is irrigation water free? a reality check in the indo ...cpwfbfp.pbworks.com/f/is irrigation water...

World Development Vol. xx, No. x, pp. xxx–xxx, 2008� 2008 Elsevier Ltd. All rights reserved

0305-750X/$ - see front matter

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doi:10.1016/j.worlddev.2008.05.008www.elsevier.com/locate/worlddev

Is Irrigation Water Free? A Reality Check

in the Indo-Gangetic Basin

TUSHAAR SHAHInternational Water Management Institute, Gujarat, India

MEHMOOD UL HASSANInternational Water Management Institute, Lahore, Pakistan

MUHAMMAD ZUBAIR KHATTAKPeshawar University of Agriculture, Kolkatta, India

PARTH SARTHI BANERJEECentre for Studies in Social Sciences, Kolkatta, India

O.P. SINGHBanaras Hindu University, Varanasi, India

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SAEED UR REHMAN *

Pakistan Rural Institutional and Management organization for EconomicDevelopment, Khanewal, Pakistan

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Summary. — ‘‘Getting prices right’’ is the silver bullet widely advocated to developing countries infighting waste, misallocation and scarcity of water. In the vast, poverty-stricken Indo-Gangetic ba-sin, however, high surrogate water price is driving out small-holder irrigation. With rising dieselprices, most small-holders who use borewells for irrigation find effective water use cost soaring,obliging them to economize on water use even by quitting irrigated farming. Electrified borewellowners, far fewer, face low marginal cost but have to contend with stringent electricity rationing.Public irrigation systems grossly under-price irrigation, but these are getting marginalized despitemassive government and donor investments.� 2008 Elsevier Ltd. All rights reserved.

Key words — Indo-Gangetic basin, water pricing, water and poverty

uthors gratefully acknowledge the financial support for the Indian part of the study from the Challenge

for Water and Food (CPWF) project on ‘‘Strategic Analyses of India’s National River Linking Project.’’

istan study was supported by the CPWF project on ‘‘Groundwater Governance in Indo-Gangetic and

River Basins.’’ Part of the research was also supported by the IWMI-Tata Water Policy Program but the

ion of this paper was supported by the CPWF Basin Focal Project on the Indo-Gangetic Basin. An earlier

sed on Indian village studies but focusing on farmers’ responses was presented in the IWMI-Tata Water

rogram’s Sixth Annual Partners’ Meet during March 8–10, 2007, and was published in Economic and

Weekly. All the 24 village studies carried out by the research partners can be obtained by writing to

cgiar.org. Final revision accepted: May 15, 2008.

1

cite this article in press as: Shah, T. et al., Is Irrigation Water Free? A Reality Check ..., Worldopment (2008), doi:10.1016/j.worlddev.2008.05.008

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1. INTRODUCTION

Recent years have witnessed the rise of a newglobal discourse on treating water as an eco-nomic good. Several global summits endorsedthe idea which also became central to the dis-cussion on Integrated Water Resources Man-agement (IWRM). This discourse, in its turn,has rekindled the ‘‘water pricing debate.’’ Atthe heart of this debate is the travesty, through-out much of the developing world, of waterbecoming increasingly scarce and yet remainingnearly free at the same time. Especially in pub-lic irrigation projects, where an agency decisiondetermines the user cost of water, woefully lowirrigation charges have been blamed for a litanyof ills: profligate water use, low water produc-tivity, poor operation and maintenance ofinfrastructure due to insufficient resource gen-eration, and failure to move scarce water tohigher value uses. These concerns have givenrise to much writing and discussion abouthow to move the debate from textbook pricetheory to the complex realpolitik of water pric-ing (Facon, 2002).

In irrigation economics, the challenge, asBriscoe (1996) highlighted, is of harmonizingthree economic measures of water use: (a) theuse cost—incurred by the user in obtainingand applying water to crops; (b) marginal valueproductivity of water in irrigation use; and (c)the opportunity cost, that is the value of irriga-tion water in the next best use. Where use costis low on the margin, farmers will have noincentives to improve productivity; the distor-tions caused will be more serious where wateris denied to other high value uses while farmerscarry on intensive water use to irrigate low-va-lue water-intensive crops.

Does raising irrigation water charges pro-gressively generate incentives for raising waterproductivity? Significantly, at least someresearchers think not (Molle & Berkoff, 2007).As De Fraiture and Perry (2007) argue, thereis a threshold level below which farmers’ de-mand for irrigation water remains price inelas-tic; below this threshold, farmers will notrespond, no matter how much the price rises.As water price (or use cost) moves beyond thelower threshold, they argue that water demandremains price elastic within a range but then be-comes inelastic as the farmer strives to save hercrop from moisture stress. The De Fraiture–Perry irrigation water demand curve is shownas the right-most curve in Figure 1. Since inmost public irrigation systems in developing

Please cite this article in press as: Shah, T. et al., Is IDevelopment (2008), doi:10.1016/j.worlddev.2008.0

countries, prevailing water rates stay way belowthis De Fraiture–Perry low ‘‘threshold,’’ pricingis a blunt instrument for influencing the behav-ior of irrigators. As a result, De Fraiture andPerry (2007) and Molle and Berkoff (2007)and others suggest that water use cost is largelyineffective as a demand management tool inlarge-scale public irrigation; and making iteffective requires profound and wide-rangingchanges—in mass politics, in public irrigationinfrastructure, in irrigation organization—allof which are unlikely to take place anytimesoon (Facon, 2002). The conclusion that the‘‘water pricing’’ debate is heading toward thenis that the use cost of water (or effective waterprice) is unlikely to significantly shape farmerbehavior in gravity irrigation, and is a blunttool for water demand management. This modeof thinking has an overwhelming impact onshaping the ongoing global debate on makingwater an economic good.

In this paper, we explore in some depth a to-tally different dynamic in the irrigation econ-omy of the vast Indo-Gangetic basin (IGB),an important exception to the above character-ization. We posit that the water use cost thatmajority of small-holder irrigators in the IGBincur is substantially above the De Fraiture–Perry low threshold. We further pose that whenthe use cost of water rises above the low thresh-old, millions of small farmers here respond torising irrigation prices initially by improvingwater use efficiency, by investing in lined chan-nels or pipes for conveying water, and byswitching to water-saving crops. However,when water use cost rises beyond some upperthreshold, farmers are increasingly forced, indistress, to respond by drastically curtailingirrigation water use or even by exiting irrigatedagriculture or agriculture itself. As suggested bythe left-most curve in Figure 1, beyond theupper-threshold, irrigation water demand be-comes super-elastic with respect to water usecost—and not inelastic as De Fraiture and Per-ry suggest—because a large number of irriga-tors subject to higher range of marginalirrigation costs are obliged to economize onwater use in immiserizing ways. High wateruse cost achieves water use efficiency but threat-ens livelihoods and food security of millions ofagrarian poor. Such stress is evident through-out the IGB, the only redeeming aspect of thesituation being the up-turn in the global riceprices in 2008.

IGB spans an expanse of some 2.25 millionkm3 in Bangladesh, India, Nepal, and Pakistan,

rrigation Water Free? A Reality Check ..., World5.008

Figure 1. Response of agricultural water demand to rising water use cost in the IGB.

IS IRRIGATION WATER FREE? 3

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in the Indus–Ganga–Brahmaputra plainextending 3,200 km between the mouth of theGanges to the east, and that of the Indus tothe west. Major rivers in the basin include theGanges, Indus, Beas, Yamuna, Gomti, Ravi,Chambal, Sutlej, and Chenab. The soil is richin silt, making the plain one of the most denselypopulated and intensively farmed areas of theworld since 2000 years ago. The IGB has oneof the world’s most prolific alluvial aquifersystems as also the world’s largest concentra-tions of rural poverty. In 2000, over 30% ofthe 747 million people living in the basin weredeclared below the dollar-a-day poverty line;and nearly 75% were below 2 dollars-a-daypoverty line. 1 Especially in its eastern reach,IGB is widely described as a basin with lowproductivity but high potential; the develop-ment of its vast groundwater resource for irri-gation has been for long considered a big partof the answer to the challenge of alleviatingagrarian poverty (Shah, 2001). This poverty-alleviating potential of IGB’s groundwater re-source has in recent years been eroded by therising ‘‘surrogate price’’ of using it. ‘‘Gettingprices right’’ has begun to conjure up altogetherdifferent images in the IGB than in the globalwater discourse.


2. THE UNDERBELLY OF SOUTH ASIANIRRIGATION

Holden and Thobani (1996, p. 1) reflected aview shared by most international waterresearchers when they wrote that ‘‘In mostcountries, the state owns the water and hydrau-lic infrastructure and public officials decide whoget water rights, or the purpose for which wateris used, and on the price to be charged for itsuse.’’ South Asia, with more than a third ofthe world’s irrigated areas, however representsa vastly different reality in which pubic systemshave been increasingly marginalized during re-cent years by a rapidly expanding private tube-well irrigation economy. The pump irrigationboom is taking much of Asia by storm (Barker& Molle, 2004; Shah, in press); however, it hasexperienced explosive growth in South Asia.‘‘Water as an economic good’’ demands a to-tally different narrative here than outlined inSection 1.

Like elsewhere in the developing world,South Asia’s public irrigation systems too arenotorious for keeping water use costs way be-low the De Fraiture–Perry ‘‘threshold’’; andthe debate summed up in Section 1 applies verywell to public irrigation systems here. Much


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recent evidence coming from a wide variety ofsources however suggests that the areas irri-gated by gravity from tanks and governmentcanal irrigation systems in South Asia aredeclining in absolute terms; and even withintank and canal commands, lift irrigation withdiesel pumps is driving out gravity flow irriga-tion (Shah, in press). In Pakistan’s Indus BasinIrrigation System, during 1990–2006, the areairrigated with tubewells increased by 38% whilethat under flow irrigation declined by 11% (UlHassan et al., 2007). In the Bhakra commandon the Indian side, canal irrigation at firstdrove out wells; however, especially since1990, the trend has been reversed, and now,75% of all irrigated areas in Indian Punjab de-pend upon well and tubewell irrigation (Dhar-madhikari, 2005; see also Singh, 2006 citing aGovernment of Punjab 2005 document). Dur-ing 1990–2002, gross sown area in Punjab in-creased by 440,000 ha, but the area served byflow irrigation from canals fell by 589,000 whilethat served by tubewells soared by 837,000(Down to Earth, 2005). Even the Punjab gov-ernment’s 2005 State of the Environment Re-port lamented a reduction of 36% in the canalirrigation area since 1990. In Punjab, canalsirrigated 1.3 million ha in 1970–71 and morethan 1.6 million ha in 1990–91, but in 1999–2000, canal-irrigated area in Indian Punjab fellto 1 million ha (PSCST, 2005). In Uttar Pra-desh, whose western parts have a long historyof canal irrigation, the area irrigated by canalsdeclined 40% and from ‘‘other sources’’ by60%, while the area irrigated by tubewells in-creased 37% (Pant, 2005, Table 1). In easternUttar Pradesh, tubewell irrigation increased13 times since 1964–65; and even as tubewell-irrigated areas expanded, canal-irrigated areasfell.

According to Selvarajan (2002), around 2000,canals were irrigating 3.06 million ha in UttarPradesh, compared with 3.33 million ha in

Table 1. Sources of irrigation in South Asia: Results of a

Region Cultivable landof sample

farmers (ha)

Rainfed(%)

Under pucanal irriga

(%)

India 150,534 57.1 2.7Pakistan 75,091 55.8 17.5Bangladesh 5,904 37.2 0.2Nepal terai 4,542 42.1 26.1Total for the

sample farmers2,306,071 55.8 7.8


1985. In Andhra Pradesh, they were irrigating11% less than 15 years ago. Uttar Pradesh,Andhra Pradesh, Bihar, Orissa, and Tamilnad-u—which account for 45% of India’s net irri-gated area—all witnessed an absolute declinein canal-irrigated areas but large increases inpump irrigation from wells (Selvarajan, 2002).During the five-year period from 1997–98 to2002–03, canal-irrigated area in Gujarat fell46%, from 0.78 million ha to 0.42 millionha. 2 For India as a whole, despite publicinvestments for an ‘‘Accelerated Irrigation Ben-efit Program’’ of the order of US $ 25 billionduring 1991–2004, the area irrigated by publicirrigation systems declined by 2.8 million hect-are during that period. 3

According to Government of India’s officialfigures, net area irrigated by groundwater wellsrose from 28% in 1950–51 to 61% in 2000(Government of India, 2005a). But this gov-ernment estimate is dwarfed by large-scalefarmer surveys by other government agencies.In 2003, Government of India’s National Sam-ple Survey Organization asked 51,770 cultiva-tors from 6,770 villages for the source ofirrigation they used in kharif (rainy seasoncrops) and rabi (winter crops); the responsewas that 69% of kharif acreage and 76% ofthe rabi acreage were irrigated with wells ortubewells (NSSO, 2005). In Bangladesh, shal-low tubewells accounted for less than 4% ofthe irrigated areas in 1972 but 70% by 2000 4

(Bangladesh Bureau of Statistics, 2000). Andin Pakistan, where canal irrigation hadcrowded out wells during the colonial period,in 2001–02, of the gross irrigated area of18.3 million ha, only 6.8 million ha was servedexclusively by canals; 7.5 million ha, or 41%,was served by ‘‘canal tubewells and wells’’and 3.4 million ha, or 18.6%, by wells andtubewells outside canal commands (Govern-ment of Pakistan, 2003). Despite massive pub-lic investments since the mid-19th century in

2002 IWMI survey of 2,600 farmers (Shah et al., 2006)

retion

Under puregroundwaterirrigation (%)

Under conjunctiveuse of ground and

canal water (%)

Other sources

32.8 5.0 2.45.3 20.0 1.440.1 4.6 17.931.5 0.3 0.526.5 9.7 2.0



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the Indus irrigation system of Pakistan, todaywells and pumps are involved in 60% of irri-gated areas. Figures provided by different gov-ernment agencies on area irrigated by differentsources are so conflicting that in 2002, IWMIcarried out a reality check by surveying 2,600farmers from India, Pakistan, Bangladesh,and Nepal terai and asked them how they irri-gated their crops (Shah, Singh, & Mukherji,2006). The results set out in Table 1 showedpure canal irrigation to be even less significantthan official figures cited above in all countriesincluding Pakistan which boasts of the world’slargest continuous irrigation system.

The decline in South Asia’s public irrigationsystem seems recent and rapid. Comparing In-dia’s Minor Irrigation Census data for 1993–94 and 2000–01, and data from Pakistan Statis-tical Bulletin for those years, Table 2 showsthat during the seven-year period during1993–2000, South Asia lost over 5.5 millionhectare of canal commands but experienced7.3 million hectare increase in groundwater irri-gation. Many argue that what tubewells pumpis canal seepage. That may be; the point is thatthe mode of delivering water to crops—and theeconomics of irrigating crops—is undergoingprofound change.

As a consequence of shrinking public irriga-tion and rapidly growing private irrigation,the fast changing profile of South Asian irriga-tion economy was somewhat like what is shownin Figure 2 during early years of the new mil-lennium.

Table 2. Changing profile of

Net irrigated area under surfirrigation (000’ ha)

1993–94 2000–01 Cha

Key Indian states 15,633 11,035 �Pakistan Punjab 4,240 3,740 �Sindh 2,300 1,960 �Bangladesh 537 480 �All areas 22,709 17,215 �

a Data for Indian states are from Minor Irrigation Cens(Government of India, 2005b). These are Andhra Pradesh,Himachal Pradesh, Madhya Pradesh and Chhattisgarh, OriWest Bengal. Only states covered by both the censuses aTamilnadu, Karnataka, and Haryana are excluded. Also eirrigated areas are small. Pakistan data are based on Pakistaare from Bangladesh Bureau of Statistics http://www.moagation in India includes area irrigated by major and mediumflow as well as lift schemes. In Pakistan, area irrigated bytubewells as well as other wells and tubewells. In Bangladesand shallow tubewells and low-lift pumps.


Figure 2 presents the six irrigation sub-econ-omies of South Asia in terms of their proximatesize (million ha or Mha) on the X-axis andwater use cost ($/m3) on Y-axis. Informationon area irrigated by different sources in India,Pakistan, Bangladesh, and Nepal is woefullyinadequate and often incomparable acrosssources. Moreover, even in India with a fairlygood statistical system, wide variations arefound in estimates made by irrigation depart-ments, agriculture departments (using landuse data), and various censuses; and the esti-mates by all these, in turn, differ widely fromestimates based on remote sensing data (see,e.g., www.iwmigiam.org). Figure 2 (not toscale) presents our best ‘‘guesstimates’’ of thearea as well as water use cost under each ofthe six irrigation sub-economies arrived at bysifting government estimates, independent sur-veys by others, and our own surveys. The low-est range of water use costs (ranging from US $0.0025 to 0.02/m3) is for flow irrigation fromcanals and tanks that partially supply, at most,30–32 Mha; the highest (at US $ 0.15–0.25/m3)is paid by farmers at the other extreme, hiringdiesel generator sets to generate electricity todrive submersible pumps on deep tubewells. 5

Naturally, this last option is used in extremison very small areas for a life-saving irrigationor two. 6 The point remains that the highestirrigation water cost/m3 of water appliedincurred in South Asia can be as much as100 times the lowest, that more land is underirrigation at non-trivial use cost above the

irrigation in South Asiaa

ace Net irrigated area served bygroundwater (000’ ha)

nge (%) 1993–94 2000–01 Change (%)

29.4 17,413 21,760 +2511.8 8,760 10,340 +1814.8 140 200 +42.910.7 2,124 3,462 +6324.2 28,437 35,762 +25.8

us 1993–94 (Government of India, 2001) and 2000–01Arunachal Pradesh, Assam, Bihar and Jharkhand, Goa,ssa, Punjab, Rajasthan, Uttar Pradesh and Uttaranchal,re included; which means that Gujarat, Maharashtra,xcluded are smaller states and Union Territories wheren Statistical Bulletins of different years. Bangladesh data.gov.bd/statistics. Net irrigated area under surface irri-projects as well as ‘‘other sources’’ which include surfacewells and tubewells include area under canal wells andh, area under groundwater includes area served by deep


http://www.iwmigiam.org

http://www.moa.gov.bd/statistics

Figure 2. Irrigation sub-economies of South Asia.

Table 3. Water economizing behavior of diesel pump owners versus electric pump owners: IWMI survey of 2,600farmers in South Asia, 2002

Sample size Average h/ha Average horse power * h/ha

Diesel pump owners: paddy 806 226 1,641Electric pump owners: paddy 455 558 2,233Diesel pump owners: wheat 1,006 62.5 665Electric pump owners: wheat 638 127 964

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De Fraiture–Perry threshold, and that the pro-ductive value of water at the margin must ex-ceed the use cost for such expensive irrigationto continue.

The global ‘‘water pricing’’ debate, reviewedfor example in Molle and Berkoff (2007) appliespartially only to the first—consisting of canaland tank irrigated areas—out of South Asia’ssix irrigation sub-economies; here, water usecost borne by farmers is neither volumetricnor anywhere near the De Fraiture–Perry‘‘threshold.’’ In all the rest, energy costs domi-nate the actual use costs of irrigation water. Insub-economy II, comprising areas irrigated byelectrified tube-wells, the use cost of water is


dominated by electricity costs which are high(at US c 1–1.75/kW h) and volumetric in Paki-stan, Punjab, Sind, Nepal, and Bangladesh. InIndia, electric tubewell owners are subject toflat tariff, but increasingly, these have to con-tend with stringent rationing of increasinglyunreliable power supply. What the ‘‘pricingdebate’’ laments as a free lunch then is increas-ingly no lunch at all. For farmers in sub-econ-omies II, III, IV, V, and VI, irrigation wateris very much an economic good; and the usercost facing them is well above the ‘‘threshold’’beyond which irrigation water demandbecomes price elastic. Even within sub-econo-mies I and II, increasingly, farmers are



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resorting to the use of diesel pumps to copewith the unreliability of surface irrigation aswell as electricity supplies; thus, an increasingproportion of water use in sub-economies Iand II in South Asian irrigation economy toois outside the purview of the global ‘‘water-pric-ing’’ debate, which at least in South Asia failsto reflect the ground reality.

3. THE DIESEL PRICE SQUEEZE

The rest of this paper is devoted largely to theanalysis of the irrigation economy of the Indo-Gangetic basin (IGB)—encompassing PakistanPunjab and Sind, Indian part of the IGB, Ne-pal terai, and Bangladesh. The IGB is the fertileground for South Asia’s groundwater revolu-tion with well over 100 million horse power ofinstalled groundwater pumping capacity in theform of millions of scattered small pumps andwells. As Figure 3 (based on the IWMI surveyreferred to earlier) highlights, the groundwatereconomy of the IGB is dominated by dieselpumps which impose a high volumetric wateruser cost on the basin’s farmers. Barring IndianPunjab and Haryana, which have sizeable num-

0

20

40

60

80

100

120

Coastal IndiaPeninsular IndiaW

est-Central India

Pakistan NWF

India

dies

el p

umps

as

% o

f pum

ps u

sed

by s

ampl

e fa

rmer

s

Figure 3. Ratio of diesel to total installed pump hors


bers of electrified tubewells, the rest of the IGB(Pakistan Punjab and Sind, Bangladesh, Nepalterai) overwhelmingly depends upon dieselpumps for irrigation. Electric pumps are insig-nificant because electricity supply to farms ismetered and expensive as in Bangladesh andPakistan or is simply not available (as in Bihar,Assam, and Nepal terai). 7 Farmers throughoutthe IGB have invested their own savingsin installing over 100 million horsepowerequivalent of diesel pump capacity as shownin Figure 4.

True, farmers in command areas of publicirrigation systems in the IGB face a water usecost way below the ‘‘threshold’’ beyond whichwater demand becomes price elastic. However,the water use cost paid by a large majority ofirrigators in irrigation sub-economies II, III,IV, V, and VI in the IGB is not only well abovethe ‘‘threshold’’ but is also approaching levelswhere it is beginning to squeeze out small-holder irrigation itself. Since 2000, all availableevidence suggests that the region’s groundwatereconomy has begun shrinking in response to agrowing energy squeeze. This energy squeezeis a combined outcome of three factors: (a) pro-gressive reduction in the quantity and quality of

Pn Tribal Belt

North Western India

Rest of Bangladesh

Pakistan Punjab

North-WestBangladesh

Eastern IndiaPakistan SindhNepal Terai

IGB regions

epower in a sample of 2,600 South Asian farmers.


Figure 4. Spread of diesel pumps in South Asia.

8 WORLD DEVELOPMENT

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power supplied by power utilities to agricultureas a means to contain farm power subsidies; (b)growing difficulty and rising capital cost ofacquiring new electricity connections for tube-wells; and (c) a 6.7-fold increase in the nominalprice of diesel during 1990–2006, a period dur-ing which the wholesale price index for all com-modities for India a little over doubled 8 butmore relevant, the nominal farm gate rice pricerose by just over 60%.

In the 2002 IWMI survey of over 2600 farm-ers in India, Pakistan, Nepal terai, and Bangla-desh, our respondents had unanimously ranked‘‘energy cost and availability’’ as the top chal-lenge to their farming, far above ‘‘groundwaterdepletion,’’ ‘‘high rate of well failure,’’ and ‘‘ris-ing groundwater salinity’’ (Shah et al., 2006).The impact of high marginal cost of diesel


pump irrigation was evident in significantlylower hours of pumpage per hectare of paddyand wheat irrigation compared to electric pumpowners among our sample farmers. These fig-ures are set out in Table 3 which, besides hoursof pumping per hectare, also provide ‘‘horse-power hours’’ to adjust for varying pumpcapacities and make the estimates more compa-rable. Since the time of our survey in 2002, die-sel prices have jumped over 70%; no surprisethen that the diesel price squeeze on small-scaleirrigation is heading towards a crisis in all thecountries of South Asia but is particularly visi-ble in eastern India and Nepal terai where theratio of rice to diesel price has turned particu-larly adverse as evident in Table 4. Small-hold-ers in Pakistan and Bangladesh enjoy somerespite thanks to higher subsidy they enjoy in


Table 4. Farm gate rice price relative to diesel price in IGB countries

Diesel price perliter: February 2007

Farm gate rice priceper kilogram: February 2007

kg of rice needed tobuy a liter of diesel

India (Indian Rs.) 34.0 (US c 85) 6.4 5.7Pakistan (Pak. Rs.) 37.8 (US c 64) 11.8 3.2Bangladesh (Taka) 35.0 (US c 50) 9.0 3.9Nepal terai (Nepal Rs.) 57.0 (US c 84) 10.0 5.7

Source: From various village studies undertaken for this research.


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diesel prices. Rapid rise in global rice pricesduring 2008 will likely alleviate the squeezesomewhat making irrigated rice productionmore profitable. The fact remains that highmarginal cost of irrigation with diesel pumpswill keep irrigation water demand price elasticand stimulate IGB’s small-holders to econo-mize on water use in various ways.

4. ENERGY SQUEEZE LEVERAGEDTHROUGH WATER MARKETS

This would be particularly true for the poor-est strata of IGB’s peasantry who depend on

0

100

200

300

400

500

600

700

1991 1995

1991

=100

diesel price index

all-India Consumer price inde

Index of Pump irrigation price

Index of farm gate price of wh

Index of farm gate price of ric

Figure 5. Increase in relative price of diesel and pu


pervasive pump irrigation service markets (orwater markets) for securing their irrigation. Be-cause decentralized, fragmented water marketsare natural oligopolies (Shah, 1993), pumpowners use diesel price increases to raise theirpump rental rates in tandem with every majorrise in diesel price despite the fact that pumpsthemselves have become cheaper in real termsduring 1990–2007. Figure 5 shows the changesin the nominal price of diesel versus the priceof pump irrigation in Uttar Pradesh. During1990–2007, diesel prices here rose from US $0.125 to US $ 0.87 per liter; but the rate buyersincur per hour of pump irrigation has increasedfrom US $ 0.75/h to US $ 2.50/h, the rise being

2000 2005 2007

x

in Deoria, Uttar Pradesh (Rs/hour 5 hp)

eat in Mirzapur, Uttar Pradesh

e at Mirzapur

rchased pump irrigation in Uttar Pradesh, India.


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far larger than needed to cover the increase infuel cost. Another characteristic of this rela-tionship has been the downward stickiness ofpump irrigation prices; every time there is abig increase in diesel price, pump irrigationprice tends to jump; however, the reverse isnever the case because of the monopoly powerof water sellers.

As a result, pump rentals relative to farmproduce prices—which are what matters tothe marginal farmers and share croppers–toohave risen rapidly relative to rice and wheatprices up to mid-2007. In Deoria, eastern UttarPradesh, a marginal farmer could buy an hourof pump irrigation (around 30 m3 of water atthe well-head) for the farm gate price of a littleover 3 kg of rice and wheat in 1990; today, thisratio is 10 kg of wheat and 12 kg of rice. Figure5 shows the rise in diesel and pump irrigationprices relative to the all-India consumer priceindex. However, what matters most to farmersis irrigation cost relative to the farm gate pricesof irrigated crops. Therefore the kg of rice andwheat needed to buy a liter of diesel or rent apump for an hour—as shown in Table 5 forDeoria in Eastern Uttar Pradesh—is a betterindicator of real increase in irrigation cost thannominal price deflated by national consumerprice index or the national income deflator. Itis not surprising then that in crop-sharing con-tracts for water sales in eastern India and Ban-gladesh, tubewell owners claim 1/3rd to half ofthe total output for pump irrigation alone whenthey pay for diesel. It is not surprising then thatbuying irrigation water against crop share israpidly on a decline.

Electric tubewells, subject to flat horse-powerlinked tariff, are cheaper to operate than dieselpumps; their owners also sell pump irrigationto marginal farmers and share croppers at low-er rates compared to diesel pump owners.Therefore, new electricity connections areavidly sought after. However, most IGBstates—which in the early 1960s gave district

Table 5. Deoria, eastern Uttar Pradesh: Rise in diesel and pu(source: interview

Year kg of wheatto buy 1 l of diesel

kg of wheat to pay for1 h of pump irrigation

1990 1.24 3.141995 1.61 4.042000 3.71 8.002005 5.63 10.002007 3.39 6.86


collectors monthly targets for minimum num-ber of tubewells to be electrified–now operatean embargo on new electricity connections totubewells; and where they are issued, the entirecost of taking the power line to the tubewell—of poles, cables and transformers—is chargedon the farmer. This has made new electricityconnections scarce as well as prohibitivelycostly. Even so, existing electric tubewell own-ers and marginal farmers who are close enoughto their tubewells to buy pump irrigation fromthem are luckier compared to diesel pump own-ers and their buyers. Since farmers who can buypump irrigation from electric tubewell ownersincur lower cost than by using their own dieselpumps, diesel pump owners in Uttar Pradeshtoday prefer purchased irrigation from electrictubewells than by irrigating with own dieselpump.

Under two research projects supported by theChallenge Program on Water and Food(CPWF), we have been tracking—through col-laboration with location-based research part-ners—the impacts of growing energy squeezeon the predominantly small-holder irrigationin the Indo-Gangetic basin states. This papersummarizes the results of village case studieswe carried out in 24 locations widely spreadover India and Pakistan. The aim of the studieswas to explore, identify, and document themain trends rather than to measure and quan-tify these impacts, something we intend toundertake in phase II of this research.

5. SHRINKING WATER MARKETS

A key finding of our reconnaissance is thatthe energy squeeze has raised the use costof pump irrigation water and thus imposed a‘‘surrogate water price’’ on farmers that is wellbeyond the ‘‘threshold’’ to a level that is prov-ing immiserizing for marginal farmers andshare croppers. Most social impacts of the en-

mp irrigation price relative to farm prices of wheat and rices with farmers)

kg of rice to buy 1 lof diesel

kg of rice to buy 1 h ofpump irrigation

1.45 3.672.17 5.435.30 11.436.75 12.006.29 12.73



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ergy squeeze on small-holder irrigation—andthe agrarian poor—work out through ground-water markets. Confronted with the energysqueeze, these are shrinking; and soaring waterprices are driving out water buyers and dieselpump irrigators who abound in the IGB. Thekey result is the shrinking of water markets.

Around 1990 and before, when diesel was 1/7th its present price, and farm power supplybetter than today, electric tubewell owners werenatural oligopolists forced to behave in a highlycompetitive market. Flat electricity tariff, whichreduced their marginal cost of pumping tonear-zero levels, created powerful incentive forthem to maximize pump irrigation sale, and inthe process pare down the prices. Diesel pumpoperators were able to offer some competitionbecause diesel price was low and their portabil-ity allowed diesel pumps to irrigate where elec-tric tubewells could not reach.

Numerous field-based studies showed thatsuch local groundwater markets emerged asthe mainstay of ultra-marginal farmers andshare croppers, especially in eastern India andBangladesh. In Bangladesh, Fujita and Hossain(1995) had noted that thanks to pump irriga-tion markets, ‘‘the economic value of land. . .has decreased in a relative sense’’ in farm in-come generation and ‘‘opportunities for thelandless and near-landless to climb the socialladder [have] expanded greatly.’’ In Uttar Pra-desh (India), Niranjan Pant (2005) wrote:‘‘. . .the smallest farmers with land-holdings upto 0.4 ha are the largest beneficiaries of thegroundwater markets as 60% of the farmersof this category irrigated their wheat crop bywater purchased from the owners of privateWater Extraction Devices. . .’’ Shah and Bal-labh (1997) based on a study of water marketsin six villages of North Bihar (India) concludedthat these had opened up new production pos-sibilities for the poor which left them better offthan before, and thereby imparted a new dyna-mism to the region’s peasant economy. Even,Wilson (2002, p. 1232), otherwise critical ofprofiteering by water sellers in Bihar (India),wrote: ‘‘extension of irrigation through hiringout [mobile diesel pump sets] to small and mar-ginal holdings is in fact the major factoraccounting for the further increase since1981–82 in cultivated area irrigated at leastonce to approximately 73% in 1995–96. Thosehiring in pump sets are overwhelmingly smalland marginal cultivators; they cultivate anaverage of 1.35 acres (compared with an aver-age of 3.89 acres cultivated by pump set own-


ers). . .’’ Most recently, Mukherji (2007) in anextensive study of water markets in West Ben-gal (India) reaffirmed their myriad benefits tothe agrarian poor. Water markets, and indeedgroundwater irrigation itself, have been asource of much succor to the agrarian poor.Studying rural poverty ratios across the Indianstates over five points during 1973/74–1993/94,Narayanamoorthy (2007) concluded that,‘‘ there is a significant inverse relationship be-tween the availability of groundwater irrigationand the percentage of rural poverty. . .’’

With soaring diesel prices and shrinkingpower supply to tubewells, this happy situationhas rapidly changed for the worse. Table 6 pre-sents the estimates of rising pumping costs andtheir impacts on water prices charged by a sam-ple of 60 diesel tubewell owners and buyers inEastern Uttar Pradesh and South Bihar col-lected by Kumar, Singh, and Sivamohan(2008). It shows that some of the poorest farm-ers in the IGB are paying Rs. 2.11–2.67 (US c5–7)/m3 of irrigating crops. At such prices, irri-gation cost would amount to a third or more ofthe value of crop output. Pump irrigation mar-kets—which boomed during 1980–90s andprobably served more area than all public irri-gation systems in the IGB (Mukherji, 2005)—are shrinking rapidly; and so is the size of thebasin’s groundwater irrigation economy itself.During 1980–90s millions of farmers in north-ern and eastern India and Pakistan Punjaband Sind purchased diesel pumps often asstand-by’s for their increasingly unreliable elec-tric pumps. Now these have come full circle;diesel becoming unaffordable, especially forwater buyers, the preference for electric tube-wells has increased. However, electric tubewellsare unable to meet these expectations becauseelectricity supply as well as connections aredwindling.

In eastern India, Nepal terai and Bangladesh,electric tubewells are few and far between.Where we find some, two impacts follow: first,their owners find their monopoly power en-hanced, which they use to increase their sharein groundwater markets and irrigation surplus;second, they are able to moderate the energysqueeze on marginal farmers especially whenpower supply situation is good and tubewellowners pay flat electricity tariff. We found thisto be the case in Uttar Pradesh, West Bengal,and Orissa in India. Where they are found insignificant numbers, electric tubewell ownershave driven diesel pump owners out of busi-ness. So unequal is the competition that even


Table 6. Behavior of groundwater pumping costs and selling price charged by a sample of diesel tubewell owners inSouth Bihar and Eastern Uttar Pradesh

Year South Bihar Eastern Uttar Pradesh

Pumping cost (Rs./m3) Selling price (Rs./m3) Pumping cost (Rs./m3) Selling price (Rs./m3)

1990 0.41 1.16 0.47 0.981995 0.51 1.40 0.56 1.312000 0.95 1.75 1.00 1.632006 1.60 2.11 1.64 2.67

Source: Kumar et al. (2008).


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owners of diesel pumps prefer to purchase irri-gation from electric tubewell owners ratherthan use own diesel pumps. In Uttar Pradesh,a 5 hp electric tubewell connection is a cash-cow for its owner: it entails a monthly chargeof a little over US $ 10 but can generate up toUS $ 225/month as gross income from watersale, a highly profitable proposition. In Birb-hum district of West Bengal, our research col-laborator wrote, ‘‘. . .by charging such highprice for electric pump irrigation the submersi-ble owners are getting their own irrigation freeof cost and, on top of that, they make someprofit as well.’’ Here, the flat tariff paid by elec-tric submersibles increased from US $ 136.5/year to US $ 223.75/year during 1990–2007;in response, irrigation rates charged for boro(pre-summer) rice too doubled from US $ 69/ha to US $ 140.6/ha. This rise was much smal-ler than the rise in the cost of purchased dieselpump irrigation. This has diverted the dieselpump owners’ business to electric tubewellowners and served to strengthen their monop-oly power. While electric submersible ownersmake merry, it is also increasingly the case thatmarginal farmers of Bengal can grow boro riceonly if they can tie up irrigation with an electricshallow/mini-deep tubewell owner.

Similar impacts highlighted our inquiries inPakistan. In Sekhan village we studied inNorth West Frontier Province, we found thecost of wheat irrigation rising 8-fold since1990. The landless here rent the land fromlarge land-owners for 400 kg of wheat/ha; ris-ing diesel prices have squeezed the residualgains for the tenant after land rent and inputcosts are paid. In Jam Samo village of Sind,we found such tenancy, which was for longthe mainstay of poor, has declined by over80%. Almost everywhere in Pakistan Punjaband Sind, we found diesel pump irrigators,especially water buyers, taking a yield-cut byirrigating fewer times, investing more laboron land preparation to save on irrigation cost,


reducing irrigated area, and commonly irrigat-ing more intensively but on a smaller plot ofland to grow high-value crops and vegetablesfor the market. In Fatehpur Afghana villagein Norowal district of Punjab, responses to en-ergy-squeeze included reduced summer ricecultivation, increase in rain-fed crops, espe-cially, fodder crops; intensified cultivation ofvegetable crops by marginal farmers and ten-ants; fewer irrigations than before; switch towater-saving crops/varieties; increase in hold-ings of small and large bovines to cut costsand reduce risks. The same story got repeatedvillage after village in Pakistan.

6. RESPONSE OF WATER DEMAND TOSOARING USE COST

Soaring diesel prices and shrinking farmpower supply are forming a pincer that first be-gan forcing IGB’s small-holder irrigators tomake myriad adaptations to increase the effi-ciency of energy use in pump irrigation; someof these involved reducing pumping cost/m3

either by switching to fuel efficient Chinese die-sel pumps, or by switching from diesel to kero-sene, and where possible, to electric power. Agood deal also involved reducing water with-drawals. But more recently, the pincer has be-gun to throw the baby with the bath-water;and the energy-squeeze is gradually drivingsmall-holders out of irrigation, and increas-ingly, from farming itself. Detailed documenta-tion on the myriad responses of small farmersto the energy squeeze is available in Ul Hassanet al. (2007) for our Pakistan village studies andShah (2007) for our Indian village studies.Here, we summarize—in Table 7– some of theprominent trends we found emerging in the 19villages we covered in the IGB. The numberofp

signs suggests the pervasiveness of a par-ticular response among irrigators in the casestudy village.



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Estimating quantitative responses of aggre-gate water demand to rising groundwater usecost in the Indo-Gangetic basin would requirefar more detailed surveys which are direlyneeded. However, our case studies of 19 vil-lages in Indian and Pakistan portions of theIGB do suggest two classes of responses whichwe may call efficiency responses and distress re-sponses. In the first category come all the adap-tations made by small-holders to retain theirirrigated agriculture by reducing somehowtheir groundwater use costs. These include at-tempts to curtail water use per acre by improv-ing distribution efficiency (through lining fieldchannels or using flexible pipes to convey waterfrom wellhead to plants), by resorting to just-in-time irrigation and reducing the frequencyof watering, by switching to low waterdemanding crops and crop varieties. Thesewere evident in many areas with most farmercategories. In India as well as Pakistan, soaringdiesel prices have rapidly increased the demandfor electricity connections; however, these aregetting increasingly difficult and costly to getbecause government power utilities now expectfarmers to pay for cables, poles, and the trans-former—all of which may double or even triplethe cost of electric tubewells. In eastern India,therefore, besides reducing number of irriga-tions and area under irrigation-intensive boro(pre-summer) rice, a common response was toswitch from Indian to Chinese diesel pumps.Chinese pumps are cheaper to buy, costingUS $ 175–210 for 3.5 and 5 hp against US $350 for a 5 hp Indian pump of standard Kir-loskar brand. The Chinese 5 hp pump runsfor 2 h from a liter of diesel, which a Kirloskar5 hp burns in an hour or less. Finally, while aKirloskar needs a bullock cart to move around,the Chinese pump can be easily carried by amale farmer on his shoulders. Kolkata hasemerged as the epicenter of Chinese pump dif-fusion. Several brands of Chinese and Chinese–Indian pump assemblies are on offer here(Greeves China, Tricircle China, GK200, Chh-anta China, Zenith China, Changfa China, ZL175 China, etc.). All these are selling at 35–40%of the price of Kirlosker 4 and 5 hp engines,which remained market leaders for decades,and Honda 4 hp pumps. Interviews with pumpdealers in Kolkata confirmed that farmers pre-ferred these for their low price, their muchhigher fuel efficiency (0.35–0.4 l/h), and mostimportantly, their ability to work on kerosenewhich is cheaper than diesel due to governmentsubsidy for cooking fuel. Chinese pumps suffer


more wear and tear and have shorter life; butChinese pump mechanics have come up inevery village, and their spare parts are cheaperand easily available.

Distress responses sometimes included forcedexit from farming all together. In eastern parts,those quitting farming were mostly marginalfarmers and share croppers dependent onexpensive purchased irrigation service fromwater sellers. As we move west, rising ground-water use cost has hastened the exit of med-ium-scale farmers many of whom had alreadyinvested in off-farm livelihoods. These typicallyleave their farms in the hands of migrant sharecroppers who now take the brunt of the energycost squeeze. Another distress response ofsmall-holders is switching to high-risk–high-va-lue crops on a small plot of land while leavingthe rest of the farm holding fallow or underrain-fed crop. The primary driver of the high-risk, capital-intensive cropping strategy is theneed to maximize the crop (and cash) per dropof diesel. In many areas, poorer farmers, whosemain concern was food-grain security for thefamily, were cajoled into learning the new skillsof vegetable cultivation and of marketing it tomaximize their household income after irriga-tion costs were covered. High-value crops onsmall plots would pay for intensive irrigationin good years but leave small farmers indebtedin years when crops fail or output marketscrash. In the Bihar village we studied, forcedto give up winter wheat, share croppers andmarginal farmers took to intensive cultivationon small plots of fully irrigated onion crop dur-ing summer. As early pioneers struck it richfrom the onion crop, others joined until a quar-ter of the village’s farm land was under summeronion. The crop was capital intensive but highreturns justified borrowing working capital athigh interest. However, after some years ofbumper returns, untimely summer rains ruinedarea’s onion crop in 2005 and 2006, leaving thesmall tenants in a huge debt trap. We encoun-tered a similar story of rise and decline of the‘‘cabbage economy’’ in some villages of Puruliadistrict in West Bengal; crash in local vegetablemarket induced by a cabbage glut left manysmall-holders in a deep debt trap. That thechoice of high-value–high-risk crops was morecommon among marginal farmers and sharecroppers dependent on purchased irrigationthan among medium farmers with own tube-wells was an indication that high groundwateruse cost was the driver of this ‘‘gambler’schoice.’’


Table 7. Small-holders’ responses to rising use cost of water in 19 IGB villages across the IGB

Number Village, province Evidence of farmers responding to rising use cost of water by:

Applyingfewer

irrigations

Shifting towater-saving

crops

Adoptingwater-savingtechniques

Adoptingenergy

cost-savingtechniques

Reducingirrigated

area

Other majorresponses

1 Sheikhan,Nowshera, NWFP

p pp p pp

2 Gandi UmerChikad, LakkiMarwat, NWFP

pp p ppp

3 Dhok Katarian,Rawalpindi, Punjab,Pak

pp pRent land out;seek non-farmwork

4 Shahia, Attack,Punjab, Pak

ppp ppSeek non-farmwork

5 Khawanwala,Jehlum, Punjab, Pak

pppSuper-intensiveproduction ofhigh-value cropsand livestock;off farm work

6 Chak 7 NB, Balwal,Sargodha, Punjab,Pak

pp p ppSuper-intensivehigh-valuecrops; seasonalout-migration

7 Fatehpur Afghana,Norowal, Punjab,Pak

pp ppp p

8 Barameel,Khanewal, Punjab,Pak

p p pIntensivevegetablefarming; high-value crops

9 Jam Samao,Matiari, Sindh

pPriority tosugarcane fromcanal irrigation;casualization offarm labor

10 Kendradangal,Birbhum, WestBengal

pp pppMarginalfarmers andshare croppersexit farming

11 Kaya, Murshidabad,West Bengal

ppp ppAdopt Chinesepumps;substitutekerosene fordiesel

12 FerozpurRanyan,Haryana

ppp pp pMarginalfarmers beginquitting farming

13 Badhkummed,Ujjain, MadhyaPradesh

p ppp pp

14 Berkhedakurmi,Sehore, MadhyaPradesh

p ppp pp


Please cite this article in press as: Shah, T. et al., Is Irrigation Water Free? A Reality Check ..., WorldDevelopment (2008), doi:10.1016/j.worlddev.2008.05.008

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Table 7—continued

Number Village, province Evidence of farmers responding to rising use cost of water by:

Applyingfewer

irrigations

Shifting towater-saving

crops

Adoptingwater-savingtechniques

Adoptingenergy

cost-savingtechniques

Reducingirrigated

area

Other majorresponses

15 Keotkuchi, Barpeta,Assam

ppp ppExit fromfarming

16 Shergarh,Hoshiarpur, Punjab,India

p ppRenting outland to migrantlaborers; exitfrom farming

17 Simra, Phulwari,Bihar

pppPumps usedonly for summeronion crop;share-croppingwith pumpirrigationdeclines.

18 Akataha, Deoria,Eastern UP

pPump irrigationconcentrated onvegetables formarket; greateruse of canalirrigation

19 Abakpur Mobana,Mirzapur, UttarPradesh

pp pPump irrigationreserved forhigh-value crops


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7. CONCLUDING DISCUSSION

Global debate on ‘‘water as an economicgood’’ presumes that irrigation water supplyis delivered, controlled, and priced by publicinstitutions; that in the developing world, theprice of water is kept so low that water use costleaves farmers no incentive to use it efficiently.From this characterization emerges the battlecry: get the water prices right. When waterprices are very low, the debate argues, tinkeringwith them does not result in efficiency improve-ments. Getting the price right may then meanraising the water price above the threshold be-yond which water demand begins respondingto price increases. We have shown in this paperthat at least in South Asia, a major irrigatingregion of the world, this characterization needsa reality check. In a region where irrigation isviewed as an instrument to alleviate agrarianpoverty, the dominant emerging trend is theopposite of what the ‘‘water-as-an-economic-good’’ debate highlights.

We showed that public irrigation systems andtheir pricing policies are losing relevance to the


irrigation dynamic of the Indo-Gangetic basin,including in their command areas. In the realirrigation economy of the IGB dominated bydiesel tubewells and pervasive pump irrigationservice markets, the ‘‘surrogate water price’’facing millions of small-holder irrigators hasfor quite some time been well above the DeFraiture–Perry ‘‘low-threshold,’’ and is nowcrossing the upper threshold beyond whichwater demand becomes highly responsive tothe ‘‘surrogate water price.’’ We also find thatparticularly post-2000, the energy squeeze—and the soaring use cost of groundwater—isinducing small-holders to adapt/respond inmyriad ways. It is indeed rare to find the DeFraiture–Perry characterization reflecting thereality of irrigation demand in the IGB; insteadof water demand becoming inelastic at high usecost, we contend it tends to become super-elas-tic. At prevailing irrigation water use cost, wefind small-holders fostering efficiency responses,that is, shifting to water-saving crops, waterand energy-saving irrigation technologies, andimproved conveyance efficiency. But the poor-est are also forced into distress responses, that



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is, switching to high-risk crops, reducing irri-gated areas, and even getting out of farming it-self. Since the onset of the 1990s, small-holderagriculture in the IGB has been stressed by anoverall input cost-price squeeze anyway; butrising diesel prices are proving the last strawon the camel’s back.

In the IGB, then, the emerging situation givesrise to an altogether new ‘‘water price debate,’’nearly opposite in its tenor to the global waterpricing debate summed up in Section 1. Bris-coe’s (1996) exposition focused on striking abalance between water use cost, marginal prod-uct of water, and water’s opportunity cost. Insome eastern parts of the IGB, the true oppor-tunity cost of groundwater pumped is negative.Here, private groundwater irrigation develop-ment has controlled massive ‘‘rejected re-charge’’ that left vast areas with surface-flooding causing enormous damage to life andproperty (Shah, 2001). In the western parts, itdid what a multi-million dollar SCARP tube-well program could not do as well: controlwater logging. Groundwater irrigation oughtto be subsidized for creating such positiveexternalities in these parts of the IGB; yet, itis here that soaring use cost of groundwater isshrinking the groundwater irrigation economy.

In the IGB, the water pricing debate is thencoming full circle. Here, the major challengeis to find ways of bringing down water use costbelow the ‘‘upper threshold’’ beyond whichabundantly available water becomes too expen-


sive for the poor to use to maintain livelihoodsand food security. Prevailing ‘‘surrogate prices’’of groundwater irrigation in the IGB are prov-ing so ‘‘efficient’’ that they are pricing outsmall-holder irrigation which has been themainstay of hundreds of millions of agrarianpoor. Small-holders using Chinese pumps arealready diverting rationed quota of subsidizedkerosene allotted for cooking purposes to runirrigation pumps; and in states like Bihar, thereis demand for allotting farmers subsidized die-sel quota, much like how fisher-folk are pro-vided in Indian coastal states. Elsewhere, thelead author has argued that investing in farmelectrification and providing rationed electricityat an affordable price—as under Gujarat’s newJyotigram Scheme (Shah & Verma, 2007)—might provide succor to small-holders in east-ern India. The challenge in IGB is then alto-gether different, and needs to be incorporatedin the global debate on ‘‘water as an economicgood.’’ Johansson, Tsur, Roe, Doukkali, andDinar (2002, p. 192) hit on the bulls eye, whenthey say:

‘‘Marginal cost pricing and water markets will serveto increase the cost of irrigation to most globally,and when the scarcity value of water is high, mayforce subsistence-level farmers out of production.In such cases, water quotas, which can be tailoredto equity considerations, may be the preferred mech-anism of allocation. The trade offs between efficiencyand equity and the use of water allocations to ad-dress poverty in many areas of the world are impor-tant questions that require further enquiry.’’

NOTES

1. http://www.waterandfood.org visited on May 4,2008.

2. See Divya Bhaskar, Ahmedabad edition, September4, 2007, 3.

3. http://www.sandrp.in/irrigation/100000_crores_s p e n t _ n o _ i r r i g a t i o n _ b e n e fi t s _ S AN DR P _ P R _Oct2007.pdf, visited on October 12, 2007.

4. Khan (1994, p. 81), however, asserted that ‘‘in 1990–91, the minor irrigation lifting devices provided irriga-tion water to about 88% of irrigated area’’ in Bangla-desh.

5. Singh and Kumar (2008, Table 3) estimated ground-water costs per m3 for a sample of farmers in westernUttar Pradesh at: Rs. 0.18 for electric pump owners, 0.65

for buyers from electric tubewell owners, 1.38 for dieselpump owners and 2.81 for buyers from diesel tubewellowners. For South Bihar, their estimates for the samegroups, respectively, were: Rs. 0.77, 0.70, 1.87, and 2.15.Singh and Kumar compared water productivity bydifferent groups of irrigators and concluded that ‘‘waterbuyers in diesel and electric well commands.. securehigher water productivity in economic terms for mostcrops as compared to water sellers.’’ (p. 435).

6. Through this paper, 1 US $ = Indian Rs. 40 = Paki-stan Rs. 59 = Nepal Rs. 70 = Bangladesh taka 68.

7. We have adjusted the diesel tubewell density for thefact that the average size of diesel pumps in use inPakistan Punjab and Sind is over three times largercompared to pumps used in the rest of the IGB. Thisdifference is accounted mostly by the greater inequality


http://www.waterandfood.org

http://www.sandrp.in/irrigation/100000_crores_spent_no_irrigation_benefits_SANDRP_PR_Oct2007.pdf




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of land holdings in Pakistan Punjab and Sind. Tubewellowners here, typically large farmers, need pumps thatmatch the areas they want to irrigate.


8. http://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/79844.pdf visited on September 25, 2007.

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