover, as soon has a low salinity content.Tools including functional water vol- as agricultural water gets into main drainage ume and quality monitoring systems have been developed for canals it may mix with wastewater from domes- planning and management.The impact of drainage water reuse tic and industrial sources, which adds another on soil, crops, and environment has been a main subject on the quality concern about human health. These agenda of Egypt's Drainage Research Institute. possible impacts call for careful planning and Source: Author. management. Failure to properly evaluate the risks of reuse and to put tools in place for safe practices may jeopardize crop production, POTENTIAL BENEFITS human health, and the environment. Reuse of drainage water holds great potential for saving valuable freshwater resources for Over the last 20 years, drainage water quality competing prime uses that require more strin- has been equated with salinity, but sustainable gent water quality standards. It can provide a reuse requires attention beyond salinity. It is reliable supply of irrigation water and rich now recognized that planning and management nutrients to cropped fields. Furthermore, reuse of drainage reuse requires other disciplines in may alleviate drainage disposal problems in addition to engineering. Nowadays, reuse prac- 182 rivers and streams by reducing the volume of tices are guided by Food and Agriculture Orga- drainage water as well as helping in the restora- nization (FAO) guidelines on crop tolerance for tion of natural wetlands. various salinity levels and the impact on crops of various chemicals in drainage water (FAO Agricultural drainage water has the advantage of 1985, 1992, 1997); World Health Organization coming in large volumes, uncontaminated by (WHO) guidelines on chemical and biological pathogens, and of often being located close to or contents for human health; and local criteria even inside the reuse areas. Reuse of drainage and guidelines based on experimentation and water for irrigation reinforces the potential for pilots (WHO 1989, 1995). implementing sustainable integrated water resources management and reducing the num- Where drainage systems are used for disposing of ber of people deprived of potable water. domestic and industrial effluent, the quality of drainage water is threatened unless adequate standards and regulations are enforced. Laws and POLICY AND IMPLEMENTATION regulations on water quality and pollution control Drainage water is a large component of the provide a framework for drainage water manage- hydrological cycle. It involves primarily dis- ment. Regulations vary in scope, depending on posal issues that allow society to exploit the the context of a specific locality, ecology, and resources base for maximum economic, social, country. In many countries, laws, regulations, A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT and institutions require reform to meet water between the Netherlands and Egypt, which quality and environmental needs. Standards includes a joint Advisory Panel. should be only as stringent as necessary to pre- vent pollution. Water user associations established under Bank- financed projects in Egypt and India have suc- Reuse of drainage water at the lower (second- cessfully contributed to the development of ary or tertiary) level reduces the risk of pollu- local solutions, thus promoting sustainable tion from domestic and industrial sources. This management of drainage water. Egypt's newly scale of reuse is important and offers potential established water boards are taking impressive for user-managed reuse projects. water quality management initiatives that were very difficult to implement by the government at the grassroots level in the past. LESSONS LEARNED Reuse of drainage water has met the increased water demand for irrigated agriculture in some RECOMMENDATIONS FOR PRACTITIONERS countries, but many drainage water reuse plans · Ensure that investment in drainage is not have been implemented without due regard for restricted to construction/improvement/ likely impacts or secondary effects. This has rehabilitation of drainage systems and generated new problems as well as tension related infrastructure; it should also be between water supply agencies and irrigators extended to promote drainage water man- and between environmentalists and irrigators. agement, including reuse programs. The quality of surface water, including drainage · Ensure that the reuse project or program water, is threatened in many countries by the includes a feasibility study and an environ- uncontrolled disposal of polluted effluents mental impact assessment, before lending. (domestic, industrial) and the improper dis- Understanding the tradeoffs in reusing posal of solid and toxic wastes from agricultural drainage water and its impacts on the envi- and human activities. Experience from Egypt ronment will ensure that reuse projects can shows that 6 of the 22 reuse-mixing stations in be designed and maintained in a way that the Nile Delta have been entirely or periodically satisfies health and environmental require- closed owing to the increasing degradation of ments within existing institutional constraints. water quality. The capital cost of a typical reuse station with five units, each processing 12.5 183 cubic meters of water a second, could reach US$10 million. Box 5.8 Australia: Drainage Interventions in the Murray Darling Basin Decisions to increase reuse of drainage water that reduce return flows to rivers could back- The dual pressure of increasing competition for water and fire. The case from Australia in box 5.8 shows declining water quality in the Murray Darling Basin have the adverse effect of a single-objective policy resulted in many policy initiatives, among which are reducing on the return flow to the Murray Darling River. drainage volumes from irrigated areas and recycling and reuse of drainage water. These policies have resulted in reduced salinity in the river and more crops grown with less water World Bank participation in ongoing drainage wastage. However, the argument is that all these efforts and programs in developing countries has helped the increased irrigated areas have reduced return flow to the these countries attract resources from other river to environmentally damaging levels that cannot sustain bilateral and multilateral donors to build local the natural ecosystems.This raises the question,"Were these capacity in water management. Long-term part- the right policies?" Could the current situation have been pre- nerships between well-developed and less- dicted and avoided had a more comprehensive planning developed drainage countries have greatly approach been considered? contributed to building local capacities. An Source: Christen and Hornbuckle 2003. excellent example of this is the partnership INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT · Support investments in small but full-sized, Food and Agriculture Organization (FAO). 1985. reuse pilots in countries with little previous "Water Quality for Agriculture," by R. S. experience that, if successful, could lead to Ayers and D. W. Westcot. Irrigation and mainstreaming the learning from initial Drainage Paper No. 29 (Rev. 1). FAO, Rome. results into larger projects. ------. 1992. "The Use of Saline Waters for · Invest in research to explore reuse opportu- Crop Production," by J. D. Rhoades, A. Kan- nities and options and understand their diah, and A. M. Mashali. FAO Irrigation and implications on water quality, public health, Drainage Paper No. 48. FAO, Rome. and the environment. ------. 1997. "Management of Agricultural · Support full use and development of well- Drainage Water Quality," by C. A. Madra- designed monitoring programs, reuse mootoo, W. R. Johnston, and L. S. Willard- guidelines, and modeling techniques to son, eds. FAO Water Report No. 13. FAO, assess how the proposed reuse program Rome. will change the natural agrohydrological conditions, how environmental values may World Health Organization (WHO). 1989. be affected, and which benefits may be rea- "Guidelines for the Safe Use of Wastewater sonably expected. and Excreta in Agriculture and Aquaculture." Available online at http://www.who.int/water_ · Promote well-established design criteria for sanitation_health/wastewater/wasteuse/en/. reuse schemes, based on successful projects financed by the Bank or other investors. ------. 1995. "Developing Human Health- Related Chemical Guidelines for Reclaimed · Invest in the development of the institu- Wastewater and Sewage Sludge Applications tional capacity to plan, implement, monitor, in Agriculture," by Andrew C. Chang, Genx- and regulate the reuse program. This ing Pan, Albert L. Page, and Takashi Asano. involves strengthening the organizations Available online at http://envisci.ucr.edu/ that will carry out the program. downloads/chang/WHO_report.pdf. · Support environmental training to promote environmental awareness, monitoring aspects, environmental and health concerns SELECTED READINGS 184 associated with drainage reuse, legislation, DRI (Drainage Research Institute). 1997. and policy development. Drainage Water Irrigation Project: Final Report. Cairo: DRI, Louis Berger Interna- · Create awareness through the proper man- tional, Inc., and Pacer Consultants. agement and dissemination of environmen- tal data and information. Dissemination to Tangy, K. K., and N. C. Killen. 2002. "Agricul- farmers should also be supported through tural Drainage Water Management in Arid the participation of public agencies, non- and Semi-Arid Areas." FAO Irrigation and governmental organizations (NGOs), and Drainage Paper 61. FAO, Rome. user organizations. WORLD BANK PROJECT DISCUSSED REFERENCES CITED Egypt. "Second National Drainage Project." Christen, E., and J. Hornbuckle. 2003. The Mur- Active. Project ID: P045499 Approved: 2000. ray Darling Basin--A Case Study of Drainage Impacts in a Multifunctional Resource Sys- This Note was prepared by Shade Abdel-Gnawed of the tem. Griffith, New South Wales, Australia: National Water Research Center in Egypt. It was reviewed by CSIRO Land and Water. Bart Smelled of ILRI. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 5.3 treatment appropriate for reuse schemes will be made. Urban wastewater is well suited to agricultural reuse and landscaping because of INVESTING INTHE REUSE OF the reliability of supply, proximity to urban TREATEDWASTEWATER markets, and its nutrient content (depending on the treatment technology). To have an Reuse of treated wastewater often disproportion- impact on scarcity, reuse of wastewater must ately benefits the poor. It must be combined with substitute for, not add to, existing uses of strategies to prevent or mitigate health risks from higher-quality water. pathogens, heavy metals, pesticides, and endocrine disrupters and environmental damage from heavy INVESTMENT AREA metals and salinity. Long-term institutional coordina- Water reuse has become part of integrated tion among urban, agricultural, and environmental water resources management policy in several authorities and end users is a requirement for water economies facing acute physical water scarcity, reuse investments to pay off.This Investment Note including Tunisia, Jordan, the West Bank and outlines technological and management interven- Gaza, and Israel (box 5.9). In other countries tions suitable forWorld Bank lending. such as Australia and the United States, benefi- cial reuse has been practiced for decades. In sit- Of the projected 1 billion growth in global uations where the investment costs to develop population by 2015, 88 percent will take place new freshwater resources are high, water reuse in cities, nearly all of it in developing countries should be given priority consideration. Owing (UNDP 1998). Investments in urban water sup- to water quality and associated risk considera- ply and sewerage coverage are rising, as tions, agricultural reuse of treated wastewater is shown in figure 5.1. However, as shown in more feasible than potable reuse (although table 5.1, adequate treatment for agricultural direct potable reuse is now practiced in Singa- reuse with acceptable risk mitigation for pore). Reuse through surface irrigation, particu- human health and the environment will require larly drip but also controlled furrow irrigation, further investment (World Bank and Swiss appears to present less risk of contaminant Development Corporation 2001). While this transmission than does groundwater recharge Investment Note addresses reuse after treat- and recovery, although Israel, the United States, ment, it is critical to ensure that investments in and Australia are gaining experience with safe 185 FIGURE 5.1 URBANWATER SUPPLY GROWTH, 1980­2015 3,000 Asia Africa 2,500 LAC Europe verage, N. America co 2,000 Oceania people supply of 1,500 water 1,000 millions Urban 500 0 1980 1990 2000 2010 2020 2030 Source: UNDP 1998. INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT POTENTIAL BENEFITS Table 5.1 WaterTreatment Gaps If reuse substitutes for an existing use, freshwater Percentage Percentage of is saved. Finding new uses for treated waste- of sewered sewered wastewater water may generate additional economic bene- population that is treated fits but does not translate into water savings. Region in large cities to secondary level Because of water competition in water-scarce sit- uations, farmers' livelihoods are often threat- Africa 18 0 ened, as cuts in allocation come at the expense Asia 45 35 of the agricultural uses. Water reuse with some Latin America and tenure security for farmers can result in signifi- the Caribbean 35 14 cant economic benefits. Environmental quality is often an important benefit of reuse programs Oceania 15 Not reported because poor-quality water is used in agriculture North America 96 90 instead of being discharged into cleaner surface Europe 92 66 water bodies or groundwater. Finally, water reuse may reduce the investment costs of devel- Source: WHO and UNICEF 2000. oping new resources for agriculture or other uses for which it is substituted (swapped). injection and recovery, soil-aquifer treatment, Based on international experience, it is increas- and related groundwater-based technologies. ingly apparent that economic win-win solutions Landscaping uses with suitable controls over are not easy. Instead, potential Bank invest- contaminant transmission to the public repre- ments in the water sector need to address alter- sent an important investment opportunity but natives and consider the economic tradeoffs, benefits and cost recovery may be limited to for example: specific high-value uses such as golf courses. · Should a sea outfall be built to discharge wastewater from a coastal city, if permitted by national and regional regulations and Box 5.9 Tunisia:Water Reuse treaties, or should wastewater be reused, possibly incurring much higher costs for the Tunisia, with per capita freshwater availability of about 450 cubic meters a year, is recognized as a leader in the area of treatment, storage, and especially the trans- 186 treated wastewater reuse. From 1996 to 2030, the share of fer of reclaimed water? treated wastewater as a percentage of total available water resources is projected to more than double from 4.4 percent · Should a reservoir for reclaimed water be to 10.9 percent. Despite strong institutional support, including built to increase its availability during the the 2002 consolidation of the Ministry of Agriculture, Environ- irrigation season or should treated water be ment, and Water Resources to oversee integrated water man- discharged during the wet season? agement and water reuse, only 18 percent of reclaimed water is currently used. Treated wastewater use has faced several · Are more expensive treatment and unre- constraints--social acceptance, salinity levels too high for stricted irrigation preferable to simpler treat- some crops, restrictive regulations, and volumetric pricing in ment and crop restrictions? the range of US$0.02 to $0.05 per cubic meter (between 50 percent and 95 percent of the cost of freshwater for irriga- tion)--and these have limited its full potential for develop- POLICY AND IMPLEMENTATION ment. Through its carefully phased approach to treated wastewater use and the concomitant development of a regula- Planned reuse is not just about treatment; it tory framework prohibiting untreated wastewater use,Tunisia requires an integrated approach. Where the has significantly mitigated environmental and public health Bank lends for wastewater treatment, the risks associated with the practice elsewhere in the world. planned reuse of effluent should be integrated Source: Author. into the decision to invest in intensive (for example, activated sludge) or extensive (for A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT example, stabilization ponds) technologies, or Box 5.10 Private Participation inWastewater centralized versus decentralized systems. Treatment and Management Because collection and treatment of waste- An example of private participation in wastewater treatment water are usually under the jurisdiction of a and reuse comes from Australia. The city of Adelaide in the different sector (such as urban water supply south was operating a wastewater treatment plant where dis- and sanitation) from the reuse sectors (such as posal of the treated effluent caused environmental concerns. Meanwhile, orchards 120 kilometers away from the city were agriculture and municipalities), intersectoral suffering from water scarcity after exhaustion of the ground- coordination in planning and management is water aquifer on which they relied for irrigation.The private extremely important. The Country Water Assis- sector, under a contract to the city government, constructed a tance Strategies offer an opportunity to ensure treatment plant and pipeline (the "Virginia pipeline scheme") such coordination (see IP 1.1). On the demand to transport the treated effluent to these farms for irrigation side, users should be involved in planning and at an agreed tariff. This commercial solution was successful, monitoring the quality of the supplied effluent. and the private investor considered further investment to Effective advisory/extension services are also expand the treatment plant to serve other irrigated areas. extremely important. Source: Croke, Kracman, and Wright 1999. Key to the success of planned strategic reuse programs are a coherent legal and institutional framework with formal mechanisms to coordi- · Guidelines linked to reuse must adequately nate the actions of multiple government author- protect human health. The international ities; policies to reduce waste loads through standard WHO guidelines (WHO 1989) are application of the "polluter pays" principle; being revised, based on the Stockholm appropriate practices for wastewater use Framework encouraging flexible, stepwise through crop choice, landscaping, and the like; implementation of guidelines that consider public awareness campaigns to establish social other sources of risk. acceptability for reuse; and consistent govern- ment commitment over the long term. · Source control of contaminants is a must, particularly for industrial wastewater; other- The private sector can play an important role in wise reuse programs will be unsustainable. promoting treated wastewater reuse. It would be even more attractive for the private sector to · Cultural values play an important part in the 187 invest in wastewater treatment when markets acceptability of water reuse, particularly for the treated effluent exist (box 5.10). This where religious views on ritual purity are arrangement requires policies and regulations highly articulated, for example in Islam and that allow the private sector to function and Hinduism. provide reliable services. · Sustained, long-term public awareness cam- paigns among the reuse target group (such as farmers or urban landscaping authorities) LESSONS LEARNED are needed for acceptance of water reuse. Based on international best practices, the fol- lowing should be borne in mind when devel- · Irrigation methods must be suitable for the oping wastewater investment plans. type of reclaimed water (high suspended, dissolved solids). Where possible, high- · Wastewater treatment must result in water water-productivity drip irrigation should be quality that is suitable for the particular encouraged. Sprinklers can lead to air- reuse application--for example, nutrient borne transmission of viruses and other removal may be counterproductive unless contaminants. It should be stressed that to enrichment or eutrophication of surface or save water, reuse must substitute for an coastal waters is a risk. existing use. INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT · Crop restrictions applied sensibly may be · Development of economic and environ- essential, particularly in view of increased mental models to support decision making phytosanitary controls required in export about reuse investments and policies, agriculture. including policies on subsidies · Institutional coordination is essential among · Promotion of regional exchange of experi- various government authorities, civil society, ences through professional networks and farmer associations of water user groups. · Support for research on reuse technology and biophysical sustainability, on institu- INVESTMENT OPPORTUNITIES tional arrangements for reuse as part of Examples of sound investments in treated master planning, on factors that enhance or wastewater use include the following: inhibit social acceptability, and on farmers' and users' innovations with water reuse. · Water swaps as a substitute for existing uses of (raw or potable) water for reclaimed water For countries embarking on reuse, the follow- ing apply: · Rehabilitation of wastewater treatment plants · Introduction of appropriate national reuse · Construction of new wastewater treatment standards plants using appropriate technologies · Introduction of appropriate crop restrictions. · Sewer systems that separate municipal from industrial wastewater And for countries that have made progress in reuse, the following apply: · Surface storage reservoirs for reclaimed water · Pilot projects on separate reuse of urine and · Formal arrangements between farmers and feces through decentralized systems (eco- utilities specifying mutual rights and respon- logical sanitation) in small towns and peri- sibilities urban areas. · Design of tariffs for reclaimed water. RECOMMENDATIONS FOR PRACTITIONERS 188 REFERENCES CITED Recommendations for countries experienced in Croke G., B. Kracman, and C. Wright. 1999. reuse are different from those for countries just "The Virginia Pipeline Scheme, Adelaide embarking on reuse. Comprehensive recom- South Australia--Commercial Solutions to mendations include the following: Environmental Problems." Paper presented at the 17th Congress on Irrigation and · Support for master plans that integrate Drainage. Granada, Spain, September reuse in the planning and design of sanita- 11­19. Special Session R7. tion projects and that build it into agricul- tural programs UNDP (United Nations Development Pro- gramme). 1998. Global Human Develop- · National reviews of reuse policies, includ- ment Report 1998. New York: Oxford ing multistakeholder workshops University Press. · Creation of interdepartmental working groups at the national and/or local levels WHO (World Health Organization). 1989. Health Guidelines for the Use of Wastewater · Awareness building on health and environ- in Agriculture and Aquaculture. Report of mental risks for farmers using untreated a Scientific Group. Technical Report Series wastewater or reclaimed water 778. Geneva: World Health Organization. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT WHO and UN Children's Fund (UNICEF). SELECTED READINGS 2000. Global Water Supply and Sanitation Drechsel, P., U. J. Blumenthal, and B. Keraita. Assessment 2000 Report. New York: WHO/ 2002. "Balancing Health and Livelihoods: UNICEF Joint Monitoring Programme for Adjusting Wastewater Irrigation Guidelines Water Supply and Sanitation. for Resource-Poor Countries." Urban Agri- culture Magazine 8: 7­9. World Bank and Swiss Development Coopera- tion. 2001. "Water for Sustainable Growth." Scott, C., F. Naser, and R. S. Liqa, eds. 2004. Regional Workshop on Water Reuse, July 2­5, Wastewater Use in Irrigated Agriculture: Cairo. Sponsored by the World Bank, Middle Confronting the Livelihood and Environ- East and North Africa Region, in cooperation mental Realities. Oxfordshire, U.K.: CAB with National Water Research Center, Ministry International. of Water and Irrigation, Egypt. This Note was prepared by Chris Scott of International Water Management Institute (IWMI) with input by Manuel Schiffler. It was reviewed by Bart Snellen of ILRI. 189 INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT INNOVATION PROFILE 5.1 integrated water resources management. Drainage has many effects and multiple impacts, positive and negative, on other func- DRAINAGE INVESTMENTS tions1 of the resources system, including floods, INTHE CONTEXT OF fisheries, sanitation, built-up property, infra- structure, health, transportation, and the envi- INTEGRATEDWATER ronment. Many of these currently go unnoticed RESOURCES MANAGEMENT and therefore do not attract investment. A sec- ond reason is that drainage has been seen only What is new? The nonagricultural impacts of land as a remedy for irrigation-induced problems in drainage are real but rarely noted, among them arid zones, although it is equally important in poverty reduction and public health. This profile humid regions. offers a new investment approach that considers all functions of the resources system that are affected by drainage intervention and integrates them into OBJECTIVES AND DESCRIPTION an infrastructural and institutional design by engag- Drainage affects the multiple functions of the ing all stakeholders. resources system in different ways. It is there- fore necessary to optimize its economic and Because drainage is indispensable to both social development outcomes, while safeguard- water resources management and crop produc- ing ecological functions. tion, the World Bank lends for drainage and flood control projects. Over the last 30 years, 60 Optimization requires the following: countries have signed loans for a total US$7.2 billion. Economic rates of return have been · Understanding and managing the diversity fully acceptable (box 5.11), yet lending of drainage situations dropped from US$1 billion a year during the 1980s to an average of less than US$200 million · Participation of all stakeholders in the deci- a year in the last decade. sion-making process · Inclusive modes of governance, decision One reason for the decline lies in the exclusive making, and stakeholder representation focus on agriculture in project design, which has excluded drainage from the discourse on 190 · Improving sustainability through research and wise management Each drainage situation is unique and warrants Box 5.11 The Impact of Drainage on consideration on its own merits. The planning Agricultural Production and design of drainage in a multifunctional resources system requires a stepwise analysis Economic rates of return (ERRs) of the drainage subprojects of the system's functions and values.2 The of Mexico's Rural Development Program for theTropicalAreas analysis identifies the first- and higher-order (PRODERITH) have ranged from 14.7 percent to 21.5 percent. changes in the resources system due to a In Bangladesh, 9 out of 17 inland flood control cum drainage drainage intervention, the geographical and projects were economically viable, with ERRs between 22 per- time range of changes, the functions affected cent and 96 percent (median 54 percent). In Egypt, the ERR of and their stakeholders, and assesses the eco- the National Drainage Project was estimated at 31 percent upon completion. Annual farm income in the Nile Delta nomic, social, and environmental impacts (box increased by US$200­US$350 per hectare. In Pakistan, yield 5.12). The process allows stakeholders to nego- increased by 27­150 percent. tiate and discuss tradeoffs, examine alterna- tives, and design mitigation measures. The Source: World Bank 2004; Project Implementation Completion Reports. analysis considers landscapes within hydrolog- ical units or even river basins. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT OUTPUT AND IMPACTS Box 5.12 Egypt and Bangladesh:A Functions A tool for integrated and participatory planning andValues Analysis of drainage intervention, known as DRAIN- FRAME, allows function-values analysis and Egypt communication and negotiation of tradeoffs Land drainage investment improved soil fertility and increased between stakeholders engaged in a participatory agricultural production (function). It raised incomes for pro- planning process. The expected result is opti- ducers (value) and had farmers as direct stakeholders and mization and sharing of all costs and benefits. Its urban food consumers as indirect ones.The investments low- capacity to integrate functions improves the ered the groundwater table in neighboring settlement areas, potential for cost recovery and may help secure which improved living conditions and reduced transmission of new financing sources by charging beneficiaries diseases (functions), improving livelihoods (social value), reduced damage to property (economic value), and improved for nonagricultural functions and increased land public health (social and economic value).The main stakehold- value. It may also attract private investment. ers were rural inhabitants in general and particular groups among them, depending on how effects were distributed spa- Use of the tool has institutional as well as tech- tially and socially.The quality of the drainage water conveyed nological implications. A polycentric gover- to coastal lagoons affected fisheries and ecological functions. nance structure generally offers great promise Bangladesh for drainage development and management. Reform in the direction of integration is needed Reduction of local floods raised productivity (function) and and would strengthen the role of local govern- farmer income (value) but lowered fisheries potential (func- tion) and fisherfolks' income (value). Farmers and fisherfolk ments, the private sector, and user organiza- are the main stakeholders, but their interests clash. Down- tions in natural resources management at the stream, this stakeholder antagonism reverses.There, increased expense of drainage line agencies. Govern- floods cause agricultural damage and reduce farmer income ments and other public and user organizations but increase fisherfolks' income. may get involved at different levels of services Source: Abdel-Dayem et al. 2004. provision. A multipurpose drainage system requires new design approaches and operating practices. This requires infrastructure and management rules with capacity to manage water levels for · Raising awareness about the value added removal or retention of excess water, improve- by integrated drainage management 191 ments in water quality, reuse of drainage water, · Building technical capacity to design and and the management of disease vectors. For manage drainage for multifunctional objec- example, controlled drainage is a promising tives option to achieve different management objec- tives (see IP 5.2). · Encouraging research on social, economic, and technological aspects of integration in drainage planning and management ISSUES FORWIDER APPLICABILITY An integrated approach to drainage requires the The World Bank has started to use the inte- following: grated approach in its drainage projects, for example, the pipeline "Integrated Irrigation · Formulating policies that facilitate inte- Improvement Management Project" in Egypt grated planning and management and the "Drainage Master Plan" and the · Creating an enabling environment by reform- "National Drainage Project" in Pakistan. These ing drainage governance and institutions projects are expected to provide useful lessons for wider application, which could improve the · Planning, involving all stakeholders in deci- planning and design of interventions and safe- sion making guard ecological values (box 5.13). INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT Box 5.13 DRAINFRAME Applications Egypt A DRAINFRAME-based study in the Mahmoudiya Command Area, during the prefeasibility of the "Integrated Irrigation Improvement Management Project" in Egypt identified four landscapes within the command area and two outside the area, whose functions would be affected by irrigation and drainage interventions.The stakeholders identified opportunities to be captured and problems to be solved for consideration during the project planning process. Project impacts on fish farms, the impact of agricultural development on drainage water from the canal command, and the ecology of a coastal lake were iden- tified as primary economic, social, and environmental issues to be addressed in the project design. Pakistan The Kotri Left Bank is the farthest downstream drainage basin in Sindh province, Pakistan. Past experience with Left Bank Outfall Drain (LBOD) and problems after the breaching of the Kotri weir and the banks of the Tidal Link made local stake- holders sensitive and turned them against any further drainage intervention planned and designed at the federal level. Stake- holder consultations based on the outcome of a DRAINFRAME rapid assessment convinced the local government, NGOs, and farmers that sound drainage and related water management plans could be developed through such an integrated and participatory approach. A local planning team at the provincial level was established to carry out full analyses and planning based on the DRAINFRAME methodology. Source: Author. REFERENCES CITED 2005. Within World Bank, available at Abdel-Dayem, S., H. Hoevenaars, P. Mollinga, http://projportal.worldbank.org. W. Scheuman, R. Slootweg, and F. van Pakistan. "Sindh Water Sector Improvement Steenbergen. 2004. "Reclaiming Drainage: Project." Proposed. Project ID: P084302. Toward an Integrated Approach." Agricul- Approval expected by July 2005. Within tural and Rural Development Report 1. World Bank, available at http://projportal. World Bank, Agricultural and Rural Devel- worldbank.org. opment Department, Washington, DC. World Bank. 2004. Country Case Studies on ENDNOTES Drainage in Bangladesh, Egypt, Indonesia, 1. The concept of functions summarizes which 192 Mexico, Pakistan, and the Netherlands. goods and services the natural resources Toward Multidisciplinary and Integrated system provides or performs. These func- Agricultural Drainage. Washington, DC: tions include production, processing, regu- World Bank, Agriculture and Rural Develop- lation, and transportation. ment Department. Online at http://www. worldbank.org/irrigation-drainage. 2. "Values" is the concept through which soci- etal preferences, perceptions, and interests with regard to functions provided by natu- ral resources are summarized. WORLD BANK PROJECTS DISCUSSED Egypt. "Integrated Irrigation Improvement and This Profile was prepared by Safwat Abdel-Dayem with Management Project." Proposed. Project ID: inputs by Peter Koenig. It was reviewed by Keizrul Abdullah of P073977. Approval expected by March the International Commission on Irrigation and Drainage. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 5.2 moisture to the root zone through capillary rise. Controlled drainage requires low-cost structural provisions appropriate to the type of INVESTING IN CONTROLLED drainage system. DRAINAGE For pipe drains, controlled drainage involves What is new? Adoption of proven technology installing an L-shaped pipe to the drain outlet, and management practices for drainage practices so that water flows only when the water table in developing countries may save time, water, and rises above the height of the top section. The fertilizer, as well as raise yields and reduce pollu- height can be adjusted by rotating the pipe. tion. Controlled drainage is a technique for regu- And for open drainage ditches, controlled lating the water table level. It allows harvesting drainage involves installing a weir with a mov- "more crop per drop" in both the scheme and the able sill at the drain ditch outlet. basin. The technique can be part of new drainage systems and retrofitted in existing ones. It is par- BENEFITS AND IMPACTS ticularly suitable in irrigated regions threatened by water scarcity. Controlled drainage can bring major improve- ments to a situation where crop yields are low because of unreliable water supply or short- Conventional land drainage acts coarsely and ages. The main benefits of controlled drainage moves too much water through the soil profile are as follows (Brabben and Abbott 2002): and away through the drain. Farmers respond frequently by overirrigating to compensate for · Water savings--more efficient irrigation and the rapid removal of water. Such practices drainage management increase the drainage water volume and the salt and nutrient loads and make irrigation opera- · Energy and labor savings--reduced pump- tions less efficient. North America and Northern ing for both irrigation delivery and drainage Europe have invested millions of dollars in water evacuation research and development on controlled drainage to combat nonpoint source pollution · Water quality improvement--less leaching by nitrates. The field scale results were quite of agrofertilizers and less potential for rewarding through reduced drainage flows and eutrophication in downstream water bodies pollutant loads, and increased crop yield (box 193 5.14). Unfortunately, other countries have made · Yield increases--better water availability for no significant investment in adapting the tech- crops after irrigation events nique to their conditions. Egypt and China have The benefits are shared by farmers and the state. carried out research and development pro- Farmers gain directly by saving time and money grams, but even they lacked either a strategy or investment support to launch controlled drainage countrywide. Box 5.14 Controlled Drainage in North America Controlled drainage in the Conetoe Creek project in North OBJECTIVES AND DESCRIPTION Carolina, United States, increased corn yields by 25 percent in The objective of controlled drainage is to man- nonirrigated fields and by 15 percent in irrigated fields. Mean- age water tables in farmland by retaining or while, data from 125 site-years with controlled drainage in removing water from the soil profile, to achieve North Carolina showed an average decrease of 30 percent in optimum benefits from the available water while drainage outflows compared to uncontrolled drainage sys- improving the quality of the drainage effluent. tems.Average reduction of nitrogen to surface water were 55 percent and of phosphate 35 percent. Maintained at predetermined depths during the Source: Skaggs 1999. growing season, the water table can supply INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT in on-farm water management and by increased grow more or more valuable crops. The uptake crop yields (box 5.15). The state gains through of controlled drainage can be promoted savings of valuable water resources and reduc- through a training and awareness-building cam- tion in environmental damage. paign (Abbott et al. 2002b). Farmers can best be trained through an existing extension service. Managing drainage under controlled conditions also reduces conflicts between farmers who have As controlled drainage maintains high water different management preferences. This is partic- tables for a fairly long time and reduces water ularly true in the case of mixed crop pattern agri- flow through drains during the growing season, culture (for example rice, cotton, and corn) on there is a risk of salt accumulation, particularly small holdings that share a drainage system. with saline groundwater. The operating regime of a controlled drainage system and associated irrigation scheduling should allow a constant ISSUES FORWIDER APPLICABILITY salt balance in the root zone. If the soils are Controlled drainage has great potential for medium textured and the irrigation water has wider applicability. It is regarded as a promising only a low to moderate salinity, the chance of technological option for managing drainage success in controlling salinity control increases. from an integrated perspective (see IP 5.1). However, several issues should be considered. Controlled drainage is most applicable when water supply varies between wet and dry spells Controlled drainage, to be successful, requires and is insufficient or unreliable. It is also effec- certain management and organizational tive for the protection of sensitive aquatic bod- arrangements. The main institutional require- ies receiving drainage effluent because the ment is that farmers make group decisions on method reduces nutrient loads. crop selection, operational guidelines, and cost and benefit distribution (Abbott et al. 2002a). Areas where irrigation and drainage are already Farmers must coordinate their cropping pat- widespread are the most likely candidates for terns with each other. Planting similar crops controlled drainage. These include: along the drain lines will minimize subsurface interaction beneath the fields. Farmer groups · North Africa: Algeria, Egypt such as water user associations are suitable · Middle East: Israel, the Syrian Arab Repub- coordination mechanisms for controlled 194 lic, Iraq, Bahrain drainage management. Controlled drainage is more likely to be successful if the farmers have · Central and South Asia: India (Punjab, an entrepreneurial attitude and are willing to Haryana, Rajasthan), Pakistan, Northern China, Uzbekistan, Tajikistan, Turkmenistan Box 5.15 Benefits of Controlled Drainage in Egypt All of these countries are strongly threatened by water scarcity over next 25 years (Abbott 2002b). In response to rising water tables in the Nile Delta, a free- flowing subsurface drainage system has been installed across most of the agricultural sector of the Nile Delta. Recent con- REFERENCES CITED trolled drainage pilots in rice growing areas showed water sav- Abbott, C., A. Lo Cascio, S. Abdel-Gawad, J. ings of up to 40 percent. Research work was done in small field plots planted to corn and wheat. Farmers can recoup the Morris, and T. Hess. 2002a. "Guidelines for costs of controlled drainage in two or three seasons, owing to Controlled Drainage." HR Report OD147. increased crop yield. In circumstances where high water sav- HR Wallingford, Wallingford, U.K. ings can be achieved, the internal rate of return is 100 percent, meaning that the investment is recouped within one year. Abbott, C., P. Lawrence, G. Pearce, and S. Sources: DRI 1998; Abbott et al. 2001; Abdel-Gawad 2002. Abdel-Gawad. 2002b. "Review of the Poten- tial of Controlled Drainage around the A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT World." HR Report OD146. HR Wallingford, DRI (Drainage Research Institute). 1998. "Con- Wallingford, U.K. trolled Drainage through Water Users Asso- ciations." DRI Technical Report 102. Abbott, C., S. Abdel-Gawad, M. S. Wahba, and A. Ministry of Water Resources and Irrigation Lo Cascio. 2001. "Field Testing of Controlled (MWRI) Drainage Research Institute, Cairo. Drainage and Verification of CDWaSim Simu- lation Tool." HR Report OD/TN102. HR Skaggs, R. W. 1999. "Water Table Management: Wallingford, Wallingford, U.K. Subirrigation and Controlled Drainage." Number 38 in the series Agronomy. In R. W. Abdel-Gawad, S. 2002. Egyptian-Dutch Co- Skaggs, ed. Agricultural Drainage. Madi- Operation in Land Drainage and Technol- son, Wis.: American Society of Agronomy. ogy Transfer." GRID Newsletter 19, 10­11. IPTRID/FAO, Rome. This Profile was prepared by Geoff Pearce and was reviewed by Bart Snellen of ILRI. Brabben, T., and C. Abbott. 2002. "Controlled Drainage--A Path for Uptake and Dissemi- nation." HR Report OD148. HR Wallingford, Wallingford, U.K. 195 INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT INNOVATION PROFILE 5.3 millimeters, while annual evaporation losses are 1,500­2,000 millimeters (box 5.16). Seepage losses from the pond are often about the same INVESTING IN EVAPORATION as evaporation. As result, 1 hectare of pond suf- PONDS fices for every 40 to 70 hectares of irrigated land. What is new? Until recently, releasing saline Storm drainage water should generally be drainage water from irrigated land into an evapora- diverted from the ponds. Pond water can rarely tion pond was acceptable only if the practice was be reused while stormwater would also signifi- temporary. But experience since the 1960shas cantly increase the required pond area. The been mostly positive. Environmental problems have World Bank­supported National Drainage Pro- been incidental and in retrospect could have been gram in Pakistan builds on this principle. easily mitigated or prevented by careful design and Natural depressions in desert land outside the management. In the arid zone, evaporation ponds irrigation perimeter are suitable sites, but evap- are now widely accepted as a credible medium- oration ponds may also be constructed on low- and long-term solution. lying wasteland inside irrigation commands. Pond sizes vary from 1­5 hectares when located The natural and time-honored disposal of saline on-farm or near villages to 1,000­25,000 drainage is by way of a river to the sea or other hectares in desert depressions serving large irri- terminal site. Where river disposal would render gation systems. In large ponds, drainage water the river water unsuitable for downstream use, is usually routed through increasingly saline other disposal solutions have to be explored. In compartments, designed and operated so that some irrigated basins, outfall drains have been the salt is deposited in the end compartment. constructed to transport the saline drainage water directly to a terminal site. The best-known ones are the drainage network of the Nile Delta OUTPUTS AND IMPACTS in Egypt and LBOD in Pakistan. Another option Ponds will generally form new water bodies in is disposal in evaporation ponds, shallow their rather dry environments and attract pio- depressions into which the drainage water can neer flora and fauna that are adapted to the readily be discharged and left to evaporate. hydrologic and water quality regime, as hap- pened in the Wadi El-Rayan in Egypt. Over time, 196 the pond usually becomes half to several times OBJECTIVES AND DESCRIPTION more saline than seawater. Fishery development Evaporation ponds are best suited for the dis- has met with mixed results and is subject to fur- posal of the irrigation effluent of subsurface ther research. Design and management should drainage systems in the arid zone. These sys- be based on careful environmental assessment tems have an annual discharge of less than 100 and monitoring (box 5.17). Evaporation ponds require some infrastructure, but costs are low compared to other irrigation Box 5.16 Evaporation Rates works built on marginal land. Initially, high seepage losses will usually decline because of Saline water surfaces evaporate less than freshwater surfaces. Under average operational conditions, pond evaporation sealing, but ponds underlain by permeable soils losses are typically 20­30 percent less than the Penman open and strata will maintain high rates throughout water evaporation. Evaporation becomes minimal when salt their lifetime (box 5.18). concentration approaches the saturation point, and salt starts to crystallize. But usually this crust covers only a small part of the pond surface. EXPERIENCES AND APPLICABILITY Source: FAO 1997. Natural salt lakes have been used to dispose of drainage water from irrigated land, but this A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT practice was little noted until the 1970s and Box 5.17 The Kesterson Reservoir 1980s, when irrigation expansion, the green revolution, and population growth made This Kesterson Reservoir was originally planned as a regulat- drainage disposal a concern. Some natural ing body in a drainage system serving the northern part of the evaporation ponds such as Lake Karoon in San Joaquin Valley in the U.S. state of California, but it turned Egypt have been in existence for centuries. into an evaporation pond when the system was not com- Only recently signs of aging and pollution have pleted. Evapoconcentration and bioaccumulation raised the concentration of selenium, a trace element that the drainage forced integrated approaches to regulate the water picked up from natural geologic formations. The sele- volume and quality of the inflow. nium buildup affected the aquatic food chain, reducing repro- duction, causing birth defects, and killing waterbirds.These and Little is known about the lifetime of artificial similar isolated incidents are reminders of the need for evaporation ponds. Known histories cover only detailed chemical analysis of incoming drainage water. the last 40 years and do not include ponds Source: California Department of Water Resources 1999. reaching their nonfunctional state. Rates of salt deposition depend on evaporation, seepage losses, and inflow of drainage water, but where Box 5.18 Seepage Problems the latter two are minimal, ponds may be expected to fill up with solid salts. Present views Seepage losses from ponds have caused waterlogging in nearby are that ponds may function for at least a half irrigated land in the sixth Salinity Control and Reclamation century before needing rehabilitation. Initially, project area in Pakistan and in the Murray Darling Basin in most evaporation ponds were planned to hold Australia.Where such impacts are likely, geohydrological inves- drainage water only temporarily, until it could tigation and groundwater modeling should be done to assess hazards and plan remedial measures. be released into a nearby river during high flow or until a final disposal solution was in place. Source: IWASRI 1991. But most have now become permanent or semi- permanent. Long-term operational experience is limited, and no authoritative technical perform- sites or eventually be linked to the LBOD outfall ance assessments have yet been made. system that empties into the Arabian Sea. Evaporation ponds for the disposal of saline REFERENCES CITED drainage water are used most extensively in the Aral Sea Basin, particularly the basins of the FAO (Food and Agriculture Organization). 1997. 197 Amu Darya and Syr Darya rivers. In both "Management of Agricultural Drainage Water basins, evaporation ponds receive about 80 Quality." Water Report 13. FAO, Rome. percent of the drainage water and only 20 per- California Department of Water Resources. cent is released into the rivers. Most ponds are 1999. "Evaporation Ponds." San Joaquin Val- large and located outside irrigation perimeters. ley Drainage Implementation Project, Sacra- They have been functioning satisfactorily since mento, Calif. they were established in the 1960s and 1970s but have now reached their maximum capacity. IWASRI (International Water and Salinity Research Institute). 1991. Evaporation In Pakistan, some 25,000 hectares of intercon- Ponds for the Disposal of Saline Drainage nected evaporation ponds are under construc- Effluent in Pakistan. Lahore, Pakistan: tion in the eastern deserts to receive discharges IWASRI. Online at http://www.iwasri.pk. from tubewell and pipe drainage schemes in Southern Punjab. It is still being debated whether This Profile was prepared by Bert Smedema and reviewed these ponds will be operated as final disposal by Bart Snellen of ILRI. INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT INNOVATION PROFILE 5.4 tries that see biodrainage as a low-cost option for combating waterlogging and salinization of irrigated land. INVESTING IN BIODRAINAGE OBJECTIVES AND DESCRIPTION What is new? Biodrainage controls excess water by using the water uptake capacity of vegetation, Biodrainage is best achieved by planting tree especially trees. Its potential is greatest in arid cli- species that are heavy consumers of water and mates. India, Australia, and other countries have also tolerant of waterlogged and saline condi- demonstrated that tree plantations can help con- tions (box 5.19). Planting in belts and blocks is trol shallow water tables and reclaim waterlogged most common and also most effective. Trees areas. But biodrainage removes more water than it have also been planted in narrow strips of three does salts. Salts accumulate when water is mineral- or more rows, resembling pipe- or ditch-type ized unless salt balances are maintained by natural field drainage systems. These strips also act as or artificial drainage. Biodrainage can assist but windbreaks. Biodrainage is best suited to com- generally not replace conventional subsurface bat waterlogging that is localized, as along drainage for salinity control of irrigated land. canals, not areawide. Biodrainage design requires a good under- Unlike conventional drainage, biodrainage standing of local hydrology and the causes and does not need ditches, canals, pumps, or other nature of the waterlogging problem. Waterlog- physical means to collect and transport excess ging in depressions and valley bottoms may be water. Nor does disposal of drainage effluent addressed by planting in the affected areas, in present a problem. Capital and O&M costs are the upslope source areas, or wherever the plan- restricted to the costs of establishing and main- tations intercept seepage flows. taining the plantations. Biodrainage is not yet practiced on a sufficiently large operational Establishment costs are considerable in sites scale to permit cost comparisons with conven- with poor soil conditions that require ameliora- tional drainage. tive and protective measures to achieve reason- able seedling survival rates. Examples of such Interest in biodrainage is strong in Australia, measures are ripping of impeding layers, lim- where it is considered an environmentally ing, fertilizing, and fencing. Products such as attractive option to restore water balances dis- 198 low-quality wood and fodder generally do not turbed by past changes in land use, and in recover the plantation costs, and the justifica- China, India, and some arid developing coun- tion must almost always derive from the drainage benefits. Environmental benefits such as water quality protection and enhanced biodi- Box 5.19 Suitable Species versity may also be significant. Biodrainage can be undertaken on different scales, by individual Trees generally have extensive and deeply penetrating root farmers or by communities through participa- systems and high aerodynamic roughness.These features make them better biodrainage performers than bushes, but bushes tory programs. outperform crops.A tree plantation normally evapotranspires 25 to 50 percent more water than a cropped area. Eucalyptic OUTPUTS AND IMPACTS species are widely used, but good experiences have also been recorded with Acacia, Prosopsis, and Tamarix spp. Poplar and Plantations have in several cases been effective willow spp are used in north China. Plantations may have one at intercepting seepage flow, controlling shallow or more species, sometimes with an undergrowth of resistant water tables, and positively amending water bal- bushes or crops. ances. Biodrainage has most potential where Source: IPTRID 2002. drainable surpluses are small compared to the water uptake of the plantations and where the A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT focus is on maintaining seasonal or annual bal- Box 5.20 Sequential Biological Concentration ances. This makes biodrainage generally better suited for arid than for temperate climates and Plants may be used to concentrate saline drainage water to for subsurface rather than surface drainage facilitate its disposal. If small in scale, this solution is feasible needs (box 5.20). where evaporation ponds or other regular means of disposal cannot be used. Biological concentration has been piloted in Biodrainage plantations will also take up and the San JoaquinValley, California.The subsurface drainage efflu- ent from land planted with regular crops and halophytes (salt- remove salts with the harvested products, but tolerant crops, trees, and bushes) is sequentially reused and usually too little salt is removed to maintain salt finally released into a small evaporation pond. Each next reuse balances. Biodrainage in the arid zone is there- area is only a fraction of the source area. In the process, the fore generally sustainable only when salt accu- drainage water is reduced in volume, but its salt concentration mulation in the root zone is minimal as a result increases to end up in solid form in the evaporator. of efficient irrigation with high-quality water or Source: USBR 1999. when natural or supplemental artificial drainage removes a sufficient amount of salt from the root zone. On the downside, where water is scarce biodrainage may evaporate water that could be used more beneficially. fed cropland. Because rainfed crops allow less evapotranspiration than does deep-rooted tree cover, and deeper percolation of rainwater, APPLICABILITY saline groundwater rises, causing widespread In the Indira Gandhi Nahar project in India, waterlogging and salinization--known as dry- eucalyptus and acacia plantations reclaimed land salinity, to distinguish it from irrigation- seepage zones along leaking irrigation canals induced salinity. Considerable success in and waterlogged depressions. The best controlling water tables has been achieved by approach was to start planting trees away from the establishment of eucalyptus plantations. In the most affected areas and move toward these waterlogged areas, the trees lower the water areas by the time the first areas had somewhat table by on-site uptake of water, and upslope dried out. Reclamation took only a few years. from these areas they lower the water tables by The plantation water tables reached depths of intercepting the recharge flow to waterlogged 15 meters in six to seven years, and the root areas. Biodrainage plantations are also valued systems were 10 meters deep. for their contribution to environmental diversity 199 and the landscape. Biodrainage has worked well in a variety of other situations. In Croatia, spring land prepara- tion on poorly drained, heavy clay soils was REFERENCES CITED able to start earlier when the land had a light IPTRID (International Programme for Technol- cover left from the previous grain crop. In the ogy and Research in Irrigation and Netherlands, reed was planted to accelerate the Drainage). 2002. "BIODRAINAGE: Princi- reclamation of polders; the seed was broadcast ples, Experiences and Applications." from the air when land emerged from the Knowledge Synthesis Report No. 6. water. In Tanzania, actively growing full canopy FAO/IPTRID, Rome. sugarcane suffered fewer drainage problems during the rainy season than the less transpir- USBR (United States Bureau of Reclamation). ing, newly planted, or ratooned crops. 1999. "Integrated System for Agricultural Drainage Management on Irrigation Land." In Australia, biodrainage is favored where the Final Report Grant 4-FG-20-11920. Westside natural water table regimes are disturbed after Resources Conservation District, Five the conversion of forests into rangeland or rain- Points, Calif. INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT ADDITIONAL INFORMATION Institute for Sustainable Irrigation Agriculture, Victoria State Department of Natural Resources, Environment and Agriculture, Tatura, Victoria, Australia. Online at http://www.dpi.vic.gov.au/dpi/nrentat.nsf/ Home+Page/Tatura~Home+Page?open. This Profile was prepared by Bert Smedema and reviewed by Bart Snellen of ILRI. 200 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 5.5 formed a working group of high-level EPADP officials and program staff that formulated four objectives: INVESTING IN USER OPERATION AND · Test a process that is acceptable to users, EPADP management, and its design and MAINTENANCE OF DRAINAGE field staff What is new? Drainage management has been a · Develop training modules for both staff and top-down agency activity with little user respon- users siveness, but this needs to change. For one, the government needs user fees to fund O&M. Sec- · Draft all new legal documents such as con- ond, farmers need finely tuned water table levels tracts, memoranda of understanding, and that allow them to raise yields and diversify their transfer deeds crops to meet market demand. Egypt's Ministry of Water Resources and Irrigation, took a successful · Transfer responsibility for O&M to user process approach in which it gradually built sup- organizations. port for reform. Building on institutional reform efforts in EPADP, the working group identified the Egypt's Public Authority for Drainage Projects required changes. Following the principles of (EPADP) brought massive and rapid drainage the process approach, it aligned the new activi- development soon after its establishment, but ties with existing EPADP procedures instead of the way it operates is outdated by today's rap- designing a totally new, project-type approach. idly changing environment and the mounting As a result, it recommended training water costs of operation, maintenance, and replace- board and EPADP staff, developing procedures ment. The agency needs to shift from construc- for participatory field investigation and design, tion to maintenance, tailor designs to users as and formalizing the partnership among agency, well as to sites, decentralize water manage- users, and contractors. ment, and privatize service delivery. The working group debated the recommenda- In an effort to adapt to this changed environ- tions in the agency and incorporated output ment, the MWRI invited two donor-funded pro- into a draft approach that it piloted with the El grams to join forces and develop practical 201 Fadly Water Board in Kafr el Sheikh, established methodology for user participation in drainage in 2001. The desired outcomes of the pilot were design, implementation, and maintenance. as follows: OBJECTIVES AND DESCRIPTION · High quality of implemented infrastructure EPADP itself identified the need for greater user · Responsibility for O&M assigned to the participation and chose water boards as its main water board vehicle. Water boards are water management organizations set up and run by irrigation and · Water board trained, motivated, and organ- drainage users at the branch canal command ized to handle maintenance level. Long-term policy foresees that they assume responsibility for O&M of the drainage · Changed working relationship between system to the field level in subsurface pipe- farmers and EPADP drained areas. The new process features the usual EPADP activ- The two MWRI programs opted for a change ities. The changes lie mostly in activities built in process, as opposed to a project, because a to ensure participation and strengthen both multitude of new behaviors was needed. They EPADP and water board organization (figure 5.2). INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT FIGURE 5.2 PARTICIPATORY DRAINAGE PROCESS STEPS Stages Activities Milestones 1. Introduction and training of water board Memorandum of Project agreement 2. Preliminary site visit EPADP­El Fadly Water Board understanding 3. Water Board Assembly meeting and approval 4. Memorandum of understanding 5. Detailed field investigations 6. Preliminary design and meeting EPADP­water board 7. Tender and contractor selection Implementation agreement Design 8. Signing contract EPADP­contractor (with joint supervision) and contract 9. Introduction meeting contractor­World Bank 10. Communication to Water Board Assembly 11. Implementation arrangement water board­EPADP 12. Mobilization and preparation Implementation 13. Implementation Handing over document and supervision 14. Joint Supervision EPADP­water board 15. Temporary transfer deed or handing over document 16. Annual Inventory and Maintenance Plan, approved by Water Board Assembly 17. Protocol EPADP­water board Operation and 18. Complaint management and performance monitoring Annual maintenance maintenance protocol 19. Financial audit Source: Author. EPADP. Egypt's Public Authority for Drainage Projects. OUTPUT AND IMPACTS · A structured design meeting where engi- INCORPORATION OF FARMER TRAINING INTO THE neers presented the design, explained PROCESS. A two-day practical training course options, and reached a consensus with the was given to prepare the water board for its executive committee on the optimal design. new tasks in design and quality control. A visit The water board executive committee con- to a pipe factory and the use of large drawings sidered that controlled drainage was feasi- and maps proved successful teaching tools. The ble for its area, although it expected trainers paid special attention to the option of difficulties organizing farmers for this pur- 202 controlled drainage and crop consolidation, a pose. It decided that the additional invest- major issue in the area (see IP 5.2). Cotton and ment of some 20 percent was worthwhile rice growers need different water levels, and and took this expensive option to the their conflicting interests sometimes lead to assembly for approval. open confrontation. With controlled drainage, farmers can reduce pumping costs for rice pro- · The water board held a large assembly duction and avoid waterlogging in cotton culti- meeting and a series of smaller public infor- vation, if the individual farmers agree to mation meetings throughout the command consolidate their cropping patterns around area to present the preferred design option drainage (sub-)collectors. and justify its higher costs. It also discussed subjects such as compensation for crop TAILORING THE DESIGN TO THE SITE AND USERS. damage during construction and stressed the The participatory design process consisted of importance of smooth implementation by three main steps: allowing equipment free access to the area. · Joint field investigations to make maximum Despite more intensive consultation, EPADP use of local knowledge of trained water design staff halved its time input in El Fadly as a board members. result of water board assistance during field A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT investigations. More important, both the water committees; and incorporate the water board board and EPADP field engineers judged that training module into the curriculum of the design quality had been greatly enhanced and Drainage Training Center and hold such better adapted to the agronomic and organiza- courses for all user organizations dealing with tional conditions of the area. The training, design, drainage development. and consultation process took six months. FORMALIZING THE PARTNERSHIP BETWEEN WATER ISSUES FOR WIDER APPLICABILITY BOARD, AGENCY, AND CONTRACTORS. In 2003, the The institutional reform process within the water board and EPADP signed their first mem- authority had already raised staff awareness orandum of understanding. It defined the rights about the need for change. Sometimes abstract and obligations of both parties. EPADP then discussions were shown to lead to a practical included provisions in its implementation con- approach that would improve drainage design tract with the contractor that defined the role and implementation. and responsibilities of the water board in super- vision and quality control. Supervision of con- High-level management supported the process. tractors by a well-trained water board, instead It allocated budgets for training, approved of an overstretched EPADP field engineer, is amending the contracts with contractors, and expected to improve quality, ownership, and signed the memorandum of understanding with maintenance. In addition, the water board and the water boards that transferred O&M respon- EPADP agreed to sign a handover protocol that sibilities. Earlier in the process, the chair and specified the role and obligations of the water vice chair made their support and commitment board in maintenance, until now an exclusive visible by attending meetings organized for the EPADP task. managers reporting to them. MAINSTREAMING THE PILOT IN EPADP PROCE- The positive and trusting attitude of the water DURES. When EPADP engineers saw the reduc- board convinced skeptical managers and engi- tion in design time and the user preference for neers of the value of accepting users' opinions controlled drainage, their feedback convinced and decisions. Board members trusted and top management that the approach should be engaged the EPADP engineers and were eager disseminated among middle-level managers to learn both practical and technical details of and engineers. A workshop decided to repli- drainage design and implementation. 203 cate the process in other areas with water boards; develop a similar approach for This Profile was prepared by William Oliemans of Royal non­water board areas, emphasizing public Haskoning with input by Adel Bichara. It was reviewed by consultation and temporary implementation Bart Snellen of ILRI. INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT 6 INVESTING INWATER MANAGEMENT IN RAINFED AGRICULTURE · Investment Note 6.1 Investing in Supplemental Irrigation · Investment Note 6.2 Investing in Watershed Management · Investment Note 6.3 Investing in Water and Soil Fertility Management · Innovation Profile 6.1 Investing in Community-Based Soil Conservation and Watershed Management Projects · Innovation Profile 6.2 Investing in Watershed Management in China's Loess Plateau · Innovation Profile 6.3 Integrated Water Management to Enhance Watershed Functions and to Capture Payments for Environmental Services 205 OVERVIEW Investments to improve incomes and reduce vulnerability in rainfed farming systems are covered in this chapter.These systems are characterized by poor and variable water availability and by pervasive poverty. Successful investments described include supplementary irrigation, combined water and soil fertility man- agement, and broader rural development and livelihoods investments within a watershed management approach. User groups are central to many of the investments described in this Sourcebook. These groups' roles in investments in supplementary irrigation, watershed management, and drought management are described in this chapter. RISK WEIGHS ON THE DAILY LIVES OF POOR RAINFED FARMERS, AND INVESTMENT PACKAGES HAVE TO HELP REDUCE THAT RISK. Risks include not only climatic risk and limited access to reliable technology and water sources but also risks from unstable land tenure and from poorly functioning product and credit markets. Some approaches described in the chapter and elsewhere in the Sourcebook were successful in overcoming these risks. For exam- Watershed management investment should focus ple, investments in supplemental irrigation, in on poverty reduction. Empirical evidence shows holistic and integrated watershed management, that the most sustainable watershed manage- and in drought management can reduce the risk ment projects focus on poverty reduction of uncertain rainfall. (See IN 6.1 on supplemen- through improvements to roads, education, tal irrigation and IN 6.2 on watershed manage- diversification, and livelihood improvement. ment. For the problem of drought and for ways Thus, sustainability starts with the farm family to handle it, see chapter 8, especially IN 8.1.) and its livelihood as the unit of development and recognizes the role of watershed communities as SOME TECHNOLOGIES FOR RAINFED AREAS CAN HAVE "conservation managers." A typical approach is a HIGH RETURNS. Investing in supplemental irriga- participatory project with a poverty focus aimed tion--a "just-in-time" dose of water--can have a at changing land use and boosting incomes significant impact on rainfed systems. Returns on through higher-value crops and more sustainable water in supplementary irrigation are higher than practices, combined with conservation invest- in conventional irrigation, and are highest at ments. Secure land tenure, a cash crop orienta- lower-than-recommended applications--a pow- tion, and investment profitability are crucial. erful message in water-scarce localities. Farmers Investments such as planting fruit trees or adopt- readily adopt supplementary irrigation once they ing micro-irrigation have demonstrated success are convinced it is profitable and reduces risk. in both income improvement and soil conserva- Maximum benefits require an integrated invest- tion. Early returns are needed to maintain farmer ment package of water-harnessing and irrigation interest. (See IN 6.2. For monitoring and evalua- technology, irrigation scheduling, training, and tion of watershed projects, see IN 9.1. See also cropping and fertilizing guidance. Combined soil "Community-Based Natural Resource Manage- and water management investments can also ment," and "Watershed Management for Agricul- have a high return. The Loess Plateau watershed tural Development," in AIS, Module 5.) rehabilitation project in the Yellow River Basin of China demonstrated on an area of 1.5 million WOMEN'S ROLE NEEDS TO BE CONSIDERED IN hectares that profitable farming could be com- RESOURCE MANAGEMENT INVESTMENTS. Women can patible with soil and water conservation. (See IN play a crucial role as "front-line resource man- 6.1 on supplementary irrigation, IN 6.3 on com- agers" and as the educators of the next genera- bining water with soil fertility management, and tion. Therefore, it is important to invest in IP 6.2 on the Loess Plateau project. See also lightening women's workload and diversifying 206 "Integrated Nutrient Management for Sustaining their livelihood source. (See IN 6.2.) Soil Fertility," in Agriculture Investment Source- book (AIS), Module 4.) NEW INSTRUMENTS ARE BEING DEVELOPED TO PAY POPULATIONS UPSTREAM IN WATERSHEDS FOR GOOD INVESTMENT IN SOIL FERTILITY MUST DEAL WITH RESOURCE MANAGEMENT. Watershed management COST AND RISK FACTORS. Farmers see improving has to give upstream populations incentives to fertility as a costly and risky business. Research manage the watershed for the benefit of all, and development programs can promote adop- including the population downstream. Various tion, and in some countries innovation grants to market-based methods are being tried for farmers have worked well. Where packages rewarding good natural resource management have been developed on a large scale, they by paying for the resulting environmental serv- have been successful in reducing poverty. One ices. There is a need for a clear database and case study on Madagascar shows the broad decision-making framework accessible by all impact of a nongovernmental organization stakeholders, such as the Drainage Integrated (NGO) program for transferring soil conserva- Analytical Framework (DRAINFRAME) (see IP tion technology. (See IN 6.3. See also IP 6.1 for 5.1). The Carbon Fund under the Kyoto Protocol the Madagascar program and IP 6.2 for the is an example of a payment mechanism for Loess Plateau project.) environmental services. (See IP 6.3.) A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT SOMETYPICAL INVESTMENTS · Water resources development for supple- Technical assistance investments may include mentary irrigation the following: · Low-energy pressurized systems · Capacity building of farmers and extension · Integrated pro-poor watershed management workers projects · Integrated studies of watersheds and their Policy-based investments may include the devel- stakeholders opment and support of national drought policy · Studies to develop market-based mecha- and preparedness plan. And finally, related invest- nisms for paying for environmental services ments may include postconflict rehabilitation or emergency projects that aim to restore assets and Project investments may include the following: production and promote supplemental irrigation. 207 INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE INVESTMENT NOTE 6.1 · Providing incentives for local communities to use water efficiently to improve livelihoods INVESTING IN SUPPLEMENTAL · Managing the economic and environmental consequences of using water in supplemental IRRIGATION irrigation Supplemental irrigation helps stabilize rainfed agri- · Developing policies that foster an enabling culture. For the greatest benefit, it must be part of environment for the adoption of water-effi- an integrated package of farm cultural practices. cient technologies to manage rainfed sys- Overexploitation of groundwater threatens the tems in a sustainable manner sustainability of groundwater-based supplemental irrigation in many areas. Supplemental irrigation that is optimized through on-farm water manage- INVESTMENT AREA ment policies and timely socioeconomic interven- Alleviating soil moisture stress during the criti- tions is essential for the sustainable use of limited cal crop growth stages is key to improved pro- water resources. duction. Supplemental irrigation is a highly efficient option to achieve this strategic goal because it provides the crop with a limited Production is low and unstable in dry farming, amount of water at the critical time (box 6.1). dependent on variable rainfall and subject to droughts and land degradation. One option for Water resources management strategies have boosting and stabilizing crop productivity is become more integrated, and current policies supplemental irrigation, whose returns to farm- look at the whole set of technical, institutional, ers can be overwhelming. Supplemental irriga- managerial, legal, social, and operational aspects tion (SI) is defined as the application of needed for development on every scale. Sustain- additional water to otherwise rainfed crops, ability is a major objective of national policies. when rainfall fails to provide essential moisture Optimizing SI in rainfed areas is based on three for normal plant growth, to improve and stabi- basic aspects: lize productivity. Unlike full irrigation, the tim- ing and amount of SI cannot be determined in · Water is applied to a rainfed crop that advance owing to rainfall stochasticity. would normally produce some yield with- 208 out irrigation. Key questions and issues for successful SI are as follows: · Since rainfall is the principal source of water for rainfed crops, SI is applied only · Determining the most appropriate schedul- when rainfall fails to provide enough mois- ing for farm conditions ture to improve and stabilize production. · Selecting crops and cropping patterns for · The amount and timing of SI are scheduled maximum returns not to provide stress-free moisture condi- tions throughout the growing season, but to · Determining the socioeconomic feasibility of ensure a minimum amount of water during occasionally supplying extra water to rainfed the critical stages of crop growth so as to crops permit optimal instead of maximum yield · Promoting water user associations (WUAs) (box 6.2). that manage water use in a sustainable manner A suitable and sustainable water supply is deci- sive. If groundwater is used, and it usually is · Setting fixed and efficient water delivery when there is no surface water source, ground- schedules water sustainability can be jeopardized by SI A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 6.1 Supplemental Irrigation in Northern andWestern Syrian Arab Republic Research has shown the following: · Wheat yields have been increased from 2 tons per hectare to more than 5 tons per hectare by the conjunctive use and timely application of only 100 millimeters to 200 millimeters of irrigation water.Therefore little water would not support a fully irrigated crop and is only productive as a supplement to rainfall. · Water productivity under SI is far higher than in conventional full irrigation.Wheat productivity in nonrainfed areas is less than 1 kilogram per cubic meter but up to 2 kilograms per cubic meter under SI.Thus, SI also improves the productivity of limited rainfall. Extent and economy of implementation: · The area of wheat under SI in northern and western Syria (where annual rainfall is greater than 300 millimeters) has increased from 74,000 hectares (in 1980) to 418 thousand hectares (in 2000), an increase of 470 percent. · Estimated mean annual increase in production cost due to SI (including fixed and variable costs) as compared to rainfed equals US$150 per hectare. Estimated mean increase in net profit between rainfed and SI for wheat equals US$300 per hectare. Ratio of increase in estimated annual net profit per hectare to estimated difference in annual costs between rain- fed and SI is 200 percent, which is highly significant. Source: Authors. Box 6.2 Optimizing Supplemental Irrigation SI led rainwater productivity in northwest Syria to increase from 0.84 kilograms of grain per cubic meter to 1.53 (at one-third SI), 2.14 kilograms per cubic meter (at two-thirds SI), and 1.06 kilograms per cubic meter (at full SI). Similarly, for biomass water productivity, the obtained mean values are 2.37, 2.42, 3.9, and 2.49 kilograms per cubic meter for rainfed, one-third SI, two-thirds SI, and full SI, respectively.The results show more significant improvement in SI water productivity at medium SI application rates than at full SI. Highest water productivity was achieved at rates between one-third and two-thirds of full SI. Water productivity becomes an issue for farmers only if water is the production factor that most constrains yields or if sav- ing water yields immediate benefits. The association of high water productivity values with high yields has important implications for crop management that aims at efficient use of water resources in water-scarce areas. Raising yields by increasing water productivity is economical only when crop yield gains are not offset by increased costs of other inputs.The curvilinear water productivity-yield relationship makes clear the importance of attaining relatively high yields for efficient use of water. Policies for maximizing yield should be examined from every angle before they are applied under water-scarce conditions. Guidelines for recommending irrigation 209 schedules under normal water availability conditions need to be revised when applied in water-scarce areas. Source: Oweis and Hachum 2003. development because of the tendency for over- Social benefits are thus derived from increased exploitation. Groundwater levels are indeed income reliability. Because economic benefits dropping rapidly in many areas. As an alterna- can be partly offset by higher annual produc- tive to groundwater, water harvesting for SI is a tion costs, sound economic analysis of such sustainable practice and is common in the investments is extremely important, but an absence of other sources, as in Sub-Saharan increase in annual net profit per hectare is Africa (box 6.3). likely (box 6.1, section on the extent and econ- omy of implementation). POTENTIAL BENEFITS In northern Iraq, where most of the country's rain- Benefits associated with SI include increased fed grains grow, huge public investments were yield productivity and reduced risk of failed made in SI schemes. Substantial improvement in harvests caused by below-average rainfall. yield was achieved by using SI in conjunction INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE Box 6.3 Supplemental Irrigation in water, and total yields increase by about 25 Sub-Saharan Africa percent; total farm production increases by 38 percent (box 6.4). In Sub-Saharan Africa and other tropical semi-arid areas, rain- water harvesting, which collects surface runoff, is used to pro- The ecology of the rainfed dry areas is fragile. vide water for SI. Although seasonal rainfall in these Resources for the poor are generally limited. environments is higher than around the Mediterranean, its Under pressure to eke out a living, farmers effectiveness is low because of higher evaporation losses and often overexploit water resources, jeopardizing lower soil-water holding capacity at the root zone. Research in the sustainability of their livelihood. Nationally Burkina Faso and Kenya has shown that SI of 60 to 80 millime- integrated policies to control the use of water ters can double and even triple grain yields from the tradi- tional 0.5­1 ton per hectare (sorghum and maize) to 1.5­2.5 resources create an enabling environment for tons per hectare. However, most beneficial effects of SI were sound technologies. Human capacity building is obtained only in combination with soil-fertility management. also crucial for improving the livelihood of the The major constraint to SI development in Africa is farmers' poor in the rainfed dry areas. The challenge in capacity, both technical and financial, to develop storage sys- the rainfed areas is to enhance and stabilize tems for runoff water. productivity of water by promoting strategic Source: Rockstrom, Barron, and Fox 2003. and sustainable use of water from conventional and unconventional sources to augment rain during the dry season. with appropriate production inputs and system management. In the growing season of 1997­8, POLICY AND IMPLEMENTATION rainfed wheat yield increased from 2.16 tons per Integrated and participatory research and hectare to 4.61 tons per hectare with the applica- development (R&D) programs offer the best tion of only 68 millimeters of irrigation water at way of bringing SI technologies and practices critical times. Every week of delay in sowing to their full potential. Any development or resulted in wheat yield losses of up to 0.5 tons per applied research program that underestimates hectare. Yield significantly increased with the role of farmers is doomed to failure. Accep- increases in nitrogen fertilizer applications. (See tance of SI by male and female farmers is a also IN 6.3.) condition for its success. For pilot tests, staff and farmers may select a water basin using In the highlands of Turkey, the Islamic Republic agreed criteria. An integrated R&D program 210 of Iran, and Central Asia, frost conditions in will be designed and implemented in a way winter put field crops into dormancy. Most that involves local communities, institutions, years, sufficient rainfall to germinate seeds and decision makers. The following issues comes late, resulting in weak crop stand during must be taken into consideration: the frost period, slow growth in the spring, and yields that are much lower than potential. · The introduction of SI techniques builds on Ensuring good stand before winter was any existing water conservation measures. achieved by early sowing and applying a small amount of SI. In Turkey's central Anatolia · Farmers should see the benefits of a project plateau, applying only 50 millimeters of SI to as early as possible. Motivating and promot- wheat sown early increased rainfed grain yield ing awareness among farmers with regard by more than 60 percent, adding more than 2 to the project objectives and the ways to tons per hectare to the average rainfed yield of achieve them are essential. Implementation 3.2 tons per hectare. requires commitment and cooperation of neighboring farmers (or communities) in In northern Syria, water-short farmers apply the coordination and management of their half the amount of full SI water requirements limited water resources. Today, local com- to their wheat fields. By so doing, the area munities seldom initiate group action and under SI is doubled using the same amount of depend on assistance from external agents A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 6.4 Water Productivity in Farmers' Fields Applying only 50 percent of full SI requirements for wheat causes a yield reduction of only 10­15 percent. Many farmers overirrigate their wheat fields.When there is not enough water to provide full irrigation to the whole farm, the farmer has two options: to irrigate part of the farm with full irrigation, leaving the other part rainfed, or to apply deficit SI to the whole farm. In areas where water is more limiting than land, applying deficit irrigation increased the benefit by more than 50 percent compared with the farmer's usual practice of overirrigation (see table). Wheat Grain Production Scenarios for a Four-Hectare Farm with Various Strategies of Supplemental Irrigation in Northern Syria Rainfed Farmer's Applying full Applying 50 Irrigation management strategy (342 mm) practice SI water percent of full SI SI, water depth applied (mm) 0 298 222 111 Grain yield (t/ha) 1.8 4.18 4.46 4.15 Water productivity (kg/m3) 0.53 0.70 1.06 1.85 Farm production (ton), water is not a limiting factor 7.2 16.7 17.8 16.6 Farm production (ton), if only 50 percent of full irrigation requirement is available 7.2 10.8 12.5 16.6 Per hectare average production (ton) 1.4 2.7 3.12 4.15 Source: Oweis and Hachum 2003. such as NGOs. The lack of developed local · Most dry area ecosystems are fragile and do institutions critically constrains exploitation not adjust easily to change. If the introduc- of the potential for improved water man- tion of SI changes suddenly the use of, for agement technologies such as SI. instance, natural resources, especially land and water, the environmental consequences · The specific needs of a local community or a can be far greater than foreseen. group of beneficiaries must be understood and designed into an appropriate system, · The necessary conditions for adoption of bearing in mind the major role often played new technologies are often location specific 211 by women in agricultural works. Farmers' because they are influenced by cultural dif- acceptance of a new technology depends on ferences, education, and awareness of a their attitudes toward production risk. It is need for change. Users of land and water important to find out whether differences in resources are usually aware of land degra- farmers' adoption behavior are caused by dation, but they may not be able to do any- differences in their perceptions about the thing about it if their primary concern is risks involved in a new technique or by dif- survival. They are unlikely to take up a new ferences in their access to credit and other practice unless they are convinced it is inputs. Risk-averse farmers will accept a new financially advantageous, does not conflict technology if they perceive that increased with other activities they consider impor- returns more than compensate them for any tant, and does not demand too much of increase in risk. their time for maintenance. · To prevent inequality at the village level · Institutional capacity building, water resources from widening as a result of the introduc- management policies, and management and tion of SI, special care should be taken to maintenance programs are key to success. make sure that poor and women farmers The institutions could be at the village, have equal access to the technique. regional, or national level, depending on the INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE size of the SI projects and the extent of a · In rainfed dry areas, maximize yield per country's decentralization. Multiple plantings unit of water, not yield per unit of land. to increase rainfall utilization should become standard practice under SI. Therefore, farm- · To maximize the benefits of SI, make sure ers need to be knowledgeable about water- that other inputs and cultural practices are stress-sensitive growth stages and correct also optimized. timing of water applications. INVESTMENT OPPORTUNITIES LESSONS LEARNED · Reform policies and regulations to govern Alleviation of the following constraints will help groundwater development and operation. SI achieve its potential: · Strengthen or create WUAs to manage water at the scheme level. · The on-demand water delivery system is best suited to SI. This is what small farms · Develop systems for monitoring groundwa- use, drawing water from wells or nearby ter quality through overexploitation. surface water. · Finance water resources development for SI · SI must be properly integrated with other through the source, the conveyance system, production inputs, including crop and soil and the field irrigation systems. management options, improved germplasm, and fertilizers to achieve the desired output. · Develop low-cost, low-energy irrigation sys- tems such as drip or sprinkler, including a · Many poor farmers in rainfed dry areas can- pumping set. not afford to buy inputs. To assist them, · Build capacity building of extension work- socioeconomic intervention should be care- ers and farmers to install, operate, and fully planned. maintain their systems. · Farmers need to understand the technology · Support development of simple and practi- and how to use it. Extension and human cal tools for SI scheduling. Scheduling is the capacity building should play a major role key to improving water use efficiency. in this respect. Long-term training and advi- 212 sory programs should be designed and · Rehabilitate SI systems damaged in conflicts implemented. (examples include Iraq and Afghanistan). · Natural resources, particularly land and water, are more efficiently utilized collec- REFERENCES CITED tively than individually. WUAs are a good Oweis, T., and A. Hachum. 2003. "Improving example of an efficient approach to collec- Water Productivity in the Dry Areas of West tive management and use. Any institutional Asia and North Africa." In W. J Kijne, R. constraints hindering the establishment and Barker, and D. Molden, eds. Water Produc- transparency of these associations should tivity in Agriculture: Limits and Opportunities be studied. for Improvement, 179­97. Wallingford, U.K.: CABI Publishing. RECOMMENDATIONS FOR PRACTITIONERS Rockstrom, J., J. Barron, and P. Fox. 2003. "Water · Use incentives for farmer participation, Productivity in Rain-Fed Agriculture: Chal- technology transfer, and water cost recovery lenges and Opportunities for Smallholder to prompt adoption of improved manage- Farmers in Drought-Prone Tropical Agro- ment options. ecosystems." In W. J Kijne, R. Barker, and D. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Molden, eds. Water Productivity in Agricul- Extending Sowing Dates." Agricultural ture: Limits and Opportunities for Improve- Water Management 50: 109­23. ment, 145­62. Wallingford, U.K.: CABI Publishing. Oweis, T., A. Hachum, and J. Kijne. 1999. "Water Harvesting and Supplemental Irriga- tion for Improved Water Use Efficiency in SELECTED READINGS Dry Areas." SWIM Paper No. 7. System- ICARDA (International Center for Agricultural Wide Initiative on Water Management. Research in the Dry Areas). 2003. ICARDA International Water Management Institute, Annual Report 2002. Aleppo, Syria: ICARDA. Colombo, Sri Lanka. Oweis, T. 1997. Supplemental Irrigation: Highly This Note was prepared by Theib Oweis and Ahmed Efficient Water-Use Practice. Aleppo, Syria: Hachum of ICARDA, and reviewed by Jean-Marc Faurčs of ICARDA. the Food and Agriculture Organization (FAO). Oweis, T., and A. Hachum. 2001. "Reducing Peak Supplemental Irrigation Demand by 213 INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE INVESTMENT NOTE 6.2 agers, and therefore addresses their priority needs first. INVESTING INWATERSHED MANAGEMENT INVESTMENT AREA Past projects emphasizing general rural develop- In many watersheds, erosion and siltation result ment have often involved large investments in a from goal-rational human action. Projects seeking comprehensive approach (box 6.5). They can be to stem these physical phenomena should first try effective if approaches are adapted to local pref- to help individual families reach their food, shelter, erences and are not prescriptive or dogmatic. and cash goals in new ways. Once that is accom- plished, conservation can be made a community About one in four Bank watershed manage- goal. Point sources may be combated by paying ment projects seeks to reduce siltation rates of a upstream watershed users for changed behavior, major body of water such as a river or reservoir, but the link between upstream action and down- sometimes to protect irrigation schemes from stream output cannot always be established, let sedimentation by upstream soil erosion. Target- alone measured.Where nonpoint sources of pollu- ing riparian communities that have problems tion or erosion and upland poverty are a problem, such as soil erosion or water pollution from their reduction through participatory projects for point sources can be more cost effective. natural resource management by the community is still a valid option. A possible approach is the use of payments to effect change. Payments for environmental Sustainability of World Bank watershed man- services are appropriate where long-term agement projects suffers from poor enabling secure funding to change behavior is avail- environments and inadequate technical sup- able. They are therefore often linked to pay- port, including overoptimistic assumptions ments by consumers for potable water or other about the long-term net benefits of new tech- services. Turning responsibility for catchments nologies. It also suffers from a focus on off- for potable water over to municipal govern- site benefits such as lower siltation rates and ments and consumers has been a growing improved security and quality of water sup- trend in Honduras. In Costa Rica (Chomitz ply. In addition, the assumption that public 1998), payments for environmental services from users to landholders under the 1997 214 and private goods are interchangeable does not always hold. Together, these assumptions Forestry Law were first organized by govern- result in large investments in conservation ment from hydropower operators. Now the with add-on incentives for farmers rather than trend has spread to tour operators and hotels, in projects that are, by themselves, sustainable which strive to maintain scenic and water because they focus on poverty reduction by quality assets. The total of incentive payments improving access, education, diversification, (US$20­US$30 a hectare per year) is about the and incomes. same as the rental price of pasturage. For project sustainability, designers must concen- The balance of policy and technology in improv- trate first on the farm family and all its sources of ing soil and water conservation and reducing soil income as the unit of development. Recognizing and water pollution has to vary with the scale of that environmental conservation is almost always the problem and the likely cost. Where nonpoint a community priority--but only after food, shel- sources of pollution or erosion at a watershed or ter, and cash needs are met--will enable task partial watershed are the problem, a participa- managers to address sustainability issues with tory project may still be appropriate with a individual farmers and their communities. Such poverty focus on changing land use and boost- an approach recognizes the pivotal role of water- ing incomes through higher-value crops and shed communities as future conservation man- more sustainable practices (box 6.5). A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 6.5 China: Soil Stabilization and Poverty Reduction Using a Farm Systems Approach The Red Soils II Area Development Project in China (1994­2000) addressed soil loss and degradation over some 11 million hectares of acid infertile ultisol and inceptisol soils during the summer drought in theYangtze and Pearl River catchments. Half of the participants in the project, an improvement program in 266 small demonstration watersheds or partial watersheds in five provinces, had incomes below the poverty line. Key features to ensure sustainability included the following: · All farms were required to incorporate livestock in the farming system for manure and early income until higher-value horticultural tree crops were bearing. No major fertilizer imports were used, and locally manufactured superphosphate (containing magnesium) was recommended instead. · Each farm had a supply of irrigation water, to be distributed by low-cost, handheld hose systems from hilltop tanks. · A project management structure was embedded in existing line agencies. · Contour planting and appropriate conservation were carried out according to slope rather than universal terracing. · Emphasis was on diversification, not specialization, at individual farm level, and on the incorporation of a balance of lowland and upland areas for food staples (rice) and cash crops (citrus, stonefruit, and grapes) · The provincial government granted a 50-year, inheritable land use right to farmers as a prerequisite for provincial participation. The implementation completion report estimated a financial rate of return of 16­17 percent depending on the province and an economic rate of return of 19 percent. Sustainability was considered highly likely. Source:"Second China Red Soils Area Development Project," Implementation Completion Report. Where a point source can be identified--for coffee on medium slopes (36­55 percent) example, in siltation of reservoirs or industrial released land for reforestation because coffee and salinity pollution of waterways--"cap and earns farmers more money per hectare than do trade" schemes, based on payments for and lower-value crops. Elsewhere, the adoption of trading in pollution, are possible. However, simple pipe and microsprinkler irrigation systems they require accurate measurement technology fed by local streams has allowed both income and a more organized society and rule of law improvement and soil conservation through inten- than are usually prevalent. Similarly, a regula- sive cultivation of vegetables and fruits. tory approach requiring farmers to erect vegeta- 215 tive barriers to streams or buy pollution credits may be tried, as in the catchment of the Wiven- POTENTIAL BENEFITS hoe Dam, the source of water supply for the For Costa Rica, Chomitz (1998) summarizes the city of Brisbane, Australia. The trend is toward per hectare benefits of environmental services pollution credit prices equal to the cost of of forests as shown in table 6.1. installing vegetative barriers and income for- gone from land lost. Less quantifiable but important benefits from watershed management interventions include Vetiver grass hedges have proven effective as soil improved food security from a diversified crop- loss barriers but suffer low adoption rates even ping base, better health and sanitation, better where climatic conditions favor them, as in India access, and an improved ability of resident pop- and China, because of planting material require- ulations to work with government and seek ments and farmers' preferences for a mix of con- outside opportunities. servation and fodder supply/cash crop species. In northern Thailand, contour grass strips, 2 to 3 meters wide, for livestock proved as effective as POLICY AND IMPLEMENTATION ISSUES bench terracing in reducing soil loss (from 50 · Promote locally relevant technologies sup- tons per hectare to 2 tons per hectare). Planting ported by research and extension. INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE Table 6.1 Forests' Benefits · Apply integrated planning to the entire watershed. In the Loess Plateau I and Red Environmental Annual value Soils II Area Development projects in China, service (in 1993 U.S. dollars) both rated as having a high likelihood of sus- tainability, key elements in gaining under- Carbon sequestration 120(20/ton) standing of what could be achieved and Ecotourism 12­25 whether it would be attractive to farmers were initial training, consultation, land use Hydropower protection 10­20 mapping, and improved farm models. Hydrological benefits 7­17 · Use cash contributions from beneficiaries to Existence and option values 13­32 ensure commitment and realism in the scope Pharmaceuticals 0.15 and quality of interventions. Most Bank proj- Total 162.15­214.15 ects require labor contributions from benefi- ciaries, and a few require a small cash outlay. Source: Chomitz 1998. Both are required in the village self-help learning initiative program (2000­4) under International Development Association and · Support policies encouraging appropriate Japanese cofinancing in Sri Lanka; communi- resource use, in particular the reform of ties must commit all the necessary labor and forestry pricing. In addition, any distorting contribute 10 percent of the total cost in cash. subsidies, particularly on outputs, should be removed. LESSONS LEARNED · Strengthen land tenure. Land tenure and Land tenure availability, a cash crop orientation, investment in conservation are correlated, and system profitability are crucial as is reliable particularly in areas with land surplus rather technical assistance. There is a strong prefer- than communal lands (box 6.6). ence for market-driven solutions that offer, first, a financially attractive return to the land owner or user and, second, the desired conservation outcome. Early returns are needed to maintain Box 6.6 Thailand: Unexpected Benefits owner-user interest--promises of future income 216 of LandTitling will not do it. The first two land titling projects assisted by the World Bank In addition to these factors, the basic needs of in Thailand (1985­93) demonstrated that the major benefit of communities, and particularly the needs of title security in lowlands was the access it gave to secure insti- tutional credit, based on a percentage of collateral value with- women and youth, must be addressed. In the Lao out a predetermined ceiling on loans.Title also increased land People's Democratic Republic, women are often values. Private titling of the lowlands led to better practices in the major source of labor for crop harvest and the uplands because farmers who had taken over old forest processing, livestock husbandry, vegetable grow- lands could afford to plant and wait for income from tree ing, weaving, and water supply: they perform crops as a result of the newly available capital. Effects on land most of the value-adding and entrepreneurial values were dramatic. Land values increased by 308 percent activities. Unless project design incorporates for lowlands and 425 percent for uplands in project areas (after correction for increase in nonproject areas) in the means of releasing some women's labor through north. In the northeast, the corresponding figures were only mechanization of crop processing or piped vil- 135 for lowland and 7 percent for upland. Regression showed lage water supply, livelihoods will not diversify that private title and presence of wells (for tree planting) and improve enough to allow families to make explained most of the variation in land value. Most commercial resource conservation a priority. banks now accept provisional title as collateral. Source: Author. In most projects, implementation and sustain- ability are best achieved by units embedded in A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT line agencies, not in specialized watershed · Irrigation development and water supply to management units with elite staff. Community villages combined with appropriate soil and participation in design, implementation, and water conservation technology funding of works is essential. REFERENCE CITED RECOMMENDATIONS FOR PRACTITIONERS Chomitz, K. M. 1998. "Financing Environmental · The first unit for consideration must be the Services: The Costa Rican Experience and family and its ability to earn cash income Its Implications." Paper prepared for the for basic needs. Environmentally and Socially Sustainable Development Group. World Bank, Latin · Invest in problem analysis and rapid America and the Caribbean Department, appraisals to determine poverty status and Washington, DC. actual community priorities as well as the status of resource degradation. WORLD BANK PROJECT DISCUSSED · Base design on sound land use capability China. "Second Red Soils Area Development Pro- planning and resource analysis. ject." Closed. Project ID: P003595. Approved: February 1994. · Use low-cost solutions wherever possible and minimal imports of goods. · The community is the unit that will do the SELECTED READINGS work. The community must therefore be Aylward, B., and J. Barbier. 1992. "Valuing Envi- committed to the work without major sub- ronmental Functions in Developing Coun- sidy and in recognition of the financial and tries." Paper presented at the International other benefits likely to accrue. Workshop on Ecology and Economics, Turi- alba, Costa Rica, January 29­30, 1991. INVESTMENT OPPORTUNITIES Blair,G. J., and R. Lefroy, eds. 1990. "Technolo- · Economic benefit study to ensure that a gies for Sustainable Agriculture on Marginal watershed management approach is a prior- Uplands of Southeast Asia." ACIAR Proceed- ity for the nation and the watershed con- ings. Series No. 33. Canberra, Australia: 217 cerned and to establish the cost that can be Australian Centre for International Agricul- justified (helps choose a suitable approach) tural Research. · Investment in reskilling of stakeholders, data Boerma, P. 2000. "Watershed Management :A systems, and consultancy for water manage- Review of the World Bank Portfolio, ment and measurement under a basin-level 1990­99." World Bank, Rural Development management authority Department, Washington, DC. · Participatory rural appraisal of problems Doolette, J. B., and W. B. Magrath, eds. 1990. and opportunities "Watershed Development in Asia: Strategies and Technologies." World Bank Technical · Land use plan and soil survey Paper No. 127. World Bank, Washington, DC. · Market studies for cash crop alternatives Edwards, G. 1990. "Balancing Cost Benefit · Identification of water sources (quality, vol- Analysis and Ecological Considerations in ume) in relation to users Developing Priorities in R&D in Upland Agriculture." In ACIAR Proceedings. Series · Initiatives for improving livelihoods of all No. 33. Canberra, Australia: Australian Cen- family members tre for International Agricultural Research. INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE Hirsch, P. 1987. "Political Economy of Environ- Rerkasem, K. 1998. "Shifting Cultivation in Thai- ment in Thailand." Journal of Contempo- land: Land Use Changes in the Context of rary Asia Publishers (Manila, Philippines National Development." ACIAR Proceed- and Woolonngong, Australia). ings. Series No. 87. Canberra, Australia: Aus- tralian Centre for International Agricultural Rady, G. 1990. "Technologies for Sustainable Research. Agriculture on Marginal Uplands in South- east Asia: An AIDAB Perspective." In ACIAR This Note was prepared by Richard Chisholm with inputs Proceedings. Series No. 33. Canberra, Aus- from Jim Smyle. It was reviewed by Benjamin Kiersch of FAO. tralia: Australian Centre for International Agricultural Research. 218 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 6.3 INVESTMENT AREA (SUB)NATIONAL LEVEL. Country-level investment should aim to improve irrigation water and fer- INVESTING INWATER AND tilizer supply systems and to increase produc- SOIL FERTILITY MANAGEMENT tion per unit of water and per unit of nutrient. Water productivity can be raised, for example, Water and soil fertility are both indispensable for by clever routing and timing of water and fertil- crop growth. Supporting their combined manage- izer nutrients to the plant and by developing ment provides more than the sum of the parts. crop varieties that use water and nutrients more Investments in joint water and soil policies, in irriga- efficiently than standard varieties. tion, runoff control, fertilizer supply, and crop improvement at the country level need to go COMMUNITY AND FARMER LEVEL. Local investments together with investments in curriculum develop- in rainfed agriculture should help farmers con- ment and capacity building. Market information sys- serve soil moisture by extending the time water tems, credit systems, and innovation grants should remains inside the productive system and main- also be in place.Examples from Burkina Faso,Kenya, taining or improving soil organic matter content and South Asia show how projects narrowed the (examples include erosion and runoff control, gaps between potential and actual yields in poorly manuring, mulching, recycling city and house- endowed agro-environments. hold waste, agroforestry, and restricted tillage). Box 6.7 shows how yields in rainfed agriculture in Burkina Faso increased through a combina- Where scope to expand agriculture is limited, tion of water and soil fertility improvement additional production needs to come from measures. Box 6.8 demonstrates how reliable increased yields and expansion of the harvested water supplies favored adoption of soil area. Both possibilities depend on adequate fertility­improving technologies in semi-arid water and fertilizer inputs (FAO 2002). Eastern Kenya. Water and soil fertility are key drivers of plant Investments in irrigated agriculture may create growth. When their availability and quality are incentives for various soil- and water-related below the level that allows plants to reach management activities. These activities include their full growth and production potential, preparation (puddling, leveling) and synchro- their role is "growth limiting." The two are nization of water delivery to the field with fertil- 219 also intertwined: water is a major driver of soil izer application and control of salinity, nutrient availability to plants, the nutrient alkalinity, and toxicity. Because water is largely uptake process, and nutrient losses. Soil removed as a growth-limiting factor in irrigated organic carbon, the single most important systems, sound and clever fertilizer and manure indicator of soil fertility, not only provides fer- application can lead to quantum-leap yield tility to plants but also holds moisture and increases, as shown for the South-Asian Rice- provides a favorable environment for biologi- Wheat Consortium (Ladha et al. 2003). cal soil life, also enhancing biological nitro- gen-fixing potential. Macro- and micro-level investments are sum- marized in the subsection on Investment Yet projects and governments rarely address Opportunities. water and soil fertility management simultane- ously. This note demonstrates that investments and policies for joint improvement of the two POTENTIAL BENEFITS production factors offer more than the sum of Investments in integrated water and soil fertility their parts and discusses projects that followed management (IWSFM) raise yields and enhance this approach. the use efficiency of scarce water and nutrients. INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE Box 6.7 JointWater and Soil Fertility Management Box 6.8 IntegratedWater and Soil Fertility on the Mossi Plateau, Burkina Faso Management in Semi-Arid Eastern Province, Kenya Recorded sorghum and millet productivity in Sanmatenga province (north of Ouagadougou) has improved between Rapid increase in Kenya's population has resulted in 1984 and 2002 (see figure).This is due to both better rainfall rural-urban migration and out-migration from the during the 1990s and adoption of IWSFM such as stone rows, high-potential to eastern semi-arid and arid areas in planting pits (zaď), and compost pits (fosses fumiers), enriched search of new farmlands (Makueni and Mwingi Dis- by local rock phosphates. tricts). Soils in these ASALs are low in fertility and receive little and unreliable rainfall.During 1998­2003, 900 activities were set up to design, test, implement, 800 demonstrate, and disseminate improved, integrated 700 soil fertility management techniques for various land 600 use zones, soil types, farming systems, and farm types 500 (kg/ha) in ASAL through participatory efforts of scientists 400 with all relevant stakeholders. Yield 300 The experimental results showed that, in rainfed 200 farming systems, low yields and negative nutrient bal- 100 ances can be remedied by applying higher doses of 0 manure and/or fertilizers.Their application in seasons 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 with erratic rainfall, however, barely attained value- Water Use Efficiency (kg/mm) cost ratios above 1. Therefore, farmers in rainfed 1984­9 and 1993­2002 lands consider water harvesting extremely important, and only when that is ensured are they really moti- Sorgho Linear (Sorgho) Mil Linear (mil) vated to invest in soil fertility management. In the case of (small-scale) irrigated vegetable pro- Zougmoré et al. (2003) recorded sorghum yields under runoff duction in other parts of the area, farmers' manage- control of 800­1,200 kg/ha at a water use efficiency of 4­6 ment practices were characterized by higher kg/mm. Combining stone rows and compost, however, gave application of mineral and organic fertilizers, higher 2,300­2,800 kg/ha and 8­12 kg/mm, respectively. Farmer and more stable yields, and higher financial returns. It experimentation in Yatenga (central Burkina) gave 200 kg/ha shows that as soon as water constraints are allevi- sorghum with planting pits (zaď) alone, 700 kg/ha in pits ated, farmers tend to value soil fertility improving enriched by dry dung, 1,400 kg/ha in pits enriched with mineral inputs differently. fertilizers, and 1,700 kg/ha in pits enriched with both dung and Source: De Jager, Onduru, and Walaga 2004. 220 fertilizers. Innovative farmers realized between 900 and 1,600 kg/ha of sorghum in good and average years, and still 500 to 900 kg/ha in bad years. Every year these farmers were food secure (Reij and Thiombiano 2003). Farmers that followed IWSFM used more compost and manure than those who did and those living in the nicely terraced environ- not, saw kilogram production per millimeter of rainfall in the ment around Machakos (Tiffen, Mortimore, and rainy season go up from 3.8 to 6.6 kg for sorghum and from 3.8 Gichuki 1994), have market access and money to 5.8 kg for millet.Villages with IWSFM harvested (in 2001) in their pockets. Such farming systems are 800 kg of grain/ha against 600 kg/ha in villages without IWSFM. viable and stable and invite farmers to invest Sources: Burkina Faso 2002; Reij andThiombiano 2003; Zougmoré et and take risks. al. 2003. Examples from the Rice-Wheat Consortium in the Indo-Gangetic plains (see http://www.rwc- prism.cgiar.org), and, singled out, those for In Burkina Faso (box 6.7), the yields of staple southern Nepal show that irrigated multiple crop- dryland crop increased, as did the yields from ping with high fertilizer and manure application vegetable irrigation along the borders of reser- provide much higher yields than those obtained voirs. Demand for these vegetables is high and under no-fertilizer conditions. In the Terai, south- their nutritive value important. In semi-arid ern Nepal, long-term research trials gave irrigated eastern Kenya, farmers with access to water, rice-wheat yields of 2,750 kilograms per hectare A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT without fertilizer, against 3,790 kilograms per new markets. These impacts may need to be bal- hectare with manure, and 5,310 kilograms per anced by investment in market development. hectare with nitrate, phosphorous, and potassium (NPK) fertilizer. Elsewhere, rice-rice-wheat triple Investment is appropriate where the growth rate cropping gave 2,000 kilograms per hectare with- of largely rainfed agriculture falls below the rate out fertilizer, against 8,140 kilograms per hectare of population growth. It may also be appropri- with manure or NPK fertilizer. These results show ate in countries dominated by irrigated agricul- considerable and promising yield gaps. ture facing stagnating and declining yields. Impacts include the following: PUBLIC-PRIVATE DIVISIONS OF RESPONSIBILITY. In the field of genetic improvement, the private · Increased food and income security for sector, national agricultural research centers, farmers and centers under the Consultative Group on International Agricultural Research (CGIAR) · Healthier and more varied diets for produc- should distribute tasks. Natural resources man- ers and consumers agement typically is a public duty, but when supplies of water and nutrients are the direct · Reduced time spent fetching water and result of a "service" by a supplying agency, they fuelwood by replenishment of subsurface have a price. For a jump start, farmers have to water supplies and revegetation of less pro- be given innovation grants, which have worked ductive land well in zaď [planting pits] and compost pit devel- · A stop to land degradation and soil fertility opment in West Africa and in a series of farmer depletion and their negative off-site effects and community-level programs in East and such as siltation, flooding, and encroach- Southern Africa supported by the Rockefeller ment of still-less-productive areas Foundation (J. Lynam, pers. comm.). SOCIAL AND ENVIRONMENTAL IMPLICATIONS. The POLICY AND IMPLEMENTATION investments will encourage farmers and other KEY POLICY DECISIONS REQUIRED FOR THE INVEST- stakeholders to improve their water and soil MENT. A joint national policy on both water and fertility management. They will also increase soil fertility is required. Limited initial price sup- their food and income, and physical and cog- port may be needed, as well as support to sup- nitive strength. 221 plying and buying sectors (chain approach). National rural programs such as the World Land under IWSFM will remain productive yet Bank­supported Programme National de Gestion sustainable. The program may protect less- des Terroirs in Burkina Faso are important to endowed lands because they will no longer be build local capacity and decentralize public tasks. needed for cultivation and may be revegetated. Subsurface water supplies will be replenished, INSTITUTIONAL ISSUES. Key components are com- reducing women's workload in fetching water bining market infrastructure and information and fuelwood. support, credit systems, and joint learning and technology development on IWSFM (bringing together farmers, NGOs, and district agricultural LESSONS LEARNED staff). The latter requires both strong, client- On Burkina Faso's Mossi Plateau (box 6.7), driven applied research and demand-driven stone rows reduced runoff and erosion, but delivery of outcomes to replace earlier ineffec- their establishment needs a "food for tive supply-driven delivery. work"­type investment because collection, transport, and placement of the stones is TRADEOFFS. Full market liberalization and struc- beyond the physical and financial scope of a tural adjustment may depress input-output price farm family. Similarly, rock phosphates are ratios for farmers with no or limited access to badly needed in phosphate-deficient lands and INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE are applied via compost pits, but grinding rock tics. At the time of the Wopereis, Donovan, and containing phosphorus, transport, distribution, Nebié studies (which were conducted during and pricing need some lending to improve land 1995­6), water scarcity during the dry season productivity and reduce expansion of agricul- was a major obstacle, and rice yields were below ture into marginal lands. 2 tons per hectare per year. This was also due to lack of knowledge on optimal timing, dosage, In semi-arid Kenya (box 6.8), farmers did not and mode of fertilizer application; optimal sow- venture into soil fertility improvement as long as ing and transplanting dates; and the importance water remained unreliable and scarce. Only of nitrogen as the major limiting factor to yield. farmers with access to water control and com- At present, upstream water withdrawal by non- modity markets invested labor and cash in soil tax-paying vegetable farmers still frustrates the fertility management. Similarly, where soil fertil- profitable running of the scheme. The situation ity is still a free good to farmers who can regu- contrasts strongly with the Office du Niger area larly occupy new land, farmers will refrain from in neighboring Mali, where a public-private part- improving and maintaining their fields. IWSFM nership in running the rice-growing area has led will therefore work only where farmers no to a relatively thriving sector. longer have this exit option and have positive incentives to invest their labor and cash and where the two resources can be made available, RECOMMENDATIONS FOR PRACTITIONERS as in the once heavily eroded Machakos land- · Push for an integrated water and soil fertil- scape (Tiffen, Mortimore, and Gichuki 1994). ity management policy at the national level. In Nepal, investments in irrigation and soil fertil- · Push for prioritization of national-level ity management have a prominent place on the investments in crop water control, a fertil- national agenda (APP 1997). The ambitious plan izer market (emphasizing the nutrient that is to increase fertilizer use from 22 to 150 kilo- limits yields most), crop improvement grams per hectare by 2015, but privatization of research, capacity building, and curriculum the sector has not led to net increases in fertil- development for IWSFM. izer use since 1995. Supply systems are poor, · Push for the prioritization of local-level fertilizer types limited (largely nitrogen and investments in IWSFM technologies that phosphorus-based), fertilizer quality low, water best match farmer ambitions and agro-eco- supply in some places unreliable, and a compar- 222 logical conditions, lighten the workload for ison with neighboring states in India on agroe- women, offer off-season options through conomic indicators unfavorable. Therefore, an small-scale water control, recycling of irrigation and a fertilizer strategy have to go organic materials from farm and nearby together, in a conducive national and district urban areas, and so on. policy environment, and against the background of attractive factor and commodity prices. · Strongly stimulate government facilitation of access to and information on factor and Water conflicts at the scheme level and, as a con- commodity markets and prices. This will sequence, unreliable supplies, can make farmers help retailers set up businesses and allow lose interest and yields plummet to very low lev- farmers to make informed decisions. For els. For the Vallée du Kou, Burkina Faso, Wop- farmers, credit systems have to be in place, ereis, Donovan, and Nebié (1999) showed that and cooperative structures should be stimu- good crop husbandry (with nitrate fertilizer) can lated to spread risk and forestall excessive give wet season rice yields of 5 tons per hectare, profit making by middlemen. and dry season yields of 4 tons per hectare. In times of proper scheme management, yields · If opportunities to increase supplies of above 4 tons per hectare have been realized, as water and nutrients are limited, start looking shown by the Department of Agricultural Statis- for ways to direct the water and nutrients A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT that are available in a clever way, so as to of markets and information systems, training, raise their use efficiency. capacity building, and joint IWSFM curriculum and technology development may fall under · Organize farmers and other stakeholders Technical Assistance Loans. Support to innova- into groups whose voices are heard at the tion can typically come through Learning and (sub)national level. Innovation Loans. INVESTMENT OPPORTUNITIES REFERENCES CITED (Sub)national level investments may target the APP (Agricultural Perspective Plan). 1997. following: NEPAL Agriculture Perspective Plan (Final Report). Kathmandu and Washington, DC: · Delivery of water control infrastructure tai- Agricultural Projects Services Centre and lored to the physical and economic condi- John Mellor Associates. tions in a region (provision of footpumps to access shallow groundwater, govern- Burkina Faso. 2002. Annual Statistics on ment co-investment in small check dams, Planted Areas, Production and Yields (by demand-driven delivery of water conserva- Province, and by Crop). Ouagadougou: tion technologies) Department of Agricultural Statistics, Min- istry of Agriculture and Water Management. · Support for a well-functioning fertilizer mar- ket with safeguards for quality De Jager, A., D. D. Onduru, and C. Walaga. · Genetic improvement of food crops where 2004. "Facilitated Learning in Soil Fertility not undertaken by private or public research. Management: Assessing Potentials of Low- External-Input Technologies." Agricultural Commodity- and farmer-level investments may Systems 79 (2): 205­23. target the following: FAO (Food and Agriculture Organization). 2002. · Capacity building and curriculum develop- "Water and Fertilizer Use in Selected Coun- ment for farmer groups, NGOs, and district- tries." Discussion Paper. FAO, Rome. level agricultural officers on IWSFM. Choice from a basket of options should give farm- Ladha, J. K., D. Dawe, H. Pathak, A. T. Padre, R. ers satisfactory and sustainable yields at L. Yadav, B. Singh, Y. Singh, P. Singh, and A. 223 high water and nutrient use efficiency. L. Kundu. 2003. "How Extensive Are Yield Declines in Long-Term Rice-Wheat Experi- · Market information and credit systems: water, ments in Asia?" Field Crops Res. 81: 159­80. fertilizer and commodity prices should be well known to farmers, and credit systems Reij, C., and T. Thiombiano, eds. 2003. must be in place. Support to and training in Développement rural et environnement au scheme-managed water supply is essential. Burkina Faso: la réhabilitation de la capacité productive des terroirs sur la partie nord du · Innovation grants for modern farmers who Plateau Central entre 1980 et 2001. Rapport play a lead and exemplary role within de synthčse. Ouagadougou: DGIS/Nether- their society. The development of planting lands Embassy. pits (zaď) in West Africa is a case in point (box 6.7). Tiffen, M., M. Mortimore, and F. Gichuki. 1994. More People, Less Erosion: Environmental Lending for irrigation technologies, fertilizer Recovery in Kenya. London: Wiley. supply systems, yield response monitoring, and genetic improvement may fall under specific or Wopereis, M. C. S., C. Donovan, and B. Nebié. sector investment loans. Loans for improvement 1999. "Soil Fertility Management in Irrigated INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE Rice Systems in the Sahel and Savanna S. L. Maskey, and S. P. Pandey. 2002. "Yield Regions of West Africa." Part I. Agronomic and Soil Fertility Trends in a 20-Year Rice- Analysis. Field Crops Research 61: 125­45. Rice-Wheat Experiment in Nepal." Soil Sci- ence Society of America Journal 66: 857­67. Zougmoré, R., A. Mando, J. Ringersma, and L. Stroosnijder. 2003. "Effect of Combined Sanchez, P. A. 2002. "Soil Fertility and Hunger in Water and Nutrient Management on Runoff Africa." Science 295: 2019­20. and Sorghum Yield in Semi-Arid Burkina Faso." Soil Use & Management 19: 257­64. Smaling, E. M. A., and C. Toulmin. 2000. "The Itinerary of Soil Nutrients in Africa: Destina- tion Anywhere? Outlook on Agriculture 29: SELECTED READINGS 193­200. FAO (Food and Agriculture Organization). 2004. "Scaling Soil Nutrient Balances." FAO Fertilizer Vlaming, J., H. van den Bosch, M. S. van Wijk, and Plant Nutrition Bulletin #15. FAO, Rome. A. de Jager, A. Bannink, and H. van Keulen. 2001. "Monitoring Nutrient Flows and Eco- Gami, S. K., J. K. Ladha, H. Padhak, M. P. Shah, E. nomic Performance in Tropical Farming Pasuquin, S. P. Pandey, P. R. Hobbs, D. Joshy, Systems (NUTMON)." Part 1: Manual for and R. Mishra 2001. "Long-Term Changes in the NUTMON-Toolbox. Wageningen, The Yield and Soil Fertility in a Twenty-Year Rice- Netherlands: Alterra/LEI. Wheat Experiment in Nepal." Biology and Fertility of Soils 34: 73­78. Woomer, P. L., E. J. Mukhwana, and J. K. Lynam. 2002. "On-Farm Research and Operation NEDECO, DHV Consultants BV, Silt Consultants Strategies in Soil Fertility Management." In B. (P) Ltd., Consolidated Management Services Vanlauwe, J. Dells, N. Sanginga, and R. Mer- Nepal (P) Ltd., Masina Consulting Engineers ckx, eds., Integrated Plant Nutrient Manage- (P) Ltd. 2003. Consultancy Services for Sun- ment in Sub-Saharan Africa from Concept to sari-Morang Irrigation Project, Stage III, Practice. London: CABI. Phase I. Annual Report 4. Kathmandu: Min- istry of Water Resources. This Note was prepared by Eric Smaling with inputs by Erick Fernandes, and was reviewed byTanjaVan den Bergen of FAO. Regmi, A. P., J. K. Ladha, H. Pathak, E. Pasuquin, Part of the material in this Note is based on work performed 224 C. Bueno, W. Dawe, P. R. Hobbs, D. Joshy, under FAO Personal Services Agreement 0477927-2 (2003). A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 6.1 devise community development plans, supervise these activities, and facilitate land-titling opera- tions (box 6.9). INVESTING IN COMMUNITY- BASED SOIL CONSERVATION Individual mini-projects typically consisted of a range of measures combining shorter-term pro- ANDWATERSHED ductivity gains such as rehabilitation of small- MANAGEMENT PROJECTS scale irrigation infrastructure or the introduction of vegetable cash crops, with soil conservation What is new? In the absence of an efficient tech- techniques that yield longer-term productivity nology transfer system or extension service, the gains such as alley-cropping or planting of Madagascar Environment Program gave the pri- eucalyptus trees on hill slopes. In the longer vate sector incentives to bring moisture-saving term, the gradual spread of mini-projects in a agricultural production technologies to farmers. region, combined with some spontaneous These techniques allowed them to improve their adoption of techniques by other farmers, is production and revenues while protecting soil and expected to reduce the extent and frequency of water resources. environmental problems including uncontrolled brush fires, degradation of soil structure and Farming communities in Madagascar overex- fertility, and sedimentation of irrigation reser- ploited agricultural and marginal land and voirs and canals. Many mini-projects include encroached on forests and protected areas. With associated assistance at marginal cost for rural insecure land tenure and few opportunities for development such as literacy or health training cash crop agriculture, farmers expanded their and provision of potable drinking water. cultivated area using slash-and-burn practices. Soil conservation is relevant for water investments In response, the implementing agency for the because soil erosion generates considerable World Bank Environmental Program Project, approved in 1997, financed community-based soil conservation and watershed management Box 6.9 National Association for Environmental mini-projects, helped formulate community Action ANAE:AWide Range of Rural development plans, and set up land-titling oper- Investments ations near protected areas and forests. The goal was to enable farmers to keep land in cultivation The ANAE in Madagascar intervened in highly populated agro- 225 ecological areas with soil degradation (erosion) but agricultural longer and increase production and revenues, production potential. Its mini-projects covered four broad cate- while reducing biodiversity loss from incursions gories: (1) management of soil and water resources (cropping into forests and protected areas. In the absence on slopes,reforestation,gully stabilization,fruit tree planting);(2) of effective government extension services, the farm production (intensive rice systems, horticulture, out-of- agency contracted local NGOs and private con- season cropping, small livestock raising, forage production, fish sultants (operators) located in small cities and farming and combined rice and fish farming, apiculture, stables, rural towns to guide farmers in moisture-saving, village granaries, composting/green manuring); (3) infrastructure zero-tillage techniques and other practices. for farm production (small irrigation networks, riverbank pro- tection, bridges, dams, rural roads); and (4) social programs (potable water,protection of springs,construction/rehabilitation of wells and markets, improved ovens, biogas, schools, rural OBJECTIVES AND DESCRIPTION libraries, and literacy programs).To conserve soil moisture and The project created an implementation agency reduce labor requirements, ANAE disseminated through its known as ANAE, the French-language acronym contracted agents innovative technologies such as direct seed- meaning National Association for Environmental ing, which calls for minimum tillage and covering the soils with Action. Its purpose was to channel funds to mulch or a seasonal/perennial green crop. farmers to finance productive and infrastructure Source: Bienvenu Rajaonson, personal communication. mini-projects, transfer technologies, help farmers INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE management costs to the farming community infrastructure, books, and improved ovens) that depends on the water resources of the through the agency's regional offices on a cost- reservoirs. Erosion-induced sedimentation of sharing basis. ANAE advertised to attract local irrigation systems increases investment and NGOs and private consultants and also con- maintenance costs, reduces agricultural pro- tracted government extension agents but on a ductivity because of poor water control, and competitive basis. reduces total irrigable area. Maintaining an adequate water supply to the reservoirs for The providers sought to interest communities in farming entails expensive de-silting operations the program. They helped them select, formu- on irrigation canals and dredging thousands of late, and submit applications and helped some cubic meters of sediment from the irrigation communities develop community development drainage system. The total erosion mitigation plans. The operators established a visit schedule cost can run into several million dollars. Soil for technology transfer and supervision. ANAE conservation can greatly reduce siltation, thus built a partial cost-recovery system to strengthen raising the cost-effectiveness of agricultural ownership and sustainability of project benefits water investments (box 6.10). and to cover partial operating costs. Costs to be recovered were for inputs and small equipment ANAE mini-projects provided farmers with tech- used in income-generating activities. Cost shar- nical assistance, training, and inputs (such as ing between ANAE and beneficiaries fluctuated seed, fertilizers, small equipment, tree plantlets, between 22 percent and 97 percent. Beneficia- ries paid with labor and local materials. ANAE also piloted land-titling operations and paid for Box 6.10 Economics of Erosion Mitigation the issuance of land titles in selected areas. and Implications for Agricultural Water Projects OUTPUTS AND IMPACTS An outcome of the economic analysis of the Madagascar Envi- Beneficiary response exceeded expectations. ronmental Program Project indicates that, to maintain an ade- ANAE had hoped to implement 4,000 mini-proj- quate water supply to the reservoirs for farming, expensive ects with 100,000 families on a surface of 32,000 de-silting operations had to be undertaken on 25 kilometers hectares. By the end of the project, it had of irrigation canals, with 25,000 cubic meters of sediment financed 4,791 mini-projects, benefiting 372,014 dredged from the irrigation drainage system.The rehabilitation costs to raise the dam on the Amboromalandy reservoir families on 75,839 hectares. It had provided 226 amounted to US$3.3 million. In addition, rehabilitation of the capacity-building services to 34 producer canal system required additional investments of US$1.2 mil- organizations and helped them become lion. These costs, combined with the project costs of respected interlocutors with government and US$300,000 for rehabilitation of the Ambilivily and Ambon- development agencies. Its titling operations, dromifehy watersheds, amounted to a total erosion mitigation involving some 15,000 hectares, had touched cost of US$4.8 million. 20,000 families. Its operators had assisted farm- Failure to undertake these corrective actions or to otherwise ers in the elaboration of some 70 community rehabilitate the degraded watersheds resulted in the sedimen- development plans, some of which attracted tation of 150 hectares of irrigated area every year.The annual ANAE funding for the ensuing activities. loss in production was estimated at US$13.8 million. While Twenty-six percent of the nearby farmers who short-term mitigation costs were much lower than the value did not participate in ANAE activities took up of lost rice output, such corrective investments were likely to become prohibitively expensive as long as erosion continued the promoted technologies on their own. unabated.A more sustainable response, and a less costly one in the long term, was to invest in rehabilitating the watershed, PRODUCTIVITY INCREASES AND SOIL EROSION. The which was expected to improve overall regional productivity. most popular technology was a zero-tillage Source: Madagascar "Environmental Program Support Project." Staff technique with moisture-retaining mulches. It Appraisal Report 1997. improved soil quality and productivity and, from the first year, increased yields: rainfed rice A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT by 188 percent, maize by 201 percent, soybeans capital investments and time and effort on the part by 170 percent, and green beans by 99 percent. of the farmers. Few farmers will seriously invest in (Comparisons are with traditional cropping.) their land without an assurance that they can Direct seeding also reduced labor time in the hang on to the soils in which they invest and field by 40 percent from the second year on, an share equitable benefits over a joint capital invest- average labor saving of US$112 per hectare. ment, particularly when technologies extend over Also, over a five-year period, farmers planting the tenure of several land owners. Hence, trees and direct seeding on slopes of 12 percent improved land security is a means to improve soil, decreased soil erosion by 80 percent, from 8 water, and biodiversity conservation. tons to 1.6 tons per hectare. AGRICULTURAL SERVICES. The training and exten- INCREASED FARMER REVENUES. Revenues increased sion services offered by the private operators significantly. The internal rate of return was 12­18 were reported as less than adequate in terms of percent for reforestation, 26­82 percent for anti- volume and quality in many areas. Some opera- erosion technology, 26­106 percent for small tors were selected because they were the only dams, and 19­202 percent for production intensi- ones in the area or because the selection fication and diversification. Using improved ovens process was not rigorous enough. More impor- saved 1.6 tons per year per household in fire- tant, operators were not given an incentive to wood, equivalent to US$23 per year per house- follow up on farmers after completion of the hold. The corresponding saving in time mini-project. previously used to fetch firewood was about 144 person-days a year, equivalent to US$115 per year ADAPTING TECHNOLOGIES. Fitting technologies to per household. Thus, one household could save the level of farmers' willingness to change their US$138 per year, not a small sum for the average habitual way of farming could have helped household in Madagascar. The impact on the improve adoption. Some farmers complained environment is translated into the preservation of that they had dropped some technologies 0.11 hectares of forest per year per household. because the projects were difficult and time- consuming to apply. ENCROACHING ON FORESTS AND PROTECTED AREAS. The annual rate of deforestation, deduced from ACCESS TO AGRICULTURAL CREDIT. Credit is impor- satellite imagery, decreased to 0.7 percent for tant for farmers in a country such as Madagas- the protected areas, and 1.0 percent for the car, where they are among the poorest 227 gazetted forests. This can be compared with a 2 members of society. This is especially true for percent annual forest loss (FAO statistics) in the women, who generally lack clear title to land or absence of any intervention. Analysis con- other assets that lenders accept as collateral. ducted on biodiversity loss showed a slow- down, from a 1.66 percent index to 0.62 HOLISTIC APPROACH TO TECHNOLOGY GENERATION percent over five years. In addition, the AND TRANSFER. The example of livestock and endemism rate index was reported to have forage production is cited. Because farmers use increased from 0.6 percent in 1993 to 0.74 per- crop residues and biomass as a source of feed, cent in 2000, a 23 percent increase. they were reluctant to use them for mulching in direct seeding. Late in the process, research tried to correct this oversight and started to take ISSUES FORWIDER APPLICABILITY a farming system approach to resolve the com- Investments should incorporate the lessons petition for biomass between livestock and elaborated below to significantly increase the crop production. potential of replicating this experience. INFORMATION, EDUCATION, AND COMMUNICATION. LAND TENURE SECURITY. Adoption of technologies To increase the adoption of technologies, infor- that pay back in the medium to long term requires mation, education, and communication are INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE essential. Community leaders and government would give farmers a significant incentive to representatives should be brought into the loop adopt better farm production technologies. and asked to actively encourage farming com- munities to adopt new technologies to improve COST RECOVERY. Cost recovery worked as a dis- their production and revenues while protecting incentive for technology adoption and did not the environment. succeed. Farmers might have accepted it, had their payments gone into a joint savings DECENTRALIZATION. ANAE operated on a highly account that they could later use to access the centralized basis with few qualified staff in the credit system, rather than to ANAE. field. Contracting out to local operators, while having too few ANAE staff in the field to super- vise all work contracted out, was not conducive WORLD BANK PROJECT DISCUSSED to accountability and best implementation, and Madagascar. "Environmental Program Support exacerbated farmers' risk-aversion behavior. Project." Closed. Project ID: P001537. Approved: 1997. MARKETS. Market connections and development are often forgotten in the design of income-gen- This Profile was prepared by Jumana Farah and reviewed by erating activities. Accessible market opportunities Inčs Beernaerts and José Benites of FAO. 228 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 6.2 to moisture-retaining terraces, and plants trees and shrubs on the wasteland. Farm households own all the farmland and the plantations under INVESTING INWATERSHED leases of 30 to 50 years. The households also MANAGEMENT IN CHINA'S undertake to repay the portion of the cost of each component (between 40 percent and 60 LOESS PLATEAU percent) represented by the credit from the International Development Association (IDA). What is new? The project, located in the Yellow The project has demonstrated on an area of 1.5 River Basin, built moisture-retaining terraces on million hectares that the conservation of land which poor farmers developed sustainable and and moisture allows the development of pro- productive farms that reduced soil erosion. On 1.5 poor, small-scale agriculture. million hectares, unsustainable crop cultivation on eroding steep slopes was replaced with moisture- Elements of success include close cooperation retaining broad flat terraces, and trees and shrubs with the farmers in preparation of detailed were planted on steep erodible wastelands. plans for changes in land use (based on geo- graphic information system [GIS] data), a focus The Loess Plateau region, an area of some on income generation, close links between 640,000 square kilometers in the Yellow River physical investments and policy change (graz- drainage basin, is subject to severe geological soil ing bans and long-term land tenure security), erosion (about 85 percent) and human-induced and a strict physical and financial monitoring erosion (about 15 percent), which wreak havoc system at all levels. in downstream river management. About 45 per- cent of the land is farmed, mostly on erodible slopelands, and the rest is steep, uncultivated OBJECTIVES AND DESCRIPTION wasteland with a sparse vegetative cover. The The objectives of the project were to alleviate region is one of the poorest in China. poverty in the Loess Plateau by increasing agri- The Loess Plateau was subjected to several cultural production and incomes and to campaigns in the 1950s and the 1970s to build improve ecological conditions in tributary terraces and plant trees. These campaigns to watersheds of the Yellow River by introducing reduce soil erosion met with some success, but more efficient and sustainable uses of land and there was little impact on farm incomes for sev- water resources and by reducing erosion and 229 eral reasons. In those days, the government sediment flow into the Yellow River. The proj- stressed grain production and discouraged indi- ect area of 1,560,000 hectares in four provinces vidual initiative in the production and market- contains about 1,000 small watersheds ranging ing of high-value crops. The terraces were from 1,000 to 3,000 hectares. Typically, a water- narrow and uneven, and lacked the simplest of shed includes several villages. access roads. Tree plantations were under com- munal control, which meant that no one felt responsible for tending and protecting them. OUTPUT AND IMPACTS Above all, there was no control over free-graz- The main achievements of the project were ter- ing of goats and sheep. races and farm roads (90,500 hectares), afforestation (290,000 hectares), orchards By the early 1990s, recognition was growing in (57,000 hectares), grasslands (155,000 hectares), China that profitable and sustainable farming sediment control dams (149 key dams, 1,140 could be made compatible with water conserva- warping dams, and 1,956 check dams), and tion. Thus, the stage was set for the Loess institutional support (training centers, vehicles Plateau Watershed Rehabilitation project. The and equipment, computers and software for project adopted an integrated watershed rehabil- GIS and information systems). The project, itation strategy that converts cultivated farmland begun in 1993, was completed in 2002. The INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE total project cost was US$252 million. An IDA government-owned land. The land planted to credit of US$150-equivalent financed 60 percent trees and shrubs was auctioned, with preference of the project cost. for local villagers, and the buyers were given a 50-year land lease. The increase in agricultural production and incomes through more efficient and sustainable Farmers are responsible for repaying about 60 use of land and water resources exceeded expec- percent of the cost (the portion disbursed from tations. More than a million farmers in the project the IDA credit); the balance consisted mainly of area directly benefited from the project. Annual farmers' own labor. The repayment responsibil- grain output rose from 427,000 to 700,000 tons, ity and land tenure security are strong incen- fruit production from 80,000 to 345,000 tons, tives for farmers to preserve and manage the (unfortunately, because of limited species diver- land developed by the project. sity, a lot of waste occurred with apples all ready for harvest at the same time; with limited avail- A Second Loess Plateau Rehabilitation project, able infrastructure, prices collapsed). Per capita requested by the government, began in 1999. A income in farm households increased from yuan critical element in the success of the two proj- 360 to yuan 1,263 (US$44 to US$154). ects was the ability of local government leaders to mobilize public participation by detailed Within the watershed, crop cultivation on steep planning at the village level in close consulta- slopes was eliminated and replaced by smaller tion with the farmers. The government is areas of newly constructed terraces with access actively preparing a third project. roads. Terraced land retains water and resists soil erosion. The improved soil and water regime and better access for inputs and outputs LESSONS LEARNED give farmers the opportunity to plant a wider SOIL AND WATER CONSERVATION IN THE LOESS range of crops with much higher yields than on PLATEAU IS COMPATIBLE WITH POVERTY ALLEVIATION slopeland. In a year of average rainfall (less THROUGH SUSTAINABLE AND PRODUCTIVE AGRICUL- than 600 millimeters), grain yields on terraces TURE. Early efforts to treat the Loess Plateau can reach two to three times those on were not integrated with efforts to raise agricul- slopelands. The slopelands and uncultivated tural productivity and farm incomes. The proj- wastelands were planted to trees and shrubs ect has convinced planners and farmers that that were contracted to farmers under long land conservation is compatible with sustain- 230 leases. Pasture was planted on large areas of able and productive agriculture and that they unused land. Sediment control dams were built are mutually reinforcing. in the gullies to intercept sediment and create new land for crops. INTEGRATED AND COMPREHENSIVE LAND USE PLANS MUST BE PREPARED FOR ALL SMALL WATERSHEDS. A The project took the approach of working with key element of the above strategy is the imple- and developing the existing institutions in mentation of detailed land use plans that are China's public administration. Project manage- designed to create high-quality terraces for field ment offices were established at each level-- crops and orchards to compensate for taking the province, prefecture, county, and township. steep slopeland out of crop production, to take These offices brought together specialists in soil slopeland that is too steep out of crops and and water management, agriculture, horticul- plant trees, to ban grazing by goats and sheep, ture, and forestry. Management at the village to plant pasture for cut-and-carry feeding of level was through a village committee. At each livestock, and to plant trees that can generate level, there was a group of leaders, composed incomes in the long term. of senior officials and specialists. FARMERS SHOULD ACQUIRE LONG-TERM LAND CON- The cultivated land was already held under long- TRACTS FOR NEWLY DEVELOPED LAND. Land con- term contracts, but the wasteland was simply tracts should be signed between farmers and A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT the authorities for newly developed land. After detailed maps of the land use plan for each tree planting, the wasteland should be auc- watershed. Funds should be disbursed only tioned to farmers (with competition limited to after work is inspected and approved. villagers unless there is insufficient demand), and successful bidders should be given a long- Disbursement for most forms of land develop- term contract. ment and afforestation should be based on pre- viously agreed unit prices (costs per hectare). COSTS SHOULD BE RECOVERED FROM THE BENEFICI- ARIES. In the IDA project, about 60 percent of the project cost was recovered from the benefi- WORLD BANK PROJECT DISCUSSED ciaries. This provides incentives to maintain and China. "Loess Plateau Watershed Rehabilitation develop the land and to reduce the burden on Project." Active. Project ID: P003540. public funds. Approved: 1994. Within World Bank, avail- QUALITY AND FINANCIAL CONTROLS. A detailed able at http://projportal.worldbank.org. physical check of progress and quality of com- pleted work should be made, and spot checks This Profile was prepared by William Smith with inputs from should be made periodically by the prefectures Juergen Voegele.The Profile was reviewed by Rod Gallacher and provinces. These should be based on of FAO. 231 INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE INNOVATION PROFILE 6.3 OBJECTIVES AND DESCRIPTION This Innovation Profile highlights the variety of market-based mechanisms and their criteria for INTEGRATEDWATER rewarding good natural resources management MANAGEMENTTO ENHANCE via payments for the resulting environmental services. For trading purposes, the services WATERSHED FUNCTIONS AND need to be tangible, scientifically quantified, TO CAPTURE PAYMENTS FOR and in accordance with local legislation. Box ENVIRONMENTAL SERVICES 6.12 provides an example of a program that is evaluating environmental service payment What is new? This Innovation Profile focuses on opportunities in Asia. The payment mecha- land management in the context of incentives and nisms include private deals, public payments, arrangements for reducing upstream-downstream and open trading schemes among local com- negative impacts of water use by irrigators and munities, municipalities, companies, and other stakeholders in the watershed. Market-based national governments. mechanisms--if adapted to local conditions--can help promote resources management changes that The market-based incentive systems that give enhance productivity and ecosystem service syner- rewards, in the hope of promoting sustainable gies, while minimizing undesired tradeoffs. land and water stewardship in catchments and basins, generally subscribe to the concept that Natural resources (biodiversity, forests, land, enhanced resources management in upper catch- water) use has upstream and downstream ments result in both productivity and ecosystem impacts not only on soil and water productivity, services that can benefit stakeholders in the but also on ecosystem services such as biodi- lower catchments. In most incentive-based sys- versity niches, water flows and quality, erosion tems, the beneficiaries are charged an appropri- control, and flooding and sedimentation (box ate amount that is then equitably shared among 6.11). Watersheds are generally managed to col- the land users in the upper catchment (box 6.13). lect the water from the upper parts for use by people living lower down. The protection of Emerging markets for payments for ecosystem vegetation for soil cover in the upper parts of services in Costa Rica (Miranda, Porras, and Luz the watershed is fundamental for maintaining Moreno 2003), India, the United States, and Aus- soil properties conducive to good water infiltra- tralia, have resulted in some positive behavioral 232 tion, ground water recharge, and moderated changes in resources management on the part of surface water flow--conditions that can pro- upstream land users--with significant downstream vide adequate volume and quality of water and benefits (Pagiola, Landell-Mills, and Bishop 2002). avoid soil erosion and sediment flows to lower- Watershed services are highly dependent on the lying dams, lakes, and ponds. Land and water watershed or subwatershed scale, however, which users in the upper watershed do not necessarily limits market scale and size. adopt resources management practices that benefit downstream populations. In many cases, practices that support the short-term sur- OUTPUT AND IMPACTS vival of upstream communities (including high- The following "best practices" can be envisaged input, heavily mechanized agriculture, and for the assessment of costs and benefits of suc- dairy and hog farms) can be quite detrimental cessful watershed management for equitable to downstream settlements. Government regu- upstream-downstream resources management: lations have generally been ineffective in pro- moting good natural resources (land, water, (1) All parties in the watershed should have a forest) stewardship. stake in the management program and A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 6.11 Are Forests and Reforestation Beneficial for Hydrology and Groundwater Recharge? Forests increase runoff? Catchment studies show that because of increased interception, transpiration, and deeper rooting depth in forests than in crop or grass land, annual runoff is generally decreased under forests. Forests regulate flows? Increased dry season transpiration but increased infiltration and, for cloud forests, cloud water deposi- tion, may augment dry season flows. More and more evidence from catchments worldwide shows that most forests reduce dry season flows. Infiltration properties are critical in partitioning runoff. Effects are site specific, so more research is needed. Forests reduce erosion? Natural forest is associated with high infiltration rates and low soil erosion, but plantations may not show these benefits because of roads, ditches, or splash erosion. Forest canopies may not protect soil from raindrop impacts. More research is needed on species and drop size. Forests reduce floods? Canopy interception of rainfall and increased evapotranspiration may reduce floods. However, forest management activities (roads, drains, soil compaction) may increase floods. Studies show flood prevention benefits for small events only in small catchments and little or negative benefit for large rainfall events. Studies in large catchments show no measurable effects on frequency or magnitude of flooding. Forests improve water quality? In general, forest water is of better quality than unforested catchments under grazing or agricul- ture. Forest management rather than the presence of forests is critical for water quality. In high-pollution environments, for- est catchments and forest water may become acidified. Source: Calder 1998. Box 6.12 Rewarding the Upland Poor Box 6.13 Incentive Programs to Avoid Costly for Environmental Services: Investments inWaterTreatment and The RUPES Program Reduce Environmental Pollution and Sedimentation RUPES is a program for developing mechanisms for rewarding the upland poor in Asia for the environ- Two well-known examples of payments by lowland communities mental services they provide.The goal of RUPES is to for ecosystems services provided by upland communities can be enhance the livelihoods and reduce poverty among found in NewYork City and in the CaucaValley in Colombia. In the upland poor while supporting environmental 1989, New York's water, piped in from the Catskills Mountains, conservation on biodiversity protection, watershed was found to contain rising levels of pollutants.The Environmen- management, carbon sequestration, and landscape tal ProtectionAgency (EPA) ordered the city to build a water fil- 233 beauty at local and global levels.The primary impact tration plant at an estimated cost of US$6 billion to $8 billion. of RUPES will be to create and study the experience Instead of building the expensive filtration plant, however, the on the use of environmental reward transfers as a city opted to work with the residents of the Catskill watershed. tool for promoting effective and sustained environ- They financed reforestation projects, created riparian wood- mental management while increasing benefit flows to lands to protect the integrity of the streams, and signed conser- poor upland communities.The main result will be a vation easements with local farmers to enhance filtration of deeper and more practical understanding of how to sediments and pollutants by the riparian vegetation.The quality formulate such arrangements, their viability, and the of the water improved dramatically, and the cost of this collabo- potential for wider use. rative effort with the residents of the Catskills was less than Source: RUPES Program of the World Agroforestry Cen- US$2 billion--a big saving to NewYork City taxpayers. Similarly, tre, Southeast Asia. Online at http://www.worldagro in Colombia's Cauca Valley, agricultural producers pay fees, via forestrycentre.org/sea/Networks/RUPES. their WUAs, to pay upland communities for soil conservation on steep slopes, reforestation, and the maintenance of riparian vegetation buffers to improve water flows and reduce sedimen- tation in irrigation canals. Source: Author. INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE watershed development functioned as an improved management of irrigation water and equity-enhancing mechanism. associated natural resources, the following chal- lenges have to be overcome: (2) Because irrigation water is often the most valuable resource of watershed manage- (1) Identifying and reliably quantifying the vol- ment, it is essential to develop mechanisms ume and quality of water flows and associ- that allow an equitable sharing of the water. ated benefits (vegetation biomass and soil This resource sharing can substitute for cover, reduced erosion, added food and direct payments to some stakeholders. fiber production) provided by good land and natural resources stewardship. (3) Where common property is involved, especially in the upper catchments, it is (2) Identifying the risks (such as climate essential that local communities collec- change) and opportunities for mitigating tively protect the common land so that the the risk to the irrigation water and natural irrigation water resource is not compro- resources management operations (Nobel mised by illegal deforestation or overgraz- et al. 2005; Watson et al. 2005). ing. Collective action is easier where communities are homogeneous. (3) Identifying and charging the beneficiaries of the improved volume and quality of water (4) The benefits of good resources manage- flows to provide the financing mechanism. ment and water harvesting for irrigation in watersheds will vary with agroclimatic and (4) Ensuring that payments are equitably dis- biophysical conditions. If the benefits are tributed to all stakeholders and the amount not substantial enough to be meaningfully not only compensates for the costs of shared, environmental service payments changes in resources management but also may not be economically viable. reflects the value of the services provided. Since supply price and ecosystem benefits (5) Leverage for the landless and less powerful are based on location in the watershed or stakeholders in the watershed is necessary landscape, Chomitz, Brenes, and Constan- to enable them to participate effectively in tino (1998) suggest a framework based on the program. In some cases, external insti- spatial information to guide prioritization tutions may need to play a facilitating role and pricing. on behalf of the "weakest" stakeholders. 234 (5) Creating an appropriate decision-making (6) If irrigation water is used to produce greater framework and institutional support vegetation biomass on common lands, bio- structure that can be accessed by all mass-sharing agreements are needed, espe- stakeholders. The World Bank's DRAIN- cially for landless stakeholders. FRAME, a multistakeholder, landscape- scale tool, can facilitate a transparent and If water harvesting results in improved recharge consensus-building approach to priority of groundwater aquifers, designating ground- setting and decisions on access and allo- water a common property resource can provide cations (Abdel-Dayem et al. 2004; see all stakeholders with a powerful incentive to also IP 5.1). Watershed modeling tools improve natural resources management prac- are also very useful in engaging commu- tices and collective action. nity, research, and policy stakeholders (Calder 1999). ISSUES FORWIDER APPLICABILITY To leverage existing public investment in To ensure that incentive-based systems remain enhanced watershed management for environ- sustainable and can successfully facilitate the mental services, the following opportunities exist: A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT (1) The use of irrigation to enhance the pro- Management (SWIM)." Paper No. 3. ductivity of staple food crops per unit area Colombo, Sri Lanka: International Water offers significant opportunities for releasing Management Institute. large areas of poorly productive land for afforestation, reforestation, and agro- ------. 1999. The Blue Revolution: Land Use forestry. This can lead to a range of prod- and Integrated Water Resource Manage- ucts and ecosystem services such as ment. London: Earthscan. biodiversity conservation and beautiful landscapes for ecotourism. Afforestation- Chomitz, K. M., E. Brenes, and L. Constantino. reforestation per se does not necessarily 1998. "Financing Environmental Services: The improve hydrological functions of water- Costa Rican Experience and Its Implications." sheds, however (box 6.13). Paper prepared for Development Economics Research Group (DECRG) and Environmen- (2) The Kyoto Protocol is now operational fol- tally and Socially Sustainable Development lowing the Russian Federation's decision to (ESSD). World Bank, Washington, DC. ratify it. Opportunities are emerging for communities to obtain payments for carbon Miranda, M., I. T. Porras, and M. Luz Moreno. sequestration via reforestation and agro- 2003. The Social Impacts of Payments for Envi- forestry systems adjacent to high-productiv- ronmental Services in Costa Rica. A Quantita- ity irrigation land (Bass et al. 2000). The tive Field Survey and Analysis of the Virilla World Bank's BioCarbon Fund is currently Watershed. London: International Institute for financing prototype operations of more Environment and Development (IIED). than US$410 million, managed in six funds (either approved or under operation). Watson, Robert, Ian Noble, Ajay Mathur, Todd Johnson, Eduardo Dopaza, and Frank Sper- (3) The Global Environmental Fund's OP 15 ling. Forthcoming. "A Proposed Approach program has dedicated significant grant for the World Bank to Climate Change." resources to the rehabilitation of degraded Draft. lands. These grants can be used to leverage private investor funds for enhanced water Nobel, Ian et al. Forthcoming Screening Tool management and environmental benefits. Concept for Climate Change. Pagiola, S., N. Landell-Mills, and J. Bishop. 235 REFERENCES CITED 2002. Selling Forest Environmental Services: Abdel-Dayem S., J. Hoevenaars, P. P. Mollinga, Market-Based Mechanisms for Conservation W. Scheumann, R. Slootweg, and F. van and Development. London: Earthscan. Steenbergen. 2004. "Reclaiming Drainage: Toward an Integrated Approach." The Agri- culture and Rural Development Report No. USEFUL LINKS 1. World Bank, Washington, DC. BioCarbon Fund: http://carbonfinance.org/ biocarbon/home.cfm Bass, S., O. Dubois, P. Moura Costa, M. Pinard, R. Tipper, and C. Wilson. 2000. "Rural Conservation Finance Alliance: http://www. Livelihoods and Carbon Management." conservationfinance.org/CFPapers.htm#PES International Institute for Environment and Development, Natural Resources Issues Ecosystems Market Place: http://www.ecosys- paper No. 1. IIED, London. temsmarketplace.com. Calder, I. R. 1998. "Water-Resource and Land- RUPES Program, The World Agroforestry Cen- Use Issues. Systemwide Initiative on Water tre, Southeast Asia Web site: http://www. INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE worldagroforestrycentre.org/sea/Networks/ RUPES United Nations FAO Land and Water Division: http://www.fao.org/landandwater/water- shed/watershed/en/mainen/index.stm This Profile was prepared by Erick Fernandes with inputs from Stefano Pagiola. It was reviewed by Kenneth Chomitz. 236 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT 7 INVESTING IN AGRICULTURALWATER MANAGEMENT IN MULTIPURPOSE OPERATIONS · Investment Note 7.1 Investing in Agricultural Water through Community-Driven and Social Fund Approaches · Investment Note 7.2 Investing in Aquaculture Activities · Innovation Profile 7.1 Rural Water Supply and Irrigation 237 OVERVIEW The approaches described in this chapter all deal with multipurpose investments where the cost-bene- fit relations are complex.These investments require an integrated approach, often within a basin plan- ning framework. Community-driven development (CDD) investments can be applied to small-scale irrigation and watershed management, improving the quality of development. How CDD programs and related social fund financing mechanisms can be applied to multipurpose investments is discussed in this chapter. Bottom-up stakeholder involvement through CDD can improve the quality of natural resource management investments by building in "holistic" vision and reconciling individual moti- vation and public goods at the grassroots level where individual farmers may otherwise see only their own interest. Cost sharing is important, because it binds the community and leads to better and more sustainable investment. It also reduces However, intensive systems can harm habitats costs, because it gives the community a stake in and affect both water and soil quality through economizing. The value of a community-driven eutrophication and acidification. Extensive, approach to water management is confirmed by low-input systems dependent on local materials the the Republic of Yemen case study discussed and wastes are good pro-poor investments. in chapter 4. Even in a situation resembling (See IN 7.2. See also "Aquaculture Production "water resources anarchy," individuals, through Systems" and "Income Generation through local interest groups and using a "partnership" Aquaculture," in AIS, Module 4.) approach, can be motivated to change their water resource management behavior in a way Considering investments together can create consistent with the public interest. (See IN 7.1 technical and economic synergies, as in the on the benefits from CDD approaches and IP case of irrigation and potable water supply. 4.1 on the illustration provided by the Republic Water investments tend to be made on a sec- of Yemen. On demand drive and community toral approach, although integrated approaches organization generally, see also chapters 2 and at the planning level are now more common. At 6. On the virtues of cost sharing, see IN 1.4 and the community level, there can be advantages IN 1.5, and, for cost sharing in watershed man- in considering investments together. For exam- agement, IN 6.2. See also "Community-Driven ple, joint investment in potable water supply Development for Increased Agricultural and irrigation can improve both incomes and Incomes," in Agriculture Investment Sourcebook health. (See IP 7.1 for examples from Vietnam (AIS), Module 11.) and Guatemala.) Aquaculture is the fastest-growing animal SOMETYPICAL INVESTMENTS food­producing sector. A very different type of multipurpose investment is in aquaculture. Possible investments in this area include the Aquaculture has grown by an average 9 percent following: annually since the 1970s and is expected to provide more than 40 percent of fish consumed · Social fund and CDD projects for small- by 2020. Aquaculture investment can improve scale irrigation and watershed management food security and nutrition, and create jobs and · Integrated drainage investments livelihoods for the poor. It can bring unproduc- tive land and "unwanted" water (that is, 238 · Aquaculture investments drainage and flood water) into use, and fish can even be sown into canals and cropped fields. · Joint potable water and irrigation systems A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 7.1 First-generation CDD projects focused on asset creation and on building community capacity to operate the new facilities. The current second- INVESTING IN AGRICULTURAL generation projects seek, in addition, to create WATERTHROUGH management skills for a broader development agenda. Social funds (SFs) typically adopt CDD COMMUNITY-DRIVEN AND approaches, and in this book SF is considered the SOCIAL FUND APPROACHES financing mechanism for CDD approaches. The key feature of SFs is that stakeholders determine CDD and social fund approaches have been devel- the investments through subproject proposals. oped to improve the relevance, quality, and sus- SFs have decentralized and efficient operating tainability of pro-poor investments. They can be procedures and aim at institutional development used for small-scale irrigation and watershed man- for both communities and central and local gov- agement investments, where substantial social cap- ernment. The investments are relevant to the pri- ital already exists. They are not suited to ority needs of the poor and are sustainable. large-scale irrigation, where participatory irriga- tion management is indicated. Both approaches can be efficient for small-scale agricultural water INVESTMENT AREA investments, but care has to be taken over equity and environmental impacts. CDD/SF approaches can also be employed for agricultural water management. They are well Governments have promoted large-scale irriga- suited to small- and medium-scale irrigation, tion for millennia. Land and water management which usually has a long social and institutional within a catchment has similarly often been the history of community involvement and where domain of the planner and the top-down devel- the scale is appropriate for local management. oper. Formal management institutions have been The community may consist of all families top down, too. But community-based irrigation residing in a village but more frequently con- and watershed management also has a history, sists of only people who, through inheritance where groups of farmers develop schemes to or labor investment, are co-owners of an irriga- improve their agriculture, and local institutions tion system. manage runoff, forests, and rangeland. CDD/SF approaches for large-scale irrigation Government-planned and -executed schemes (LSI) are more problematic. Experience shows 239 often lack the local information and the institu- that incorporating the views of stakeholders is tional control to ensure optimal resource alloca- vital, and LSI investments work best when based tion, poverty targeting, and sustainability. In on a practical "ownership" of the project by response, CDD approaches have been designed farmers and on a practical participation to as to promote decentralized, participatory, and high a level as possible. However, LSI can never equitable development, with priority to poor be fully driven by community imperatives rural communities. CDD takes many forms but because it requires planning, study, investment, has, as a common organizing principle, delega- and management capacity way beyond commu- tion of powers and responsibilities to communi- nity capability. For LSI, gradations of participa- ties to turn them into actors for their own tory irrigation management have been employed development. Nevertheless, major risks and instead of CDD approaches. Participatory irriga- challenges exist. Recent evidence (Mansuri and tion management allows the essential top-down Rao 2004) suggests that many CDD projects planning and financing considerations to be rec- have not been effective in targeting the poor. onciled with requirements expressed by users Moreover, CDD projects may still be dominated (see IN 2.1). As seen in box 7.1, CDD can, how- by elites, and both poverty targeting and project ever, be employed at the lowest level of LSI--for quality tend to be markedly worse in more example improvement of irrigation turnouts or unequal communities.1 on-farm efficiency improvements. AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS For watershed management, scale and technical Experience has confirmed that CDD/SF considerations are again often beyond the scope approaches can be used for small- and of community capability, and at the basin level, medium-scale irrigation. Recent improvement top-down study and planning are clearly needed. projects have been based on existing social However, experience has shown that top-down capital and hydraulic layouts. CDD approaches approaches alone rarely work. Local communi- have proven particularly suitable, for example, ties need to "own" the interventions to a degree in the Republic of Yemen and the Arab Repub- that planners can rarely induce. CDD/SF lic of Egypt, for community water basins for approaches can be adapted for watershed man- agriculture, livestock, and human use. In water- agement activities (box 7.2). (See also IN 6.2.) shed management, existing resources manage- ment institutions (for example, for runoff, forest, and rangeland management) have formed the basis of CDD approaches. In situa- Box 7.1 The Power of Social Capital-- tions of public interest or third-party externali- An Example from Large-Scale Irrigation ties such as forest conservation or soil protection, where regulation has been used in The introduction of farmer organizations for decision making, the past, comanagement approaches are being resource mobilization, management, communication, and con- tried with some success, but the evidence is not flict resolution turned the Gal Oya irrigation system, once yet conclusive. known as the most deteriorated and disorganized irrigation system in Sri Lanka, into one of its most efficient. Production of rice per unit of water increased by 300 percent, and at least two-thirds of the increase was due to the creation of new POTENTIAL BENEFITS roles and relationships and the activation of certain norms and An evaluation of CDD/SF approaches (Carvalho attitudes among irrigators. 2002) finds significant advantages in the Source: Kahkonen 2003. approach. The first benefit is information. Rely- ing on local demand overcomes the typical information gap about the high-impact invest- ment needs and the correct design of projects. Box 7.2 The Morocco Oued Lakhdar Local demand also has an inbuilt holistic vision Watershed Management Project of the management of land and water resources. Second, CDD/SF builds on and In the early 1990s, Morocco prepared a national watershed 240 strengthens existing social capital, with particu- management plan and piloted it in the Oued Lakhdar water- shed. CDD approaches were used because previous attempts lar emphasis on helping communities adapt to at top-down watershed management had not produced last- changed environments--for example, adapting ing results. to managing groundwater rather than springs or adapting to dealing with a modern state and its The project worked with community representatives to iden- tify a local agenda comprising production investments such as projects and financing windows. Third, CDD/SF irrigation, social investments, and conservation measures.This can help reconcile public and private interests, approach was designed to reflect interactions between com- as in the watershed management example in munities and the environment and between upstream conser- box 7.1. Fourth, CDD/SF should improve vation and downstream production.To provide incentives for poverty targeting and inclusion. Fifth, demand conservation measures, cost sharing for these was lower, pro- drive should help improve sustainability ductive investments such as fruit trees or fodder crops were through ownership. Finally, SF procedures are used wherever possible, and the downstream production usually simple and decentralized, so that com- investments were undertaken first. Now at the end of the project, communities have created their own permanent munities can participate in design and contract- development associations and are working directly with the ing, and procurement and disbursement can be local social fund office on projects that include both produc- rapid, which helps build trust and ownership. tion and conservation investments. The more recent evaluation of Mansuri and Rao Source: Author. (2004) emphasizes that these benefits can be achieved only if the approach is applied with A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT care. Lack of analysis of the necessary precon- example of "engineering"). CDD/SF favors local ditions (such as the institutional environment public goods and communal assets, and care is and the level of equity in the community) can needed if private or only partly public goods reduce the envisaged beneficial effects. such as irrigation water or rangeland improve- ment are to be provided. For natural resources management, there is need, too, for appropriate POLICY AND IMPLEMENTATION technical framework, and a tailored menu of The key policy decision is "to let go," phrased by investments with incentives for conservation one practitioner as "losing control--and gaining and other purposes (box 7.2). ownership." Governments may be reluctant, and need persuading, particularly in planner domains such as irrigation and watershed man- LESSONS LEARNED agement. Box 7.3 illustrates the problem. Empirical evidence is accumulating about where and how CDD/SF approaches are effec- Where irrigation is offered through CDD/SF, it tive. This section is largely based on recent and may crowd out other investments because farm- ongoing World Bank evaluations of CDD/SF ing communities usually prefer irrigation to (especially Carvalho [2002]; World Bank [vari- social or conservation investments. This may ous years]; and Mansuri and Rao [2004]). create a risk of appropriation by an elite because irrigation is ultimately a private benefit, · CDD/SF projects have stronger ownership and user rights over water or other natural and higher quality and sustainability.2 resources follow an ownership pattern that may CDD/SF does help in empowering communi- be inequitable. But it is usually impossible to ties and in building capacity, for instance to provide assistance to the many small plot own- resolve conflicts in water management or ers on farmer-managed irrigation systems with- maintenance. For irrigation and natural out also helping owners of larger plots. A resources management, CDD/SF works best reinforced offtake and weir, or an improved where social capital and rules already exist. main canal, benefits all farmers downstream, In fact, overall CDD/SF approaches have small and large. "Losing control" may also lead functioned as users rather than as producers to farmer choices that do not coincide with envi- of social capital. CDD/SF approaches could ronmental concerns about, for example, water- be indicated for small- and medium-scale irri- shed management or groundwater mining. gation and natural resources management, 241 One variant on the multisector CDD/SF approach is a project that targets a single sector Box 7.3 Nepal: Farmers Leading theWay in using a CDD approach (for instance, a project Groundwater Development where irrigation or watershed management is the main investment). A CDD project targeting a Since 1999, a project has been working with 657,000 people single main sector can also offer complemen- in the Nepal Terai to alleviate poverty through community- tary investments in social and community managed shallow tubewells. Working with communities, assets, as in the Morocco Irrigation-Based Com- NGOs banks, the private sector, and government, the project has transformed an agency-led, supply-driven method favor- munity Development Project. This approach is ing big farmers into a demand approach, driven by farmers appropriate when all or almost all households below the poverty line, and by the private sector. Costs are are irrigators (or herders or forest users). low, and, by 2003, more than 600 groups had installed wells. More than half the beneficiaries are women. Government has CDD/SF is not universally applicable. For small- been convinced by this project that social mobilization and medium-scale irrigation, there is a risk that through NGOs is a reliable and inexpensive way to reach "inclusion"--of women, the landless, the small farmers absolute poor--may be difficult, unless it is Source: CGISP 2003. specifically engineered (see box 7.2 for an AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS where extensive social capital usually exists. · CDD/SF approaches reduce costs, especially However, community size and power distri- where community contributions are high bution are important. CDD works well with and where communities manage contracts. smaller groups, based on kinship or resi- dence, and with more homogeneous com- · Without clear, but simple, environmental munities. assessment procedures, irrigation and natu- ral resources management projects can cre- · Farmer organizations may not include the ate environmental problems under CDD/SF poor and marginalized as other community approaches (World Bank 1999). organizations do. CDD/SF approaches gen- erally focus on inclusive community organi- · CDD/SF approaches are effective in deliver- zations and communal assets for exactly this ing small infrastructure, but the demand reason. However, unlike community assets, mechanism does not necessarily reach the irrigation systems co-owned by farmers do poorest in the community or the poorest com- create incomes. Tradeoffs may be necessary munities. This is probably especially true for to solve the poverty problem. (See De Jan- small- and medium-scale irrigation projects. vry et al. 2001). · CDD works best with active involvement of · If irrigation investment is done through local government and line agencies. How- CDD, producer organizations are likely to ever, where a social fund program is used be the appropriate partner rather than rather than integrating CDD into a line min- broader community groups, and careful istry's approaches, linkages to line min- attention will have to be taken to ensure istries and their programs may be weak. equity. If a CDD project works with pro- Typically, social funds do not work well ducer organizations, it is likely that they with line ministries. will select irrigation investments. · For irrigation and natural resources man- RECOMMENDATIONS FOR PRACTITIONERS agement, assessing the resource constraint · Where poverty alleviation is the goal, con- is important, because moderate scarcity sider CDD/SF approaches to small- and promotes cooperation, but abundance or medium-scale irrigation and watershed absolute scarcity have the opposite effect. management, but as part of a package with 242 provisions for the poor and marginalized people with no or little land (box 7.4). Box 7.4 Bank Requirements for Using Community-Driven Development/Social · Where CDD/SF approaches are used, start Fund Approaches for AgriculturalWater by evaluating existing social capital care- fully because it is key to success. CDD/SF approaches should be preferred where the following apply: · Given the risks of "elite" capture where irri- · They are the most efficient, in terms of improving invest- gation or any investment for private benefit ment quality, through better information and solid owner- is concerned, consider participatory planning ship, and in terms of lower cost, through most and research as a first step toward CDD. This appropriate design and implementation procedures. precursor stage, before the question of · They are demonstrably more equitable and pro-poor financing arises, will make clear whether the because this is a specific objective of CDD/SF approaches. Where there is a risk,appropriate alternative measures to community has the necessary social capital ensure "inclusion" are required. and mechanisms for ensuring equity. · They are environmentally sound in terms of "no harm" and make a positive contribution to externalities and to com- · Look at levels of contribution to projects. mon resources management. For private benefit investments such as irri- Source: Carvalho 2002. gation, ensure that beneficiaries invest more than they do for public interest investments. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT · Ensure that CDD/SF investments in agricul- World Bank. Various years. "Social Capital Ini- tural water are linked to overall agricultural tiative." This research project is publishing programs such as research and extension. a series of working papers including "Insti- tutional Reform and the Informal Sector," · Check that the CDD/SF process has ade- obtainable at http://www.iris.umd.edu/ quate environmental safeguards built in. socat/topics/cdd.htm. · Take part in the Poverty Reduction Strategy World Bank. 1999. "Environmental Assessment Paper (PRSP)/Country Assistance Strategy of Social Fund Projects." Environmental (CAS) process and help assess the relevance Assessment Sourcebook Update No. 24. of CDD/SF to agricultural water needs. World Bank, Environment Department, Washington, DC, January. REFERENCES CITED Carvalho, Soniya. 2002. "Social Funds: Assess- SELECTED READING ing Effectiveness." World Bank, Operations "OED Social Funds Evaluation." Available Evaluation Department,Washington, DC. online at http://wbln0018.worldbank.org/ OED/SocialFunds/AR/SecDocLib.nsf/Table+ CGISP (Community Groundwater Irrigation Sec- Of+Contents+Web?OpenView. tor Project). 2003. "Farmers Leading the Way in Groundwater Development." CGISP Newsletter # 1 (Winter). Available online at ENDNOTES http://www.cgisp.org.np. 1. Mansuri and Rao (2004) focus on the fol- lowing questions: does community partici- De Janvry A., Sadoulet E., Collion M. H., and pation improve the targeting of private Rondot P. 2001. "Impact of Producer Orga- benefits? Are the public goods created by nization Capacity-Building Component in community participation projects better tar- Agricultural Services Projects. The Case of geted to the poor? Are they of higher qual- Sénégal and Burkina Faso." Joint research ity, or better managed than similar public project between the University of Califor- goods provided by the government? Does nia at Berkeley and The World Bank. A participation lead to the empowerment of survey is available online at http:// marginalized groups? Do the characteristics wbln0018.worldbank.org/essd/nrwtrust.nsf/ of external agents--donors, governments, 243 0/85256b1900666c8785256aff007eacf2/$FILE/ nongovernmental organizations (NGOs), ScialWindowProgressAttachment2Activity and project facilitators--affect the quality of ReportsOct2001_1-47.pdf. participation or project success or failure? Can community participation projects be Kahkonen, S. 2003. "Does Social Capital Mat- scaled up in a sustainable manner? ter?" Social Capital Initiative Working Paper No. 9. World Bank, Washington, DC. 2. Empirical evidence has not, however, estab- lished that the participatory elements are Mansuri, G. and Rao, V. 2004. "Community- responsible for these improved project out- Based and -Driven Development: A Criti- comes (Mansuri and Rao 2004). cal Review." The World Bank Research This Note was prepared by Christopher Ward with inputs Observer 19(1): 1­39. Available online at from Daniel Sellen and Melissa Williams. It was reviewed by http://www.cultureandpublicaction.org/ Keizrul Abdullah of International Commission on Irrigation bijupdf/mansurirao.pdf. and Drainage. AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS INVESTMENT NOTE 7.2 in tanks and reservoirs; and cultivation in rice fields, irrigation ditches, land depressions filled by drainage water, and seasonal water bodies in INVESTING IN AQUACULTURE floodplains. The latter technique is practiced ACTIVITIES primarily by poor households. Farming fish, shellfish, and aquatic plants is the fastest growing subsector in agriculture. High-input INVESTMENT AREA aquaculture helps supply global consumption and Intensive systems for salmon, trout, tilapia, floun- earns foreign exchange. Less intensive forms are der, turbot, shrimp, and other species have high suitable for low-income small producers and play a input for seed, formulated feeds, vaccines and key role in poverty reduction. Pro-poor interven- chemicals for disease control, improved strains tions require definition of public and private sector selected for growth, high feed-conversion effi- responsibilities and equitable distribution of bene- ciency, and other production and market charac- fits in the longer term. All aquaculture investments teristics. Globally, operators therefore tend to should be planned within national strategies for partner with feed suppliers. Their high-value fish fisheries, water use, and the environment. Invest- and seafood products are filleted, frozen, ments in irrigation and drainage may incorporate canned, or cured for urban and export markets. an aquaculture component, taking advantage of the possibility of using irrigation canals and drainage Extensive low-input systems are more readily water for this purpose. Investments to enhance adopted by poorer or subsistence farmers and market-oriented aquaculture will be aided by con- communities. Such systems use local feeds and current development of national capacities in mon- fertilizers but few other inputs. Farmers often itoring product safety and health. grow juveniles of indigenous species trapped in the wild together with higher-value species. The The world's capture fisheries have stabilized, at farmers' objectives are household consumption, 85 million to 90 million tons a year, but aqua- local barter, and trade. These systems have con- culture has been growing, at a compounded siderable potential to enhance local food secu- rate of 9.2 percent a year since the 1970s. Its rity, alleviate poverty, and improve rural global rate of growth is estimated at 7 percent. livelihoods (Friend and Funge-Smith 2002). Chi- Aquaculture is thus critical to meeting future nese and Indian carp and tilapia dominate fresh- 244 demand for food fish. By 2020, aquaculture will water production for local demand. provide an estimated 41 percent of all fish for human consumption--10 percent more than in Between these extremes are many intermediate 1997 (Delgado et al. 2003). Most growth will practices, depending on experience, local sup- occur in developing countries, which will port infrastructure, and market access. For account for 79 percent of food fish production example, in Andhra Pradesh, India, the growth in 2020. In China, already the largest single pro- of aquaculture followed the availability of effi- ducer of fish, aquaculture has exceeded the cient road transportation to distant markets production of capture fisheries. such as Calcutta. Tilapia and catfish can be grown in a range of less-demanding culture sys- This rapid expansion features diversification, tems and now have both local and international intensification, and technological advances. markets. The world supply of aquatic plants is More than two hundred aquatic organisms are currently 10.1 million tons, valued at US$5.6 bil- now grown in marine, brackish, and freshwater lion, most of them grown in simple systems, systems. They include finfish, mollusks, crus- predominantly in China and the Philippines. taceans (with shrimp the most valuable export commodity), sea cucumbers, and seaweeds. A successful experience in northern Cameroon Aquaculture practices range from culture in and a recently approved project in Uzbekistan ponds, pens, cages, and raceways; to stocking show how investments in agricultural water, A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT especially drainage, can successfully include an farm household. Marginalized women and aquaculture component. In northern Cameroon, even the landless have been organized in com- after the restoration of the hydrological dynam- munity arrangements for water bodies. People ics of former floodplain depressions, in 1982 the displaced by dam building have engaged in Benue River was dammed for hydroelectricity reservoir fisheries, and persons displaced by and irrigated agriculture. Large parts of the capture fisheries have developed new liveli- downstream floodplains could no longer be hoods in coastal aquaculture. used. However, after a long rainy season, the dam had to release water. Former floodplain Aquaculture can bring unproductive land into depressions were reconnected with the river use. An example is the river beach develop- and in several weeks were teeming with fish. ment in the Shanxi Poverty Alleviation project The restoration of fisheries potential was so (World Bank 1996) and similar development in impressive that experiments began with man- other Bank- and World Food Program­assisted agement of floodplain depressions, now being aquaculture development in China. China's Sus- filled with drainage water from the irrigation tainable Coastal Resources Development Pro- scheme. At the end of the dry season, fish were ject is an advanced coastal management project taken out and the entire depression was drained that includes integrated coastal zone manage- and left to dry until the next rains as an effective ment, marine aquaculture, and seafood pro- means of vector control (schistosomiasis snails) cessing; it follows international facility design (Abdel-Dayem et al. 2004). A recent project in and operation standards. Uzbekistan plans to use drainage water to recharge wetlands and foster the production of Aquaculture can help raise the productivity of fish and reeds. Total economic benefits from agricultural water when it uses irrigation canals, aquaculture are expected to exceed US$400,000 drainage water (box 7.6), and rice fields (box (see Uzbekistan in "World Bank Projects Dis- 7.7). Also, in deltas such the Ganges and cussed" below). Mekong, dry-season, brackish water shrimp and aquaculture complements wet-season rice farm- Asia, and China in particular, dominate aqua- ing in the same paddies that are alternately culture, but important producers have devel- inundated with brackish and freshwater. oped in Latin America, the Caribbean, Europe, Africa, and the Middle East. Markets for higher- value produce will follow rising urban incomes 245 and perceptions of fish as a nutritious and healthy food. Japan, the European Union, and Box 7.5 Major Public Sector Investment the United States are major importers of high- Approaches for Aquaculture value produce. · Introduction of aquaculture to new entrants as a compo- nent of integrated poverty reduction or coastal and water basin management schemes POTENTIAL BENEFITS · Integration of support services and infrastructure to help Aquaculture can improve local and national communities of aquaculture farmers shift from subsis- food security and earn important foreign tence farming to more market-oriented enterprises exchange, including for low-income food · Provision of training and educational institutions for deficit countries (box 7.5). Fitchett et al. (1997) extension and development of aquaculture technologies appropriate for practitioners and new entrants report a successful example, dealing with · Support for research to advance, identify, test, and evalu- shrimp aquaculture in Madagascar. ate aquaculture applications in local conditions · Provision of a national regulatory environment to guide Aquaculture can generate jobs and livelihoods aquaculture development and domestic and export mar- for many, including disadvantaged or dis- keting initiatives placed people. Women and children have Source: Author. started "own enterprise" initiatives close to the AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS POLICY AND IMPLEMENTATION Box 7.6 DrainageWater for Fish Farming in Egypt FORMULATION OF COMPREHENSIVE STRATEGIC In the southern vicinity of Lake Edku in Egypt, fish farming with DEVELOPMENT FRAMEWORKS. Developing initia- drainage water started 20 years ago. Fish ponds now cover an tives for coastal and inland areas requires con- area of 8,000 acres. The government leases out the land for sultative and participatory decision-making the ponds at very low rents.A 1-acre pond leased for US$15 a processes with all key interest groups. Inte- year can earn the renter about US$1,000. The average fish grated coastal zone development and manage- yield is 2 tons per acre per year, compared with 500 kilograms ment plans should identify the place of per acre per year from the lake. Only drainage water is used in aquaculture in relation to competing uses by fish ponds, and a fish pond produces more than five times the value of cropped land with the same amount of water. cities and for energy, transport, tourism, and critical natural habitats. The potential for using Source: Scheumann 2004. drainage water, which would otherwise be wasted by discharging it into the sea, to fill aquaculture ponds should also be examined. For inland areas, location of land and water resources for aquaculture should complement Box 7.7 Community-Based Fish Culture in Seasonal investments in water management and in Floodplains hydropower, reservoirs, and irrigation and drainage schemes. Rice-fish systems can bring benefits to many inhabitants of flood-prone areas. Seasonal floodwaters have been regarded ENVIRONMENTAL REGULATION. The rapid and as a constraint and been utilized only for occasional fishing. unregulated development of intensive practices, Fish can, however, be stocked concurrently with deepwater rice or by alternating the stocking of fish during the flood sea- particularly for shrimp, has destroyed habitats-- son, in an enclosed area such as a fish pen, with rice culture in both when farmers cleared mangroves to build the dry season. ponds and when they caused eutrophication of water bodies and acidification of pond soils Alternating rice and fish culture was recently tested in deep, flooded areas of Bangladesh and Vietnam in a community- through excessive use of inputs. Their actions based management system. The institutional arrangements have caused outbreaks of disease and failure of were designed for sharing benefits in proportion to provision enterprises. They also sparked legal responses of land, labor, guarding against poaching, and so on, so that all and triggered community controversy. Adverse contributors benefited. Loans taken out for fence construction social impacts also resulted where belts of were repayable at the first harvest. shrimp pond development cut off fishermen's 246 Results indicate that community-based fish culture in rice fields access to the sea, where flooding and water can lead to fish production of 600 kilograms per hectare per logging were improperly managed, and where year in shallow flooded areas and up to 1.5 tons per hectare groundwater reserves were depleted, causing per year in deep flooded areas, without reducing rice yield and saltwater intrusion. Some firms have developed wild fish catch. Overall profitability, counting rice and fish, rose management guidelines to address these prob- to US$690 per hectare a year in Bangladesh, an increase of lems. The World Bank and others have 20­160 percent.Annual per capita income of the landless labor- ers in the group increased by 60 percent, and their per capita embarked on the development of general fish consumption increased by 25­60 percent.These gains are guidelines, including codes of conduct for likely to improve through technical modifications. water quality and sustainable shrimp farming. Formulating and enforcing environmental stan- This approach is applicable to several million hectares of Asian floodplains if aquaculture practices are shaped to match local dards is key to meeting the industry's develop- sociocultural and economic conditions. In Africa, the potential ment goals. for community-based fish culture is greatest in seasonal flood- plains and in irrigation schemes. In West African floodplains, ENABLING ENVIRONMENT. Aquaculture requires 470,000 hectares used to grow deepwater rice could be used steady supplies of good quality larval or juvenile concurrently for fish culture. fish. National strategies to manage hatcheries, Source: World Fish Center 2001. brood stock, and strain quality are required to avoid inbreeding and loss of productivity. These A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT strategies should include provision of more local improve strains in line with national law and seed fish to regions where aquaculture is being acceptability in target importing countries. introduced or expanded. Adoption and exten- sion of aquaculture will require pilot industry BALANCE BETWEEN PRIVATE AND PUBLIC SECTOR development, locally affordable credit, and RESEARCH AND INVESTMENT. Export-focused aqua- capacity building of extension services. Oppor- culture is pursued by private sector firms and tunities for entry depend on farmers' land and occasionally by joint ventures. However, in water tenure. NGOs and community organiza- some countries, the establishment of aquacul- tions have played key roles in the extension of ture has clearly been augmented, if not led, by aquaculture for poverty alleviation in countries government research and planning support. such as Bangladesh. Their contributions are Examples are Norway and China. Aquaculture valuable but need strengthening with technical industries develop rapidly. Some farmers, once assistance. trained and established, quickly shift from low- value species that meet local demand to high- MANAGEMENT OF OTHER INPUTS AND EFFLUENTS. value species for external markets. Public policy Input management is mainly a private sector goals for investment need careful definition to concern, but public policy may have to encom- avoid duplicating private sector responsibilities. pass feeds--to minimize use of wild fish, fish- meal, and fish oils--and water, with attention to quality and effluent management. Moreover, LESSONS LEARNED standards should minimize or prohibit use of FEASIBILITY ASSESSMENT AND PLANNING. Importing drugs such as antibiotics and chemicals for pest technologies from other regions can work if control or water quality management. Such local soil and water quality are taken into standards protect both the environment and account, and if use is made of indigenous profitability. In addition, effluent discharge species for which artificial propagation methods needs to be managed effectively to forestall and hatchery management techniques are well adverse effects on water quality and habitats understood, for which feeds can be identified nearby and downstream. Solid waste should locally or imported. The strategy must also be also be appropriately reused or disposed of to cost effective, and marketing channels and prevent damage to the environment and unde- demand must be ensured. The costs of seed sirable social impacts. and feed supply have been difficult to sustain without government assistance or differentia- 247 MARKET ORIENTATION--GRADES AND STANDARDS. In tion of roles among adopters after completion many cases, aquaculture produce can join of pilot projects. Market substitution between postharvest, cold, and marketing chains already fish and seafood products can be quite high. established for capture fisheries. Importing Assessments of target species should therefore countries increasingly impose health and sani- take into account availability of local inputs, tary standards--such as sanitary-phytosanitary market competition, production efficiencies, standards (SPS) and hazard analysis and critical and transport costs, for instance when dealing control point (HACCP) regulations on food with unprocessed products, shelled mollusks, imports, in part because seafood is perishable. and other perishables. Successful industries can Some aquaculture industry associations are ultimately depress market prices and lower adopting environmental standards to maintain profits, as with Norwegian salmon. Labor needs market acceptability. Governments of export for starting aquaculture industries must be thor- countries can enhance competitiveness by oughly evaluated because they have sometimes establishing product health and monitoring serv- been overestimated. ices that meet the importing countries' certifica- tion needs. Such government services would POVERTY ALLEVIATION AND ADOPTION. The price of also help small producers join supply chains. fish compared to starchy food staples makes Policies should promote biotechnologies that farmed fish a major component of livelihood AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS schemes. Women have been quick to access the environmental concerns to address it. Industry nutritional and income benefits of rural aquacul- associations have responded strongly by adopt- ture, even in simple forms such as growing fin- ing and promulgating agreed practices among gerlings. Adoption of aquaculture can be slow in their members; governments have adopted zon- rural communities with little experience in water ing and other laws to sustain water quality, and management. However, after adoption, practices environmental certification and labeling that may quickly evolve, incomes rise, and fish prices help maintain export-market share. stabilize in the local markets. Equitable access to land and water for the poor and durable institu- tions are the two most important conditions. RECOMMENDATIONS FOR PRACTITIONERS The World Bank Group's involvement in aqua- LONG-TERM SUPPORTING RESEARCH IS REQUIRED. culture development has included investments Strains of fish improved for growth or other fea- in the full range of technologies for production tures by selective breeding can augment pro- expansion, including infrastructure support ductivity but must be implemented with care to (hatcheries, feed-processing plants, seafood- preclude adverse impacts to the genetics and processing plants, improvement and new con- fitness of wild populations. Public and private struction of wholesale markets, disease control sector goals should be defined for strain facilities, coastal zone management centers, improvement that meets the goals of subsectors water quality monitoring laboratories, and train- and national biodiversity. Import, propagation, ing and education facilities). Sector work and culture of exotic species must be carefully includes a coordinating role with the global considered with monitoring and control sys- shrimp farming and environment study with the tems in place before introduction. Analysis of Network of Aquaculture Centers in Asia-Pacific, the social mechanisms governing community the World Wildlife Fund, and the Food and involvement in aquaculture is needed to sustain Agriculture Organization. The work involved 40 equity in the distribution of benefits so that a case studies and thematic reviews and the pub- disproportionate share of the benefits does not lication of a guide on the assessment of source go to the better-off. water quality for aquaculture. RISK. Marketing channels must be well under- Recommendations for practitioners investing in stood and established. Increases in the incidence aquaculture can be summarized as follows: of disease in fish has been a major consequence 248 of unregulated development and has caused · Plan for aquaculture within comprehensive some initiatives to collapse. Contamination with development frameworks, including the antibiotic residues can prevent produce from integrated use of water, and not as stand- meeting importing-country health criteria. Exter- alone enterprises. nal sources of pollution can cause morbidity and · Take advantage of investment projects in mortality of cultured organisms or make produce irrigation and drainage and/or integrated unsaleable. In addition, products such as farmed water resources management to foster the salmon may contain dioxin and polychlorinated development of aquaculture. biphenyls (PCBs) that can reduce market interest and pose significant health risk, particularly to · Include in feasibility studies an assessment children and pregnant women. Similar concerns of potential interactions with fisheries (at have been identified for fish caught in the wild, the level of feed and food uses, water such as tuna, which are high in mercury. resources, markets, and community inter- ests) and other animal industries. ENVIRONMENT AND INDUSTRY ASSOCIATIONS. The performance and image of aquaculture have · Assess realistically the potential for absorp- been tarnished by people who do not differenti- tion of labor by aquaculture, if job creation ate between ranges of intensification when raising is a development goal. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT · Tailor flexible packages, in new initiatives, Sector and Development: Five Case Stud- for local conditions, longer-term technical ies." World Bank Report 23470, Washington, support (including for agricultural extension DC. Available online at http://www-wds. workers), and establishment or provision of worldbank.org. associated services (seed, feed, health, and marketing). Friend, R. F., and S. J. Funge-Smith. 2002. "Focus- ing Small-Scale Aquaculture and Aquatic · Plan sufficiently long water or community Resource Management on Poverty Allevia- tenure over aquaculture sites to prevent tion." Report of an expert consultation, held resource mining. at the Food and Agriculture Organization of the United Nations, Bangkok, Thailand, Feb- · Include environmental guidelines and ruary 12­14. FAO, Network of Aquaculture assessments in every aquaculture initia- Centers in Asia-Pacific (NACA), and Support tive--and support for the development and for Regional Aquatic Resources Management implementation of such guidelines where (STREAM). they are lacking. Scheumann, W. 2004. "Toward Integrated Plan- · Enlist national capacities to monitor product ning of Irrigation and Drainage in Egypt-- health and safety from production through Institutional Perspective." Study in support the postharvest chain to support export-ori- of the Integrated Irrigation Improvement ented aquaculture development. and Management Project (IIIMP), Interna- Overall, the Bank Group's experience in aqua- tional Program for Technology and Research culture development has been satisfactory, with in Irrigation and Drainage. FAO, Rome. most investments yielding sustainable out- comes. Projects with doubtful medium- and World Bank. 1996. "China--Shanxi Poverty long-term benefits were often overambitious Alleviation Project." Staff Appraisal Report. with regard to scale, complexity of technologies World Bank, Washington, DC. Available employed, and dependency on public sector online at http://www-wds.worldbank.org. management for sustainability. These are World Fish Center. 2001. "Community-Based important and useful lessons to guide future Rice-Fish Culture on the Floodplains of operations considered for investment. South and South East Asia." In Stories from the CGIAR Annual Report 2001. Available 249 REFERENCES CITED online at http://www.worldfishcenter.org/ Abdel-Dayem, S., H. Hoevenaars, P. Mollinga, reshigh01_cg.htm. W. Scheuman, R. Slootweg, and F. van Steenbergen. 2004. "Reclaiming Drainage: Toward an Integrated Approach." Agricul- WORLD BANK PROJECT DISCUSSED tural and Rural Development Report 1. Uzbekistan. "Drainage, Irrigation and Wetlands World Bank, Agriculture and Rural Develop- Improvement Phase-I Project." Active. Pro- ment Department, Washington, DC. ject ID: P009127. Approved: June 2003. Within World Bank, available at http://proj- Delagado, C. L., N. Wada, M. W. Rosegrant, S. portal.worldbank.org. Meijer, and M. Ahmed. 2003. Fish to 2020: Supply and Demand in Changing Global Markets. Washington, DC: International SELECTED READINGS Food Policy Research Institute. Ahmed, M., and M. H. Lorica. 2002. "Improving Developing Country Food Security through Fitchett, D., F. Jaspersen, G. Pfefferman, I. Kar- Aquaculture Development--Lessons from makolias, and J. Glen. 1997. "The Private Asia." Food Policy 27: 125­41. AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS Dey, M. M., and F. J. Paraguas. 2001. "Eco- ------. 2002. The State of World Fisheries and nomics of Tilapia Farming in Asia." In S. Aquaculture. Rome: FAO. Subasinghe and Tarlochan Singh, eds, Tilapia: Production, Marketing and Gupta, M. V., J. D. Sollows, M. Abdul Mazid, A. Technological Developments. Proceed- Rahman, M. Golam Hussain, and M. M. ings of an International Technical and Dey. 1998. Integrating Aquaculture with Trade Conference on Tilapia, May 28­30, Rice Farming in Bangladesh: Feasibility Kuala Lumpur, Malaysia. Kuala Lumpur: and Economic Viability, Its Adoption and INFOFISH. Impact. Manila, Philippines: International Center for Living Aquatic Resources Man- Dey, M. M., and M. Prein. 2003. "Community- agement (ICLARM). Based Fish Culture in Seasonally Deep Flooding Ecosystems." Agriculture Tech- Zweig, Ron. 1998. "Sustainable Aquaculture-- nologies for Rural Poverty Alleviation. IFAD Seizing Opportunities to Meet Global Technical Knowledge Notes No. 1, Aquacul- Demand." Agriculture Technology Notes ture Series. International Fund for Agricul- No. 22. World Bank, Agriculture Rural tural Development, Rome. Development Department, Washington, DC. FAO (Food and Agriculture Organization). 1997. This Note was prepared by Peter Gardiner with inputs from Review of the State of World Aquaculture. FAO Ronald Zweig. It was reviewed by Bart Snellen of the Interna- Fisheries Circular No.886, Rev 1. Rome: FAO. tional Institute for Land Reclamation and Improvement. 250 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 7.1 funded through grants, that it was poorly equipped to handle minor infrastructure, and that RWSS was a matter for the provinces. RURALWATER SUPPLY AND IRRIGATION During project identification and preparation, the Bank team worked closely with the Viet- What is new? Simultaneous investment in drink- namese government and gradually obtained ing water supply and irrigation is rare, although it is buy-in. It helped that RWSS coverage in the often cost effective in reducing rich-poor gaps in delta was low compared to the rest of the coun- income and health. Rural communities can operate try, that the incidence of sanitation-related dis- systems using the same source of water for both ease was high owing to a lack of sanitation small-plot irrigation and drinking water as income- facilities and sanitation awareness, and that the generating businesses. The Mekong Delta Water Vietnamese government had set a goal of 100 Resources Project shows that a small investment in percent rural water supply coverage by 2005 separate rural water supply hardware, funded but that the national program was underfunded. through a subcomponent of a large water- The project supported an integrated approach to resources or irrigation project, can also cost-effec- improving water resources infrastructure as well tively deliver benefits to the rural poor, especially as upgrading clean water provision and sanita- to those living far from roads. tion for the rural inhabitants. In line with the evolving national RWSS strategy, it tested demand Combining investment in irrigation with devel- responsiveness and community participation in opment of water supply for humans has been planning, implementation, and financing. It tar- hard to do in spite of its many advantages: (1) geted primarily remote rural households that the additional income from irrigation allows other programs cannot reach. users to repay loans for their water supply hardware within two or three years and after- The RWSS strategy was carried out by the Min- ward pay for operation and maintenance istry for Agriculture and Rural Development. It (O&M); (2) combining human water supply gave implementation responsibility to the with crop water supply reduces per capita provinces, which delegated it to provincial rural investment cost, especially in remote areas, and water supply development centers that mobilize (3) poor health caused by contaminated drink- communes and conduct awareness campaigns, ing water often constrains input of labor on the provide technical assistance, and design and 251 irrigated farm. supervise construction through contractors. The centers outsourced the sanitation improvement Large irrigation projects can include water sup- component to provincial women's unions, which ply components and take a cue from commu- were certified by the provincial authority to oper- nity-driven investment. The main constraint is ate a sanitation revolving fund. Each women's institutional, both within the World Bank and union has branch units in villages and communes in-country. that work with individual women farmers. Hybrid systems in Guatemala (box 7.8), OBJECTIVES AND DESCRIPTION Nicaragua, Bangladesh, Zimbabwe, Nepal, and The Mekong Delta Water Resources project suc- Vietnam often do not need grants because users cessfully combined large irrigation development can generate enough income from cash-pro- with small-scale water supply development. The ducing irrigated plots and fees for domestic government of Vietnam first proposed to the water use. The increased revenue stream allows World Bank what was primarily an irrigation proj- them to pay off both their individual loans for ect. The line ministry initially opposed the rural the irrigation system and the community loan water supply and sanitation (RWSS) component for the installation of the water supply system. on the grounds that RWSS had always been Rural villages, especially in arid regions, often AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS Box 7.8 The Guatemalan Experience waterway transport benefited the local inhabi- tants but did not satisfy their need for clean In Guatemala more than 100 small community-owned and drinking water. A small investment in RWSS operated irrigation systems supply domestic water to commu- delivered immediate benefits to those living in nities that do not have connections to water supply. Hillside remote communes, beyond the reach of large farmers installed these systems, which rely on gravity pressure, system supplies, a group often difficult to primarily for irrigation.The average system size is 20 hectares serve with a standalone project. The added and average farm plot size 0.2 hectares.Each farm plot is served investment did increase project preparation by a tap in the center. Farmers connect a hose to a conven- and supervision costs. tional sprinkler on a tripod and move it around the field to irri- gate.The communities repaid the government loans in less than three years with proceeds from their high-value crops mar- INVOLVE GRASSROOTS ENTITIES. These grassroots keted in Guatemala City. This experience was successful for connections can mobilize small communities, three main reasons: technical assistance and credit at reason- and in this case, experience with the women's able interest rates were available;the participants formed small, unions contributed to effective organization of tightly knit groups; and they were able to grow and market awareness campaigns that reached individual high-value crops such as fruits and vegetables. women farmers with small group-based credits Source: Polak et al. 2002. and training in hygiene. FOSTER INTERACTION AMONG THE "WATER PLAY- ERS." Although they inhabited the same min- already have the organizational infrastructure to istry, the "irrigation people" and the "RWSS operate these systems (for example in Pakistan, people" interacted little. Project implementa- Afghanistan, and Tunisia). tion brought interaction through meetings, supervision, and monitoring. Trust grew between these professional groups and OUTPUTS AND IMPACTS between the central and provincial agencies In the Mekong Delta Water Resources project, dealing with water, which reinforced integrated implementation of the rural water supply sub- water resources management. component began in 2001 and was planned to end in 2005. Instead, it ended in 2003 because · Balance cost-recovery and poverty goals. most activities had been completed. Output The goals of greater cost recovery and included 244 schemes for piped clean water, poverty alleviation had to be balanced 252 2,290 wells, 1,060 filter systems, and 13,176 because the target population lived in water jars to supply clean water to local com- remote areas with little market access. munities, benefiting some 314,330 rural poor. At the mid-term review, the Vietnamese govern- · Synergies with irrigation development may ment requested a US$9 million increase to be the key to the financial sustainability of expand the component from 6 provinces to 10. RWSS. Irrigation usually raises incomes with which to repay loans and pay O&M of Evaluations of water supply development domestic water supply. through hybrids in Nicaragua and Nepal indicate that rural families quickly repay loans for system · Strengthening communication and collabo- construction and also move up the income lad- ration between the professional communi- der, from absolute poverty to relative poverty. ties. In water supply and sanitation, water resources and irrigation, communication among all actors is key, both in-country and ISSUES FORWIDER APPLICATION within the Bank. Funding mechanisms and SMALL INVESTMENTS YIELD GREAT BENEFIT AND budget provisions should be set aside for ARE WORTH THE EXTRA EFFORT. In Vietnam, proj- joint design and implementation. The RWSS ect investment in irrigation and drainage, toolkit for multisector projects provides use- flood control, saline intrusion control, and ful support. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT HYBRID SYSTEMS ARE SOMETIMES NOT FEASIBLE. Opportunities." International Develop- They will not work in cases in which (1) water ment Enterprises (IDE). Available online at needs to be treated, and treatment would make http://www.ideorg.org/html/library/tech_ the water too expensive for irrigation; (2) the pop_index.jsp?pdf=1056561357553_water construction cost would be too high to pay off %20opportunities.pdf. a loan from the proceeds of horticultural crops; (3) a village is too far from markets; and (3) clean, affordable drinking water is available WORLD BANK PROJECT DISCUSSED from other sources. Experience in Guatemala Vietnam. "Mekong Delta Water Resources Pro- also shows that hybrids generate income for ject." Active. Project ID: P004845. Approved: farmers only if there are market opportunities. 1999. Within World Bank, available at http://projportal.worldbank.org. REFERENCE CITED This Profile was prepared by Carlos Linares and Mei Xie with Polak, P., D. Adhikari, B. Nanes, D. Salter, and inputs from Parameswaran Iyer. It was reviewed by Sarah S. Surywanshi. 2002. "Transforming Rural Cline, Timothy Sulser, and Mark Rosegrant of the Interna- Water Access into Profitable Business tional Food Policy Research Institute (IFPRI). 253 AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS 8 COPINGWITH EXTREME CLIMATIC CONDITIONS · Investment Note 8.1 Investing in Drought Preparedness · Investment Note 8.2 Investing in Flood Control and Management · Innovation Profile 8.1 Planning Scarce Water Resources Using Evapotranspiration Quotas: The Hai Basin Integrated Water and Environment Project in China · Innovation Profile 8.2 Fighting the Adverse Impacts of Climate Change on Agriculture · Innovation Profile 8.3 Investing in Participatory Approaches for the Cultivation of New Varieties and Soil and Water Conservation in India 255 OVERVIEW Extreme climatic conditions most seriously affect poor farmers trying to eke out a living in the most vul- nerable and marginal of the world's production systems. Climate change is likely to have a particular impact on the poor. Some of the available high-impact technologies and institutional responses to these climatic challenges are discussed in this chapter. DROUGHT HARMS MORE PEOPLE THAN ANY OTHER NATURAL HAZARD, BUT INVESTMENT IN PROACTIVE MAN- AGEMENT CAN REDUCE RISKS AND COSTS. Planners in most countries should now assume that climate is variable and that "drought is normal." The common response has been reactive and ineffectual in mitigating impacts on the vulnerable. Recent best practices concentrated on lessening risk through policies to reduce vulnerability, and through investments in preparedness and drought- mitigation planning. Investment in drought management brings benefits by reducing the associated economic, social, and environmental costs. Because the poor are especially vulnerable, drought preparedness is a critical part of poverty reduc- salinity, temperature, and lack of nutrients. tion strategies. (See IN 8.1. See also "Kenya: Recent pilot projects in India have successfully Community-Based Drought Management," in tested integrated soil, water, and agronomic the Agriculture Investment Sourcebook (AIS), investments in very marginal watersheds (cf. Module 10.) the Loess Plateau experience). Earlier attempts to "introduce" new technical packages top- EVEN FLOODS CAN BE TURNED TO GOOD ACCOUNT. down--for example, vetiver grass--had failed. Floods can be harnessed beneficially as sources Instead, new investments were based on a "bot- of irrigation water, groundwater recharge, and tom-up" approach, testing, evaluating, and then soil fertility renewal. They can improve water scaling up innovations. Cost sharing cemented quality and sustain ecosystems and fisheries. ownership. Uptake has been excellent. Family Investment in integrated flood management incomes have increased considerably. The proj- within basin plans improves beneficial use and ects have demonstrated a cost-effective invest- minimizes losses. Measures include investments ment mechanism for making a large and to improve water retention, investments to miti- sustainable impact on the lives of poor people. gate flood impacts and reduce susceptibility to (See IP 8.3 and IP 6.2.) damage (including disaster preparedness), and flood protection measures such as dikes, lev- INNOVATING INVESTMENTS CAN CONTRIBUTE SIGNIFI- ees, and flood embankments. Because poor CANTLY TO AGRICULTURAL WATER MANAGEMENT AND people are most vulnerable, investment in POVERTY REDUCTION WHERE CLIMATIC CONDITIONS improved flood management and preparedness ARE ADVERSE AND RESOURCES SCANT, PROVIDED is pro-poor. Stakeholder involvement and THAT THEY ARE "INTEGRATED" WITHIN A FAVORABLE appropriate environmental policies are essential SOCIAL AND INCENTIVES FRAMEWORK. This chapter to investment outcomes. (See IN 8.2. See also shows that even the most difficult technical IN 4.4 on groundwater recharge in California.) problems--for example, drought, salinity, and reclamation of sodic soils--can be overcome RESPONSES TO CLIMATE CHANGE ARE POSSIBLE, BUT but that the approaches require both "technical THEY NEED SITE-SPECIFIC FLEXIBILITY, BACKED UP BY integration" (of soil, water, agronomy, for exam- RESEARCH. The future incidence of climate ple) and parallel "socioeconomic integration" change can only be conjectured, but it is likely (for example, input and output markets, which to have particular impact on the poor in mar- create incentives and lead to income improve- ments). Success requires community involve- 256 ginal areas who have the least knowledge and resources to cope. Experience has shown that ment; a bottom-up approach; development and programs can be adapted to help, particularly testing of locally adapted technical packages through technological innovations such as min- that address soil, water, and agronomic prob- imum tillage and improved water management. lems together; the availability of input and out- Future research and technology transfer will put markets; and a flexible approach with have to focus increasingly on helping poor participatory monitoring. (See IN 8.3. See also farmers cope with climate change. (See IP 8.2.) "India: Community Organization for Sodic Lands Reclamation," in AIS, Module 4.) TECHNOLOGIES ARE AVAILABLE FOR EVEN THE MOST UNPROMISING MARGINAL RAINFED SYSTEMS, BUT SOMETYPICAL INVESTMENTS THEIR ADAPTATION AND ADOPTION IS BEST DONE BY Investments in technical assistance may include PARTICIPATORY APPROACHES. The Green Revolu- the following: tion depended largely on water availability, and offered little to marginal rainfed areas where · Drought and salinity programs the challenge is low productivity caused by environmental and soil problems of drought, · Flood mapping and flood management plans A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Project investments may include the following: · Drought and salinity programs · Water retention · Flood mitigation · Flood protection measures Pilots may include drought and salinity pro- grams. And finally, related investments may include postflood emergency operations. 257 COPING WITH EXTREME CLIMATIC CONDITIONS INVESTMENT NOTE 8.1 more detailed discussion see Hess (2002), deal- ing with several Indian states. INVESTING IN DROUGHT PREPAREDNESS INVESTMENT AREA There is no universal definition of "drought," Relief efforts in drought-stricken areas are by defi- because its characterization is impact- and nition reactive and increase farmer dependence on application-specific. A conceptual definition of national and foreign governments. However well drought is a deficiency of precipitation over an intentioned, they may deprive farmers of incen- extended period of time with serious impacts tives to adapt. From a poverty-reduction as well as on human activities and the environment. This from a cost-effectiveness point of view, it is prefer- definition links intensity and duration to socie- able to handle drought as a risk for which govern- tal impacts. Meteorological drought focuses ments and farmers may prepare, in the hope of only on the intensity and duration aspects of mitigating its effects. drought. As drought conditions persist for months, seasons, or years, other components of the hydrologic system will be affected. For example, agricultural drought is best defined by Drought is a normal part of climate for virtually deficiencies in soil moisture; hydrological every country. It is a slow-onset, creeping phe- drought, by deficiencies in surface and subsur- nomenon with serious economic, environmen- face water supplies. The links between precipi- tal, and social impacts. It affects more people tation deficiencies and impacts are less direct than any other natural hazard. The common for these drought types, with impacts lagging response has been reactive, ineffective, and meteorological drought. Conflicts between untimely--usually leading to increased depend- water users increase as drought persists ency on government and other organizations. because competition for surface and subsurface The conventional response also adds to vulner- water supplies intensifies. Socioeconomic ability, because it provides a disincentive to drought is associated with the supply and adopt best management practices. demand of some commodity, resource, or prod- uct that is influenced, though indirectly, by pre- A risk-based management approach is more cost cipitation amounts, timing, and effectiveness, as effective. It emphasizes improved monitoring well as by resource management practices. 258 and early warning systems; development of strong decision-support systems; identification Greater investment should be directed to lessen- and implementation of mitigation actions; educa- ing risk associated with drought. Drought risk is tion and training of policy makers, natural defined by a region's exposure to the natural haz- resources managers, and the public; and drought ard and society's vulnerability to it. Because cli- mitigation plans that reduce the most serious mate is variable through time, exposure to impacts. This approach addresses the underlying drought also varies from year to year and decade causes of vulnerability rather than the symptoms to decade. Global warming and the probability (impacts). Investments in drought-mitigation that drought and other extreme climatic events planning, management, and appropriate policies may become more frequent in the future may will provide individuals and governments with translate into increased exposure to drought. the tools necessary to reduce societal vulnerabil- Water resources planning should be based on the ity to future droughts. A possible complement to assumption that climate is variable and extremes this kind of investments is offered by the devel- are a normal part of climate everywhere. opment of financial weather-related risk-man- agement instruments (see box 1.7 in IN 1.3), Vulnerability to drought is defined by social fac- which are being implemented in several coun- tors such as increases in population and regional tries such as Morocco, Mexico, and India. For a migration trends, demographics, urbanization, A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT land use changes, natural resources policies, into a timely and reliable assessment of severity water use trends, environmental awareness and and impacts. These data are commonly available degradation, technology, and the like. Vulnerabil- from national meteorological, hydrological, and ity is dynamic and must be periodically evaluated agricultural services units. Development of an at the local and national levels. The preparation automated weather data station network is rec- of vulnerability profiles (who and what is at risk ommended to collect data from a broader spec- and why) can help individuals and governments trum of meteorological variables and in at every level to better understand and systemati- near­real time for locations representative of the cally address drought risk by concentrating on agricultural environment rather than the urban the underlying causes of vulnerability rather than setting. Automated networks can be established the symptoms (impacts). in most settings. Drought early warning systems must have the capacity to detect the first signs of an emerging POTENTIAL BENEFITS rainfall deficiency, the best indicator of meteor- A comprehensive early warning system can ological drought, but other key drought indica- provide decision makers with information for tors (reservoir levels, groundwater levels, making timely decisions that can reduce the stream flow) are also important. There are also economic, social, and environmental costs and critical social indicators (market data such as losses associated with drought. Drought man- grain prices and changing terms of trade for sta- agement reduces the risk to people, property, ple grains and livestock as an indicator of pur- and productive capacity. It is a critical part of chasing power in rural communities, migration poverty reduction strategies. of household members to search for work, sell- ing of nonproductive assets). All of these indi- cators provide decision makers with early POLICY AND IMPLEMENTATION information on emerging impacts in various Shifting from crisis management to drought risk sectors. Climate indexes should be used to eval- management is difficult because governments uate the status of climate and water supplies, and individuals typically take a reactive and potential impacts in specific sectors such as approach and little institutional capacity exists in agriculture, energy, and urban water supply. most settings to alter this paradigm. A 10-step This information should be supplemented by drought planning methodology to assist in long-range or seasonal forecasts. A drought building institutional capacity is illustrated in 259 early warning system must not only encompass box 8.1. Steps 1 through 4 focus on making sure mechanisms and procedures for the collection, the right people (scientists, policy makers, and analysis, and integration of information from stakeholders) are brought together, understand multiple sources in a timely manner, but also the process, know what the drought plan must include procedures for the dissemination of that accomplish, and are supplied with enough data information to potential end users. Training end to make equitable decisions when formulating users about the value of this information in the and writing the drought plan. Step 5 describes decision-making process is essential. Once the process of developing an organizational drought conditions are detected, there should structure for completion of the tasks necessary be continuous information flow on the severity to prepare the plan. One outcome of this step is of conditions, potential impacts, and possible the conduct of a risk assessment to create a vul- mitigation or emergency response actions. nerability profile for key economic sectors, pop- ulation groups, regions, and communities. It Best practices include development of a com- identifies and ranks the most significant drought prehensive drought early warning system that impacts; examines the underlying environmen- includes collection of data for all meteorological tal, economic, and social causes of these and hydrological variables and for critical social impacts; and guides the choice of actions that indicators and which integrates this information address these causes. This process can identify COPING WITH EXTREME CLIMATIC CONDITIONS Box 8.1 The 10-Step Drought Planning Process risk through preparedness and mitigation. This principle can be promoted through more, or bet- The 10-step drought planning process was originally based on ter, seasonal and shorter-term forecasts; inte- interactions with U.S. states but has been modified greatly to grated monitoring, drought early warning incorporate the experiences and lessons learned from many systems, and associated information delivery sys- developed and developing countries. It has been the basis for tems; preparedness plans at various levels of discussions at regional training workshops and seminars on government; mitigation actions and programs; a drought management and preparedness.This planning process safety net of emergency response programs that has evolved to incorporate more emphasis on risk assessment ensure timely and targeted relief; and an organi- and mitigation tools in response to the increasing interest in drought preparedness planning.The steps are as follows: zational structure that enhances coordination within and among levels of government and 1. Appoint a drought task force or committee. with stakeholders. 2. State the purpose and objectives of the drought plan. 3. Seek stakeholder input and resolve conflicts. 4. Inventory resources and identify groups at risk. Australia developed a drought policy in 1992, 5. Prepare and write the drought plan. and South Africa quickly followed. India has in 6. Identify research needs and fill institutional gaps. place many long-term strategies and measures 7. Integrate science and policy. to reduce the impacts of drought. The United 8. Publicize the drought plan and build awareness States has been moving toward, but has not yet and consensus. enacted, a national drought policy.1 9. Develop education programs. 10. Evaluate and revise drought plans. South Africa has a wide range of institutional Source: Author. capacity to respond to drought emergencies. Its neighbors have no drought policy or plan, although most have some infrastructure to respond to drought conditions, but usually on a who and what is at risk and why. Understanding reactive or ad hoc basis. In Botswana, drought why specific impacts occur offers an opportu- preparedness planning is part of development nity to lessen them in the future through mitigat- planning, and its institutional structure is well ing actions. defined, with local involvement at the district level. In Swaziland, a consortium of NGOs has Steps 6 and 7 describe the need for ongoing been identified to address the needs of vulnera- ble population groups for drought and other 260 research and coordination between scientists and policy makers. Steps 8 and 9 stress the natural hazards. importance of promoting and testing the plan before drought occurs. Finally, Step 10 empha- sizes that the plan must be kept current and be LESSONS LEARNED constantly evaluated in the postdrought period. Individuals, governments, and others consider Although the steps are sequential, in practice drought a rare and random event. As a result, many are taken simultaneously. little, if any, planning is usually completed in preparation for the next event. Because drought Governments, nongovernmental organizations is an inevitable feature of climate, strategies for (NGOs), and international organizations have reducing its impacts and responding to emer- increasingly emphasized the development of a gencies may and should be well defined in drought policy and preparedness plan. Simply advance. Almost without exception, the crisis stated, a drought policy establishes a set of prin- management approach has been untimely and ciples or operating guidelines. It should be con- ineffective and has done little to reduce vulner- sistent and equitable for all regions, population ability to the next drought. Also, relief measures groups, and economic sectors and consistent have been poorly targeted. In fact, drought with the goals of sustainable development. Its relief actually increases vulnerability to future overriding principle is an emphasis on managing events by reducing self-reliance and increasing A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT dependence on external assistance. If govern- Municipal and industrial ments and others provide assistance to those · Provide guidance to local government and most harmed by drought, what incentive do water supply providers on long-term water relief recipients have to alter the resource man- management issues, including drought agement practices that make them vulnerable? planning. In addition, agricultural producers and natural resource managers that employ best-manage- · Encourage water reuse as part of an ongo- ment practices are usually not eligible for ing water conservation program. drought relief or assistance programs. In reality, governments not only promote poor manage- · Provide water efficiency education for indus- ment by providing drought relief, but also try and business. reward it. · Develop and implement an incentives pro- gram to encourage efficient use of existing water supplies. RECOMMENDATIONS FOR PRACTITIONERS Many drought mitigation actions exist for each · Assess and classify the drought vulnerability impact sector. Conducting a drought risk assess- of individual water supply systems. ment will help identify the most essential miti- gation actions for each of these sectors to · Identify vulnerable water-dependent indus- reduce drought vulnerability. Recommenda- tries, and fund research to help determine tions for investment in the agricultural, munici- impacts and improve predictive capabilities. pal, and industrial sectors and general recommendations to benefit all sectors are sum- General marized below. · Improve the reliability of seasonal climate forecasts and increase their use to improve Agriculture decision making for water management. · Train farmers on best-management prac- · Establish an automated weather station net- tices and conservation irrigation. work to provide end users with near­real time data to improve decision making. · Encourage the use of innovative cultiva- tion techniques to reduce crop water use · Alter operating procedures for reservoir 261 and provide guidance on alternative crop- management during drought. ping systems and crop types to employ during droughts. · Augment water storage capacity of surface and subsurface systems to improve drought- · Conduct crop irrigation efficiency studies to coping capacity. improve water management. · Conduct feasibility studies to evaluate the · Provide farmers with real-time irrigation potential for desalinization of saltwater. scheduling and crop evapotranspiration information. · Improve information delivery systems and provide technical assistance to improve · Monitor soil moisture and provide farmers decision making by government officials, with real-time data. agricultural producers, and water managers during droughts and help create the neces- · Encourage installation of water-efficient irri- sary infrastructure. gation technology. · Improve water conservation practices for · Develop an actuarial-based crop insurance domestic and agricultural sectors during program for agricultural producers. drought and nondrought periods. COPING WITH EXTREME CLIMATIC CONDITIONS · Monitor the effects of drought on water decrease both short-term and long-term quality for both surface and groundwater drought impacts and consistency with sustain- supplies. able development goals. Below are examples of investment options that should be consid- The World Bank has several lending instru- ered by the World Bank to increase resiliency ments to stimulate progress in drought risk to drought. management. The Specific Investment Loan program may facilitate development of institu- · Establish automated weather networks to tional capacity. Because a shift from the crisis provide decision makers with improved and management approach to a risk management more comprehensive local and national approach must be gradual, the Adaptable Pro- information as part of an integrated drought gram Loan may offer the opportunity to transi- early warning system. tion to this new paradigm. Moving to risk-based drought management requires restructuring of · Invest in research to improve the reliability current emergency assistance programs and of seasonal climate forecasts to provide building consensus among stakeholders on pri- decision makers with timely information. orities for mitigation measures. Government agencies possess considerable institutional iner- · Improve the infrastructure for delivering tia toward maintaining the status quo (in other reliable information to decision makers, words, maintaining current emergency drought including the development of training pro- relief programs). Effective drought risk manage- grams through agricultural extension and ment requires building consensus between gov- other services and others to improve the ernment and stakeholders. The best time to application of information in making risk- develop a drought policy and a preparedness based decisions. plan is right after a disastrous drought. The les- sons learned in attempting to manage the · Develop institutional capacity for risk-based drought crisis without a viable plan and the far- drought management by establishing a reaching impacts associated with drought are national drought policy and preparedness fresh in the minds of policy makers, natural plan through the application of drought resources managers, and the public. The Bank's planning methodologies. Emergency Recovery Loan program is intended · Develop national water policies directed at to restore assets and production levels after a 262 improving water management and facilitat- natural disaster. This program could be effective ing water transfers, especially during water in implementing drought disaster­resilient tech- shortages. nology, including creation of a comprehensive and integrated early warning and delivery sys- · Create water conservation programs and tem and appropriate training programs to avoid provide local, regional, and national author- or mitigate the impact of future droughts. ities with opportunities for training on the implementation of these programs. INVESTMENT OPPORTUNITIES · Establish risk-based crop insurance programs. Investment opportunities in drought mitigation are numerous and varied. As part of the drought planning process, a critical step is the REFERENCE CITED identification of appropriate mitigation actions Hess, U. 2002. "Innovative Financial Services for that will address those sectors, population India. Monsoon-Indexed Lending and Insur- groups, and regions most at risk. As potential ance for Smallholders." Agricultural Rural mitigation options are identified, each should Development Working Paper No. 9. World be evaluated in terms of its potential to Bank, Washington, DC. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT USEFUL LINKS Rossi, G., A. Cancelliere, L. Pereira, T. Oweis, M. Agriculture and Agri-Food Canada. "Drought Shatanawi, and A. Zairi. 2003. Tools for Watch." Online at http://www.agr.gc.ca/pfra/ Drought Mitigation in Mediterranean Regions. drought/index_e.htm. Boston: Kluwer Academic Publishers. International Research Institute for Climate Wilhite, D. A. 2000. Drought: A Global Assess- Prediction. Columbia University. Online at ment. Vols. 1 and 2. London: Routledge. http://iri.ldeo.columbia.edu/. ______, ed. 2005. Drought and Water Crisis: National Drought Mitigation Center. University of Science, Technology, and Management. Nebraska-Lincoln. Online at http://drought. Boca Raton, Fla.: CRC Press. In press. unl.edu. Queensland Government. "The Long Paddock: ENDNOTE Climate Management Information for Rural 1. All "pending" legislation expires and has to Australia." Online at http://www.longpaddock. be reintroduced in the new Congress. No qld.gov.au/index.html. drought legislation was passed by the out- going Congress per Steve Lanich, House Environmental Affairs Committee 1-12-05. SELECTED READINGS Botterill, L. C., and M. Fisher. 2003. Beyond Drought: People, Policy, and Perspectives. Collingwood, Australia: Commonwealth Sci- entific and Industrial Research Organization. This Note was prepared by Donald Wilhite of the Interna- tional Drought Mitigation Center, with inputs from Shobha Glantz, M. H. 1987. Drought and Hunger in Africa. Shetty. The Note was reviewed by Jean-Marc Faurčs of the Cambridge, U.K.: Cambridge University Press. Food and Agriculture Organization (FAO). 263 COPING WITH EXTREME CLIMATIC CONDITIONS INVESTMENT NOTE 8.2 and nonstructural measures and water manage- ment improvements offers the best value for money. This combination is summarized as INVESTING IN FLOOD integrated flood management, the process that CONTROL AND MANAGEMENT integrates land and water resources develop- ment in a basin, aiming at trading off the bene- In flood management and protection, structural and fits from using floodplains and utilizing flood nonstructural measures need to be balanced in a flows against minimizing losses from flooding basin context. The measures often involve sensitive (WMO/GWP; see References Cited). tradeoffs that require well-structured discussion Water retention measures improve the capac- between the main players.The development and sus- ity of river basins to retain unusual rainfall. In tainability of flood management plans presupposes many basins, the original retention capacity buy-in by stakeholders, including the poor, and rein- has changed, and often diminished, because of forcement of the institutional clout of units favoring deforestation, river training, development of nonstructural measures. stormwater removal systems, increase in metallic surfaces, blockage of natural drainage Floods affect more people--140 million in an patterns, and conversion of natural depres- average year--than all other natural and tech- sions. Catchment protection, afforestation pro- nological disasters put together. From 1998 to grams, and mountain stormwater systems slow 2002, 683 flood disasters were recorded, with down runoff and attenuate flood peaks. In most people affected in Asia (97 percent) and West Africa, efforts to integrate road planning the remainder largely in Africa (OFDA/CRED and water management, using road levees as database--see References Cited). Exposure to barriers, impeded runoff and improved infiltra- floods will increase as more people respond to tion. In plains, drainage systems play a crucial population growth by moving to areas prone to role in water retention. Drainage systems cre- flooding such as floodplains and deltas and as ate soil storage capacity to buffer excess rain- global climate change increases heavy runoff fall and runoff. They can slow down and reduces infiltration. stormwater runoff, control water tables, and improve soil chemistry. The benefits of such In many areas, floods are not only hazards, but controlled drainage systems are twofold: also sources of groundwater recharge and improved flood management and increased 264 renewal of soil fertility. Cyclic floods improve agricultural production. water quality, maintain aquatic ecosystems, and Other water retention measures utilize runoff sustain inland fisheries. In poor regions, floods and flood water for irrigation. With measures are the main source of irrigation water. Invest- such as gully plugging, contour bunding, ment in improved flood management and pre- trenching, and recharge wells, monsoon rain- paredness can reduce vulnerabilities and fall is controlled in the upper catchments and improve the positive effects of floods. used to improve soil moisture and recharge shallow aquifers. These programs often trigger individual or small group investments in tanks INVESTMENT AREAS and wells. Watershed programs in Andhra A broad repertoire of flood management meas- Pradesh, India, established payback periods of ures is required to reduce the negative impact five years or less (Wassan 2004). Water har- of floods and improve their positive impact. vesting in high rainfall areas slows down ero- Structural measures such as flood embankments sive sheet flow and increases shallow and storage reservoirs have their place, but groundwater tables, enhancing the reliability absolute protection from flooding is often of rain-dependent paddy cultivation. In North- impossible, unaffordable, or simply undesir- east India such investment had short payback able. In many cases, a combination of structural periods (CDHI n.d.) A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Spate irrigation systems also use runoff and flood Box 8.2 Northern Nigeria:The Floodplain of flows. Small and medium-scale seasonal floods the Hadejia-Jama'are Basin from ephemeral rivers are diverted for irrigation. Investments in civil head works have compli- At the confluence of the Hadejia and Jama'are Rivers lies a cated the management of the sedimentation large floodplain. After construction of the Tiga and Challawa processes and shifted control over the flows to Gorge Dams upstream, this floodplain decreased from upstream land owners, creating substantial social 300,000 hectares to less than 100,000 hectares. Net economic benefits from the floodplain (agriculture, fishing, fuelwood) problems. Different and often cheaper modalities were about US$32/1,000 cubic meters of water, whereas merit preference. Support in the shape of earth- return from crops grown in the Kano River irrigation scheme moving equipment to build smaller "traditional" was less than US$2/1,000 cubic meters of water. systems is often more effective. Source:World Bank 2003. The same argument applies to inundation canals and flood recession cultivation, where a rising perennial river overtops its banks and Box 8.3 The Orissa Disaster Management Project inundates the banks and plains alongside the river, allowing farmers to grow crops on the In the wake of the catastrophic Super Cyclone of 1999, the residual moisture. Water productivity in flood Orissa disaster management project introduced flood and dis- aster preparedness measures in 10 coastal subdistricts in India. recession agriculture can be high (box 8.2) The following was achieved: and, in several dams in Africa, controlled flood releases are part of the operating procedures · Community contingency plans were prepared in 1,600 vil- to continue capturing this benefit. lages, starting with participatory risk assessment and mapping.The plans called for the construction of school buildings that would double as shelters, installation of Even greatly enhanced retention and storage raised tubewells, construction of storage for nets and dry does not offer absolute protection from flood- fish, road and embankment repair, and alternative building ing. Measures to mitigate flood impacts and technologies. Mock drills tested the contingency plans. reduce susceptibility to damage offer scope for · The community plans were integrated into subdistrict dis- complementary investments. They include aster management plans. floodplain regulation, design and location of · Local task force groups were created and given training in facilities, building codes and flood forecasting, first aid, rescue evacuation, water and sanitation, shelter and availability of controlled overflow areas. management, and carcass disposal. · A ham radio system was developed for use during emer- They may be supported by robust flood fore- gencies and control rooms were established in the sub- casting and warning systems. Disaster pre- 265 district centers. paredness will further reduce the impact of The project was completed in 18 months on a slim budget of flooding--with coordinating and control mech- US$211,000 thanks to volunteer input. The preparedness anisms, supported by information campaigns, measures were successfully activated in the 2001 floods and the construction of safe shelters, and the estab- the 2002 near-cyclone.The challenge is to maintain alertness in lishment of coordinated emergency response years without threats. mechanisms (box 8.3). The challenge is to Source: Victoria 2002. maintain rigor during periods when there are no major floods. Flood protection measures such as dikes, levees, extended a dike, dug a belt canal around the and flood embankments are justified in areas city center, and rehabilitated natural drains at a with high population densities, historical her- cost of US$27.7 million and a postproject eco- itage, and costly assets and infrastructure. An nomic rate of return (ERR) of 23 percent. example is the Sfax Flood Protection project (2289-TUN), which protected Tunisia's second largest city. The year before the project, the city POTENTIAL BENEFITS suffered a severe, 1-in-130-years flood that The primary benefits of flood management caused US$80 million in damage. This project investments derive from reduction of potential COPING WITH EXTREME CLIMATIC CONDITIONS damage--in terms of loss of life, damage to eries, riverine ecology, water recharge, soil fer- property and infrastructure, crop loss, service tility, and local irrigation. disruption, and increased poverty (UN-ESCAP). A second point to acknowledge is that interests in Flood damage can be phenomenal. In China in different options vary and may conflict with one August 1998, floods claimed 2,300 to 3,000 lives another. A good example is the flood control and and caused damage estimated at US$20 billion. drainage projects in Bangladesh (box 8.4). In Two other floods in the Republic of Korea the lands that include flood control and drainage, same year caused US$1 billion in damage (UN- agricultural land in the floodplains was protected ESCAP). against flooding, but this often pitted fisherfolk against farmers. In these circumstances, political and social feasibility comes into play. It is hard to POLICY AND IMPLEMENTATION accept the message of "giving up" certain areas, Flood mapping is useful for assessing an area's where a braiding river can no longer be con- vulnerability to flooding, the value of its assets, trolled. This was a finding in the Bangladesh and the feasibility and impact of flood manage- Drainage and Flood Control Project (864-BD), ment investments. In preparing flood manage- where local politicians fiercely resisted the retire- ment investments, decision makers must ment of embankments. They pushed for the con- compare packages of flood management meas- struction of expensive groynes, but in the end ures at basin level (table 8.1). Decision makers these structures could not reverse the change in should consider not only these measures' bene- the riverbed. The best package may not be the fits in terms of reduced flood damage, but also one with maximum economic benefits, but the their positive or negative effects on inland fish- one that offers the most acceptable tradeoff Table 8.1 Summary of Strong andWeak Points in Flood Management Measures Potential strong points Potential weak points Water retention Additional benefits such as recharge, May not protect against peak floods, which irrigation, and drainage may still cause substantial damage 266 Investment can be multipurpose Flood mitigation Possibility of extensive coverage at low Requires discipline, which in case of financial cost infrequent floods may be lost No impact on natural processes Perpetuates insecurity May be politically unacceptable without flood protection Flood protection Protects critical and high-value assets May interfere with inland fishery and aquatic systems Protects low-lying areas, where poor neighborhoods are often situated May reduce river storage capacity Results in very high demand after May make land acquisition difficult flood disasters May raise investment costs May generate high recurrent costs that might not be paid Source: Author. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT between divergent interests. It is through stake- Box 8.4 Conflicts in Flood Protection holder involvement in assessing options that such solutions can be reached. The Chalan Beel flood control and drainage project in Bangladesh failed to recognize the different interests that Investments in flood management need to be come into play in flood management. The construction of supported by policies that safeguard water reten- embankments interfered with local floodplain fishery. The tion and storage capacity by protecting upper- many cuts made in the embankment structures to enable fish- catchment vegetation, protecting wetlands for ing ultimately rendered them ineffective. flood storage, restricting sand and gravel mining Source: Abdel-Dayem et al. 2004. in rivers, and regulating development of roads, railways, and built-up areas. Investing in the enforcement of such policy measures gives bet- fee--yet this presupposes the existence of a rev- ter value for the money than remedying the con- enue collection system. More commonly, invest- sequences of the lack of enforcement. The same ment in flood protection is inscribed on the applies to policy measures regulating access and government budget and rarely leads to effective use of flood-prone areas. Such low-cost meas- preventive maintenance. This is a strong argu- ures keep maintenance costs down. In spite of ment in favor of measures with additional func- some efforts, there are no cases of cost recovery tions for which users would be willing to pay. of flood protection by the direct beneficiaries. This point is made in several Bank Implementa- Given the high negative opportunity costs of not tion Completion Reports, for instance the Small- investing in integrated flood management, sev- Scale Drainage and Flood Control Project eral lending modalities can be used in flood man- (955-BD) in Bangladesh. At best, costs are recov- agement and flood protection. Table 8.2 gives an ered as a surcharge on a general tax or water overview of some of these, but it is important to Table 8.2 Examples of Possible Loans Loan modality Type of activity Sector Investment and Integrated investment packages of water retention measures (drainage, water Maintenance Loan harvesting, flood irrigation, road embankments), flood mitigation (flood warning, flood preparedness and mitigation, flood zoning, shelters, communication), and 267 flood protection measures (embankments, storages, groynes)--including the development and implementation of policies (such as flood zoning, cost recovery) and emergency mitigation and relief measures, awareness building, and capacity building Learning and Innovation Loans (1) Development of innovative packages of flood mitigation and protection measures, also addressing financing mechanisms--including monitoring of effectiveness Learning and Innovation Loans (2) Development of appropriate innovative measures for water retention and nonreservoir water storage--for instance in upstream drainage and flood-based irrigation Technical Assistance Loans (1) Flood mapping and development of flood management plans, including consultation and capacity building Technical Assistance Loans (2) Strengthening the enforcement of flood mitigation policies and measures, including dam operations Emergency Recovery Loans Postflood emergency operations--including regional macroeconomic stability-- to augment food stocks and restart economic activities Source: Author. COPING WITH EXTREME CLIMATIC CONDITIONS be selective in deciding where to invest. This was · Flood mapping to assess the effectiveness a major lesson of the Bangladesh Drainage and of alternative flood management packages Flood Control project (864-BD). Investments in relatively simple polders without pumped · Reinforcing capacity to enforce and imple- drainage in shallow flooded areas were econom- ment nonstructural measures ically justified, but similar investments in deeper · Establishing mechanisms to settle divergent flooded areas were not. interests and undertake local planning · Installing water retention measures-- LESSON LEARNED including measures to utilize flood flows The main lesson learned concerns the value of looking at water retention and flood storage · Preparing flood impact mitigation measures, capacity at basin level. A package of invest- including controlled flooding ments and measures has to be identified to pre- vent and attenuate flooding, mitigate its impact, · Preparing flood protection measures and protect areas with high-value assets. REFERENCES CITED RECOMMENDATIONS FOR PRACTITIONERS Abdel-Dayem, S., J. Hoevenaars, P. Mollinga, W. · Avoid isolated perspectives and falling into Scheumann, R. Slootweg, and F. van Steen- the trap of assuming that some investment bergen. 2004. "Reclaiming Drainage: areas--particularly civil engineering works-- Towards an Integrated Approach." Agricul- are always appropriate. This is a challenge in tural and Rural Development Report 1, countries where the organizations responsi- World Bank, Washington, DC. ble for flood management have been geared toward flood protection works, and where CDHI (Centre for Development of Human Initia- water management improvements, flood tives). n.d. "Water Harvesting and Soil Con- preparedness, and land use planning to help servation in High Rainfall Areas." Online at attenuate flood peaks have no institutional http://www.cdhi.org/upl_pdf/wwguide.pdf. home. OFDA/CRED (Office of United States Foreign · Capacity should be strengthened to enforce Disaster Assistance and Center of Research 268 nonstructural measures. on the Epidemiology of Disasters). "Interna- tional Disaster Data Base." Catholic University · Community-based disaster preparedness is a of Louvain, Brussels. Online at http://www. necessary element in building up response cred.be/emdat/profiles/disaster/flood.htm. capacity to deal with flood impact. UN-ESCAP (United Nations Economic and Social INVESTMENT OPPORTUNITIES Commission for Asia and the Pacific). "Water Investment opportunities for practitioners include Hazards, Resources and Management for the following: Disaster Prevention: A Review of the Asian Conditions." Available online at http://www. · Developing a basin-level flood management unescap.org/enrd/water_mineral/disaster/ plan watdis5.htm. · Preparing an integrated package of water Victoria, L. 2002. "Impact Assessment Study of the retention measures, flood impact mitigation, Orissa Disaster Management Project." and flood protection Bangkok: Asian Disaster Preparedness Center. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Wassan/ Water Conservation Mission. 2004. Threat." In Progress in Development Studies "Report on Watershed Impact Assessment 3 (1): 43­58. Study." Parker, D. J. (ed). 2000. Floods, vols. I and II. WMO/GWP (World Meteorological Organisa- London: Routledge. tion and the Global Water Partnership), Associated Program on Flood Management. Van Steenbergen, F. 1997. "Understanding the Online at http://www.wmo.ch/apfm/. Sociology of Spate Irrigation." In Journal of Arid Environments 35 349-3­65. World Bank. 2003. "Water Resources and Envi- ronment: Environmental Flows: Flood For guidelines on spate irrigation, see http:// Flows." Technical Note C3, World Bank, www.spate-irrigation.org. Washington, DC. For information on flood mitigation, see the SELECTED READINGS Web site of the Association of State Flood- plain Managers in the United States at Associated Programme on Flood Management http://www.floods.org/home/. 2003. "Integrated Flood Management: Con- cept Paper." World Meteorological Organi- zation/Global Water Partnership. For more on disaster preparedness, see the Web site of the Asian Disaster Preparedness Cen- Du Plessis, L. A. 2002. "A Review of Effective tre at http://www.adpc.net/. Flood Forecasting, Warning and Response System for Application in South Africa." In Water SA 28 (2): 129-1­38. This Note was prepared by Frank van Steenbergen, with inputs from Abla Ilham and Alessandro Palmieri. It was Few, R. "Flooding, Vulnerability and Coping reviewed by Bart Snellen of the International Institute for Strategies: Local Responses to a Global Land Reclamation and Improvement (ILRI). 269 COPING WITH EXTREME CLIMATIC CONDITIONS INNOVATION PROFILE 8.1 The Hai Basin project in China will pilot water resources planning through allocation of ET quotas. In this basin, where Beijing is located, PLANNING SCARCE water availability is only 305 cubic meters per WATER RESOURCES USING capita, which is 14 percent of the national aver- age and 4 percent of the world average. EVAPOTRANSPIRATION Groundwater is pumped at a rate of 26 billion QUOTAS:THE HAI BASIN cubic meters a year, mostly for irrigation. INTEGRATEDWATER AND Abstraction exceeds recharge at a rate equal to ENVIRONMENT PROJECT IN one-third of total abstraction. Excess abstraction CHINA is 13 billion cubic meters a year, 9 billion cubic meters of it through groundwater overexploita- tion and 4 billion cubic meters through overuse What is new?Water resources planning and man- of surface water. agement using units of evapotranspiration (ET) is useful wherever water is scarce. It makes particu- larly good sense where irrigated agriculture is the OBJECTIVES AND DESCRIPTION major water user. The approach is practical and The objective is to increase the volume and aims to make the utilization of water resources sus- value of agricultural production in the demon- tainable and raise farmer incomes. It helps to maxi- stration areas using a target ET amount. This mize agricultural production in water-scarce areas amount will be less than the current ET, a goal in a sustainable way. It raises farmer social capital that can be achieved only by reducing nonben- and improves farmer access to information. eficial ET and raising crop water use efficiency in the narrow sense of the word. In water-short areas, it is important to manage The productivity of irrigation water is the result water resources in terms of the amount lost for of a host of factors, among them plant breed- other uses. Water mobilized by large irrigation ing, soil fertility, fertilization, plasticulture, systems can be divided into the portion that tillage, weed control, soil moisture manage- crops, trees, and weeds use for ET, and the ment, drainage, soil salinity, soil sodicity, irriga- portion that returns to the surface water or tion scheduling, deficit irrigation, irrigation groundwater systems. The portion consumed technologies, and techniques and cropping pat- 270 through ET is the amount lost for users down- tern changes. The project will therefore work stream; this is often called the net extraction.1 with farmers on irrigation and cultivation as Managing water resources in terms of net well as general management practices to extraction encourages farmers to maximize the improve their water productivity (WP). benefits from the ET allocated to their area. Farmers will reduce the evaporation and tran- The project will estimate ET in the demonstra- spiration that does not contribute to plant tion areas with remote sensing techniques, growth. For example, they will reduce evapo- drilling down to farm plots if need be. It will tar- ration by reducing waterlogged areas, by irri- get reductions in nonbeneficial ET and increases gating when evaporation is lowest (at night in crop water use efficiency in selected demon- instead of during the day), by using moisture- stration areas. It will work with farmers to retaining mulches, and by replacing open reduce ET to these target levels, while aiming to canals and ditches with pipes. They may also maintain, if not raise, farmer incomes. It will cor- reduce plant transpiration by weeding, using relate this ET information with data on produc- water stress­resistant varieties, and fine-tuning tion and farmer income and develop spectrums deficit irrigation. that show the range of yields and incomes per A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT unit of ET for several crops. The project will irrigated agriculture is the major water user. The identify irrigation, cultivation, and general man- approach is practical and aims to make the uti- agement practices with low, average, and high lization of water resources sustainable and raise WP and train farmers with low WP in the prac- farmer incomes. It helps maximize agricultural tices of the high-WP farmers. production in water-scarce areas in a sustain- able way. It raises farmer social capital and improves farmer access to information. Reliance OUTPUT AND IMPACT on monitoring through remote sensing makes it Water resources management is primarily a bot- applicable everywhere because the entire globe tom-up undertaking that requires individual is served by satellites. involvement of the water users. The project will work directly with farmers and farmer groups to achieve its objectives. It will form and WORLD BANK PROJECT DISCUSSED strengthen water user associations through China. "Hai Basin Integrated Water and Envi- which farmers will learn to manage water con- ronment Management Project." Active. Pro- sumption within allocated (target) amounts of ject ID P075035. Approved: April 4004. ET while increasing the volume and value of Within World Bank, available at http://proj- their production, including switching to higher- portal.worldbank.org. value, less water-consuming crops. Output is likely to be sustained, and even ENDNOTE expanded, after completion. The objectives are in 1. If return flows are unusable because of poor the interest of both farmers and government. Pro- quality of the return flows or of the receiving viding farmers with assistance during the project water body, they are not recoverable and can and keeping water use within the allocated limits, be considered "real" losses. In this profile, we local water bureaus and agriculture bureaus will are concentrating only on "real" water sav- increase their own knowledge and skills. ings related to ET reduction and not reduc- tions in other nonrecoverable losses, which would also be "real" water savings. WIDER APPLICABILITY Water resources planning and management using ET units is useful wherever water is This Profile was prepared by Douglas Olson and reviewed by 271 scarce. It makes especially good sense where Jack Keller of International Development Enterprises. COPING WITH EXTREME CLIMATIC CONDITIONS INNOVATION PROFILE 8.2 Table 8.3 summarizes the impact of climate change on seven sectors, among them rainfed agriculture and agriculture with water control. FIGHTINGTHE ADVERSE In what way can World Bank projects address IMPACTS OF CLIMATE this vulnerability for people already exposed to CHANGE ON AGRICULTURE multiple poverty-associated liabilities? (See box 8.5 for climate-related components in World What is new? Agricultural water investment proj- Bank projects.) For an answer, this profile looks ects can do much to enable rural communities to at Brazil's "Land Management II--Santa Cata- adapt to negative impacts of climate change such as rina" project and China's "Tarim Basin" and drought, soil degradation, and waterlogging.To allevi- "Tarim Basin-II" projects. Components of these ate or reverse negative climate effects, new projects help farmers mitigate the impact of cli- approaches and technologies such as combining mate change, even though they were not infrastructure investment and economic incentives, designed for that purpose. diversification,satellite technology,and climate infor- mation can be used. OBJECTIVES AND DESCRIPTION Poor rural people depend on natural resources THE LAND MANAGEMENT II--SANTA CATARINA PRO- but live in marginal areas and lack the knowl- JECT. The Land Management II project was edge and resources to adapt easily to the unex- implemented in Brazil's southern province of pected. Changes associated with climate are Santa Catarina between 1991 and 1997. Its therefore likely to affect them more than any objectives were to increase agricultural produc- other group. tion on 81,000 small farms, make land and Table IP 8.3 Climate Impacts on Natural Resources-Using Sectors and Implications for the Poor Sectors Economic impacts Ecosystem impacts Welfare indicator Impacts on the poor Agriculture Loss of agricultural Pests and diseases Poverty incidence Food poverty and production malnutrition 272 Irrigation, drainage, Drought, waterlogging, Impact on biodiversity Percentage of area Vulnerability to drought and watershed and electricity irrigated management shortage Drinking water Infectious and Unhygienic conditions Access to water Disease burden and and sanitation waterborne diseases and sanitation pollution Public health: Mortality and Epidemics Disability-adjusted Infectious diseases malaria morbidity life years Infrastructure: Slow regional Impacts on land use Per capita road Income and employment rural roads progress network Renewable energy Dependence on Pollution and air Access to electricity Low access to modern traditional energy and quality energy fossil fuels Disaster Impacts on multiple Ecosystem diversity Loss prevention Extreme vulnerability management sectors and productivity through mitigation and adaptation Source: Reddy, Dinar, and Mendelsohn 2004. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT water management sustainable, improve farm Box 8.5 Reflections on Climate-Related incomes, and protect the environment. The Components in Bank Projects project sought to introduce land and water management methods that would allow farmers · Low agricultural productivity and high levels of poverty to cope with changing climatic conditions that are associated with marginal climates. lead to soil degradation. The main project com- · World Bank project investments tend to concentrate in ponents were agricultural extension, research, marginally climatic regions. · Project implementation reports present anecdotal evi- incentives for sustainable land management, dence on climate events but do not provide information land use planning, mapping, and monitoring of on their influence on project outcomes. the environment. · The components show wide variation in their sensitivity to climate variables, which is reflected in the project ERR. THE CHINA TARIM BASIN I AND TARIM BASIN II Source: Authors. PROJECTS. The Tarim Basin in Xinjiang Uygur Autonomous Region in northwest China sup- ports 5 million people. Its arid climate implies significant ET, much of which does not con- tribute to agricultural production or human use. farmers who had improved their land manage- Basin inhabitants depend mainly on agriculture, ment suffered only small income drops. which suffers from water shortages, salinity, and waterlogging. THE CHINA TARIM BASIN I AND TARIM BASIN II PROJECTS. The Tarim Basin projects increased Tarim Basin I was implemented between 1991 crop yields by 20­47 percent in high areas and and 1997 to improve irrigation and drainage, 68­118 percent on low-lying land. The projects develop hydropower and agriculture, strengthen achieved an ERR of 33 percent in terms of support services for agriculture and livestock improved crop production and reclaimed development, and restore the Tarim River 42,000 hectares, benefiting 104,000 households ecosystem. Tarim Basin II is underway. It is and 33,000 livestock owners. Per capita expected to improve the productivity of a low- incomes grew by 250 percent in six years (from yielding irrigated area of 105,350 hectares, Y400­610 in 1991 to Y1,030­1,510 in 1997). The reclaim a nonproductive area of 75,350 hectares, project used innovative mechanisms to sup- improve drainage, and support institutional press hail, which used to badly damage crops development initiatives for water management in the Weigan prefecture. The hail was detected 273 and delivery. by radar and suppressed by seeding the clouds with silver iodide. OUTPUTS AND IMPACTS Tarim Basin II utilizes remote sensing data from THE LAND MANAGEMENT II--SANTA CATARINA PRO- Landsat and the U.S. National Oceanic and JECT. Through appropriate extension activities, Atmospheric Association to map biomass pro- the project promoted minimum tillage, seed duction, maximize consumptive use, and processing, and adaptive research by upgrading reduce nonbeneficial ET. The project estimates agrometeorological stations. Land management water productivity of the water user associa- initiatives supported moisture conservation on tions and establishes water use quotas at sub- 400,000 hectares in 523 microcatchments, with basin level so that adequate water is delivered spontaneous adoption on 480,000 hectares in to the middle and lower reaches of the Tarim nonproject catchments. Reduction of soil loss River when rainfall is low and ET is high. helped reduce the cost of soil enrichment and stabilization, waterborne diseases, and mainte- nance costs of rural roads. Macroeconomic ISSUES FORWIDER APPLICABILITY adjustments and decisions to join Mercosur and Some of the techniques used in these projects the Southern Cone free trade area affected the could be adapted for use in other geographic project through lowered output prices, but and institutional settings. Adaptation could be COPING WITH EXTREME CLIMATIC CONDITIONS simple changes in management practices and in World Bank Operations." February. Wash- available technologies at farm level or support ington, DC: World Bank, World Bank Global through government-sponsored planning and Climate Change Team. Available online at advisory services. In either case, data and http://lnweb18.worldbank.org/ESSD/envext. appropriate institutions have to be available. nsf/46ByDocName/LookBeforeYouLeapARisk ManagementApproachforIncorporatingClimate Addressing site-related climate problems is an ChangeAdaptationinWorldBankOperations/ efficient and cost-effective way to cope with $FILE/LookBeforeYouLeapCCteam2004.pdf. such issues. For example, in the case of the projects in this profile, combining remote sens- Kurukulasuriya, P., and S. Rosenthal. 2003. "Cli- ing with socioeconomic data allows evaluation mate Change and Agriculture, A Review of of the relationships between site productivity, Impacts and Adaptations." Environment climate, and project performance. Department Paper No. 91. World Bank, Washington, DC. REFERENCE CITED Mathur, A., I. Burton, and M. van Aalst, eds. Reddy, R. C., A. Dinar, and R. Mendelsohn, R. 2004. "An Adaptation Mosaic: A Sample of 2004. "Climate Influence on World Bank Emerging World Bank Work in Climate Agricultural Portfolio in Brazil and India." In Change Adaptation." Final draft, February. Ajay Mathur, Ian Burton, and Maarten van World Bank, World Bank Global Climate Aalst, eds. "An Adaptation Mosaic: A Sample Change Team, Washington, DC. of Emerging World Bank Work in Climate Change Adaptation," 53­70. Washington, DC: World Bank, World Bank Global Cli- WORLD BANK PROJECTS DISCUSSED mate Change Team. Available online at Brazil. "Land Management II--Santa Catarina." http://lnweb18.worldbank.org/ESSD/envext. Closed. Project ID: P006473. Approved: 1992. nsf/46ByDocName/AnAdaptationMosaicA SampleoftheEmergingWorldBankWorkin China. "Tarim Basin Project." Closed. Project ID: ClimateChangeAdaptationPart1/$FILE/ P003556. Approved: 1991. AnAdaptationMosaicCCteam2004part1.pdf. China. "Tarim Basin II Project." Closed. Project ID: P046563. Approved: 1998. 274 SELECTED READINGS Burton, I., and M. van Aalst. 2004. "Look Before You Leap--A Risk Management Approach This Profile was prepared by Ariel Dinar and Rama Chandra for Incorporating Climate Change Adaptation Reddy and reviewed by Ian Noble and Peter Jipp. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 8.3 and contour cultivation, but the benefits of local grasses were not explored. INVESTING IN PARTICIPATORY Beneficiaries did not identify with introduced APPROACHES FORTHE CULTI- vetiver grass and considered it a top-down gov- ernment program. Testing drought-tolerant VATION OF NEWVARIETIES crops, including fodder, was not a high priority, AND SOIL ANDWATER and the horticultural crops, fruit, and vegetable CONSERVATION IN INDIA crops promoted had to have adequate water. During the mid-term review (December 1993), What is new? Stakeholder involvement opened both projects were restructured to rectify short- the door to success for two World Bank projects comings and realign objectives and priorities by to help poor farmers increase yield from mar- taking on the following: ginal land. The success of the projects is mostly due to the local community's sense of ownership · Involving communities in testing introduced through its involvement in selecting and testing technologies new varieties and technologies, the high priority given to the cultivation of local grasses, and the · Assigning high priority to use of local grasses close collaboration between research institutions with economic benefits in fodder and robe and the projects. making and using vetiver where applicable · Streamlining relationships between benefi- Community involvement through village devel- ciaries and forestry departments in grass opment committees (VDCs) and "ownership" of collection introduced technical packages has been crucial to meeting project objectives and introducing · Including livestock development in project new technologies in the last decade. Successful activities by providing improved feed, mak- pilot projects in integrated watershed develop- ing fodder available, and offering artificial ment and combating soil sodicity1 through bilat- insemination and other veterinary services eral and multilateral investments have led to scaling up of further investments. · Introducing drought-tolerant varieties of crops, particularly grains such as barley, wheat, and maize and horticultural crops OBJECTIVES AND DESCRIPTION 275 such as guava, pomegranate, and amla Bank investment in watershed development to (cape gooseberries) promote and adopt moisture and soil conserva- tion measures started in the 1980s with pilot · Planting napier grass (pennisetum pur- operations to test technologies under field con- pureum) as a source of green fodder in ditions. Some bilateral small (village and dis- field borders trict-size) investments were also introduced. Moderate success was achieved in introducing To implement proactive participatory concepts, soil and water conservation measures, espe- community organizations such as VDCs were cially in rainfed areas (600 to 1,000 millimeters formed as incubators for sustainable project average annual rainfall). Technical success led objectives. A "show and tell" approach was to twin investments in integrated watershed used in which project staff and community development in the geographically contiguous organizations introduced new villagers to the Shivalik hills in India (Jammu and Kashmir, ideas and techniques. This participatory Punjab, Haryana and Himachal Pradesh) and approach was instrumental in designing the the plains (Orissa and Rajasthan). In both proj- Integrated Watershed Development project, ects, vetiver grass (vetiveria zizanoides) was known as "Hills II," which covered the Shivalik planted for soil conservation through terracing hills in five states, including Uttararchal. COPING WITH EXTREME CLIMATIC CONDITIONS Watershed development in India has proven 150,000 hectares and incorporate project activi- highly cost effective as a mechanism for reach- ties into the main government-supported pro- ing many of the rural poor (including the land- gram in a unified approach.2 less, women, and disadvantaged groups) and having a large and sustainable impact on their Achieving sustainability in combating drought lives. The bottom-up participatory involvement and salinity is a central objective of Bank invest- of communities in project formulation and ments, particularly in watershed development implementation ensured their ownership and and reclamation of sodic soils. The project com- effective benefit- and cost-sharing arrangements ponents were broadly based on the following: for project investments. This implied that, if communities and their VDCs were proactive · Forming community development groups stakeholders, flexibility could be woven into to proactively empower project beneficiar- project design and investments. Project imple- ies including the landless, women, and dis- mentation plans were proposed by project staff advantaged groups and finalized after consultation with VDCs. Aide-mémoires, signed by VDCs and project · Promoting suitably tested technical pack- staff, specified the rights and responsibilities of ages and their adoption and modification everyone involved. according to local conditions The participatory approach of empowering · Sensitizing project staff to the changes beneficiaries was also adopted in reclamation needed for a bottom-up approach through of sodic lands in Uttar Pradesh (UP) in two suc- effective institutional development programs cessive Bank-financed projects in 1993 and · Making inputs available at the time needed, 1998. Other agencies were involved on a particularly seeds, seedlings, agrochemicals, smaller scale in UP: the European Union in and soil amendments three districts in 1994 and the government of the Netherlands in two districts. · Rationalizing subsidies by enacting evolving benefit- and cost-sharing arrangements The pilot project (UP Sodic I) tested and adopted several technologies based on system- · Upgrading infrastructure for drinking water atic soil testing, digging surface drainage, and farm-to-market roads drilling tubewells, applying gypsum, leaching 276 with good quality groundwater, crop manage- · Minimizing water loss and waste through ment, and regular flushing of salts from link operation and maintenance (O&M) proce- drains. NGOs were actively involved in training dures agreed between communities and beneficiaries and in effective, forward-looking project management project management. The technologies used are based on extensive research by national and · Establishing effective monitoring, evaluation, international institutions. The Indian Council of and feedback systems involving beneficiaries Agricultural Research and its affiliated research institutes (particularly the Central Soil Salinity Research Institute at Karnal, Haryana), con- OUTPUT AND IMPACT tributed to the development and implementa- At full development the Integrated Wasteland tion of technical packages including varietal Development Program (IWDP) of Hills II would development and testing of salt-tolerant barley, treat about 200,000 hectares, 75 subwatersheds wheat, and rice varieties and green manure serving 1,920 villages in the five project states under field conditions. UP Sodic I brought the out of a total area of 522,000 hectares. During first green cover to about 64,000 hectares of bar- preparation and early project implementation, ren land, surpassing the initial 50,000-hectare visits by groups of beneficiaries to treated subwa- objective. At full development, UP Sodic II tersheds in earlier projects proved instrumental (1998) would bring into cultivation about in fostering exchanges of ideas not only with A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT beneficiaries, but also with project management the appraisal estimates. Cropping intensity staff. Experience from Uttaranchal was also increased from 62 percent to 222 percent, with valuable, because the European Union was wheat and rice yields reaching 2.7 and 3.0 tons involved in promoting participatory aspects and per hectare, respectively. This has undoubtedly establishing a revolving fund for watershed contributed to poverty alleviation and reversal maintenance with beneficiaries' contributions. of soil and water degradation. The visits also helped in exchanges of technolo- gies, seeds, seedlings, and fodder. LESSONS LEARNED Earlier projects and research efforts identified Effective management of natural resources in the most appropriate vegetative technologies marginal and wastelands has proven techni- for watershed protection and management. cally and socially feasible. Technically, devel- However, the use of vetiver grass was per- opment of drought- and salt-tolerant crops ceived to be a Bank-driven technology. This was integrated with crop management, on-site perception was remedied for both Hills I and moisture conservation, and soil conservation. the plains projects after the 1993 mid-term Socially, proactive participation of project review. Emphasis is now on selecting locally stakeholders, particularly beneficiaries, is cru- available grasses and using indigenous technol- cial to effective implementation of invest- ogy to reduce soil loss from erosion and ments. The support and coordination of increase on-site moisture and crop yields. qualified project staff is essential to the real- ization of project objectives. Some of the key In rainfed areas, major crops are maize and lessons learned are as follows: pulses in the Kharif season and wheat and grain in the Rabi season. The Hills I project comple- · The Adaptable Program Loan is the recom- tion report confirmed increase in both crop mended lending instrument for long-term yields (40­60 percent) and cropping intensity (7 drought and salinity programs However, a percent) owing to increased availability of Learning and Innovation Loan or a pilot moisture and a rise in the groundwater table. In operation is suggested, if recommended addition, construction of water-harvesting and technologies and approaches have to be minor irrigation structures ensured availability tested before scaling up investments. of irrigation and drinking water for domestic use and livestock. With increased irrigation, · Formation of community development 277 more vegetables and fruits such as mango and groups is essential to proactively empower guava were planted in the Rabi season. Milk project beneficiaries, including women, production increased by 20­30 percent as a landless, and disadvantaged groups. result of improved availability of fodder and · Developing suitably tested technical pack- veterinary services. ages, and their adoption and modification The mid-term review of IWDP, Hills II (April 23, through local field testing, would ensure the 2002) and supervision report (October 19, sustainability of interventions. 2003) confirmed that implementation progress · Project staff should be sensitized, through is satisfactory, and 1,260 VDCs have been effective institutional development pro- formed (80 percent of target). Wheat yields grams, to the changes needed for a bottom- have increased from 2.3 tons per hectare to 2.9 up, participatory approach. tons per hectare. Milk production has also risen, by 19­34 percent, as envisaged at appraisal. · Timely availability of financing of inputs, particularly seeds, seedlings, agrochemicals, As for the UP sodic reclamation projects, the and soil amendments should be ensured. results are impressive--the land, once barren, whitish, and sodic, has become green and · Subsidies should be based on acceptable productive. Rice and wheat yields are double benefit- and cost-sharing arrangements. COPING WITH EXTREME CLIMATIC CONDITIONS · Infrastructure for drinking water and farm- Within World Bank, available at http:// to-market roads should be included in proj- projportal.worldbank.org. ect activities. · Agreed operation and maintenance proce- ENDNOTES dures and cost-sharing arrangements should 1. Sodic soils are salt-affected lands dominated by be clearly delineated between communities the electrochemical bonding of sodium to clay. and project management. This results in the dispersal of the finer soil par- ticles, impedance of water and air movement, and creation of highly alkaline conditions that WORLD BANK PROJECTS DISCUSSED make the soil unsuitable for crops. India. "Integrated Watershed Development Pro- 2. Another innovative project in this respect is ject--Plains (Hills I)." Project ID P009860. the National Agricultural Technology Project Approved: 1990. (NATP) in India. Its goals were to enhance the role of agricultural research for cropping India. "Integrated Watershed Management Devel- systems and variety development and pro- opment Project (Hills II)." Active. Project ID mote the dissemination of research out- PO41264. Approved: 1999. comes on crop varieties and technological innovations for water saving and harvesting. India. "Uttar Pradesh Sodic Lands Reclamation The project supported research to enhance Project I." Closed. Project ID: P009961. performance and effectiveness in responding Approved: 1993. to farmers' technological needs and devel- oped technology dissemination techniques India. "Uttar Pradesh Sodic Lands Reclamation II." based on greater accountability to, and par- Active. Project ID: PO50646. Approved: 1998. ticipation by, the farming communities. India. "National Agricultural Technology Pro- This Profile was prepared by Hamdy Eisa with inputs from ject." Active (expected closing date: June 30, Shawki Barghouti. It was reviewed by Aly M. Shady of the 2005). Project ID: P010561. Approved: 1998. Canadian International Development Agency. 278 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT 9 ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURAL WATER INVESTMENTS · Investment Note 9.1 Monitoring and Evaluating the Poverty Impacts of Agricultural Water Projects · Innovation Profile 9.1 Assessing the Economic Benefits of Land Drainage · Innovation Profile 9.2 Guiding Environmental and Social Safeguard Assessment in Agricultural Water Projects · Innovation Profile 9.3 Estimating the Multiplier Effects of Dams · Innovation Profile 9.4 Benchmarking for Improved Performance in Irrigation and Drainage · Innovation Profile 9.5 Applying Environmental and Social Safeguard Policies to Agricultural Water Operations and Monitoring Them during the Project Cycle 279 OVERVIEW Selecting the best investments, targeting them to the poor, and managing them efficiently requires meas- urement and evaluation tools and processes. Social and economic analysis, benchmarking and monitoring, and evaluation are critical to getting the right investment design, targeting, and justifying projects to deci- sion makers who may think them low yielding and diffuse in their impacts.These tools and processes, and the role of safeguards in improving program quality, are discussed in this chapter. MONITORING AND EVALUATION HELP ASSESS AND IMPROVE THE POVERTY REDUCTION IMPACTS OF AGRICUL- TURAL WATER MANAGEMENT INVESTMENTS. In a pro-poor operation, monitoring and evaluation should track multidimensional measures of welfare such as data on income and poverty and indicators of health and nutritional status. The resulting knowledge about investment returns and impacts enables choices about the most cost-effective way to reach poverty reduction targets. (See IN 9.1.) Scientific analysis of benefits can provide power- SAFEGUARDS SHOULD IMPROVE INVESTMENT QUALITY ful support to technical assertions or help over- AND OWNERSHIP. Safeguard policies are designed turn prejudices. Rigorous analysis of costs and to integrate social and environmental concerns benefits is highly valuable in steering resource into decisions about investment design. They allocation. For example drainage--the "forgotten can help to reduce and mitigate adverse environ- investment"--is systematically downplayed in mental and social impacts, and transparency investment programming, even though it is rela- requirements ensure that stakeholders are con- tively cheap and irrigation investments devel- sulted. Seven of the 10 safeguards may be trig- oped without proper drainage may prove gered by agricultural water projects: typical unsustainable. A study in India showed that the impacts might include downstream and third- cost of creating new irrigated land is US$6,400 party effects from surface and groundwater with- per hectare, while the cost of drainage is drawals, polluted runoff and drainage water, and between $700 and $1,000 per hectare. Rigorous loss of farmland and displacement. Safeguards analysis provides the material for advocacy to may be seen as imposing a cost on countries and correct this neglect of drainage. (See IN 9.1 on World Bank teams. However, technical support monitoring and evaluation and IP 9.1 on measur- is available and properly applied safeguards ing the costs of "absence of drainage." For more should, in fact, improve investment quality and on drainage, see chapter 5.) ownership. (See IP 9.2 and IP 9.5.) ECONOMIC AND FINANCIAL ANALYSIS IMPROVES BENCHMARKING IS A USEFUL MEANS OF IDENTIFYING INVESTMENT QUALITY. Economic and financial SHORTFALLS IN IRRIGATION PERFORMANCE AND OF analysis can help refine project design and DESIGNING IMPROVEMENT PROGRAMS. To tackle the ensure that financial flows improve sustainabil- problem of poor irrigation performance, bench- ity. One case study in chapter 7 examines a marking systems have been developed that allow project where analysis demonstrated that irriga- comparison of performance between similar tion benefits could pay the costs of a commu- schemes. Benchmarking allows decision makers nity's water supply. Capturing indirect benefits to measure performance, to identify reasons for and externalities can also improve investment variations between schemes, and to draw up an choices. The indirect benefits of dams may dou- agenda for change. The approach could be gener- ble their direct benefits. The same is true for alized within the World Bank as part of the moni- many agricultural water investments, because toring of key performance indicators. (See IP 9.4.) second-round multiplier effects of creating 280 incomes and wealth in rural areas are high. Evaluation of these linkages is vital to assessing SOMETYPICAL INVESTMENTS the real impact of agricultural and water invest- Typical investments in this area may include the ment in rural areas. Analysis is also invaluable following: in showing the distributional impact of invest- ments. In the case of untargeted programs, this · Monitoring and evaluation systems has often revealed unexpected benefits for the · Impact evaluation studies poorest. (See IN 9.1 on methodology in gen- eral, IP 9.3 on multiplier effects, IP 7.1 on · Economic modeling of multipliers and rural water supply and irrigation, and IP 5.1 direct and indirect impacts of multifunc- on evaluating multifunctional investments tional investments such as dams within an integrated water resources manage- ment framework.) · Benchmarking for irrigation modernization A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INVESTMENT NOTE 9.1 · Deciding on outputs of the M&E system, who will produce them, and how they will be used MONITORING AND · Determining the resources needed to set up EVALUATINGTHE POVERTY and run the M&E system IMPACTS OF AGRICULTURAL WATER PROJECTS Each step of M&E of agricultural water projects should focus on poverty but the first step is Monitoring and evaluating (M&E) the poverty impact especially important: defining the indicators, of agricultural water investments may allow some the types of data, and the procedures for ana- conclusions about returns on different types of lyzing and evaluating them. investments and their contributions to poverty reduction.M&E of the poverty impact should receive INDICATORS. In addition to the standard indica- attention early in project preparation to ensure ade- tors for inputs (resources assigned to project quate data collection capacity, collection of the right activities) and outputs (for example, the length type of data, and a system set-up that allows analysis of irrigation canals upgraded or built), outcome and interpretation. Broad consultations and early and impact indicators are needed to monitor user involvement in the design and implementation welfare dimensions such as health status, con- of the M&E system are important to build consensus sumption, and income levels (box 9.1). and ownership. These data, collected for different groups of project beneficiaries, measure which target groups receive the most benefits and these Agricultural water projects contribute in several groups' satisfaction or dissatisfaction with the ways to achieving the Millennium Development benefits. Beneficiary groups may be distin- Goals of eradicating extreme poverty and guished according to income status (sometimes hunger and ensuring environmental sustainabil- proxied by landholding status, if adequate data ity. Increased yields and cropping area and on income status are unavailable), ethnicity, shifts to higher-value crops help boost the indigeneity, and gender. Good assessments incomes of farm households, generate employ- ment, and lower consumer food prices. They also stabilize incomes and employment. Com- Box 9.1 Some Outcome and Impact Indicators 281 munity participation and the creation of water for Monitoring Poverty in Agricultural user groups have become integral parts of these Water Projects projects, which have empowered users and made them self-reliant. Mainstreaming M&E will Outcome indicators help generate the data to establish the cost- · Crop yields, cropping patterns, and production levels effectiveness of projects in reducing poverty · Output and input prices and propose ways to improve it. · Fisheries and livestock production · Employment rates and wages Impact indicators INVESTMENT AREA · Share of population below the nationally established rural M&E systems are usually based on four steps: poverty line or share of population with less that $US1 a day pre- and postproject · Deciding what information is needed · Prevalence of underweight and stunted children (meas- ured by height for age and weight-for-height) pre- and · Assessing the availability and requirements postproject. of tools for collecting and analyzing the Source: Author. data needed ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS have also collected indicators on interventions A rigorous "with/without" design may be justi- complementary to agricultural water­related fied to evaluate the impact of an investment projects (such as the establishment of market- that is critical to poverty reduction but which ing infrastructure and processing facilities) and suffers from substantial knowledge gaps about have monitored the quality of services affecting which approaches work best or when a new the impact of investments. Because projects do approach should be tested. With/without evalu- not take place in isolation, the inclusion of ation helps determine whether reductions in quantitative and qualitative information on poverty result from project interventions or intervening and/or external influences on the other causes. Controlled impact evaluations are selected indicators is recommended. As shown demanding in terms of the analytical capacity in box 9.1, one would include anything else and resource requirements, and not all invest- that might influence the output/input prices or ments warrant them. the prevalence of child malnutrition. PROCEDURES FOR ANALYZING AND EVALUATING MONI- TYPES OF DATA. Well-designed baseline surveys TORING AND EVALUATING (M&E) OUTPUT. Initial are an essential tool for collecting data for planning for M&E includes developing the man- investment planning purposes, monitoring, and agement information system. It should allow dis- evaluation. Poverty maps have also proved aggregation of key data by social and economic valuable tools for targeting and monitoring groups to allow monitoring of the poverty impact poverty (box 9.2). of activities. It should also enable an assessment of the inclusiveness of project activities. Depending on the project interventions, base- line surveys usually collect data at several levels Emphasis on poverty M&E early in project such as the village, watershed, household, plot, preparation can ensure that data collection and individual through a combination of house- capacity is adequate, that the right type of data is hold and individual surveys and participatory collected, and that a system is set up that allows methods. To allow statistically significant infer- analysis and interpretation. Broad consultations ences from the data, the sampling framework and early user involvement in the design and must be appropriate. Surveys have been done implementation of the M&E system are important in-house by implementing agencies, but they to build consensus and ownership (box 9.3). are frequently contracted out to a research or survey firm or an institution. This approach is Early involvement of potential data users (typi- 282 generally preferred. cally the project implementing agency) and broad consultations with researchers, benefici- aries, donors, and implementers during the ini- Box 9.2 Poverty Maps tial design stage have been helpful in building consensus on what to monitor and how to do it Poverty maps are spatial representations of poverty assess- and in generating a sense of ownership among ments.They combine survey with census data and graphically present indicators of poverty such as per capita income or the various stakeholders. daily subsistence levels or well-being indicators such as life expectancy, child mortality, and literacy. RESOURCE REQUIREMENTS. The resources needed for poverty M&E vary from project to project, In the Peruvian Social Fund project, FONCODES, poverty depending on the scope of project activities and maps, in conjunction with community poverty assessments, helped target community-based projects including small irriga- systems set up for M&E. For example, conduct- tion projects. Superimposing remote sensing data (publicly ing a full-fledged household survey to collect available satellite images) with poverty maps provides enor- data on welfare measures may be costly, but mous scope for better water resources planning, poverty tar- alternative rapid assessment methods could geting, and impact assessments. (See also IP 9.1.) provide a more affordable alternative for meas- Sources: Author;World Bank 1998. uring poverty impacts. Alternatives include approaches such as collecting "core welfare" A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT indicators (typically assets) that help track Box 9.3 India:The SujalaWatershed Project changes in consumption and income. Plans for the M&E system for the Sujala Watershed project in Karnataka, India, are a good example of how such a system can POTENTIAL BENEFITS be set up to evaluate the poverty impacts of an agricultural Agricultural water­related projects that monitor water project. poverty impacts have improved poverty target- Impact indicators to be monitored in the project include the ing and tailored activities to maximize benefits following: during implementation. They have made end- · Households--incomes, expenditures (consumption), assets of-project assessments of the returns and · Village/community--employment and wages, empower- impacts from different types of investments, ment and equity, including opportunities for women and allowing more cost-effective planning and vulnerable groups and changes in access to services implementation of future investments (box 9.4). · Watershed--cropping patterns and production, improve- ments in groundwater levels, and reductions in soil loss Plans for the baseline surveys include selection of control villages POLICY AND IMPLEMENTATION to assess the"without" project situation.Impact assessments are CONDUCTING AN IMPACT EVALUATION. The objec- planned at mid-term and at project completion. In addition, the tive of impact evaluation is to measure the stakeholders will do periodic self-assessments. The project intends to evaluate the poverty impact on small and marginal results of the project interventions on dimen- farmers, landless persons, women, and indigenous people. sions of poverty (box 9.5). Impact assessment necessitates answering a counterfactual ques- Source: Government of Karnataka 2003. tion, "What would have happened in the absence of the intervention?" Establishing causality is necessary for impact evaluation. Box 9.4 Monitoring Poverty Impacts in the Answering the counterfactual requires identify- Uttar Pradesh Sodic Lands Reclamation ing a comparison or control group that does not Projects I and II receive the project intervention and comparing this group to the treatment group. The control Contributing to poverty alleviation by providing land to the landless, together with rehabilitating sodic-affected land, were group must match the treatment group in terms primary objectives of the Uttar Pradesh projects. Project of its socioeconomic aspects and the physical interventions were targeted to households below the poverty characteristics of its site. line, and project impacts were monitored by a third party.The evaluation of the pilot project pointed to key areas to Experimental or quasi-experimental designs are 283 strengthen the poverty impact, which received attention in the generally used to address the counterfactual. In second project.This included a greater emphasis on strength- experimental design, the intervention is allo- ening women's self-help groups and involving them in micro- cated randomly among all eligible beneficiaries. enterprise activities to augment household incomes. Additionally, to ensure sustainability of reclamation and Experimental designs need to be set up prior to income from the land, the importance of ensuring that the the investment. Quasi-experimental designs, in drainage systems were maintained was emphasized. contrast, attempt to generate control groups after the intervention by means of statistical and Source: Jeeva Perumalpillai,Essex,World Bank,personal communication. econometric methods such as propensity score matching, computing double differences, or using instrumental variables (Baker 2000). study of selected issues, cases, or events and can provide critical insights into beneficiaries' QUANTITATIVE VERSUS QUALITATIVE DATA: Integrat- perspectives, the dynamics of a particular ing qualitative and quantitative approaches in reform, or the reasons behind results observed monitoring and evaluating poverty impacts has in a quantitative analysis. A special attempt can proven very effective. Quantitative analysis be made to monitor the satisfaction of the poor results in more generalizable results, but quali- with the project through focus group or other tative and participatory methods allow in-depth qualitative methods. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS Box 9.5 India: An Example of an Impact Evaluation ofWatershed Development Projects An example of an impact evaluation that also attempted to examine the poverty impact of agricultural water­related projects is a study by the International Food Policy Research Institute (IFPRI) evaluating watershed development projects in India.The primary objectives were to assess the following: (1) Which watershed projects were most successful in raising agricultural productivity, improving natural resources management, and reducing poverty? (2) What approaches enabled projects to suc- ceed? (3) What nonproject factors contributed to achieving these objectives? The study evaluated projects funded and imple- mented by several donors and state governments, including the World Bank. The study used mainly quantitative analysis but also drew on qualitative information about the effects on interest groups such as farmers with and without irrigation, landless people, shepherds, and women.The study used a nonexperimental design, rely- ing on an instrumental variable approach to correct for the endogeneity of program placement. Instrumental variables were first used to predict program participation, and then the variation of outcome indicators with predicted values of program participation was examined. The study covered a 10-year period and relied on baseline survey data from the World Bank and the Indian Council of Agri- cultural Research villages.The postproject situation was captured through a 1997 survey of 86 villages in Maharashtra and Andhra Pradesh conducted by IFPRI.The survey collected quantitative data at the village, plot, and household level for econo- metric analysis of the conditions that determined changes before and after the project. Qualitative information on project impacts was collected from interest groups through open-ended discussions. Control villages were selected and roughly matched geographically (data were insufficient for rigorous matching). The authors measured the impact on household welfare through proxy indicators including the perceived effects of the proj- ect on the household, perceived changes in living standards, changes in housing quality, change in percentage of families migrat- ing, perceived changes in real wage and availability of casual employment opportunities. Lack of adequate baseline and monitoring data in the projects was a major limitation to the study. The study found that participatory projects performed better than top-down approaches. Projects where participation was combined with sound technical inputs performed best of all.The authors also found that equity issues remained a problem and respondents perceived that project benefits rose with landholding size, and that the landless and near-landless people were most likely to report negative effects from projects. For example, across projects while 45 percent of households with 2 or more hectares claimed they had benefited from watershed projects, only 12 percent of the landless and 19 percent of farmers with less than 1 hectare claimed to have benefited. On the other hand, 19 percent of the landless felt that they were harmed by the projects compared to 7 percent of larger farmers.The authors also found that projects run by nongovernmental organiza- tions (NGOs) were associated with higher net returns; however, the econometric results for the model were insignificant. Source: Kerr, Pangare, and Pangare 2002. 284 RECOMMENDATIONS FOR PRACTITIONERS · Keep the number of indicators collected · Involve beneficiaries early in the M&E within manageable proportions. process. Broad consultations and early involvement of users in the design and imple- · Ensure that a good baseline survey is mentation of the M&E system will do much undertaken. Without a proper baseline, it is to build consensus and ownership. difficult to monitor progress and evaluate the impacts of investments. · Use beneficiary self-assessments and other participatory approaches so that assessments can be made mid-course. There may be a REFERENCES CITED long time lag in realizing a reduction in Baker, J. L. 2000. Evaluating the Impacts of poverty from agricultural water­related proj- Development Projects on Poverty: A Hand- ects, and the poverty impact often cannot be book for Practitioners. Washington, DC: evaluated until well after a project ends. World Bank. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Government of Karnataka. 2003. Operation SELECTED READINGS Manual: Sujala Watershed Project. Banga- Henninger, N., and M. Snel. 2002. Where Are lore: Government of Karnataka Watershed the Poor? Experience with the Development Development Department. and Use of Poverty Maps. Washington, DC.: World Resources Institute. Kerr, J., G. Pangare, and V. Pangare. 2002. "Watershed Development Projects in India: Prennushi, G., G. Rubio, and K. Subbarao. 2002. An Evaluation." IFPRI Research Report No. "Monitoring and Evaluation." In World Bank, 127. International Food Policy Research Poverty Reduction Strategy Source Book. Institute, Washington, DC. Washington, DC: World Bank. Available online at http://poverty.worldbank.org/ World Bank. 1998. "Implementation Completion library/view/4480/. Report." Peru Social Development and Compensation Fund Project, Report No. This Note was prepared by Mona Sur and reviewed by Sarah 18016. World Bank, Washington, DC. Cline,Timothy Sulser, and Mark Rosegrant of IFPRI. 285 ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS INNOVATION PROFILE 9.1 OBJECTIVES AND DESCRIPTION: THE NORTHWEST INDIA CASE The potential benefits of surface and subsurface ASSESSINGTHE ECONOMIC drainage are equal to the damage caused by BENEFITS OF LAND DRAINAGE waterlogging and soil salinity. This damage can easily and accurately be assessed through a soil What is new? Investment in drainage has the salinity classwise analysis, based on sets of data on potential to lift out of poverty large numbers of soil salinity level and crop yield. These data can be people who live in waterlogged and saline areas. collected through systematic samplings within a This Innovation Profile discusses how the poten- grid of predetermined dimensions. The required tial benefits of drainage investment were assessed dimensions depend on the size of the project area in two settings. One was dominated by smallhold- and the number of samples needed to reflect vari- ers located on an Indian irrigation system and the ations in soils and soil salinity within the area. other by large farm enterprises typical of Eastern Europe.This Innovation Profile also shows that it is To analyze the effect of soil salinity on crop economically feasible to drain a moderately yield and assess the total loss of production due affected area. to excess salinity, the data were grouped into classes. Next, the percentage of the project area under each class was determined. The average In northwest India and other tropical semi-arid crop yield at all observation points in a soil areas, irrigation canal systems were built many salinity class was calculated for all classes. decades ago, but rising water tables have Finally, the relationship between soil salinity undone part of the effort, causing waterlogging level and crop yield was established. and soil salinity. In those areas, hundreds of thousands of farmers are watching their already The loss of production due to soil salinity was small farms shrink, and their yields and incomes calculated by subtracting the average crop yield are falling through salinization. This profile dis- in each of the other soil salinity classes from the cusses a way of assessing the economics of average crop yield in soil salinity class I (that is, investing in the installation of surface and sub- the soil class unaffected by salinity). Using the surface drains in the state of Haryana. proportion of the total area under each class, researchers calculated the weighted average The profile also discusses the method used to crop loss per hectare. The total crop loss in the 286 estimate the potential benefits of rehabilitating project area was calculated by multiplying the drainage systems in large farm enterprises in average crop loss per hectare by the number of the humid lowland areas of Central and Eastern hectares in the area. Europe. It is based on work in the East Slovak Lowlands, typical of humid and semi-humid From input data also collected at the observa- areas in the temperate zone. tion points, the relationship can also be estab- lished between soil salinity level and net The two methods look only at agricultural ben- production value, and the total loss in net pro- efits and do not include estimates of the impact duction value in the project area can be calcu- of well-functioning drainage systems on the lated. This is important, because the loss in net protection of houses, buildings, roads, and production value due to soil salinity is equal to other infrastructure from damage by high the loss of net income, and soil salinity affects groundwater levels and occasional floods or net crop income much more than it does gross their impact on the quality of drinking water yield. The classification of soil salinity is and human and animal health. explained in box 9.6. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT If the data are collected by, or under close Box 9.6 Classification of Soil Salinity supervision of, experts who will process and analyze the data, conclusive results can be Soil salinity classes are categorized based on an interval of four obtained in one agricultural year (one or two soil salinity units. Soil salinity is expressed as the electrical con- seasons). With 12 expert months, and another ductivity of the saturated soil extract (ECe), and the units are 24 laborer months, data collection, processing, usually expressed in dS/m or mmhos/cm. Class I covers the and analysis can be completed for an area of interval from 0 to 4 dS/m, class II from 4 to 8 dS/m, and so on. Below 4 dS/m, the threshold value for the major agricultural 2,000 to 5,000 hectares. The result will be a crops, soil salinity barely affects crop yields. Consequently, the close assessment of the damage caused by class I soils are considered "unaffected," and the average yield waterlogging and soil salinity and, conse- of a specific crop in class I is taken as that crop's "reference quently, a close estimate of the potential bene- level." Crop damage due to soil salinity in the higher classes is fits of land drainage development. measured against the class I reference level. Soil salinity in class II is called "marginal," in class III "moderate," in class IV "severe," and in classV "extreme." In classV, no more crops are OBJECTIVES AND DESCRIPTION: grown, because their gross production value scarcely exceeds THE EAST SLOVAK LOWLANDS production costs, excluding labor. In the East Slovak Lowlands, an assessment Source: Author. was done to determine the financial feasibility of improving the water management systems to attract investment in rehabilitation. To assess the effect on the yield of different crops of sub- Box 9.7 Damage fromWaterlogging and Soil soiling, flushing the subsurface drainage sys- Salinity in the Gohana Pilot Project tems, and cleaning the drainage canals, 12 large experimental fields were divided into two In the project area, 44 percent of the land was unaffected, 33 parts, each planted with the same crop. In one percent marginally affected, 10 percent moderately affected, 7 part, all three necessary interventions were car- percent severely affected, and the remaining 6 percent ried out; in the other part, two out of the three extremely affected. interventions. Both parts received the same · The average per hectare loss in gross production value amounts of agricultural inputs. At harvest time, was 12 percent over the whole project area and 22 per- in each part an equally wide representative cent in the affected area. strip was harvested and the yields were com- · The average per hectare loss in net production value was pared. Care was taken to ensure comparable a good 20 percent over the whole project area, and 37 287 soil conditions and microrelief in each strip. percent over the affected area. The positive yield difference was attributed to · Because of the scattered nature of the drainage problem, the losses were "unevenly" spread over the project area. the third intervention, and the negative result Source: Author. to its absence. In addition, daily rainfall was recorded during the entire year. The experiments were repeated twice. By analyzing the collected yield data with the help of a long-term series of annual OUTPUT AND IMPACTS: rainfall data, the long-term effect (or the bene- THE NORTHWEST INDIA CASE fits) of subsoiling, proper subsurface drainage, The study done in the Gohana pilot in north- and canal cleaning could be assessed. In addi- west India provided reliable estimates of the tion to the assessment of the benefits of the damage caused by waterlogging and soil salin- three interventions, their costs were also meas- ity in the area. The results of the study are sum- ured through time-and-motion studies. marized in box 9.7. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS General data and results analysis of the data requires some expertise. Even in this area with only a moderate drainage The analysis shows that rehabilitating the problem, the effect on the weighted average drainage systems through canal cleaning, drain- net production value is strong, and it is the loss pipe flushing, and subsoiling is financially and of net production value that reduces the economically feasible even when nonagricul- farmer's income. The experiment was repeated tural benefits--such as infrastructure protection, in the (small) Konanki pilot area in Andhra reduced waterlogging, flood prevention, and Pradesh in southeast India. the proper discharge of polluted drainage efflu- ent so that it does not degrade water quality-- In both Gohana and Konanki, surface and are not taken into account. subsurface drains were installed. Cropping intensities, crop yields, and farm incomes sub- stantially increased, demonstrating that land ISSUES FORWIDER APPLICABILITY drainage can be central to combating poverty. Experiments and studies must be financially It is also cost effective, because conserving independent of the collaborating institutions so already irrigated areas by (sub)surface that their financial problems will not influence drainage costs only a third as much as build- research progress and quality. The availability ing new irrigation systems. Drainage develop- of machinery and equipment, such as a tractor, ment on the hundreds of thousands of a drain flushing machine, and a water tank waterlogged hectares in northwest India must be secure at all times. The same applies to (Haryana, Punjab, and Rajasthan) could save equipment for canal cleaning and subsoiling at least 100,000 farmer families from sinking (Eastern Europe only). Progress should be below the poverty line. Health and living con- recorded carefully for accurate cost calculation. ditions would also strongly improve. Waiting for the drainage component of an irri- gation project to become economically feasible OUTPUT AND IMPACTS: is economically and socially questionable. Wait- THE EAST SLOVAK LOWLANDS ing will only increase crop and income losses, The experiments provided an accurate assess- thus increasing impoverishment in the affected ment of the benefits and the costs of proper sub- rural areas (Asia only). surface drainage in the lowland areas of the 288 Eastern Slovak Republic and in similar lowlands Areas for project development, whether this is in Central and Eastern Europe, as well as a close rehabilitation or construction, should be care- approximation of the financial feasibility of reha- fully selected, taking due account of soil and bilitating the drainage systems. At a discount rate water management conditions. In addition, the of 10 percent, the benefit-cost (B/C) ratio for quality of (farm) management should be con- subsoiling varied from 1.7 to 2.3. The B/C ratio sidered, as well as the willingness of the for canal cleaning could not be accurately estab- prospective beneficiaries. lished because there were not enough suitable sites, but an earlier study indicated that it would Project development should include the estab- be feasible if it increased average yield by only 2 lishment of (an) institution(s) to secure proper percent. The B/C ratio of the three interventions operation and maintenance (O&M) of the together was more than 1.25, again at a discount newly constructed or rehabilitated drainage sys- rate of 10 percent. This figure is conservative, tems. The beneficiaries should be closely because experiments were done in dry years. involved in this O&M. The inputs were low, however, because of the poor economic state of the farm. Good local managers and staff are available. They should be involved from the beginning in The method is simple and can easily be planning and implementing the project(s). Expa- repeated by trained farm managers, although triate consultants are needed only to coordinate A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT activities carried out by the multidisciplinary Region of India." Irrigation and Drainage group of local experts and to coach them in the 51: 275­92. interdisciplinary work. Hanaumanthaia, C. V., K. K. Datta, and C. de The M&E of the project activities should be Jong. 2004. "The Effect of Soil Salinity on done by a small number of independent foreign Crop Production in the Konanki Pilot Area consultants with the help of highly competent (Andhra Pradesh), India." Course material. local consultants willing to do the fieldwork. Agricultural Water Management. If good use is made of the experience gained in ILRI. 1995. "Pre-Feasibility Study of a Water earlier projects, successful implementation of Management Project in the East Slovak Low- financially feasible projects can be achieved. lands." International Institute for Land Improving land drainage will have a strong pos- Reclamation and Improvement, Wagenin- itive effect on the regional economy and gen, The Netherlands. poverty. There is no doubt about it. ------. 1999. "The Effect of Soil Salinity on SELECTED READINGS Land Productivity in the Gohana Area in Alterra-ILRI. 2003. "Improving Water Management Haryana State, India." Annual Report of for Agriculture." Final Report of the PSO+ Pro- the International Institute for Land Recla- ject. Institute for Land Reclamation and mation and Improvement. Wageningen, Improvement, Wageningen, The Netherlands. The Netherlands: ILRI. Datta, K. K., and C. de Jong. 2002. "Adverse ------. 2000. "Improving Water Management for Effect of Waterlogging and Soil Salinity on Agriculture." Inception Report of the PSO+ Crop and Land Productivity in the North- Project. Institute for Land Reclamation and west Region of Haryana, India." Agricul- Improvement, Wageningen, The Netherlands. tural Water Management 57: 223­38. Rehak S., and J. Alena, eds.1998. "Working Doc- Datta K. K., C. de Jong, and O. P. Singh. 2000. uments for the Feasibility Study of a Multi- "Reclaiming Salt-Affected Land through Drainage Functional Rural Development Project in in Haryana, India: A Financial Analysis." the East Slovak Lowlands." Hydromeliora- Agricultural Water Management 46: 55­71. cie, Bratislava, Slovak Republic. 289 ------. 2002. "Feasibility of Subsurface Drainage This Profile was prepared by Cor de Jong and reviewed by for Salinity Control in the Trans-Gangetic Sarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS INNOVATION PROFILE 9.2 Mitigation measures are covered by the Disclo- sure Policy (World Bank 2002a, 2002b),which promotes access to information so that stake- GUIDING ENVIRONMENTAL holders in proposed projects can comment on AND SOCIAL SAFEGUARD both the impacts and proposed mitigation measures. As a consequence, safeguard policies ASSESSMENT IN contribute to democratic processes in develop- AGRICULTURALWATER ing countries by opening up information PROJECTS sources and promoting the participation of affected populations. What is new? Safeguard policies aim to integrate social and environmental concerns into project design and the borrowing country's decision-mak- OUTPUTS AND IMPACTS ing process. Seven of the World Bank's 10 policies Water-related agricultural projects are both can be triggered by agricultural water projects.To investment and Development Policy Lending decide whether to apply safeguards to an agricul- projects where either more water is to be used tural water project, Bank staff need to interpret or the current water supply is to be used more the scope of the policy and may also have to har- efficiently. These projects include sectoral monize Bank policies with those of cofunders. improvements through the introduction of Issues for clients include cost and technical water use charges, development of water user demands and the resolution of conflict between groups, and devolution of water management national law and the policies. responsibilities; development and rehabilitation of infrastructure such as dams, weirs, ground- The World Bank has 10 safeguard policies (box water pumping, canals, delivery systems as well 9.8) designed to achieve the following: as dryland water infrastructure such as pans, dams, and bores; improvements in drainage · Be mechanisms for integrating environmen- and development of water reuse and water con- tal and social issues into decision making servation measures; and improved operational practices such as weather forecasting, irrigation · Provide a set of specialized tools to support scheduling, and O&M activities. Such projects development processes can have both detrimental and beneficial envi- ronmental and social impacts. 290 · Support participatory approaches and trans- parency Typical detrimental environmental impacts from water-related agricultural projects include the OBJECTIVES AND DESCRIPTION effects of surface water withdrawals on down- Most safeguard policies require that (1) stream ecosystems; effects of increased ground- potentially adverse environmental impacts water use on water-dependent, sensitive affecting the physical environment, ecosys- ecosystems such as wetlands; and increased tem functions and human health, and physi- concentrations of fertilizers and agrichemicals cal cultural resources, as well as specific in runoff and drainage water from agricultural social impacts, be identified and assessed intensification. Water-related agricultural proj- early in the project cycle; (2) unavoidable ects can also lead to beneficial environmental adverse impacts be minimized or mitigated to impacts--water "saved" through increased agri- the extent feasible; and (3) stakeholders be cultural water use efficiencies (water charges, provided with timely information so that they drip irrigation) may reduce pressure on water have an opportunity to comment on both the resources; or improved water application and nature and significance of impacts and the drainage may reduce environmental degrada- proposed mitigation measures. tion and pollutant discharges. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT Box 9.8 World Bank Safeguard Policies OP/BP 4.01 Environmental assessment--An umbrella policy requiring environmental assessments to cover a broad range of potential impacts OP/BP 4.04 Natural habitats--Avoiding the degradation or conversion of natural habitats unless there are no feasible alterna- tives and there are significant net benefits OP 4.09 Pest management--Promoting environmental and biological pest management in both public health and agricultural projects (chemical methods can be supported where justified) OP/BP 4.12 Involuntary resettlement--Avoiding resettlement where possible and, where not, ensuring that resettled people are fully consulted, share in project benefits, and their standard of living is not reduced OD 4.20 Indigenous peoples--Ensuring that indigenous peoples are involved in fully informed discussions so that they do not suffer adverse effects, and receive culturally compatible social and economic benefits from Bank-financed projects. OP 4.36 Forestry--Harnessing the potential of forests to reduce poverty, while integrating forests into sustainable economic development and protecting the environmental services and values of forests OP/BP 4.37 Safety of dams--Ensuring that new dams are constructed and operated to internationally accepted standards of safety and that existing dams used in a project undergo safety inspection and any necessary upgrades OPN 11.03 Cultural property--Avoiding or mitigating adverse impacts on cultural resources such as valuable historical and sci- entific information, assets for economic and social development, and integral parts of a people's cultural identity and practices OP/BP 7.50 Projects on international waterways--Informing affected riparian countries of proposed projects on international waterways and, if there are objections, referring the proposal to independent experts OP/BP 7.60 Projects in disputed areas--Ascertaining that the governments concerned agree that the existence of a project in disputed areas does not damage claims made by other governments BP--Bank procedure; OD--Operational directive; OP--Operational policy; OPN--Operational policy note. Source: World Bank. Note: The specific wording and application of these policies can be obtained from the operational procedures and Bank policies them- selves. These can be found on the Bank Safeguard Policies Web site at http://lnweb18.worldbank.org/ESSD/sdvext.nsf/ 52ByDocName/SafeguardPolicies. Typical detrimental social impacts include loss potential environmental impacts, some of which of productive farmland from new or rehabili- may be covered in more detail by other safe- 291 tated water resources infrastructure, physical guard policies. OP/BP 4.01 and OP 4.09 apply to displacement of farmers and villages because of Sector Adjustment Loans as well as to investment new water storage and irrigation schemes, loss loans. All others apply to investment activities. of access to traditional water resources by nomadic groups, and disruption to traditional Projects are categorized by the task team into social structures through the influx of people one of three classes, A, B, or C, representing attracted to economic growth areas because of their possible environmental impacts. Category water resources investments. A projects are likely to have "significant adverse environmental impacts that are sensi- The policies most likely to be triggered in water- tive, diverse, or unprecedented"; category B related agricultural projects are OP/BP 4.01 projects are likely to have "adverse environ- Environmental assessment, OP/BP 4.04 Natural mental impacts"; while category C projects are habitats, OP 4.09 Pest management, OP/BP 4.12 likely to have "minimal or no adverse environ- Involuntary resettlement, OD 4.20 Indigenous mental impacts." A fourth category, Financial peoples, OP/BP 4.37 Safety of Dams, and OPN Intermediaries (FI), is used for projects where 11.03 Cultural property. OP/BP 4.01 is an the full extent of project investments cannot be umbrella policy that allows identification of foreseen during project preparation, such as ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS when there is a small grants component. The policies address development policy lending-- Environmental Assessment Sourcebook (World an increasingly important component of Bank Bank 1991) and its Updates provide informa- lending activities (see IN 1.2). Efforts to tion on categorizing projects. improve agricultural water resources manage- ment through water sector reforms are likely to lead to increases in adjustment loans with their ISSUES FORWIDER APPLICABILITY potential for minor social dislocation and envi- Issues for Bank staff ronmental improvements. The wording of the safeguard policies is inevitably somewhat ambiguous and open to Most multilateral and bilateral lending agencies interpretation (World Bank 2002c) because not have some form of social and environmental every circumstance can be covered and all ambi- safeguard policies. The task team needs to guities removed without introducing costly rigidi- reach an agreement with cofunders and the ties. Thus, the "significant conversion or borrowing country about the application of the degradation of critical natural areas" in the natural safeguard policies. This is not usually difficult, habitats policy requires some interpretation, partly but adds a burden to the work of the task team because the criticality of an area varies across dif- during project preparation. ferent interest groups1 and partly because impacts of agricultural water projects can be difficult to predict. For this reason, the terms of reference of Issues for borrowing countries the environmental assessment should include a The safeguard policies can impose a consider- thorough evaluation of the importance of poten- able cost on a borrowing country. For example, tially affected natural areas to different interest projects proposed for noncritical natural areas groups, the nature and extent of likely impacts in (OP/BP 4.04) have to demonstrate that there these areas, and possible mitigation measures. are no feasible alternative sites and that the benefits of the project outweigh the loss of the Nor do the policies cover all circumstances. For functions of the natural area. Establishing this example, OP/BP 7.50 refers specifically to inter- can be time consuming, costly, and viewed as national surface waters, even though exploita- an impediment to progress by the borrowing tion of transboundary groundwater resources country. The longer-term benefits, particularly without notifying affected neighboring countries the ecosystem services supplied by natural can have just as serious repercussions socially, 292 areas, should be included in these assessments politically, and environmentally. Thus, projects so that these benefits of protecting natural areas with transboundary groundwater impacts should become apparent to the borrowing country. be treated in the spirit of this policy so that the underlying purpose of the policy is achieved. Borrowing countries may also lack the technical OP/BP 4.12 is one of the most important for capacity to carry out or oversee environmental water-related agricultural projects, especially assessments for category A and B projects. those with components involving dams. The Impacts such as the downstream effects of policy focuses on involuntary resettlement changes in river flows from increased irrigation because of its potential for severe social disrup- withdrawals can be difficult to assess in any tion and loss. However, people accepting vol- country, let alone those with limited technical untary resettlement face many of the same capacity. The Bank can assist by assessing the difficulties reestablishing their lives and liveli- country's capacity through Economic Sector hoods as those involuntarily resettled, but do Work, by providing advice to the country by not benefit from the same level of oversight and adding an environmental expert to the task protection through the policy. team, and by including components that strengthen the country's capacity to perform Only the environmental assessment (OP/BP environmental assessments and implement 4.01) and the pest management (OP/BP 4.09) environmental management plans. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT The safeguard policies generally represent a Box 9.9 VietnamWater Resources higher standard of protection than provided by Assistance Project law in most borrowing countries. Bank disclo- sure policy requires that more information TheVietnam Water Resources Assistance project will improve about projects be made publicly available than farmers' access to irrigation water in six irrigation systems. is normal in most countries, and the resettle- However, some land will be lost because of canal rehabilita- ment policy can have more generous eligibility tion, and a few households will have to be relocated. The national government's decree on compensation for land acqui- criteria than found in the laws and customs of sition was broadly in conformity with the Bank's policy except many borrowing countries (box 9.9). that individuals without formal title to land would have been treated less favorably than those with formal title.Through dia- Discrepancies between the borrowing country logue, it was agreed that all individuals affected, irrespective of and Bank policies can cause resentment about their legal status, would be fully compensated. intrusion into internal country affairs. In some Source: Author. cases, the borrowing country may choose to approach another lending institution with less rigorous policies. ------. 2002a. Disclosure of Operational Infor- mation. BP 17.50. Washington, DC.: World Bank. Guidance and resources available to Bank staff ------. 2002b. The World Bank Policy on Dis- The task team should establish the environmen- closure of Information. Washington, DC.: tal category of a project as early as possible so World Bank. that an environmental assessment can be com- menced, if needed. The assessment of potential ------. 2002c. "Safeguard Policies: Framework For environmental and social impacts and possible Improving Development Effectiveness: A Dis- mitigation measures can then be obtained in cussion Note." World Bank, Washington, DC. time to influence the project design. The Bank's regional offices and anchor units ADDITIONAL INFORMATION possess considerable environmental and social The safeguard policies are available from the expertise. In addition, specialist groups such as Safeguards Web site at http://lnweb18. the Groundwater Management Advisory Team worldbank.org/ESSD/sdvext.nsf/52ByDoc of the Bank-Netherlands Water Partnership Pro- Name/SafeguardPolicies. gram (GW-MATE) are available to assist. This 293 expertise should be used to strengthen task Advice can be obtained from the safeguards teams and to guide country counterparts units in each of the regional Vice-Presiden- preparing environmental assessments, social cies. In addition, the Quality Assurance and impact assessments, and management plans. Compliance Unit provides training courses in the implementation of the safeguard. The regional and anchor safeguard staff can advise on interpreting safeguards when the pol- Groundwater Management Advisory Team icy appears ambiguous or does not appear to (GW-MATE) Web site: http://lnweb18. apply directly to project circumstances. In addi- worldbank.org/ESSD/ardext.nsf/18ByDoc tion, training courses in the application of the Name/SectorsandThemesGroundwater safeguard policies are offered by the Quality FunctionsandObjectives. Assurance and Compliance Unit. ENDNOTE REFERENCES CITED 1. Annex A to OP/BP 4.04 provides detail on World Bank. 1991. Environmental Assessment the definition of significant critical areas. Sourcebook. Washington, DC: World Bank. [Twenty-eight Updates to the Sourcebook This Profile was prepared by James Richard Davis and have been published.] reviewed by Colin Rees and L. Panneer Selvam. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS INNOVATION PROFILE 9.3 the projects reviewed in the OED report (World Bank 1996, 20). Similarly, the World Commission on Dams states in its final report that "a simple ESTIMATINGTHE MULTIPLIER accounting for the direct benefits provided by EFFECTS OF DAMS large dams--the provision of irrigation water, elec- tricity, municipal and industrial water supply, and What is new? This Innovation Profile outlines the flood control--often fails to capture the full set of importance of multiplier effects of large multipur- social benefits associated with these services. It also pose water projects and what a multiplier analysis misses . . . their ancillary and indirect economic can tell us about their indirect impacts. Multipliers benefits" (World Commission on Dams 2000, 129). estimate the investment's total (direct and indirect) effects of an investment in relation to its direct OBJECTIVES AND DESCRIPTION effects. Multiplier models based on the Social Accounting Matrix and the Computable General The major indirect impacts of dam investments Equilibrium also estimate the impact on income dis- include the following: tribution and poverty. This profile also summarizes the first results of a multicountry World Bank study · Interindustry impacts from backward and on multiplier effects and income distribution impacts forward linkages that increase demand for of dams (Bhatia, Scatasta, and Cestti 2005). outputs of other sectors · Consumption-induced impacts arising out of income increases generated by the direct Investments in water resources projects includ- dam outputs ing multipurpose dams generate a vast array of economic impacts in their region and at interre- Estimating indirect effects is a necessary step to gional, national, and even global levels. The improve our understanding of the impact of impacts are both direct and indirect. Indirect dams. Indirect effects are induced by the link- impacts are called multiplier impacts. Ex post ages between the direct effects and the rest of and ex ante evaluations of these projects, when the economy. based on a cost-benefit analysis, tend to esti- mate only direct impacts such as irrigation, Water releases from a dam to irrigate crops hydropower, water supply, fish production, increase agricultural output. Raised output 294 recreational benefits, and flood control. They requires more seed, fertilizer, pumpsets, diesel do not take into account the indirect economic engines, electric motors, tractors, fuels, electric- impacts, although they may run up to 90 per- ity, and so on. Increased output also encourages cent of the direct economic impacts.1 The mul- entrepreneurs to set up food-processing (sugar tiplier values for large multipurpose dams in factories, oil mills, rice mills, bakeries) and other Brazil, India, and the Arab Republic of Egypt industrial units. Similarly, water releases from a range from 1.4 to 2.0, meaning that for every multipurpose dam to provide electricity for one dollar of value added directly by the proj- households generates new demand for appli- ect, another 40 cents to one dollar were gener- ances and prompts the establishment of new ated through indirect effects. businesses and factories. Changes in industrial output require more inputs from sectors such as Recent reports by the Operations Evaluation steel, energy, and chemicals, among others. In Department (OED) of the World Bank and the sum, water releases for power and irrigation World Commission on Dams also make these generate demand for inputs and opportunities points. The OED writes that "dams providing for processing. water for irrigation also produce, in general, sub- stantial benefits stemming from linkages between Increased industrial and agricultural output irrigation and other sectors of production," but no generates additional household incomes. estimates are available on the indirect benefits of Higher incomes raise consumption of goods A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT and services, which, in turn, encourages pro- Table 9.1 Values ofVariables Required for the duction of agricultural and industrial commodi- Estimation of a Project Multiplier of ties. Changes in wages and prices have both the Bhakra Dam Project, India income and substitution effects on expenditure and on saving decisions of owners of the vari- Regional value added with ous production factors, which further affects project minus regional value added demand for outputs in both the region and the without project wider economy. Induced impacts reflect the Definition of project multiplier Value added of agriculture and feedbacks associated with these income and electricity with project minus value expenditure effects and also include impacts on added of agriculture and electricity government revenues and expenditures. without project Source: Author. For estimating a project multiplier value (table 9.1) for a dam, we need a numerator that esti- mates the regional value added under a "with project" situation as well as the regional value region, with technical coefficients, shares, and added under a "without project" situation. We rates computed based on the 1992 regional I/O also need a denominator that estimates the matrix (Bhatia, Scatasta, and Cestti 2005). One value added from the sectors directly affected by version of the model assumes that the construc- the major outputs of the dam (such as agricul- tion of large dams in the northeast would relax tural output, hydroelectricity, and water supply). supply constraints sufficiently to treat as non- tradables all sectors but those directly affected For example, the multiplier for the Bhakra Dam by the dams. A second version of the model is in India has been estimated at 1.9, meaning that built with supply constraints on 10 additional for every 100 paise of value added directly by sectors, treated as tradables. the dam, another 90 paise were generated in the region through indirect effects. SAM-based, fixed-price, multiplier models have been used to provide a quantitative analysis of How to conduct multiplier effect analysis for a project the direct and indirect impacts and income dis- Multiplier analysis requires a multisectoral tribution impacts of the Bhakra Dam and Bunga macro model of the region with quantitative Check Dam in India (Bhatia, Scatasta, and Cestti information on the linkages of sectors and insti- 2005, ch. 3 and 4). For estimating the multiplier 295 tutions (government, households, firms). Given impacts of increased agricultural production and resources and time constraints, the selection of electricity output available from the Bhakra a multiplier analysis tool takes into account the Dam, a SAM-based multiplier model was cali- availability of input/output (I/O) tables or social brated for the state of Punjab for the period accounting matrix (SAM) databases and of com- 1979­80, almost 20 years after the dam was putable general equilibrium (CGE) models for completed. The effects are divided into direct the region where the project is located. and indirect. The indicators, capturing the effects, include production and value added, as The World Bank completed a multicountry study well as disaggregated household incomes and (Bhatia, Scatasta, and Cestti 2005) on the multi- their distribution. For the Bunga case study, a plier effects of dams (box 9.10) in 2003. The SAM-based model for the period 2000­1 was studies include three large dams in Brazil, India, used to assess the economic impacts of addi- and Egypt with multiregional or economywide tional irrigation available from two check dams impacts; and one small check dam in India with in the village. considerable local and spillover effects. The analysis of the impacts of the Aswan High For the Brazilian case study, a semi-input/output Dam (Bhatia, Scatasta, and Cestti 2005, vol. 2, (S-I/O) model was calibrated for the northeast ch. 4) is based on an extended version of the ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS Box 9.10 MultiplierValues and Poverty Impacts of Selected Dams in Brazil, India, and Egypt The World Bank has just completed a multicountry study on multiplier effects of dams. Main features of dams and their outputs 1. Sobradinho Dam and cascade of reservoirs in Northeast Brazil Hydropower: 10.5 GW capacity; irrigation 330,000 hectares 2. Bhakra Dam system in northwest India Hydropower: 2,880 MW; annual output 14 billion kWh; additional irrigation 7.1 million hectares 3. Aswan High Dam, Egypt Hydropower: 2100 MW; annual output 8 billion kWh per year; perennial irrigation to 350,000 hectares. 4. Check dam at Bunga village, Haryana, India Irrigation: 395 hectares Multiplier values for each case study Multipliers are summary measures that reflect the total (direct and indirect) effects of a project in relation to its direct effects. The multiplier values, though not strictly comparable across case studies, vary from 1.4 to 2.0.The multiplier values in the case study of Sobradinho Dam in Brazil show for every unit of value (CR$) generated by the sectors directly affected by the dams, another unit could be generated indirectly in the region. Estimates for the Bhakra Dam indicate that for every rupee (100 paise) generated directly, another 78 to 90 paise were generated in the region as downstream or indirect effects. For the Aswan High Dam, multiplier values range between 1.22 and 1.4 in the three simulations.The multiplier value for the impact of check dams in the Bunga village is estimated as 1.41. Income distribution and poverty reduction impacts The multisectoral, economywide models used for multiplier analysis also provide quantitative estimates of income distribution and poverty impacts of dams. For example, in the case of the Bhakra Dam, agricultural labor gained an estimated 65 percent in income as compared to a rural average increase of 38 percent under the "with project" scenario compared with a hypo- thetical situation where the project had not been undertaken. For the case study on the Aswan High Dam, household consumption estimates were available in quintiles of rural and urban households.The gain for the lowest quintile of the rural population was a 20 percent increase over a "without" project hypo- thetical case.The other four quintiles averaged gains of 22 percent. In the case of the Bunga Check Dam, the household categories are landless workers, marginal farmers, small farmers, and large farmers.The increase in the incomes of marginal farmers was 50 percent compared with the average increase of 48 percent 296 under with/without project situations.The increase in the income of small farmers was 59 percent compared to the average increase of 48 percent under with/without project situations. Source: Bhatia, Scatasta, and Cestti 2005. IFPRI standard CGE model. For comparison, the OUTPUTS AND IMPACTS impact has also been simulated with the model The results from the World Bank multicountry run in a fixed-price multiplier mode (replicating study on multiplier effects of dams are given in a SAM multiplier analysis). The database uses a box 9.10. In addition to multiplier values, the SAM for 1997. The effects of the dam that have multisectoral, economywide models used for been covered are changes in the supplies of multiplier analysis provide quantitative esti- irrigated land and water; changes in the sup- mates of income distribution and poverty plies of electric power; and changes in yields impacts of dams. The SAM-based, fixed price, and production technology (primarily changes multiplier models and CGE models provide in fertilizer use). The analysis covers the main income and consumption estimates under direct and indirect effects of the dam, including with/without project situations for various disaggregated household incomes and their dis- household groups (rural self-employed, agri- tribution, in a typical year during its lifetime. cultural labor, marginal farmers, household A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT quintiles in rural and urban areas). These data ing the impacts on income distribution and have been used to compute "gains" or "losses" poverty reduction. Such assessments are neces- associated with the dam for each category of sary in the context of ex post evaluations, household (box 9.10).2 which can be a valuable tool for the identifica- tion and design of alternatives for new projects. ISSUES FORWIDER APPLICABILITY Investments in irrigation and hydropower proj- REFERENCES CITED ects have very significant indirect economic Bhatia, Ramesh, Monica Scatasta, and Rita Ces- impacts that could be as high as 90­100 percent tti. Forthcoming. Indirect Economic Impacts of direct economic impacts. Such indirect of Dams: Methodological Issues and Sum- impacts must be taken into account in a com- mary Results of Case Studies in Brazil, India prehensive analysis of the economic, social, and and Egypt. 2 Vols. Washington, DC: World environmental impact of large water projects. Bank. The benefits from irrigation and hydropower projects to agricultural labor, the poorest rural Gittinger, P. 1982. Economic Analysis of Agri- group, are sometimes higher than benefits to cultural Projects. 2d ed. EDI Series in Eco- other households. Thus, investments in large nomic Development. Baltimore: Johns water projects may help reduce poverty in the Hopkins University Press. region and beyond. World Bank. 1996. "The World Bank's Experi- Multiplier analysis is important for large water ence with Large Dams--A Preliminary projects--agricultural and other infrastructure Review of Impacts." Operations Evaluation projects that have significant regionwide impacts. Department Report No. 15815. World Bank, Such an analysis should be carried out for all Washington, DC. projects where it is important to evaluate indirect impacts and impacts on the rural and urban poor World Commission on Dams. 2000. "Dams and or agricultural labor households or tribal popula- Development: A New Framework for Decision- tions. Some of the potential investments suitable Making." The report of the World Commission for a multiplier analysis are as follows: on Dams, issued November 16. Available online at http://www.damsreport.org. · Large-scale surface or tubewell irrigation 297 projects SELECTED READINGS · Multipurpose dam projects Bhatia, Ramesh, Monica Scatasta, and Rita Ces- tti. 2003. "Study on the Multiplier Effects of · Hydropower projects Dams: Methodology Issues and Preliminary · Projects that include a river-link to bring Results." Paper presented at the Third World water to a region Water Forum, Kyoto, Japan, March 16­23. · Water conservation programs Bell, C., Peter B. R. Hazell, and R. Slade. 1982. Project Evaluation in Regional Perspec- The design and application of modeling tech- tive--A Study of an Irrigation Project in niques that compute multipliers can be used to Northwest Malaysia. Baltimore and London: explore the impacts on expected project out- Johns Hopkins University Press. comes of alternative assumptions about sector characteristics, policy packages, and structure Hazell, Peter B. R., and C. Ramasamy. 1991. of the economy. Economywide models (SAM- The Green Revolution Reconsidered: The based, fixed price, or CGE) should be used for Impact of High-Yielding Rice Varieties in assessing the full range of direct and indirect South India. Baltimore: Johns Hopkins development impacts of dam projects, includ- University Press. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS Robinson, S. 1989. "Multisectoral Models." In H. framework and the use of shadow prices Chenery and T. N. Srinivasan, eds. Hand- may not include multiplier effects. book of Development Economics. Vol. 2, pp. 885­947. Amsterdam: Elsevier Science. 2. Some of the impacts on the poor in other regions are not captured by the multiplier Taylor, J. Edward, and Irma Adelman. 1996. Vil- analysis carried out for a particular region. lage Economies: The Design, Estimation, and For example, in India, the urban poor have Use of Village-Wide Economic Models. Cam- also benefited from surplus foodgrains from bridge: Cambridge University Press. Bhakra distributed all over the country through fairprice shops. Bhakra Dam con- tributed 30 million tons, 60 percent of total ENDNOTES foodgrains procured by public distribution 1. It is sometimes asserted that, in cost-benefit agencies during 2000­1. Remittances analysis, "Shadow prices that include care- (around Rs 3,548 million or US$75 million fully traced indirect changes in value added during 1995­6) sent by migrant laborers include the multiplier effects while mini- working in the Bhakra command have ben- mizing the danger of double counting." fited millions of poor in the villages in Bihar And ". . . most of the multiplier effect is and Uttar Pradesh, with resulting multiplier accounted for if we shadow-price at oppor- and downstream effects. tunity cost" (Gittinger 1982, 61). However, in practice, when cost-benfit analysis is per- This Profile was prepared by Ramesh Bahtia of Resources formed for large water projects, shadow and Environment Group, New Delhi, and reviewed by Sarah prices are not estimated in a regional Cline,Timothy Sulser, and Mark Rosegrant of IFPRI. 298 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURALWATER MANAGEMENT INNOVATION PROFILE 9.4 way in which irrigation and drainage systems are managed and about raising the expectations of all parties as to what performance is achievable. BENCHMARKING FOR It is a change-management process that requires IMPROVED PERFORMANCE IN identification of shortcomings, and then accept- ance by key stakeholders of the need, and path- IRRIGATION AND DRAINAGE ways for achieving the identified goals. What is new? Increasing water demand from nonagricultural sectors is placing severe pressure OBJECTIVES AND DESCRIPTION on the irrigation and drainage sector to reduce Benchmarking enables an organization to make the abstraction of water from surface and an objective comparison between its own per- groundwater systems. Performance assessment formance and that of best practice elsewhere. It is within the irrigation and drainage sector has been defined as "a systematic process for securing con- widely discussed in recent years, and genuine tinual improvement through comparison with rel- attempts are now needed to improve perform- evant and achievable internal or external norms ance. Benchmarking is a practical approach to set and standards" (Malano and Burton 2001). realistic targets for key processes. It introduces competition in a setting characterized by natural Benchmarking is part of a strategic planning monopoly and presents regulators and senior process that asks and answers such questions management with a tool for M&E progress in as, "Where are we now?" "Where do we want to management and resource use. World Bank staff be?" and "How do we get there?" Of course, can make the difference in promoting bench- farmers and managers may use the same data to marking, by using such an assessment as part of compare their schemes with others. project preparation. There are six key stages in benchmarking (fig- Irrigation and drainage schemes in many coun- ure 9.1): tries are monopoly enterprises managed by government agencies, frequently operating with little accountability to the captive water users. Service delivery, often poor--unreliable, inade- FIGURE 9.1 STAGES IN BENCHMARKING quate, and untimely--impairs agricultural pro- duction, especially on farms at the tail end of 299 the system. Excess water results in waterlogging 1 Identification and loss of crop production. and planning 6 2 Benchmarking offers an opportunity to com- Monitoring and Data pare performance between irrigation and evaluation collection drainage schemes, identify best practices, and Benchmarking replicate them on schemes that perform less process well. It makes information on performance available to stakeholders--in particular, water 5 3 Action Analysis users. It is an important addition to perform- ance-assessment procedures because it helps 4 set achievable targets. Integration Benchmarking is about moving from one level of performance to another. It is about changing the Source: Malano and Burton 2001. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS 1. Identification and planning. The objec- Box 9.11 Descriptors for Irrigation tives of the benchmarking program and and Drainage Schemes key processes contributing to performance are defined. Organizations with similar · Irrigable area processes are identified, key performance · Drained area indicators are formulated, and a data · Annual irrigated area acquisition program formulated. Use of · Climate · Water resources availability key descriptors (box 9.11) enables similar · Water source schemes and processes to be identified for · Average annual rainfall comparison. · Average annual reference crop potential evapotranspiration (ET) 2. Data collection. Data are collected and per- · Method of water abstraction formance indicators calculated. These data · Water delivery infrastructure are for the scheme under review and other · Type of water distribution identified schemes and will include process · Type of drainage and output performance indicators. Addi- · Predominant on-farm irrigation practice tional data may have to be collected for the · Major crops (with percentages of total irrigated area) benchmarking exercise beyond those · Average farm size already collected for day-to-day system · Type of irrigation system management management, operation, and maintenance. · Type of drainage system management Source: Malano and Burton 2001. 3. Analysis. Data are analyzed and the per- formance gap(s) identified in the key processes. The analysis also identifies the cause of the performance gap, and the 5. Action. Implementation of proposed action(s) to close the gap. Recommenda- actions, to which leadership by senior tions are formulated from the options management is key. available, reviewed, and refined. Further data collection may be required for diag- 6. Monitoring and evaluation. An important nostic analysis if certain processes are not part of the change-management program fully understood. is monitoring the implementation of the plan and its impact on the key processes 300 4. Integration. To achieve change, the action as disclosed through monitoring of the plan has to be integrated into the opera- performance indicators (box 9.12). Stake- tional processes and procedures, requiring holder monitoring is key. acceptance by key stakeholders. Bench- marking programs may fail at this stage if insufficient attention is paid to winning OUTPUTS AND IMPACTS acceptance for the action plan. Increas- International benchmarking draws on the expe- ingly, service contracts between the irriga- rience of the program started by the Australian tion and drainage service provider and National Committee of the International Com- water users are being introduced, allowing mission on Irrigation and Drainage (ANCID) in water users to play a key role in setting 1998. During 1997­8, the committee reported service delivery performance targets. that 33 irrigation systems were covered, using a Information on realistic and achievable tar- limited set of performance indicators. Subse- gets can be obtained through the bench- quent annual benchmarking exercises (ANCID marking process of identifying best 2000) reported on 46 systems using 47 perform- practices and service providers to be held ance indicators in four key management areas: accountable to levels of performance system operation (7 performance indicators), achieved on similar schemes. environmental management (5 performance A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT indicators), business processes (22 performance Box 9.12 Widely Accepted Benchmarking indicators), and financial management (13 per- Performance Indicators formance indicators). · Annual irrigation water delivery per unit irrigated area Similar initiatives have since been launched in (cubic meters per hectare) other countries. In Sri Lanka, Jayatillake (2003) · Main system water delivery efficiency reports work by the Irrigation Management · Total annual volume of drainage water removal (cubic meters per year, cubic meters per hectare) Division of the Irrigation Department to bench- · Drainage ratio mark scheme performance across the country. · Cost-recovery ratio Cropping intensity across 52 schemes was a · Total management of operation and maintenance (MOM) starting point for identifying relative perform- cost per unit area (dollars per hectare) ance, and a range of between 0.35 and 2.0 was · Total maintenance expenditure per unit area found. In five schemes in one water resources (dollars per hectare) system, benchmarking was used to reduce the · Total gross annual agricultural production per unit area (tons per hectare) period of water issues made from reservoirs · Output per unit of irrigated area (dollars per hectare) during the Maha and Yala seasons in order to · Output per unit of water consumed conserve limited water supplies (figure 9.2). (dollars per cubic meter) Further international comparative assessments · Water quality (chemical, biological, salinity) were then made with other rice-based schemes · Change in water table over time (meters) using the Online Irrigation Benchmarking Ser- · User satisfaction with service delivery vice (OIBS 2003) benchmarking tool (figure · Complaints by users 9.3) of the International Water Management Source: Author. Institute (IWMI). Statewide benchmarking of medium- and total annual irrigated area; water use effi- large-scale irrigation and drainage schemes ciency; recovery of irrigation water charges; has been carried out in Maharashtra, India and crop yields. With the basic data collected, (Sodal 2003). Five key output and process work is now underway to identify the better- indicators have been identified: irrigation performing schemes and the processes con- potential created and utilized; seasonal and tributing to this performance. 301 FIGURE 9.2 REDUCTION OF MAHA SEASON WATER ISSUESTHROUGH BENCHMARKING Kaudulla Minneriya 152 152 158 Giritale 150 141 150 161 151 157 Parakrama Samudra 156 145 149 131 125 126 128 Days 127 133 151 162 154 133 136 135 125 132 123 151 146 121 128 137 133 121 127 126 1994/5 1995/6 1996/7 1997/8 1998/9 1999/2000 2000/1 2001/2 2002/3 Season Source: Jayatillake 2003. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS FIGURE 9.3 PLOT OF COMPARATIVE ANALYSIS USINGTHE ONLINE IRRIGATION BENCHMARKING SERVICE 3.0 and Selected season Selected scheme Other(s) dem 2.5 tion 2.0 1.5 supply/Irriga 1.0 irrigation 0.5 Relative 0.0 0 10 20 30 40 50 60 70 Irrigation scheme number Source: OIBS 2003. In Turkey, Cakmak et al. (2003) applied the pre- a scheme (such as maximization of crop produc- liminary set of indicators presented by Malano tion, or protection of livelihoods), and selecting and Burton (2001) to five schemes, identifying key performance indicators accordingly. noteworthy differences in water delivery per- formance (figure 9.4). From this study, the bet- ter-performing schemes were identified, one ISSUES FOR WIDER APPLICABILITY difficulty encountered being that different Benchmarking is a means to understanding cur- schemes performed best according to different rent relative performance of irrigation and indicators. This emphasizes the need to be clear drainage schemes in a growing number of coun- at the outset on identifying the key objectives of tries. Most schemes in the initiative supported by FIGURE 9.4 COMPARATIVE PERFORMANCE OF WATER DELIVERY IN FIVETURKISH SCHEMES 302 16,000 3.0 14,000 2.5 Demand 12,000 tion 2.0 10,000 /ha 3 8,000 1.5 m Supply/Irriga 6,000 1.0 4,000 Irrigation 0.5 2,000 0 0 Relative Batman-Silvan Devegeçidi Derik- Nusaybin Cinar-Goksu Kumluca WDCA (m3/ha) WDIA (m3/ha) Relative Irrigation Supply/Irrigation Demand Source: Cakmak et al. 2003. Note: m3/ha = cubic meter per hectare. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT the World Bank, the International Commission other nonirrigation stakeholders to demand on Irrigation and Drainage (ICID), the Food and improvements and an end to wasteful use of Agriculture Organization (FAO), and IWMI are in land and water resources, as has happened in stages 1, 2, and 3, although some reports have the state of Victoria, Australia. Better perform- been received that management changes have ance is about better resource use, more pro- been made based on benchmarking results. To ductive agriculture, and enhanced livelihoods, some extent, the first two stages are the easy particularly for those with limited access to part. More difficult is the identification of the rea- water within irrigation and drainage systems. son(s) for performance gaps between different schemes and the action needed to raise the per- formance of the less well-performing schemes. REFERENCES CITED The true impact of the benchmarking initiative ANCID (Australian National Committee of the will be felt when reports are received detailing International Commission on Irrigation and action in stages 4 and 5. Drainage). 2000. Australian Irrigation Water Provider--Benchmarking Report. As with any change-management process, key Victoria, Australia: ANCID. factors in ensuring success in stages 4 and 5 are strong leadership, communication, and gaining Cakmak, B., M. Beribey, Y. E. Yildirim, and S. ownership. Strong leadership is needed to cre- Kodal. 2003. "Performance of Irrigation ate the future vision, to develop strategies, and Schemes: A Case Study from Turkey." Spe- to make the change happen. Communication is cial Issue on Benchmarking in the Irriga- needed with stakeholders to provide informa- tion and Drainage Sector. Irrigation and tion gained from the gap analysis and to clearly Drainage 53(2). identify the benefits to be derived from chang- ing the way things are done. This should be Jayatillake, H. M. 2003. "Irrigation Benchmark- supported by measures to gain ownership of ing in Sri Lanka." Special Issue on Bench- the proposed changes such as meetings with marking in the Irrigation and Drainage stakeholders to discuss and debate the pro- Sector. Irrigation and Drainage 53(2). posed changes. Malano, H., and M. Burton. 2001. Guidelines for World Bank staff can make a difference in pro- Benchmarking Performance in the Irriga- moting benchmarking by using such an assess- tion and Drainage Sector. Rome: Food and 303 ment as part of project preparation. The current Agriculture Organization, International Pro- version of the Project Appraisal Document gramme for Technology and Research in (PAD) includes a section for key performance Irrigation and Drainage. indicators to enable M&E. The choice of such indicators is generally made on an ad hoc basis, OIBS (Online Irrigation Benchmarking Service). and the resulting list does not facilitate any com- 2003. Online at http://www.lk.iwmi.org:82/ parison between similar projects. Hence, apply- oibs/main.htm. ing the proposed stepwise methodology would enable management to implement M&E based Sodal, S. V. 2003. "Present Practices and Oppor- on more meaningful and comparable indicators. tunities for Performance Improvement of Irrigation Schemes in Maharashtra State of For schemes in the public sector, benchmark- India." Special Issue on Benchmarking in ing is a political issue, assuming a genuine the Irrigation and Drainage Sector. Irriga- desire and rewards for improving performance. tion and Drainage 53(2). Governments and reform advocates may use benchmarking to put reform of irrigation man- This Profile was prepared by Martin Burton of ITAD~Water agement on the national agenda. Public score- Ltd, Hector Malano of University of Melbourne,Australia, and cards may prompt environmental groups and Ian Makin of IWMI. It was reviewed by Maria Saleth. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS INNOVATION PROFILE 9.5 agricultural water operations. It demonstrates how, for effective and sustained application of Safeguards, mitigation measures may be inte- APPLYING ENVIRONMENTAL grated into the project cycle to ensure timely AND SOCIAL SAFEGUARD management and coordination within and across the agriculture sector. The need for prior POLICIESTO AGRICULTURAL review of the relevant policies, legislation, and WATER OPERATIONS AND regulations and the importance of appraising MONITORINGTHEM DURING agriculture and water sector administrative/insti- THE PROJECT CYCLE tutional arrangements and capacity are stressed. Finally, this Innovation Profile cites issues that What is new? The Bank's Environmental and the Bank and the borrower need to recognize as Social Safeguard Policies ("Safeguards") are man- particular challenges to mainstreaming environ- dated instruments to help integrate environmental mental and social safeguards at project design and social considerations in the planning and imple- and implementation stages. mentation stages of the project cycle.This Innova- tion Profile reviews adverse environmental and social impacts associated with agricultural water POTENTIAL ENVIRONMENTAL AND SOCIAL operations, steps needed to mitigate such impacts IMPACTS OF AGRICULTURAL WATER PROJECTS in the sector policies and the project cycle, and The potential environmental impacts of projects problems observed and lessons learned in the may be direct, indirect, or cumulative. Direct design and implementation stages of past projects. environmental impacts (also known as primary The importance of evaluating institutional arrange- impacts) are caused mainly by such develop- ments and ensuring monitoring of agreed mitiga- ment actions as water abstraction, diversion or tion measures is stressed. impoundment, and land grading, and include loss of habitat as well as modifications to the hydrology of watersheds and to the water and OBJECTIVES AND DESCRIPTION salt content of soils. Direct impacts also involve This Innovation Profile elaborates on IP 9.2, the human environment, especially displace- which provides guidance on the incorporation of ment of indigenous peoples or rural settlements the Bank's Safeguards into agricultural water or disruption of their lifestyles, as well as 304 operations such as irrigation and drainage, water increased incidence of water-borne diseases, logging and salinity control, groundwater particularly when reusing irrigated wastewater. abstraction, and water reuse and conservation at Unless appropriately mitigated, other factors sectoral and project levels. It is designed for such as constraints on access to water, land, those in agriculture and water sector agencies and vegetation may result in significant loss or specifically concerned with the planning and reduction of incomes of landowners, tenants, management of investment operations, including and sharecroppers. Extensive ditching and preparation and implementation of environmen- related excavations associated with a major tal and social assessments, supervision of tender drainage project may potentially intersect sites contracts, and monitoring and evaluation of mit- of local or national cultural significance. igation measures.1 It may also prove useful to government environmental agencies and other Indirect impacts (also known as secondary relevant organizations responsible for assisting impacts) may sometimes have more profound the agricultural sector in the application of Safe- consequences than do direct impacts. They may guards, as well as to NGOs and the public. affect larger geographic areas of the environ- ment than anticipated and continue well after This Innovation Profile identifies significant project completion. Examples include gradual potential environmental and social impacts degradation of vulnerable ecosystems such as (direct and indirect) normally associated with wetlands, seawater intrusion into downstream A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT freshwater systems, and overpumping of Box 9.13 Tanzania: Social Action Fund Project groundwaters. Other common indirect impacts associated with new or rehabilitated projects The importance of maintaining river flows has been demon- involve increased deforestation, influx of set- strated in several subcomponents supported under this proj- tlers, deterioration of surface water quality ect. Completed irrigation works abstract water from through erosion of land cleared or modified for neighboring rivers that, in some cases, have resulted in denying construction to enhance agricultural productiv- any downstream flow during the dry season. Downstream users have been marginally affected but the impact on river ity, and the application of agricultural chemi- ecology has been substantial and is under investigation by the cals. Downstream indirect impacts may be in Department of Environment. the form of reduced agricultural productivity and incomes due to change in water levels and Increasing realization that flows are critical to maintaining ecosystems has generated moves to understand and describe the like. links between flows and ecosystem functioning so that "envi- ronmental flows" can be specified and thus minimize the loss of Cumulative impacts can generate additive or valued ecosystem features.This realization may be mobilized to synergistic impacts and result in damage to the describe flows for a river that will (1) minimize or mitigate the functions of neighboring ecosystems. This is impacts of new water resources development, (2) rehabilitate particularly the case with investments involving systems impacted by past developments, and (3) allow calcula- multiple subprojects, for example the impacts tion of the costs of compensating people for such impacts. of the creation of access roads for transporting Source: Author. produce to markets or the establishment of small check dams in a concentrated area. Other of complementarity and departure. Most coun- cumulative impacts involve modifications to tries have enacted environmental laws consti- river or stream flows and maintenance of water- tuting the legislative and regulatory basis for dependent ecological functions and services in conducting an environmental assessment a catchment area. (See box 9.13.) (EA)--which includes an assessment of social dimensions--as part of project development Virtually all undesirable impacts may be and implementation; articles and regulations avoided or controlled by the adoption of miti- may also list project categories subject to EA gation measures. This may be attained by the and, by inference, social assessment (SA), and formulation of environmentally and socially other Safeguards. They may also have sector sound designs and appropriate institutional guidelines covering safeguards and these arrangements for implementation, the imple- should be consulted during the review. 305 mentation of contract clauses by the contractor to ensure environmentally and socially sound Invariably, regulations require a clear definition construction and work practices, and diligent of the rights and obligations of the investing monitoring and supervision. party (government authorities and/or the pri- vate sector) and the general public. Conse- quently, before initiating any activity, there INTEGRATING ENVIRONMENTAL ASSESSMENT should be a clear understanding of all Safe- AND OTHER SAFEGUARDS INTO INVESTMENT guard procedures to follow and authorities and OPERATIONS other stakeholders (including the public) to be The integration of Safeguards into investment engaged and consulted. In particular, all parties operations consists of several steps: should know the required EA/SA procedures to follow; the assigned responsibilities to prepare Review of relevant policies, laws, and regulations for and approve the EA, Environmental Manage- water sector operations ment Plan (EMP), and/or the SA--and, as The first step involves a broad review of the required, a Pest Management Plan (PMP) and country's current policies and legislative and other appropriate mitigation plans; and, regulatory practices relevant to the application arrangements to monitor and evaluate the of the Bank's Safeguards and determining levels application of the relevant Safeguards. Such ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS parties should also know what sanctions might available in-country in a local language and be imposed in cases of noncompliance. at a public place accessible to project-affected groups and local NGOs prior to appraisal. Many countries have signed several interna- (See table 9.2 for the classification of EA cate- tional conventions and agreements that serve as gories.) It is good practice to disclose the guidelines for environmental protection in agri- draft EA report through the information-shar- culture and water resources projects. These tar- ing agencies, such as the InfoShop of the get biodiversity conservation, wetlands of World Bank. international importance, world cultural and natural heritage, migratory species, climate change, desertification, and hazardous wastes. Review of Bank and other donor The advice of the environment authority or Safeguard requirements equivalent organization should be sought con- The Bank's Safeguard policies should be cerning the conventions' and agreements' appli- reviewed with the borrower during the initial cation to agricultural water projects. stages of project preparation. For the most part, Bank and borrower EA policies will be comple- mentary, though differences sometimes occur REVIEW OF SECTOR-SPECIFIC POLICIES, over project classification, public consultation, or REGULATIONS, AND PROCEDURES disclosure. Such differences should be resolved A parallel analysis should be undertaken of as early as possible. Other Safeguards may not be existing sector-specific policies, responsibilities, as well accommodated and require special atten- and regulations (along with a review of the sec- tion and defining arrangements for their effective tor investment planning process for review and implementation with the borrower. If the project approval of investment projects) to determine involves other donors, steps should be taken to whether environmental and social Safeguard ensure complementarity and consistency in the issues are covered adequately in the processing application of all relevant Safeguards. Where nec- of both sectorwide and project-specific invest- essary, an environmental and social management ments. This includes appraisal of in-country framework should be developed to fill any gaps capacity for the effective application of Safe- that may exist between local laws and regulations guards and, as appropriate, recommending and international best practice. means to strengthen relevant institutions for 306 effective execution of investments. This is espe- Review of the project cycle cially critical for sectorwide investments. The EA Safeguard policy is specifically It is important to ensure that government and designed to integrate EA and other Safeguard private sector units responsible for contract requirements with the project cycle. This inte- management, quality control, and monitoring at gration is essential to providing timely environ- regional and district levels have clear objectives mental and social information for decision and procedures, including those for reporting making at key stages in the project cycle-- the effective application of all Safeguards dur- when findings may indicate practical siting and ing implementation. design changes--to avoid or minimize adverse impacts or better capture the project's benefits. In keeping with the requirements of the Envi- Sector agencies and other parties have the ronmental Assessment Safeguard Policy opportunity to review and comment on a proj- (OP/BP 4.01), a review should be conducted ect as it is formulated and, where necessary, of public consultation/participation and require changes to avoid or reduce adverse grievance redress mechanisms and practices. impacts before irrevocable project decisions are In addition, the borrower should make the made. Likewise, all parties can monitor the mit- draft EA (for category A projects) or any sep- igation measures to ensure their implementa- arate EA report (for category B projects) tion to a satisfactory standard. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT The Bank's increasing use of programmatic, proposed project with the borrower, the need sector-based loans and time-slice investments for an EA, and the likely level of environmental involving multiple subprojects has stimulated planning and management. Depending on the the use of the Sectoral Environmental Assess- country, an SA may be required as a separate ment (SEA). The assessment undertakes a sec- document. However, the Bank and the bor- torwide environmental and social analysis of rower should ensure the integration of environ- policies and investment strategies before major mental and social concerns and their mitigation decisions are determined and supports the inte- for final decision making. gration of Safeguard concerns into long-term development and investment planning. SEAs STAGE II: PREPARATION OF THE EA/SA (SCOPING) are also suitable for analysis of institutional, Scoping involves identifying and narrowing legal, and regulatory aspects related to the sec- down potential environmental and social impacts tor and for making recommendations on Safe- of the project (including alternatives) so that guard standards, guidelines, law enforcement, efforts focus solely on those likely to be of signif- and training, thus reducing the need for similar icance. For a project to be properly scoped, a site analysis in downstream EA work. Details on visit and preliminary consultations with relevant further advantages and use of SEAs may be stakeholders must be included. It is important not found in World Bank (1993). only to cover all environmental and social issues known at inception of the project (and identified For EA and other Safeguards to be incorporated during screening), but also to allow breadth and into sectorwide and project-specific activities, it flexibility so that unanticipated impacts may be is essential to understand the project and the identified and, if significant, addressed at any relationships within and between the sector and time during the project cycle. its partners, including the private sector. This will help determine the particular Safeguard Alternatives to a proposed project are a major activities to be synchronized with each stage of requirement of the Safeguard on EA and should the project cycle and identify the parties be explored at this stage. They may include responsible for these actions. improving the efficiency of existing projects, such as the adoption of integrated pest manage- A summary of the triggers and mechanisms for ment (IPM), and locating an irrigation or achieving policy objectives of each Safeguard is drainage project where adverse environmental provided in table 9.2. and social impacts may be minimized. The dif- 307 ferent impacts described should indicate which The application of Safeguards within the project are reversible or unavoidable and which may be cycle involves several stages: mitigated. The analysis should address the costs and benefits of each alternative and incorporate STAGE I: SCREENING (CLASSIFICATION) OF PROJECTS the estimated costs of any associated mitigation Screening serves two major purposes: to deter- measures. The alternative of maintaining the cur- mine if proposed projects require an EA or the rent status should be included for comparison. application of other Safeguards, and to indicate actions to ensure compliance with the relevant It is also essential at this stage to prepare Terms Safeguards. of Reference (TORs) for the EA/SA and obtain the necessary expertise to conduct the assess- OP/BP 4.01 (Environmental assessment) classi- ments. Special studies such as those on resettle- fies the proposed project into one of four cate- ment and pest management and the necessary gories (A, B, C, or FI) depending on the type, specialists to conduct them should be noted. location, sensitivity, and scale of the project and The Bank and the borrower should subject the the nature and magnitude of its potential envi- TORs to review and approval by the relevant ronmental impacts. Consequently, the Task Bank specialist(s) and the borrower's environ- Team needs to determine classification of the mental regulation agency. ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS Table 9.2 PolicyTriggers and Mechanisms Policy Triggers Mechanisms for achieving policy objectives OP/BP 4.01 When a project is likely Classification of the project as Category A, B, C, or FI according to Environmental to have potential (adverse) the nature and magnitude of potential environmental impacts. For assessment environmental risks and Category A and B projects, the borrower prepares an EA report. impacts in its area of influence. Depending on the project and the nature of the impacts, a range of instruments can be used: Environmental Impact Assessment, Environmental Audit, Hazard or Risk Assessment, and EMP. A sectoral or regional EA is required when the project is likely to have sectoral or regional impacts. OP/BP 4.04 When a project has the The environmental assessment should identify any critical natural Natural habitats potential to cause significant habitats within a proposed project's area of influence. Bank-supported conversion (loss) or projects must avoid significant conversion or degradation of any degradation of natural critical natural habitats. If significant conversion or degradation of habitats. noncritical habitat is needed, the project must include mitigation measures acceptable to the Bank. OP 4.09 When procurement of Pest and pesticide management issues relevant to the project should Pest pesticides or pesticide be addressed in the EA. A separate PMP is prepared when there are management application equipment is significant pest management issues or when financing of substantial envisaged or when existing quantities of pesticides is envisaged (EP 4.01, annex C). pest management practices are not based on IPM. A list of pesticides authorized for procurement under the project should be established prior to financing of pesticides and in compliance with selection criteria in OP 4.09 (pest management). OP/BP 4.12 Owing to land take causing When the policy is triggered, preparation of a Resettlement Plan (RP) Involuntary loss of shelter, assets, or is required as a condition of project appraisal; an abbreviated plan may resettlement livelihood and incomes with be developed where fewer than 200 persons are affected or where the or without any physical impacts are minor.Where precise impacts cannot be known at displacement; and restriction appraisal, a Resettlement Policy Framework (RPF) is prepared as a of access to legally condition of the loan and detailed plans are prepared during 308 designated parks and implementation. In projects resulting in restriction of access to parks protected forests causing and protected forests, a process framework is required prior to loss of incomes. appraisal. OD 4.20 When the project affects Where there are adverse impacts, or where indigenous peoples are Indigenous indigenous peoples in the among the beneficiaries, the borrower prepares an Indigenous Peoples' peoples project area. Development Plan (IPDP) in consultation with the affected groups. OP 4.36 When forest sector Bank lending in the forest sector is conditional on government Forestry activities and other Bank- commitments to undertake sustainable management and conservation- funded interventions have oriented forestry, including the adoption of policy and a legal the potential to have a institutional framework; adoption of forestry conservation and significant impact on development plans; use of social, economic, and environmental forested areas. assessments of commercial forests; setting aside of compensatory preservation forests; and establishment of institutional capacity to implement and enforce these commitments. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT Table 9.2 PolicyTriggers and Mechanisms (Continued) Policy Triggers Mechanisms for achieving policy objectives OP/BP 4.11 Applies to all projects The borrower assesses the project's potential impacts on physical Physical cultural requiring a Category A or B cultural resources as an integral component of the EA, procedural resources environmental assessment. steps being the same for Category A and B projects.Where the EA predicts adverse impacts, the cultural resources component of the EA also proposes a management plan. OP/BP 4.37 When the project involves For small dams, generic safety measures designed by qualified Safety of dams a large dam (15 meters or engineers are usually adequate. For new large dams or high dams or higher) or a high hazard dam the rehabilitation of existing large or high hazard dams, the Bank or is dependent on an requires reviews by an independent panel of experts throughout the existing dam. project cycle; preparation and implementation of detailed plans, including an emergency preparedness plan; prequalification of bidders; and periodic safety inspection upon dam completion. For existing dams, the Bank requires the borrower to arrange for the use of one or more dam specialists. OP/BP 7.50 When a project involves a The policy requires ascertaining whether riparians have entered into Projects on water body contiguous with agreements or arrangements or have established any institutional international two or more states or when framework for the waterway or waterways concerned.The beneficiary waterways any tributary or other body state must formally notify other riparians of the proposed project and of surface water is a its details. component of any applicable waterway. OP/BP 7.60 When the proposed project The Bank must be satisfied that other claimants to the disputed area Projects in is in a disputed area. have no objection to the project or special circumstances of the disputed areas Bank's financial support to the project, notwithstanding any objection or lack of approval by other claimants. Source: Author. 309 Decisions to undertake and mobilize resources mine mitigation measures. The main tasks involve for the preparation, assessment, and review of the following: environmental and social Safeguards are the responsibility of the relevant sector agencies. The · Collecting information/data on existing con- borrower should ensure that appropriate staff is ditions (baseline studies) from records, sur- selected to undertake the required decisions on veys, and consultation with local residents, its behalf and is responsible for contractors, con- experts, and professionals sultants, and engineers from specialized govern- ment agencies or the private sector undertaking · Characterizing the existing environmental the implementation of the Safeguards. and social conditions and predicting the sig- nificance of major impacts (including STAGE III: MANAGING THE APPLICATION OF SAFE- reviewing expected trends within the pro- ject's influence area) GUARDS The main objective of the environmental and · Developing approaches to avoid, mitigate, social assessments is to predict the potential or compensate any adverse impacts and to nature and magnitude of positive and adverse resolve conflicts and enhance positive impacts, evaluate their significance, and deter- impacts ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS · Determining the institutional responsibilities experienced, independent supervisors may for completing the EA and ensuring the monitor them. implementation of mitigation measures and needed institutional strengthening require- STAGE IV: REVIEWING THE ADEQUACY OF THE ments, including provisions for training EA/SA REPORT(S) AND MANAGEMENT PLANS This stage of the process calls for an intensive · Producing the required EA/SA reports and review of the draft EA (and SA as required) and management plans: EMP, Resettlement Action management plans by the borrower and the Plan (RAP), IPDP, or PMP as required by the Bank; all parties are expected to make com- Safeguards policies ments and offer recommendations for revisions · Providing for the involvement of the public as needed. The following items should be con- in the assessment and for reviewing the sidered in determining the adequacy of the proposed project in an open, transparent, reports and plans and giving approval: and participatory manner. · Has the EA/SA addressed all the important At all times, it is essential to ensure close consul- issues raised in the TORs? tation between the assessment and engineering design teams, especially on provisions for the · Is the executive summary adequate, that is, reports and management plans and public con- does it highlight significant impacts and sultation. The developer is ultimately responsible their mitigation and management sufficient for ensuring compliance with statutory require- for decision making? Does it cite outstand- ments. Components of effective participation ing issues? required by the Safeguards include the following: · Are the baseline studies complete? Do they address pertinent issues? Are the methods · Identification of groups or individuals inter- that are used scientifically and technically ested in or affected by the proposed project sound? · Provision of accurate, understandable, perti- · Is the section on predicted impacts and their nent, and timely information assessment rigorous, that is, has the assess- · Dialogue between those responsible for ment included the environmental/social decisions and those affected by them impacts or consequences of adopting alter- 310 natives (such as development schemes, · Assimilation of public views with the decision management/operational practices, capital and operating costs, and costs of mitigation · Feedback about actions taken and how the measures)? public influenced the decision. · Are mitigation measures stipulated along It is important that implementers of this stage with monitoring/supervision responsibili- identify and confirm linkages to environmental ties, costing, and scheduling arrangements legislation and regulations and Safeguards perti- in the Environmental Management Plan nent to the project, and describe proposed mit- (EMP), RAP, or other plans? igation measures to accommodate public views derived from consultation with the public. · Is the project in compliance with national Equally, to ensure that mitigation measures are legislation and regulations and with donor implemented effectively and on time, clauses in requirements (if applicable)? contract documents should specify environ- mental and social practices to be adopted dur- · Are institutional arrangements for coordina- ing construction and related activities. In turn, tion, problem solving, reporting, and the provisions should be made so that suitably like in place? A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT · Are proposals for institutional strengthening tory requirements and agreed conditions and training provided? specified in construction contracts and operating licenses · Has community consultation proven effec- tive and been adequately recorded? · Demonstrate to all parties (including the public) that the project activities comply · Are references given and is there a glossary with Safeguard requirements, including con- of terms used? sultation and disclosure, and that mitigation measures are being implemented effectively · Are the EA/SA reports and management plans clearly and coherently organized and · Undertake regular site visits by the sector presented so that they may be understood, agencies and environment agency to super- especially by the decision makers and the vise environmental and social measures and public? help resolve issues · Do the reports provide information needed Construction site supervision teams may carry by the decision makers to assess whether or out many of the monitoring and supervision not the environmental and social conse- activities with guidance from environment/social quences are acceptable? specialists. However, regular visits to the sites will need to be undertaken by specialists Comments should be submitted to the EA/SA employed as part of construction supervision Team for discussion and review. If necessary, teams. Monitoring findings will be judged by the the Team may need to conduct more work application of the indicators specified in the EMP where data are required or provide explana- or variant (such as groundwater and surface tions to resolve apparent inconsistencies. The water quality) and provisions in environmental Team should be clear about what issues are to contract clauses (such as removing and retaining be addressed, when and how mitigation meas- topsoil for subsequent rehabilitation). ures are to be applied, what agency is responsi- ble for implementing them, and estimates of STAGE VI: EVALUATING THE EFFECTIVENESS OF THE their cost. SAFEGUARDS STAGE V: MONITORING AND SUPERVISION OF SAFE- Evaluation of EA/SA reports and management plans involves determining whether or not Safe- GUARDS guard issues were anticipated and the effective- 311 Monitoring and supervision provides informa- ness of mitigation measures and of institutional tion for periodic review to ensure that antici- arrangements, including strengthening and pated impacts are maintained within the levels training. Items to evaluate include the following: predicted, unanticipated impacts are suitably mitigated, and the benefits of the EA and other · The extent to which recommendations in the Safeguards are retained as the project is imple- EA/SA and management plans were followed mented and operated. To do this, the following should be arranged : · The extent to which the EA/SA and man- agement plans influenced decision making · Provide information for periodic review during project preparation, appraisal, and (and possible modification) of the EMP, implementation RAP, or other plan to help optimize the application of Safeguards at all stages of the · Assessment of project operation and main- development process tenance activities as they affect environmen- tal and social considerations, such as the · Assess performance and monitoring compli- functioning of mitigation measures and the ance with Safeguards and legal and regula- status of staff training programs ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS · Evaluation of the costs and benefits result- · Synergy with neighboring projects (tempo- ing from adopting Safeguard measures ral and spatial domains) was not registered. · Problems areas to be considered in future · Team members were not experienced in application of Safeguards for the sector(s) environmental planning and management. Problems due to supervision weaknesses are ISSUES FORTHE BANK ANDTHE BORROWER the following: A number of systemic problems in the effective application of environmental and social safe- · There was a need for earlier interventions guards have been identified in studies of envi- to help restructure and modify components ronmental and social safeguards implementation (especially in terms of institutional arrange- by the OED and the Quality Assurance Group ments and responsibilities), for sharpening (QAG). These are caused by design weaknesses of the baseline studies, and for reordering at entry and deficiencies in supervision: management priorities. Problems due to design weaknesses are the fol- · The Team was reluctant to reshape supervi- lowing: sion requirements, including the composi- tion of Team members. · Project components were sometimes overly · Supervision was inadequate at the site level. ambitious and complex in their manage- ment of safeguards. · The preparation of supervision objectives was not coordinated with the borrower's · Institutional arrangements were fragile, often agencies. based on an expectation that a champion (individual or technical body) was judged · There was a lack of appropriate support by secure enough to sustain the functions in an the borrower and Bank management. unstable institutional environment. These issues present constant challenges and · Analysis of institutional capability/organiza- require diligence by Task Teams and Project tion was inadequate, particularly for identi- Management Units to ensure compliance with fying weaknesses in coordination across the the Safeguard policies. 312 sectors. · The complexity and constraints of the REFERENCE CITED legal/planning process was underappreciated; World Bank. 1993. Sectoral Environmental in addition, the phasing of environmental and Assessment. Environmental Sourcebook social requirements with engineering/plan- Update No. 7. Washington, DC: World Bank. ning needs was frequently absent or poorly conceived, and the timeframe for their imple- mentation was insufficient. ADDITIONAL INFORMATION World Bank. 1991. Environmental Assessment · The monitoring and evaluating framework Sourcebook, Volume II: Sectoral Guidelines. was typically generalized: indicators (out- Washington, DC: World Bank. puts/outcomes) lacked potency. ------. 2003a. "Environmental Aspects of Water · There was a lack of guidance for supervi- Resources Management." Water Resources sion (that is, there was no supervision plan), and Environment Technical Note A 1. World including designated use of specialists. Bank, Washington, DC. A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT ------. 2003b. "Environmental Flows: Concepts minimizing the danger of double count- and Methods." Water Resources and Envi- ing." And "...most of the multiplier effect is ronment Technical Note C.1. World Bank, accounted for if we shadow-price at Washington, DC. opportunity cost" (Gittinger 1982, 61). However, in practice, when cost-benefit The Safeguard Policies are available from the analysis is performed for large water proj- World Bank's Safeguard Web site at ects, shadow prices are not estimated in a http://www.worldbank.org/safeguards. regional framework and the use of shadow prices may not include multiplier effects. Advice on the application of Safeguards may be obtained from the Safeguard Units in the 4. Some of the impacts on the poor in other regional vice presidencies and the Quality regions are not captured by the multiplier Assurance and Compliance Unit (QACU). analysis carried out for a particular region. Refer to http://www.worldbank.org/ For example, in India, the urban poor have safeguards. also benefited from surplus foodgrains from Bhakra distributed all over the country through fairprice shops. Bhakra Dam con- ENDNOTES tributed 30 million tons, 60 percent of total 1. For large dams, the reader should refer to foodgrains procured by public distribution Annex B for the BP section of OP/BP 4.01 agencies during 2000­1. Remittances (Environmental assessment). (around Rs 3548 million or US$75 million during 1995­6) sent by migrant laborers 2. Annex A to OP/BP 4.04 provides detail on working in the Bhakra command have ben- the definition of significant critical areas. efited millions of poor in the villages in Bihar and Uttar Pradesh, with resulting mul- 3. It is sometimes asserted that, in cost-bene- tiplier and downstream effects. fit analysis, "Shadow prices that include carefully traced indirect changes in value This Profile was prepared by Colin Rees and reviewed by added include the multiplier effects while L. Panneer Selvum and Pramod Agrawal. 313 ASSESSINGTHE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS INDEX 315 Tables, figures, and boxes are indicated by t, f, Agricultural Sector Adjustment Loan (ASAL), 33 and b respectively. Agricultural trade food security and, 38 implementation of, 40 Adaptable Program Loan (APL), 14, 15t, 262, 277 investment in, 39­40, 42­43 Adjustable Program Loan (APL), 170 lending related to, 40b Adjustment loans, 292 lessons learned from, 42 Adverse climate impacts, 272­274 open, 22 Afforestation-reforestation, 235, 264 recommendations related to, 42­43 Agricultural drought, 258 reforms in, 22 Agricultural Growth and the Poor: An Agenda research issues, 40­41 for Development, 3 Agricultural water. See Water management; Agricultural Investment Sourcebook (AIS), 3, Water use efficiency (WUE) 22, 68, 102­103, 144, 174, 206, 238, 256 Agricultural Water Management: An Agenda Agricultural output, 294­295 for Sustainable Development, 3, 7 Agricultural water strategy (AWS) pro-poor irrigation in, 115b benefits of, 26 RUPES program in, 233b defined, 24 water management in, 19t elements of, 24­26 Asset transfer, 54 implementation of, 26­28 Aswan High Dam, 178b, 295, 296b investment in, 29 Australia lessons learned from, 28­29 biodrainage in, 198, 199 planning cycle, 25b drainage interventions in, 183b recommendations related to, 29 irrigation issues in, 67, 93­95 of Tanzania, 24 technology benefits in, 125b Agriculture water reforms in, 80b chemical residues, 182 water rights in, 48b climate impacts on, 272­274 Australian National Committee of the drainage impact on, 190b International Commission on Irrigation flood recession, 265 and Drainage (ANCID), 300 investment in, 5­6 Automated weather data station network, 259, irrigated, 219 261, 262 low water return in, 5 Automation poverty reduction by, 7 applicability issues, 140 rainfed, 151b centralized, 140 wastewater use in, 157 introduction to, 139 Alley-cropping, 225 objectives of, 139­140 Allocative efficiency, 53 prerequisites for, 140b Alternative crop systems, 261 Ambilivily and Ambondromifehy watersheds, Bangladesh, drainage investments in, 191b 226b Bangladesh Drainage and Flood Control Antibiotics, 247, 248 Project, 266, 268 Aquaculture activities Bank Procedure (BP), 291b adoption of, 248 Baseline surveys, 282, 283b, 284 benefits of, 245 Belt canal, 265 export-focused, 247 Benchmarking implementation of, 246­247 benefits of, 299 316 introduction to, 238, 244 comparative assessment, 302f investment in, 244­245 defined, 280, 299 lessons learned from, 247­248 drainage schemes and, 300b recommendations related to, 248­249 impact of, 300­302 Aquatic vegetation, 120, 121 objectives of, 299­300 Aquifers (See also Groundwater) performance indicators, 301b contamination, 169 promoting, 299, 303 groundwater, 150, 157, 165, 167 stages in, 299f tubewells and, 152 water issues and, 301f Area based water charges, 46t, 47 wider applicability, 302­303 Arid regions Beni Amir project, 135b biodrainage in, 199 Benue River, 245 evaporation ponds in, 196 Bhakra Dam, 295b, 296b, 313 waterlogging and, 177 Biodiversity loss, 227 Armenia, 43, 47b, 52 Biodiversity niches, 232 Artificial evaporation ponds, 197 Biodrainage Asia applicability issues, 199 drainage development in, 177b, 179 in arid regions, 199 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT in Australia, 198, 199 groundwater overexploitation in, 128, 130b, impact of, 198­199 146b objectives of, 198 irrigation charge system in, 48, 49b purpose of, 198 Red Soils Project in, 215b Biological concentration, 199b Sustainable Coastal Resources Development Biomass, 227, 234, 273 Project in, 245 Brazil water use efficiency in, 56 AWS of, 26b, 27, 28 World Bank projects in, 215b, 217, 231, 271, crop diversification in, 111b 274 dam investments in, 296b Climate impacts, fighting water rights in, 84b impact of, 273 World Bank projects in, 86, 113, 274 introduction to, 272 Bunga Check Dam, 295, 296b objectives of, 272­273 Burkina Faso, 219, 220b wider applicability, 273­274 Climate change, 6­7, 234, 255­256, 264, 272, California 306 groundwater management in, 164b Climate indexes, 259 water trade in, 81 Climatic conditions, 255­256 Canals Coalition Building for Reform of the Office du drainage, 127 Niger, 94b maintenance, 120 Colorado, groundwater management in, 165b Capacity-building programs Comite Tecnico de Aguas Subterraneas-COTAS, activities related, 91t 163b benefits of, 87 Community-based fish culture, 246b donor-recipient partnership in, 89 Community-based soil conservation projects. implementation of, 87 See Soil conservation projects investment in, 87 Community-driven development (CDD) irrigation and, 211, 212 approaches, 11 benefits of, 240­241 lessons learned from, 89 government and, 239 recommendations related to, 90­91 implementation of, 241 soil fertility management and, 223 introduction to, 237­238 strategy, 89 317 investment in, 239­240 technology and, 131 lessons learned from, 241­242 "Cap and trade" schemes, 215 participatory approaches and, 277 Capture fisheries, 244, 247 recommendations related to, 242­243 Carbon Fund, 206 requirements for using, 242b Caribbean, water management issues in, 19t watershed management and, 240b Catchments, 232, 233b, 264, 273 Computable general equilibrium (CGE) Cauca Valley (Columbia), 233b models, 294, 295, 296, 297 Cau Son-Cam Son Irrigation scheme, 135b Computerized gate movement, 140 Central Africa, water management in, 88b Conetoe Creek project (North Carolina), 193b Central Asia. See Asia Conjunctive water use Centralized automation, 140 benefits of, 158­159 Cereals production, 6 defined, 144 Chalan Beel flood and drainage project, 267b in India, 156b, 157b, 158b Chile, water rights in, 83b institutional issues, 159­160 China introduction to, 156 CWRAS of, 60, 61 investment in, 144, 156­158, 160­161 evapotranspiration in, 130f lessons learned from, 160 INDEX in Mexico, 159b investment in, 110­111, 112 recommendations related to, 160 lessons learned from, 112 Contour bunding, 264 recommendations related to, 112 Controlled drainage tubewell irrigation and, 145 applicability issues, 194 Crop pattern benefits of, 193­194 conjunctive management and, 159 defined, 193 controlled drainage and, 194 drainage systems and, 202, 203 water rights and, 128­129, 131b in Egypt, 194b Crop yield objectives of, 193 controlled drainage and, 193 Controlled impact evaluations, 282 irrigation and, 135b, 152 Conveyance efficiency, 53 soil salinity and, 286, 287b "Core welfare" indicators, 282, 283 technology and, 129b Cost-benefit analysis, 313 watershed project and, 230 Cost recovery issues Cultivated land, 230 irrigation charges and, 48, 49 Cultivation techniques, 261 soil conservation projects and, 228 Cultural values, wastewater reuse and, 187 watershed project and, 231 water supply and, 252 Dam investments Council of Australian Governments (COAG) impact of, 296­297 Water Reform Framework, 80 in India and Brazil, 296b Country Assistance Strategy (CAS), 14, 26, 243 introduction to, 294 Country Water Assistance Strategies, 187 objectives of, 294­296 Country Water Resources Assistance Strategy wider applicability, 297 (CWRAS) Dams, safety of, 309t assessment of, 60 Deep tubewell irrigation description of, 59­60 benefits of, 152 equation, 59 implementation of, 152­153 impact of, 60 introduction to, 150 introduction to, 59 investment in, 150­151, 153­154 lessons learned from, 61 lessons learned from, 153, 154b objectives of, 59 recommendations related to, 153 318 of Philippines, 60b Deforestation, 227 poverty reduction and, 60t Demand management purpose of, 14, 23 AWS and, 28 World Bank projects and, 61 irrigation charges and, 48 Credit systems, 223, 227 water management project and, 170 Croatia, biodrainage in, 199 Developing countries Crop(s) drainage systems in, 176, 178 breeding, 40 water management and, 91 cultivation, 230 Development Policy Lending (DPL) restrictions, 188 benefits of, 33­34 varieties, 275 effectiveness of, 33 water charges and, 46t, 47 features of, 31­33 water productivity, 128b implementation of, 34 Crop diversification as a lending instrument, 14, 15t benefits of, 111 lessons learned from, 35 effective O&M and, 125 purpose of, 31 implementation of, 111­112 recommendations related to, 35­36 introduction to, 110 water projects and, 290 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT Diesel pumpsets, 114 applicability issues, 203 Direct seeding, 227 design process and, 202f Disaster preparedness, 268, 272t in Egypt, 201­203 Disclosure Policy, 290, 293 impact of, 202­203 Disputed areas projects, 309t objectives of, 201 Dissemination plans, 29 Drainage water reuse Distributor modules, 139 benefits of, 182 "Dog-eat-dog" attitude, 166 in Egypt, 182b Downstream ecosystems, 290 implementation of, 182­183 Drainage introduction to, 181 canals, 127 investment in, 181 climate issues and, 272t lessons learned from, 183 crop diversification and, 112 quality concerns related to, 182, 183 in humid tropics, 177b recommendations related to, 183­184 impact of, 190b DRAINFRAME networks, 110 drainage investments and, 191, 192b on-farm, 110 participatory planning and, 174, 177 rehabilitation, 179 watershed management and, 234 schemes, 300b, 301, 302 Drinking water, 251­253, 272t, 277, 278 technology, 174, 176 Drip irrigation systems, 115, 117 water, 246b Drought Drainage Integrated Analytical Framework agricultural, 258 (DRAINFRAME). See DRAINFRAME conjunctive management and, 158 Drainage investments defined, 258 applicability issues, 191 early warning systems, 259 assessing benefits of, 286­289 hydrological, 258 decline in, 5­6 meteorological, 258, 259 DRAINFRAME and, 192b participatory approaches and, 276 in Egypt, 191b planning process, 259, 260b, 262 impact of, 191 policy, 262 introduction to, 190 relief, 260 objectives of, 190 risk, 258 319 Drainage Master Plan (Pakistan), 191b socioeconomic, 258 Drainage projects vulnerability to, 258­259 flood management and, 266 water rights and, 79 operation and maintenance of, 123­125 water supply and, 78 planning of, 123, 126b Drought preparedness technology for, 127­132 benefits of, 259 Drainage systems implementation of, 259­260 benefits of, 176­177 introduction to, 255­256, 258 ditch-type, 198 investment in, 258­259, 262 flood management and, 264 lessons learned from, 260­261 implementation of, 177­178 recommendations related to, 261­262 introduction to, 176 Dry area ecosystems, 211 investment in, 176, 179 Dublin Principle, 24, 25, 28 lessons learned from, 178­179 recommendations related to, 179 East Asia. See Asia rehabilitation of, 286, 288 East Slovak Lowlands, 287, 288 subsurface, 196 Economic incentives Drainage systems O&M benefits of, 55 INDEX features of, 57b Evaporation rates, 196b implementation of, 56 Evapotranspiration (ET) investment opportunities and, 53­55, 57 biodrainage and, 199 lessons learned from, 56­57 in China, 130f recommendations related to, 57 drought preparedness and, 261 water management project and, 171 environmental management plans and, 128, 129b water-saving technologies and, 106 forests and, 233b in water use, 22, 53 technology and, 131b World Bank projects and, 54b water resource planning and, 270­271 Economic rates of return (ERRs), 190 "Evapotranspiration (ET) quotas", 101, 103 Economic Sector Work, 292 Expatriate resource persons, 36 Ecosystem services, 232, 233b, 235, 292 Extreme climatic conditions, 255­256 Egypt controlled drainage in, 194b Fadama User Association, 146b dam investments in, 296b Farmer-irrigators drainage systems in, 178b, 191b, 201­203 applicability issues, 98­99 DRAINFRAME applications in, 192b approach, 98 fish farming in, 246b impact of, 98 irrigation project in, 132b introduction to, 96 water reuse in, 182b, 183 objectives of, 96­97 World Bank projects in, 52, 184, 192 Farmers EIER-ETSHER Group, 88b aquaculture activities and, 244, 246 Electromechanical automatic gates, 140 CDD/SF approaches and, 242 El Fadly Water Board (Egypt), 201 controlled drainage and, 193­194 Emergency Recovery Loan (ERL), 14, 15t, 262 drainage systems and, 202 Endemism rate index, 227 grants for, 223 Engineers. See Planners and engineers groundwater development and, 241b Environmental assessment (EA) policies, irrigation issues and, 150, 210­212 305­308, 310­311 PIM and, 71­75 Environmental Assessment Safeguard Policy, 306 revenues of, 227 Environmental concerns, 248 soil conservation projects and, 226 Environmental management, 170 soil fertility management and, 219, 222 320 Environmental Management Plan (EMP), 305 wastewater reuse and, 188 Environmental Protection Agency (EPA), 233b water management and, 90 Environmental regulations, 246, 249 water resource planning and, 271 Environmental services watershed project and, 230 benefits of, 215, 216t Farmers-Managed Irrigation Systems (FMIS) payments for, 214, 232, 233b, 234 Act, 82b Environmental sustainability, 7 Farming Environment Strategy, 3 fish, 246b Erosion mitigation, 226 shrimp, 246 Europe sustainable, 229 drainage development in, 178b Fertilizer use, 222 water management in, 19t Financial Intermediaries (FIs), 291, 307, 308t Evaporation ponds Fiscal policy, 55 applicability issues, 196­197 Fish farming, 246b in arid zone, 196 Flap gate, 139 artificial, 197 Flood impact of, 196 damage, 266 objectives of, 196 disasters, 264 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT embankments, 264 O&M technologies and, 119 mapping, 266 PIM and, 70, 74, 75 mitigation, 266b policy framework and, 22 protection, 265, 266b, 267b safeguard policies and, 306 recession agriculture, 265 soil fertility management and, 222 Flood management tubewell irrigation and, 146 benefits of, 265­266 water entitlements and, 81 implementation of, 266­268 water investment and, 68 introduction to, 256, 264 water management project and, 171 investment in, 264­265, 268 watershed project and, 230 lessons learned from, 268 water use efficiency and, 56­57 loans for, 167b WUAs and, 73 recommendations related to, 268 Groundwater (See also Aquifers) strong and weak points in, 266b abstraction, 147b, 150, 153, 270 water quality management and, 174 aquifers, 165, 167 Floodplain depressions, 245, 264, 265 designated, 165b Flow dividers, 123 development, 111b, 241b Flow rate monitoring, 139 drought preparedness and, 262 Flow-through irrigation, 127 governance of, 162, 166 Fodder crops, 240b irrigation systems and, 120 Food and Agriculture Organization (FAO), 120, legal framework for, 167 182, 248, 303 overdraft, 6, 12 "Food for work"-type investment, 221 overexploitation of, 130b, 146b, 162, 166, 208 Food-processing units, 294 quality of, 146, 148 Food production, water resources and, 6­7 recharge, 157, 160, 233b, 264 Food security regulation of, 147b aquaculture activities and, 245 saline, 157 investment in, 39­40 tubewells and, 145 lessons learned from, 42 wells, 145b water scarcity and, 38 Groundwater irrigation Food Security Special Program, 90b advantages of, 143­144, 150b, 152 Forestry Law, 214 crop yield and, 152 321 Forests, evapotranspiration and, 233b problems of, 144 "Formosa", 111b surface water and, 144 Groundwater management Gal Oya irrigation system, 240b benefits of, 162 Geographic information systems (GIS), 131, 229 in California, 164b Global Environmental Facility (GEF), 15, 26 in Colorado, 165b Global Environmental Fund's OP 15 program, 235 implementation of, 162­166 Global warming, 258 (See also Climate change) introduction to, 162 Gohana Pilot Project, 287b, 288 investment in, 162 Governments lessons learned from, 166 aquaculture activities and, 247 in Mexico, 162, 163b CDD/SF approaches and, 239, 240 recommendations related to, 167 conjunctive management and, 159 Groundwater Management Advisory Team of DPLs and, 35­36 the Bank-Netherlands Water Partnership drainage systems and, 177, 178, 191 Program (GW-MATE), 293 drought preparedness and, 260, 261, 262 Guatemala, water supply and irrigation in, 251, farmer networks and, 98 252b, 253 irrigation issues and, 93, 94, 148 Gully plugging, 264 INDEX Hadejia-Jama'are Basin, 265b AWS and, 28 Hai Basin Integrated Water and Environment CDD/SF approaches and, 242 Management project, 128, 130b climate impacts and, 272t Hai Basin project, 103, 270 conjunctive management and, 159 Hatcheries, 246, 247, 248 drought preparedness and, 262 Hazard analysis and critical control point evaporation ponds, 196 (HACCP), 247 groundwater management and, 167 Herbicides, 121 hydraulic, 78, 156, 160 Higher-value crops/species, 244, 281 irrigation projects and, 105, 124, 125b Human health, wastewater reuse and, 187 water control, 223 Hybrid Policy and Investment Loan (HPIL), 14, Inland areas, 246 15t, 33 Innovations grants, 223 Hybrid systems, 251, 253 Input management, 247 Hydraulic gates, 139 Input/output (I/O) tables, 295 Hydraulic infrastructure, 78, 156, 160 Institutional development, 170 Hydrological drought, 258 Institutional innovations, 16 Hydrological cycle, 182 Institutional reforms, 72 Hydropower projects. See Dam investments; Institutional Revolutionary Party (PRI), 94b Irrigation projects Integrated Irrigation Improvement Management project (Egypt), 191 Impact evaluation, conducting, 283 Integrated Wasteland Development Program, 276 Imperial Irrigation District, 136 Integrated water and soil fertility management Income generation, 108b (IWSFM), 220b India Integrated Water Resources Management aquaculture activities in, 244 (IWRM), 28 benchmarking process in, 301 Integrated Watershed Development project, conjunctive water use in, 156b, 157b, 158b 275, 278 crop water productivity in, 128b International Bank for Reconstruction and dam investments in, 295 Development (IBRD), 41 farmer networks in, 96­98 International Commission on Irrigation and groundwater wells in, 145b Drainage (ICID), 120, 303 irrigation project in, 50b International Development Association (IDA), 322 participatory approaches in, 275­278 108b, 216, 229 water reforms in, 82b International Finance Corporation (IFC), 23 water reuse in, 183 International Food Policy Research Institute watershed development in, 275, 283b, 284b (IFPRI), 284b World Bank projects in, 52, 86 International Fund for Agricultural Indian Council of Agricultural Research, 276, Development (IFAD), 15 284b International Institute for Land Reclamation Indigenous Peoples' Development Plan (IPDP), and Improvement (ILRI), 90 310 International Monetary Fund (IMF), 31 Indira Gandhi Nahar project (India), 199 International Network on Participatory Indonesia Irrigation Management, 97 Groundwater Development Project in, 154b International Programme for Technology & water management in, 88b Research in Irrigation and Drainage WATSAL of, 32b (IPTRID), 120, 179 World Bank projects in, 36, 155 International Waterlogging and Salinity Industrial output, 294 Research Institute (IWASRI), 90 In-field irrigation efficiency, 53 International Water Management Institute Infrastructure. See also Technology (IWMI), 120, 127, 301 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT International waterways projects, 309t O&M technologies, 119­122 Investment opportunities on-demand, 152 in aquaculture activities, 244­245 on-farm, 110 AWS and, 24­26, 29 pro-poor, 115b in capacity building, 90­91 RDS objectives and, 2 in conjunctive water use, 144, 156­158, schemes, 300b, 301, 302 160­161 subsidies and, 9­10 in crop diversification, 110­111, 112 wastewater reuse and, 187 in drought preparedness, 258­259, 262 water management and, 4­5 economic incentives and, 53­55 water supply and, 251­253 in flood management, 264­265, 268 WRSS and, 2­3 in food security, 39­40 Irrigation and drainage (I&D) sector, 31 in groundwater management, 162 Irrigation and Training Research Center (ITRC), in irrigation, 114, 150­151, 153­154, 135b 208­209, 212 Irrigation projects ISCs and, 45­49 in Armenia, 47b, 52 in land drainage, 176, 179 funding issues, 45 in monitoring and evaluating, 281­283 in India, 50 in O&M technologies, 119­121 investment in, 78 PIM-related, 70­71, 73­76 modernization of, 135, 136, 139­140 in RAP, 134­135 operation and maintenance of, 123­125 in remote-sensing technologies, 127­128 planning of, 123, 126b in soil fertility management, 219, 223 technology for, 127­132 in wastewater use/reuse, 185­186 wider applicability, 297 in water management, 87, 90, 219, 223 Irrigation reforms in water-saving technologies, 105, 106, 107, applicability issues, 94­95 109 in Australia, 93 in water scarcity, 39­40 crop diversification and, 112 in watershed management, 214­215, 217 farmer networks and, 96­98 World Bank, 16, 17t impact of, 93­94 Investment returns, 10 introduction to, 93 Involuntary resettlement, 308t in Mali and Mexico, 51b, 94b, 95b 323 Iraq, 209­210 objectives of, 93 Irrigation. See also Agricultural water strategy Irrigation service charges (ISCs) (AWS) benefits of, 49 advisory services, 107b implementation of, 49 climate impact on, 272t introduction to, 45 costs, 71 investment opportunities and, 45­49, 51 development policy, 55 lessons learned from, 50 efficiency, 129b in Morocco, 48b Environment Strategy and, 3 recommendations related to, 50­51 equipment, 63­65 water use efficiency and, 22 flow-through, 127 Irrigation systems furrow, 121 automation of, 139­140 gender-sensitive, 75 challenges facing, 127 investment in, 5­6, 10, 105b in China, 48, 49b low water return and, 5 drip, 115 management transfer, 67 in Egypt, 132b with mine water, 158b flood management and, 265 modernization, 101, 102 government-owned, 105, 107, 134 INDEX groundwater and, 120 Lending instruments/program in Guatemala, 252b drought preparedness and, 262 low-energy, 212 for flood management, 267b modernization of, 135, 136 for irrigation technology, 223 on-demand, 132b rapid appraisal method for, 134­138 piped, 105, 106b reorienting, 16, 17t, 18 sedimentation of, 226 for water-saving technologies, 105­109 of World Bank, 15t Jala Spandana, 97 Lerma Chapala Basin, 159b Jordan Letter of Developmental Policy (LoDP), 31, 32 water use efficiency in, 55b, 56b Limarí Basin, 83b World Bank projects in, 36­37 Lined canals, 124, 125, 135, 136 Loess Plateau Watershed Rehabilitation project Karnataka State Agriculturalist Society, 96 impact of, 229­230 Kenya, soil fertility management in, 220b, 222 introduction to, 229 Kesterson Reservoir, 197b lessons learned from, 230­231 Kotri Left Bank, 192b objectives of, 229 Kyoto Protocol, 206, 235 Los Angeles County Flood Control District, 164b Labor supply, smallholder irrigation and, 116 Madagascar Environment Program, 225, 226b Lake Karoon (Egypt), 197 Maharashtra Water Resources Regulatory Lam Pao Scheme, 111b Authority (MWRRA) Act, 82b Land Maha season, 301 consolidation, 110­111 Mahaweli Restructuring and Rehabilitation proj- contracts, 230 ect (MRRP), 73b management, 273 Main San Gabriel River Basin, 164b reclamation, 128­129, 131b Making Sustainable Commitments: An tilting, 216b, 225 Environment Strategy for the World Land and Water Conservation project, 108 Bank, 3 Land drainage Mali benefits of, 176­177 irrigation reforms in, 94b impact of, 287­288 mango exporting project in, 41b 324 implementation of, 177 Market-based incentive systems, 232 introduction to, 174, 176 Market conditions, 116 investment in, 176, 179 Market opportunities, 228 lessons learned from, 178­179 Mauritania, 43­44 objectives of, 286­287 Mechanized technologies, 114, 117 poverty reduction and, 286 Medium-scale irrigation, 239, 240 recommendations related to, 179 Mekong Delta Water Resources Project, 251 wider applicability, 288­289 Meteorological drought, 258, 259 Land Management II-Santa Catarina Project, Mexico 272­273 conjunctive management in, 159b Land tenure systems groundwater management in, 162, 163b irrigation and, 116 irrigation issues in, 51b, 95b soil conservation projects and, 225, 227 RAP outcome in, 137b watershed management and, 216, 230 water rights program in, 79b Large-scale irrigation (LSI), 239, 240b World Bank projects in, 86, 140 Latin America, water management in, 19t Micro-irrigation installations, 101, 102, 103, 105, Learning and Innovation Loan (LIL), 15t, 277 121 Left Bank Outfall Drain (LBOD), 192b, 196 Middle East A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT crop diversification in, 112b Nigeria water management in, 19t flood management in, 265b Millennium Development Goal (MDG), 7 irrigation in, 146b Mine wastewater, 158b Nile Delta, 182b, 183, 190b, 196 Modeling techniques, 184 Nile River Basin, 178b Modernization of irrigation projects, 135, 136, Nitrate, phosphorous, and potassium (NPK) 139­140 fertilizer, 221 Monitoring and evaluation (M&E) systems Nondesignated groundwater entitlements, 165b benchmarking process and, 300 Nongovernmental organizations (NGOs) benefits of, 283 aquaculture activities and, 247 implementation of, 283 DPLs and, 34 introduction to, 279 drought preparedness and, 260 investment in, 281­283 farmer networks and, 98 planning for, 282 participatory approaches and, 276 purpose of, 281 safeguard policies and, 306 recommendations related to, 284 soil conservation projects and, 226 resource requirements for, 282­283 Nonirrigation inputs, 116 "More crop per drop" criteria, 30, 87, 152, 193 Nonpaddy crops, 110 Morocco Nonpoint source pollution, 193, 214 irrigation charges in, 48b Nontributary aquifers, 163, 164 Rainfall-Based Contract in, 39b North America RAP in, 135b controlled drainage in, 193b watershed management in, 240b, 241 drainage development in, 178b water use efficiency in, 55b, 56 Multiplier analysis, 297, 313 Ogallala aquifer, 165b Multiplier impacts/values/effects On-farm surface drainage systems, 176b, 177b of dams, 296b On-farm water-saving technologies. See Water- defined, 294 saving technologies how to conduct, 295 Online Irrigation Benchmarking Service Murray Darling Basin, 48b, 183b (OIBS), 301 MWRI programs, 201 Operational Policy/Bank Procedure (OP/BP) 8.60, 31, 37 325 Napier grass, 275 Operation and maintenance (O&M) National Agriculture Technology Project of drainage systems, 123­126, 177b, 178, (NATP), 278 201­203 National Association of Environmental Action of irrigation projects, 31, 123­126, 154b (ANAE), 225b participatory approaches and, 278 National Drainage Project (Egypt), 190b water charges and, 46, 47b, 78 National Drainage Project (Pakistan), 191b, 196 water loss and, 276 National Water Law, 79b water reforms and, 82b Natural habitats, 308t water-saving technologies and, 106b, 107 Natural resources management, 241, 242 Operation and maintenance (O&M) Natural salt lakes, 196 technologies Nepal benefits of, 121 groundwater development in, 241b implementation of, 121­122 soil fertility management in, 222 introduction to, 119 Netherlands, The, 199 investment in, 119­121 Network of Aquaculture Centers in Asia-Pacific, lessons learned from, 122 248 recommendations related to, 122 Neyrtec float gates, 139 selection of, 119 INDEX Operations Evaluation Department (OED), 11, wastewater reuse and, 186 311 Poverty maps, 282b Orissa Disaster Management Project, 265b Poverty reduction Overabstraction, 153 by agriculture, 7 aquaculture activities and, 247 Paddy crops, 110 CDD/SF approaches and, 242 Pakistan climatic conditions and, 256 crop water productivity in, 128b CWRAS and, 60t DRAINFRAME applications in, 192b dam investments and, 296b evaporation ponds in, 197 irrigation projects and, 11­12 World Bank projects in, 192 soil stabilization and, 215b Participatory approaches Tanzania's water policy and, 24b impact of, 276­277 water projects and, 281­284 introduction to, 275 watershed project and, 229, 230 lessons learned from, 277­278 water supply and, 252 objectives of, 275­276 Poverty Reduction Strategy Paper (PRSP), 16, Participatory irrigation management (PIM) 26, 243 benefits of, 71 Pragathi, 96, 97b implementation of, 71­72 Precipitation deficiencies. See Drought introduction to, 68, 70 Pre-tubewell conditions, 151b investment in, 70­71, 73­76 Private agencies, 119 lessons learned from, 74 Private sector units, 306 recommendations related to, 74­75 Programa de Modernización del Manejo de risks of, 71b Aqua (PROMMA), 163b Periurban agriculture, 157 Programmatic Development Policy Lending Peru, water management in, 89b (PDPL), 15t, 32, 35 Peruvian Social Fund project FONCODES, 282b Programmatic economic and sector work Pest Management Plan (PMP), 305, 308t (PSEW), 14 Philippines, CWRAS of, 60b, 61b Programme National de Gestion des Terroirs, 221 Physical culture resources, 309t Project Appraisal Document (PAD), 303 Piloting approach, 16 Project multiplier value, 295b Piped irrigation systems, 105, 106b "Pro-poor agreement", 38 326 Planners and engineers Pro-poor interventions, 244 for drainage systems, 202, 203 Pro-poor investments, 239, 279 for irrigation projects, 135, 136 Public health, 272t remote-sensing technology and, 130 Public investment/sector Policy-based loans, 68 in agriculture, 5­6 Policy framework/reforms in aquaculture activities, 245b, 247, 248 agricultural trade and, 38­43 benchmarking process and, 303 AWS and, 24­29 Punjab Private Sector Groundwater DPL and, 31­37 Development project, 147b governments' role in, 22 PVC pipes, 108b, 115b overview of, 8­9, 21 Polluter pays principle, 178, 187 Qat chewing, 170 Pollution, 183, 193, 214, 215 Quality Assurance Group (QAG), 311 Polychlorinated biphenyls (PCBs), 248 Quality Assurance and Compliance Unit Polyphagous organism, 121 (QACU), 313 Poor-quality water Quasi-experimental designs, 283 conjunctive use with, 157, 158b, 160 reuse of, 174 Rainfall-Based Contract, 39b A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT Rainfed crops Rice-fish systems, 246b biodrainage and, 199 Risk-Management Instruments, 39b climate impact and, 272 River-basin level, 159 irrigation and, 208 River flows, maintaining, 305b water management and, 219, 221 Rock phosphates, 221 Rapid appraisal procedure (RAP) RUPES program, 233b benefits of, 135 Rural development, 177b implementation of, 136 Rural Development Strategy (RDS), 2, 3 indicators used in, 134b Rural water supply and irrigation. See Water introduction to, 134 supply and irrigation investment in, 134­135 Rural water supply and sanitation (RWSS), 251, lessons learned from, 136 252 in Morocco, 135b outcomes of, 137b Safeguard policies recommendations related to, 136, 138 application of, 309­310 in Vietnam, 135b EA/SA reports and, 310­311 watershed management and, 217 effectiveness of, 311­312 Raymond Basin, 164b impact of, 290­292 Reaching the Rural Poor: A Renewed Strategy list of, 291b for Rural Development (RDS), 2 monitoring of, 311 Red Soils II Area Development Project (China), objectives of, 290, 304 215b, 216 policy triggers and, 308t­309t Rehabilitation Investment Loan (RIL), 37 problems related to, 312 Remote monitoring, 139 purpose of, 280, 290 Remote-sensing technologies review of, 306 applications, 129b sector-specific, 306­307 benefits of, 128 wider applicability, 292­293 conjunctive management and, 160 Sahayoga, 96 implementation of, 128­130 Saline drainage water, 197, 199b introduction to, 127 Salinity, 215, 276 investment in, 127­128, 131­132 Salinity Control and Reclamation project, 159 lessons learned from, 130 Salinization 327 outcomes of, 127b crop diversification and, 110 poverty maps and, 282b drainage systems and, 176, 178, 198­199 recommendations related to, 130­131 impact of, 2, 7 Renewable energy, 272t land drainage and, 286 Republic of Yemen tubewells and, 145, 147, 152 AWS of, 27b, 28 water quality management and, 173 CWRAS of, 60, 61b water-saving technologies and, 106­107, 110 groundwater management in, 162 Salt deposition, 197 water conservation in, 108 Salt lakes, 196 World Bank projects in, 30 Sana'a Basin Water Management project Research and development (R&D) projects applicability issues, 171 irrigation and, 210 benefits of, 171 water management and, 88, 90 components of, 170 Reservoir fisheries, 245 hydrological facts about, 169­170 Resettlement Action Plan/Resettlement Plan impact of, 170 (RAP/RP), 310, 311 introduction to, 169 Resettlement Policy Framework (RPF), 308t lessons learned from, 171 Resource sharing, 234 objectives of, 170 INDEX risks of, 171 Small scale irrigation Sanitary-phytosanitary standards (SPS), 247 CDD/SF approaches for, 239­243 Sanitation, 252, 272t tubewells for, 145­148 San Joaquin Valley (California), 199b Sobradinho Dam, 296b Satellites. See Remote-sensing technologies Social accounting matrix (SAM) databases, 294, Seasonal climate forecasts, 262 295, 296, 297 Seasonal floodplains, 246b Social action fund project, 305b Secretariat of Water Resources (SRH), 84 Social assessment (SA) policies, 305, 307, Sector Adjustment Loans/Credits 310­311 (SECALs/SECACs), 37 Social fund (SFs) approaches Sectoral Environmental Assessment (SEA), 307 benefits of, 240­241 Sedimentation, 226, 232, 233b implementation of, 241 Seepage problems, 197b introduction to, 239 Semi-arid regions investment in, 239­240 irrigation technologies and, 105, 107 lessons learned from, 241­242 soil fertility management in, 220b, 222 recommendations related to, 242­243 tubewells and, 145 Society for Water Resource Development, 96 waterlogging and, 177 Socioeconomic drought, 258 Semi-input/output (S-I/O) model, 295 Sodic soils, 276, 278 Sfax Flood Protection project, 265 Soil Shadow prices, 313 degradation, 225b Shallow tubewells irrigation. See also Ground- erosion, 226, 230, 233b water management, 110 benefits of, 145­146 stabilization, 215b implementation of, 146­147 Soil conservation projects introduction to, 145 applicability issues, 227­228 investment in, 145, 148 impact of, 226­227 lessons learned from, 147 introduction to, 225 in Nigeria, 146b objectives of, 225­226 pre-tubewell conditions and, 151b participatory approaches for, 275­278 recommendations related to, 148 watershed project and, 230 Shanxi Poverty Alleviation project, 245 Soil fertility management 328 "Show and tell" approach, 275 benefits of, 219­221 Shrimp farming, 246 flood management and, 264 Silt deposition, 124, 214, 226 implementation of, 221 Slope erosion, 124 introduction to, 206 Smallholder farmers investment in, 219, 223 PIM and, 71 lessons learned from, 221­222 ZATAC and, 63­64 recommendations related to, 222­223 Smallholder irrigation Soil salinity benefits of, 114­115 classification of, 287b implementation of, 116 conjunctive management and, 159 introduction to, 114 land drainage and, 286 investment in, 114 remote-sensing technology and, 129b lessons learned from, 116­117 waterlogging and, 287b recommendations related to, 117 South Africa technology financing issues, 117 conjunctive water use in, 158b in West Africa, 115b drought preparedness in, 260 Small Scale Drainage and Flood Control South America, drainage development in, 179 Project, 267 South Asia. See Asia A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT South-Asian Rice-Wheat Consortium, 219, 220 water-saving technologies and, 105 Southeast Asia. See Asia Sustainable farming, 229, 246 South India Farmers Organization for Water Syria, 209b Management, 97 Specific Investment Loan (SIL), 15t, 32­33, 262 Tanzania Spot market, 83b AWS of, 24b, 27 Sri Lanka social action fund project in, 305b benchmarking process in, 301 World Bank projects in, 30 World Bank projects in, 76 Tarim Basin projects, 128, 129, 131b, 273 WUAs and, 72, 73b Technical assistance Stakeholder participation climatic conditions and, 256­257 in AWS, 26, 27t, 28 drought preparedness and, 261 benchmarking process and, 299, 300, 303 economic incentives and, 57 DPL and, 33 effective O&M and, 126b drainage investments and, 190, 191b institutional reforms and, 69 irrigation issues and, 95, 239 irrigation issues and, 104, 144, 207 participatory approaches and, 276, 277 water quality management and, 175 technology and, 130 water resources assessment and, 23 watershed management and, 217 water reuse and, 181 Sub-Saharan Africa watershed management and, 207 irrigation in, 210b ZATAC and, 64 water management issues in, 19t Technical Assistance Loan, 36 Subsidies Technology. See also Remote-sensing irrigation and, 9­10, 147 technologies participatory approaches and, 277 adoption of, 227, 228 water efficiency issues and, 53­55 drainage, 174, 176 water-saving technologies and, 106, 107b irrigation issues and, 107, 108, 117, 223 Subsurface drainage systems, 196, 286­289 making use of, 10­11 Sujala Watershed project, 283b O&M, 119­122 Supplemental irrigation (SI), 206 RAP and, 138 benefits of, 209­210 soil fertility management and, 222 implementation of, 210­212 water control, 125 329 investment in, 208­209, 212 water resources and, 6­7 issues related to, 208 Terms of Reference (TORs), 307 lessons learned from, 212 Thailand purpose of, 208 crop diversification in, 111b recommendations related to, 212 World Bank projects in, 113 in Sub-Saharan Africa, 210b Trade facilitation in Turkey, 210 agricultural trade and, 41­42 Supply chain development, 116­117 recommendations related to, 43 Supply management, 170 water scarcity and, 40 Surface drainage, 286­289 Trade policy framework, 55 Surface irrigation methods/projects Trade reforms, 22 drought preparedness and, 261 Transboundary groundwater resources, 292 groundwater irrigation and, 111, 150, 157, Treadle pumps 163, 164 cost issues, 64, 103 lessons learned from, 160 irrigation and, 114, 115b, 117 pre-tubewell conditions and, 151b Treated wastewater reuse. See Wastewater reconfiguring, 156­157 use/reuse wastewater reuse and, 185 Tree plantation INDEX biodrainage and, 198 water quality management and, 174, 175 watershed project and, 229, 231 Water Tubewells. See Shallow tubewells irrigation boards, 201, 202, 203 Tunisia control, 223 water management in, 88b delivery system, 212, 302f water reuse in, 186b harvesting, 234, 264 Turkey pollution, 214 benchmarking process in, 302 productivity, 211b, 270 irrigation in, 210 resources, 6­7, 80­81 retention, 264, 266b, 268 United Nations Economic and Social Commis- supply, 78 sion for Asia and the Pacific (UN- trade, 81 ESCAP), 266 Water and Land Management Institute, 96 Unlined irrigation canal, 120, 124 Water charges Upper levels associations (ULAs), 82b allocation methods, 46t Upstream-downstream resources management, water pricing and, 54, 56 232 Water conservation Upstream populations, 206 drought preparedness and, 261, 262 Urbanization, 157 participatory approaches for, 275­278 Urban wastewater, 157 in Republic of Yemen, 108b User operation and maintenance. See watershed project and, 230 Operation and maintenance (O&M) Water entitlements. See Water rights Uttar Pradesh Sodic Lands Reclamation Project, Waterlogging 276, 278, 283b conjunctive management and, 159 drainage systems and, 110, 176, 177b Vetiver grass, 215, 275, 277 irrigation projects and, 124 Vietnam salinization and, 7, 107 RAP in, 135b soil salinity and, 287b Water Resources Assistance project in, 293b technology and, 129b World Bank projects in, 253 tree plantation and, 198 Village development committees (VDCs), water quality management and, 173 275­277 water tables and, 286 330 Virtual water concept, 38b, 40 Water management. See also Policy "Virtuous circle", 102 framework/reforms; Soil fertility Volumetric entitlements, 79, 80, 81 management Volumetric water devices, 46t, 47 benefits of, 40, 87, 219­221 Voluntary resettlement, 292 capacity building and, 69, 73, 74 CDD/SF approaches and, 239­243 Warping dams, 229 challenges facing, 4­7 Wastewater disposal, 158b changing emphasis of, 8t Wastewater use/reuse climatic conditions and, 256 in agriculture, 157 defined, 2 benefits of, 186 development policy for, 7­8 drought preparedness and, 261 in different regions, 16, 18, 19t implementation of, 186­187 donor-recipient partnership in, 89 investment in, 185­186, 188 drought preparedness and, 262 lessons learned from, 187­188 governance for, 9 private participation in, 187b government's role in, 107b recommendations related to, 188 implementation of, 87, 221 in Tunisia, 186b integrated approaches to, 11 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT introduction to, 1, 219 reforms, 159 investment in, 87, 90, 219, 223 water management project and, 171 knowledge transfer for, 88 water reuse and, 185 lessons learned from, 89, 221­222 Water Resources Management Group (WRMG), in Peru, 89b 59 rainfed crops and, 219, 221 Water Resources Sector Adjustment Loan (WAT- RAP and, 138 SAL), 32b, 33, 34 RDS objectives and, 2 Water Resources Sector Strategy (WRSS), 2­3 recommendations related to, 90­91, 222­223 Water reuse. See Wastewater use/reuse for sustainability, 12 Water rights watershed management and, 232­235 assessment of, 79 WRSS and, 2­3 assignment of, 54 in Zambia, 89b in Australia, 48b Water markets (See also Water rights) benefits of, 78­79 advantages of, 79 in Brazil, 84b water allocation and, 80, 81 cropping pattern adjustment and, 128­129 water rights and, 51, 54, 78­84 droughts and, 79 Water projects formalization of, 51 categories of, 291 implementation of, 79­81, 82 EA and safeguards integration into, 305­306 investment in, 69, 84­85 impact of, 290­291, 304­305 irrigation issues and, 120, 153 policies related to, 291b ISCs and, 50 poverty reduction and, 281­284 land reclamation and, 128­129 screening of, 307 legal framework, 82, 84b Water quality lessons learned from, 81­83 drought preparedness and, 262 market-based, 83b irrigation issues and, 116 recommendations related to, 83­84 wastewater reuse and, 185 tradable, 48b, 50 wastewater treatment and, 187 training farmers for, 90 waterlogging and, 173 water management project and, 171 water projects and, 305 Water Rights Adjustment Program (WRAP), 79 Water productivity 39-40, 45, 68, 70-75, 90, 105, Water-saving technologies 331 127-132, 173, 265, 270, 273 adoption of, 103, 105 Water reforms benefits of, 106­107 in Australia, 80b in group context, 108b farmer networks and, 98 implementation of, 106­107 in India, 82b introduction to, 101­103 introduction to, 67­68 investment in, 105, 106, 107, 109 Water resource planning lessons learned from, 107 applicability issues, 271 recommendations related to, 107­109 impact of, 271 Water scarcity introduction to, 270 drainage water reuse and, 181­184 objectives of, 270­271 food security and, 38 Water Resources Action Program (WRAP), 63 groundwater management and, 166 Water Resources Assistance project, 293b investment in, 39­40 Water resources management ISCs and, 45 drainage investments and, 190­192 water resource planning and, 270­271 implementation of, 41 Water sector investment in, 39 lending instruments for, 15t recommendations related to, 43 reforms, 67­68 INDEX Watershed management water reuse and, 183 benefits of, 215 water rights and, 80, 83b CDD/SF approaches and, 240 water-saving technologies and, 106 climate impact on, 272t water use efficiency and, 54 community-based, 225­228 Weather data station network, 259, 261, 262 implementation of, 215­216 Weed infestation, 124 introduction to, 214 West Africa, irrigation issues in, 115b investment in, 206, 214­215, 217 Wetlands, 290 lessons learned from, 216 "With/without" design, 282 in Loess Plateau, 229­231 Wivenhoe Dam, 215 recommendations related to, 217 Women water management and, 232­235 aquaculture activities and, 245, 248 Watersheds irrigation issues and, 211 development, 275, 276 PIM and, 71, 72b, 75 flood management and, 264 water management and, 88­89 projects, 283b, 284b Women Irrigation Network (WIN), 89b services, 232 World Bank Water supply and irrigation lending instruments of, 15t impact of, 252 safeguard policies, 290­293 introduction to, 251 strategies, 2­3 objectives of, 251­252 World Bank projects wider applicability, 252­253 in Armenia, 43, 52 Water tables (See also Groundwater, Aquifer) in Brazil, 86, 113, 274 controlling, 176b in China, 215b, 217, 231, 271, 274 drainage systems and, 179, 193, 194 climate-related components in, 273b rise in, 174, 177 CWRAS and, 59­61 tree plantation and, 198, 199 in Egypt, 52, 184, 192 waterlogging and, 286 in India, 52, 86 Water treatment in Indonesia, 36, 155 gaps, 186b in Jordan, 36­37 hybrid systems and, 253 Madagascar Environment Program, investments in, 233b 225, 226b 332 Water use efficiency (WUE). See also Economic in Mauritania, 43­44 incentives in Mexico, 86, 140 improving, 53 in Pakistan, 192 irrigation service charges and, 22 in Republic of Yemen, 30 water projects and, 290 in Sri Lanka, 76 Water user associations (WUAs), 25 in Tanzania, 30 controlled drainage and, 194 in Thailand, 113 farmer-irrigators and, 96, 98 in Uzbekistan, 249 irrigation issues and, 147, 151, 154, 212 in Vietnam, 253 O&M technologies and, 119 World Commission on Dams, 294 PIM and, 70­71, 74 World Conservation Union (IUCN), 16 water investment and, 68 World Cultural and Natural Heritage, 306 water management and, 88, 89b World Wildlife Fund (WWF), 16 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT Yala season, 301 focus of, 63 Yangtze and Pearl River catchments, 215b impact of, 64 Yaqui Irrigation project, 136 introduction to, 63 Yellow River Basin, 157, 229 irrigation credit and, 64 objectives of, 63 Zambia, water management in, 89b wider applicability, 64­65 Zambia Agribusiness Technical Assistance ZATAC Integrated Coffee Program, 64 Center (ZATAC) Zero-tillage technique, 226 description of, 63­64 333 INDEX ECO-AUDIT ENVIRONMENTAL BENEFITS STATEMENT The World Bank is committed to preserving endangered forests and natural resources. We have chosen to print Shaping the Future of Water for Agriculture: A Sourcebook for Investment in Agri- cultural Water Management on 30% post-consumer recycled fiber paper, processed chlorine free. The World Bank has formally agreed to follow the recommended standards for paper usage set by the Green Press Initiative--a nonprofit program supporting publishers in using fiber that is not sourced from endangered forests. For more information, visit www.greenpressinitiative.org. The printing of these books on recycled paper saved the following: Trees* Solid Waste Water Net Greenhouse Gases Electricity 20 937 8,503 1,841 3,419 *40' in height and Pounds Gallons Pounds KWH 6­8" in diameter 334 A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT Agricultural water management is a vital practice in ensuring food security, poverty reduction, and environmental protection. After decades of successfully expanding irrigation and improving productivity, farmers and managers face an emerging crisis in the form of poorly performing irrigation schemes, slow modernization, declining investment, constrained water availability, and environmental degradation. More and better investments in agricultural water are needed. In response, the World Bank, in conjunction with many partner agencies, has compiled a selection of good experiences that can guide practitioners in the design of quality investments in agricultural water. The messages of Shaping the Future of Water for Agriculture: A Sourcebook for Investment in Agricultural Water Management center around the key challenges to agricultural water management, specifically: n Building policies and incentives n Designing institutional reforms n Investing in irrigation systems improvement and modernization n Investing in groundwater irrigation n Investing in drainage and water quality management n Investing in water management in rainfed agriculture n Investing in agricultural water management in multipurpose operations n Coping with extreme climatic conditions n Assessing the social, economic, and environmental impacts of agricultural water investments The Sourcebook for Investment in Agricultural Water Management is an important resource for those interested and engaged in development with a focus on agricultural water. ISBN 0-8213-6161-9