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Shaping the Future of Water for AgricultureA 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

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Washington, DC 20433

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E-mail: [email protected]

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ISBN-10: 0-8213-6161-9

ISBN-13: 978-0-8213-6161-0

eISBN-10: 0-8213-6164-3

DOI: 10.1596/978-0-8213-6161-0

Library of Congress Cataloging-in-Publication Data has been applied for.

iii

CONTENTS

Foreword viiAcknowledgments ixAcronyms and Abbreviations xiii

OverviewSourcebook Objectives 1Background of the Three World Bank Corporate Strategies 2The Agricultural Water Management Sourcebook 4Challenges Facing Agricultural Water Management 4Cross-Cutting Themes of the Sourcebook 7Lessons and Next Steps 12

Chapter 1: Building Policies and IncentivesOverview 21Investment Note 1.1: Preparing a National Agricultural Water Strategy 24Investment Note 1.2: Development Policy Lending to Support Irrigation

and Drainage Sector Reforms 31Investment Note 1.3: Agricultural Trade, Water, and Food Security 38Investment Note 1.4: Pricing, Charging, and Recovering for Irrigation Services 45Investment Note 1.5: Economic Incentives in Agricultural Water Use 53Innovation Profile 1.1: Agricultural Water in the New Country Water Resources

Assistance Strategies 59Innovation Profile 1.2: Enabling Smallholder Prosperity: Irrigation Investments

for Ready Markets 63

Chapter 2: Designing Institutional ReformsOverview 67Investment Note 2.1: Investing in Participatory Irrigation Management 70Investment Note 2.2: Investing in Water Rights, Water Markets, and Water Trade 78Investment Note 2.3: Investing in Building Capacity in Agricultural

Water Management 87Innovation Profile 2.1: Drivers of Public Irrigation Reform in Australia 93Innovation 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 101Investment Note 3.1: Lending for On-Farm Water-Saving Technologies 105Investment Note 3.2: Investing in Irrigation for Crop Diversification 110Investment Note 3.3: Investing in Smallholder Irrigation 114Investment Note 3.4: Selecting Technologies for the Operation and

Maintenance of Irrigation Systems 119Investment Note 3.5: Cost-Effective Operation and Maintenance of Irrigation

and Drainage Projects 123Investment Note 3.6: Using Satellites to Assess and Monitor Irrigation

and Drainage Investments 127

CONTENTS

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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 IrrigationOverview 143Investment Note 4.1: Investing in Shallow Tubewells for Small-Scale Irrigation 145Investment Note 4.2: Deep Tubewell Irrigation 150Investment Note 4.3: Conjunctive Use of Groundwater and Surface Water 156Investment Note 4.4: Groundwater Governance and Management 162Innovation Profile 4.1: The Republic of Yemen’s Sana’a Basin Water

Management Project 169

Chapter 5: Investing in Drainage and Water Quality ManagementOverview 173Investment Note 5.1: Investing in Land Drainage 176Investment Note 5.2: Investing in the Reuse of Agricultural Drainage Water 181Investment Note 5.3: Investing in the Reuse of Treated Wastewater 185Innovation Profile 5.1: Drainage Investments in the Context of Integrated

Water Resources Management 190Innovation Profile 5.2: Investing in Controlled Drainage 193Innovation Profile 5.3: Investing in Evaporation Ponds 196Innovation Profile 5.4: Investing in Biodrainage 198Innovation Profile 5.5: Investing in User Operation and Maintenance of Drainage 201

Chapter 6: Investing in Water Management in Rainfed AgricultureOverview 205Investment Note 6.1: Investing in Supplemental Irrigation 208Investment Note 6.2: Investing in Watershed Management 214Investment Note 6.3: Investing in Water and Soil Fertility Management 219Innovation Profile 6.1: Investing in Community-Based Soil Conservation and

Watershed Management Projects 225Innovation Profile 6.2: Investing in Watershed Management in China’s

Loess Plateau 229Innovation 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 OperationsOverview 237Investment Note 7.1: Investing in Agricultural Water through Community-Driven

and Social Fund Approaches 239Investment Note 7.2: Investing in Aquaculture Activities 244Innovation Profile 7.1: Rural Water Supply and Irrigation 251

Chapter 8: Coping with Extreme Climatic ConditionsOverview 255Investment Note 8.1: Investing in Drought Preparedness 258Investment Note 8.2: Investing in Flood Control and Management 264

A SOURCEBOOK FOR INVESTMENT IN AGRICULTURAL WATER MANAGEMENT

v

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 279Investment Note 9.1: Monitoring and Evaluating the Poverty Impacts of

Agricultural Water Projects 281Innovation Profile 9.1: Assessing the Economic Benefits of Land Drainage 286Innovation Profile 9.2: Guiding Environmental and Social Safeguard Assessment

in Agricultural Water Projects 290Innovation Profile 9.3: Estimating the Multiplier Effects of Dams 294Innovation Profile 9.4: Benchmarking for Improved Performance in

Irrigation and Drainage 299Innovation Profile 9.5: Applying Environmental and Social Safeguard Policies to

Agricultural Water Operations and Monitoring Them during the Project Cycle 304

Index 315

CONTENTS

vii

FOREWORD

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.

viii


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

Agriculture and Rural Development Agriculture and Rural Development

ix

ACKNOWLEDGMENTS

The work leading to this Sourcebook involved a large group of people interested in agricultural water both

from within and outside the World Bank.The Agricultural Water 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.

x

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 Bank–Netherlands 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

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,


xi

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); Inès

Beernaerts, José Benites, Kenneth Chomitz, Jean-Marc Faurès, 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 Faurès, 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.

ACKNOWLEDGMENTS

xiii

ACRONYMS AND ABBREVIATIONS

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

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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

(Comité Técnico 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

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


xv

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

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


xvi

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

OED Operations Evaluation Department

OP Operational Policy

PAD Project Appraisal Document

PAVCOPA Agricultural Trading and Processing Promotion Pilot project (Projet d'Appui

à la Valorisation 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


xvii

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

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


xviii

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


1

OVERVIEW

SOURCEBOOK OBJECTIVES

PROBLEMS FACING AGRICULTURAL WATER MANAGEMENT

There are heavy demands on agricultural water to provide more food to consumers and inputs toindustry, 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 inexchange for recycled wastewater from cities.

After a century of expansion of large-scale surface irrigation and decades of rapid groundwaterdevelopment, opportunities to harness new resources are fewer and more expensive. Improving theproductivity of existing water use and reusing secondhand water are therefore becoming commoninvestment objectives. However, returns on public investment have been generally disappointing.

2

New solutions have emerged, based on widelyavailable technology and new managementoptions. The role of government is changing,responsibility is being decentralized, farmersare playing an increasingly important role indecisions and investment, and markets are driv-ing growth.

How to grow more food, increase incomes,reduce poverty, and protect the environment—all from an increasingly constrained resourcebase—are the challenges facing agriculturalwater management discussed and addressed inthis Sourcebook.

BACKGROUND OF THE THREEWORLD BANK CORPORATESTRATEGIES

The World Bank’s approach to the agriculturalwater management challenges summarizedabove is guided by the recent corporate strate-gies for Rural Development, Water Resources,and the Environment. These three corporatestrategies all assign a vital role to agricultureand water management in promoting ruralgrowth, sustaining the environment, and reduc-ing poverty.

The Bank’s Reaching the Rural Poor: A RenewedStrategy for Rural Development (RDS) (WorldBank 2003) highlighted the pivotal importance ofthe rural sector as the home of the vast majorityof the world’s poor and underlined the centralityof rural development to the Bank’s povertyreduction mission. RDS demonstrates that agri-cultural development is the primary instrumentfor poverty reduction in most developing coun-tries and urges, against a sharp decline in agri-cultural lending in recent years, the return ofagriculture to the forefront of the Bank’s agenda.

RDS also argues forcefully for a strengthenedrole for the Bank as an advocate for ruralpoverty reduction and as a leader in investmentand policy dialogue.

Agricultural water management is critical toachieving key RDS objectives: durable ruralgrowth, enhanced productivity and competitive-ness, and sustainability of natural resource man-agement. Underlining the growing shortage ofwater and competition from other users, RDS out-lines the agenda for improved water resourcesmanagement: to ensure that agricultural water ismanaged within an integrated basin approach, toallocate water to environmental uses, to preparefor the likely increase in recycled water use inirrigation, and to devise long-term approaches toissues of waterlogging and salinization. RDS alsofocuses on improving the productivity of existingwater management systems, especially on small-scale projects characterized by demand-drivenon-farm improvements, rehabilitation, and partic-ipatory approaches. On the economic side, RDSemphasizes the key role of incentives and theneed to increase the role of private investmentand management as well as the efficiency of pub-lic investment. Finally, RDS outlines an agendafor reform of fragmented institutions and unac-countable and inefficient public bureaucracies.

The Bank’s Water Resources Sector Strategy:Strategic Directions for World Bank Engage-ment (WRSS) (World Bank 2004b) also givesprominence to irrigation as the key producer offood and source of livelihood for the world’spoor, and as the largest user of water. WRSSunderlines that water management and devel-opment are essential for growth and povertyreduction and argues that both broad andpoverty-targeted interventions further thoseresults. WRSS emphasizes two imperatives: toexpand investment in irrigation and to changethe way irrigation is managed. Calling for “prin-cipled and pragmatic reforms,” the strategystresses the need to return to basic economicprinciples that incentives should reflect boththe financial cost of supplying services and theopportunity cost of water. WRSS also arguesthat, although the Bank portfolio in irrigation hasbeen shrinking, there are compelling reasons to


Agricultural water management includes irrigation on largeand small schemes and farms, drainage of irrigated and rainfedareas, watershed restoration, recycled water use, rainwaterharvesting, and all in-field water management practices.

What Is Agricultural Water Management?

3

“get back in.” As for RDS, WRSS envisages abroader and more active role for the Bank inthe irrigation sector, arguing that dealing withcomplexity and risk is a strength of the Bank,which should embrace “affirmative engagementwith risk,” through a business model that putsdevelopment impact first.

WRSS proposes an agenda for agricultural watermanagement directed toward improving theefficiency of water service delivery and use atthe farm, scheme, and sector levels, underliningthat water efficiency is pro-poor. The strategyemphasizes the role of demand management(cost recovery and water pricing, water rights,and the links between energy subsidy andgroundwater depletion), the need to improvegovernance (user associations, gender partici-pation, modernizing formal irrigation institu-tions, addressing the political economy ofreform), and integrated approaches and multi-functional technologies (basin management,packages for drought, saline soils and floods,and drainage).

The Bank’s Making Sustainable Commitments:An Environment Strategy for the World Bank(World Bank 2001) recognizes irrigation’s vitalcontribution to rural economies and welcomesthe increased attention to mitigating adverseenvironmental impacts. The strategy supportsparticipatory approaches to address problemsof groundwater depletion and drainage.

Although each corporate strategy has a differentthematic emphasis, their combined messagesfor agricultural water management are clear:

• Productivity. The age of expansion is draw-ing to a close. In the future, governance,management, and technology must combineto improve the productivity of existing assetsand available resources.

• Incomes. The bottom line is sustainableincreases in farmer incomes, with a focuson the poor.

• Institutions. Improved governance isbasic to increasing efficiency of resourceuse, and the energies of water users need

to be harnessed through expanded privateand user participation at every level, andthrough inclusion, notably of women.

• Integration and sustainability. Water hasto be used sustainably within an integratedapproach. Resource constraints and envi-ronmental risks impose integrated watermanagement approaches. Productivity atevery level hinges on integrated manage-ment of land and water and on integrationof policies and programs among water man-agement, agriculture, and the environment.

OPERATIONALIZING THE CORPORATE STRATEGIES

The priority assigned to the agricultural sector inthese three corporate strategies, along with theirarguments that the Bank can and should play acentral role in the development of the sector inthe coming years, impelled the Bank’s decisionto prepare a set of documents putting into oper-ational terms the messages in the strategies. Forthe agriculture sector as a whole, the Agricul-ture Investment Sourcebook (World Bank 2004a)sets out specific examples and guidance onproject design and investments that World Banktask team leaders can consider when preparingtheir projects to promote sustainable develop-ment and poverty reduction in the sector. TheAgriculture Investment Sourcebook is comple-mented by a Directions in Development Report,Agricultural Growth and the Poor: An Agendafor Development (World Bank 2005a), which setsout guidance on policy interventions and reforminitiatives that can underpin pro-poor invest-ment and sustainable growth.

In conjunction with these documents, the pres-ent Sourcebook and its companion Directions inDevelopment Report, Agriculture Water Man-agement: An Agenda for Sustainable Develop-ment (World Bank 2005b) have been compiled.The preparation of two documents specificallydevoted to agricultural water managementdemonstrates that agricultural water manage-ment is vital to meeting the objectives of the cor-porate strategies and underlines the intersectoralnature of water use in agriculture, reflected in itscentral place in all three corporate strategies.

OVERVIEW

4

Taken together, the above publications areamong the World Bank’s handbooks for its reen-gagement with the agricultural sector. They givepolicy, investment, and implementation guid-ance for the operationalization of the Bank’scorporate strategies on rural growth and povertyreduction through agricultural development andsustainable natural resources management.

THE AGRICULTURAL WATERMANAGEMENT SOURCEBOOK

With the background of the corporate strate-gies and alongside its companion publica-tions, the Shaping the Future of Water forAgriculture: A Sourcebook for Investment inAgricultural Water Management is designedto show how—in conjunction with macroeco-nomic and broader sectoral policies andinvestments—policy and investment in agri-cultural water management can contribute tosustainable rural growth and poverty reduc-tion. Although the Sourcebook covers a wholerange of issues, the focus is operational, con-centrating on the following:

• The policy and institutional reforms neededto make improved water productivity prof-itable for the farmer and for the nationthrough governance, management, markets,and trade policy

• The investment, technology, and manage-ment means available to increase waterproductivity

The Sourcebook guides Bank staff in the designof agricultural water management investments:

• It documents a range of solutions and goodpractices from Bank and worldwide experi-ence that can be mainstreamed into theBank’s portfolio, including policy and insti-tutional reforms, investments in hardwareand software, and recent innovations andsuccesses for scaling up.

• It highlights means of improving perform-ance and increasing production, incomes,and social returns.

• It suggests ways of increasing investmentand improving its quality and sustainability.

WHAT IS NOT COVERED

The Sourcebook’s coverage is not always com-prehensive and it is expected that there will beperiodic updates as fresh topics arise and mate-rial becomes available. The Sourcebook isessentially a guide to designing investment pro-grams. Policy issues are discussed where theyare relevant to investment. However, enablingpolicy issues are treated more broadly in thecompanion Directions in Development paper(World Bank 2005b), where they are presentedwithin the wider strategic framework.

This section of the overview has briefly out-lined the overall problem of investing in agri-cultural water and has described the purpose ofthe Sourcebook. The next section will look inmore detail at the challenges facing investmentin agricultural water.

CHALLENGES FACINGAGRICULTURAL WATERMANAGEMENT

Challenges facing agricultural water manage-ment include (1) the policy and institutionalchallenge, (2) the economic and financial chal-lenge, (3) the problem of declining investment,(4) the challenge of technology and waterresources to supply growing demand, (5) thepoverty and rural incomes challenge, and (6)environmental dimensions and the sustainabil-ity imperative.

THE POLICY AND INSTITUTIONAL CHALLENGE

Governments readily shouldered the develop-ment mission in the 1970s and 1980s, with thestate as principal investor and service provider.In irrigation, government planning and top-down solutions often led to poor choices, highcosts, poor service, low cost recovery, and aculture of dependency on the state. In manycountries, the poor track record of the state hasprompted a shift toward a new public-private


5

paradigm for irrigation, in which governmentprogressively becomes more of a facilitator, andregulator and users and markets play a growingrole in management and finance. Reconciliationof agricultural policy with macroeconomic poli-cies is often challenging: governments that aimfor low-cost, domestically produced foodencounter problems in providing adequateincentives—and incomes—to farmers, and gov-ernments have to adjust to the best tradeoffbetween support to agriculture and an econom-ically efficient food security policy. Within agri-culture, too, there is a need to integrateagricultural water management issues intobroader agricultural policy. Both irrigated andrainfed agriculture use and invest in waterresources and management as one of the manyinputs to the agricultural production processand in response to market opportunities andincentives that are determined in the broaderagricultural and macro economies. Thus, invest-ment and incentive policies for agriculturalwater management have to be developed in anintegrated way within a broader agriculturalpolicy. At the same time, agricultural water allo-cations and management priorities have to beintegrated with overall water management pri-orities at the basin and national levels. Theseand other policy and governance adjustmentsdrive sector reforms in many countries. Anunderstanding of the political economy of thesereforms, and of how reform processes work, isneeded. New water management skills andinstitutional capacity building are also needed.

THE ECONOMIC AND FINANCIAL CHALLENGE

Compared to other water-using sectors, agricul-ture in most locations generates the lowest valueadded per unit of water, and so will progres-sively give up water to domestic, municipal, andindustrial uses as water scarcity increases andcompetition mounts. Yet within agricultural usethere is considerable scope for improving returnson water. Low returns mean low incomes; higherreturns will boost incomes for farmers, includingthe poor. The key economic challenge is to getan incentive framework in place that encouragesefficient water use and profitable high-value

agriculture. There is evidence that, for the serv-ice provider and the farmer, a well-balancedincentive framework improves efficiency andaccountability, raises productivity, and promotessustainable and environmentally responsibleresource use. The parallel financial challenge onirrigation schemes is to generate cost recoveryadequate to finance an excellent service to farm-ers. A broader financial challenge is to set up anenabling and incentive framework that willencourage both large- and small-scale privateinvestment. These challenges are considerable.At the international level, markets are widelyprotected and commodity prices generally low.Domestically, many agricultural economies arecharacterized by inadequate or noncompetitivemarkets, pervasive subsidies, and food self-suffi-ciency goals that are inconsistent with compara-tive advantage. Cost recovery remains acontentious issue in many countries and privateinvestment is often crowded out by public sub-sidy or deterred by uncertain investment envi-ronments and distorted incentive frameworks.

THE PROBLEM OF DECLINING INVESTMENT

Governments are investing less public money inagriculture worldwide; public investment in agri-culture has dropped, and investment in irrigation,drainage, and other agricultural water manage-ment projects has also been declining worldwide.World Bank lending for new irrigation anddrainage projects dropped to a record low of $220million in fiscal 2003, a dramatic plunge from thelevels of the 1980s and early 1990s, when it aver-aged between $1.0 billion and $1.2 billion annu-ally. There are several reasons specific toagricultural water management for this decline.First, investment costs have risen because irriga-tion has moved into more marginal areas. Withthe average cost of developing new irrigated landnow above $6,000 per hectare, rates of return onnew schemes are generally in single digits. Sec-ond, the performance of large surface schemeshas been disappointing. Third, much of the efforton large schemes now goes into rehabilitationand management changes to improve water deliv-ery service. These investments are inherentlylower cost than developing new schemes.

OVERVIEW

6

In groundwater irrigation, investment has beenpredominantly private. In most countries,groundwater is now fully exploited, often over-exploited, and investment has to switch toimproving on-farm efficiency. Improving wateruse efficiency pays high economic returns, butoften the incentive framework is distorted so thatfarmers do not invest because it is not financiallyprofitable. Another area in which investmentsare needed but neglected is drainage, where themultifunctional aspects and multiple impacts andexternalities are not usually taken into account inproject design and socioeconomic justification.Cost-benefit analysis typically understates bene-fits, and cost recovery is difficult. A final reasonsometimes adduced for decline in investment isthat the safeguard policies of the World Bank areseen as adding to the transaction cost of prepar-ing projects.

THE CHALLENGE OF TECHNOLOGY AND WATERRESOURCES TO SUPPLY GROWING DEMAND

The threat of global food shortages thatappeared in the 1960s has diminished throughinnovations and investments in the Green Revo-lution and water control technologies. Increasesin irrigated areas and improved yields havehelped to increase food production per capita,despite significant population increases. For alldeveloping countries, average daily caloricintake per person has risen from 2,360 in themid-1960s to 2,800 during 1997–9. Output perunit of water worldwide rose 100 percent dur-ing 1961–2001—for wheat, the increase was 160percent. As a result, the water needed to feed aperson for a year has been halved in the last 40years, from 6 m3 to 3 m3 a year. In addition,investments in irrigation, drainage, and generalwater management have driven the growth ofrural economies and of lasting employment inmany parts of the world. Today, irrigated agri-culture supplies about 40 percent of the world’sfood, though occupying only 17 percent of thecultivated land. However, for the future, theFood and Agriculture Organization (FAO) esti-mates that by 2030, food production needs togrow at 1.4 percent a year, and about half ofthis growth would have to be generated fromirrigated agriculture. The ability of the world’s

farmers to meet this increase in demand is con-strained. Indeed, the pace of technologicalchange has slowed down—the water resourcebase is in most places fully developed, and nowmore than half the world’s population lives inwater scarcity. Intersectoral competition forwater is growing, with water supply to citiestaking priority and demand for water for nonir-rigation purposes projected to increase 62 per-cent between 1995 and 2025 (Rosegrant, Cai,and Cline 2002). Efficiency of agricultural watersupply and use remains well below technicalpotential. Groundwater overdraft and pollutionare further reducing available resources, espe-cially for poor and small farmers, and climatechange is also expected to increase farmer vul-nerability and reduce water availability inwater-scarce regions, especially throughincreased risk of drought. Domestic, industrial,and, increasingly, environmental and resourceprotection needs will take a growing share ofthe world’s water. The share of agriculture,which already uses about 70 percent of totalwater abstractions worldwide, can only shrink.The International Food Policy Research Institute(IFPRI) calculates that, on current trends, globalannual cereals production will be 300 milliontons1 less in 2025 than would be the case if anadequate supply of water were available, a dif-ference nearly as large as the entire U.S. cerealscrop in 2000 (Rosegrant, Cai, and Cline 2002).

The water resources challenge thus requires bet-ter resource allocation—systems of integratedmanagement and incentives that allow water toflow to the highest social and economic priori-ties. But it also requires a reinforcement of theintensification process: most of the extra produc-tion needed in the future will have to come fromintensification of land and water use and only aminor share from newly harnessed land andwater resources. Globally, cereals yields will haveto increase from the current average of about 3tons per hectare to 4 tons per hectare by 2030.Agricultural water management will thus have toprovide more efficient and equitable solutions forintensification at the basin level to increase waterand land productivity at the field level. Farmerseverywhere will seek to improve their incomesfrom an increasingly constrained water resource,


7

and this too will provide a powerful impetus toincreasing water use productivity.

THE POVERTY AND RURAL INCOMES CHALLENGE

Agricultural growth is central to poverty reduc-tion. Seventy percent of the world’s poor live inrural areas, and most of them are dependent onagriculture. Typically, the rural poor live on mar-ginal lands or on drylands, with little or noaccess to controlled water sources. Their techno-logical options for improved water managementare limited, and they face high risks from rainfallvariations. The poor are also exceptionally vul-nerable to drought, floods, effluent discharge,aquifer depletion, waterlogging, salinization, andwater quality deterioration. Thus the key agricul-tural water challenges for the poor are foodsecurity, risk mitigation, and income growth. Mil-lennium Development Goal (MDG) 1—Eradi-cate extreme poverty and hunger—can beachieved only if agriculture grows and can pro-vide access to food for the poorest and most vul-nerable. Improved management of availablewater thus has a critical role to play in povertyreduction and food security. Other MDGs suchas gender equality,2 child nutrition, and marketaccess also depend directly or indirectly on pro-poor agricultural growth and related manage-ment of scarce water.

ENVIRONMENTAL DIMENSIONS AND THESUSTAINABILITY IMPERATIVE

Rural people are the trustees of much of theworld’s land and water resources, and thereforeare central to achieving MDG 6—Ensure envi-ronmental sustainability. However, this trustee-ship is increasingly hard to respect. Manycountries are at the limit of water resourcesdevelopment, and pressure on land and wateris intense. The tension between production andprotection of natural resources has grown. Insome basins, water no longer reaches the sea,and environmental flows have virtually ceased.In many basins, where competition is allowed,overabstraction of groundwater is leading toirreversible decline in water tables. Salinizationand waterlogging have affected 30 million

hectares worldwide, and a further half millionhectares go out of production each year—asmuch farm land as new irrigation creates. Dis-posal of agricultural drainage water and reuseand recycling of water are causing environmen-tal and health problems. The “multifunctional”dimension of much agricultural water use andthe prevalence of environmental externalitiescreate a complex challenge, which integratedwater resources management is only beginningto take up. At the same time, drought andfloods, exacerbated by climate change, have aheavy impact on agriculture, and particularly onthe poor. In many countries, watersheds aredegrading under multiple use.

Improvements in agricultural water managementhave much to contribute to the goals of improv-ing productivity and sustainability, and therebyto increasing incomes and reducing poverty.However, not all goals can be achieved togetherin all circumstances; tradeoffs will be needed, forexample, where environmental concerns andpoverty reduction goals cannot both be met.Informed policy decisions have a key role toplay in selecting alternatives in these circum-stances. The Directions in Development ReportAgricultural Water Management: An Agenda forSustainable Development (World Bank 2005b)that accompanies this Sourcebook will give guid-ance on the management of these tradeoffs.

The next section summarizes the cross-cuttingthemes that emerge from the Sourcebook.

CROSS-CUTTING THEMES OFTHE SOURCEBOOK

Shifts have occurred in the way countriesapproach development policy for agriculturalwater management in recent years, includingthe following:

• A stronger focus on poverty reduction;

• An awareness of the need to “managescarcity”—of water, capital, and institutions;

• Growing emphasis on sustainability andenvironmental externalities;

OVERVIEW

8

• More consideration of the value of marketsand economic incentives; and

• Political economy processes of democrati-zation, decentralization, and participation.

These shifts have brought about significantchanges in agricultural water management.Almost every country is moving along the con-tinuum shown schematically in table 1.

These shifts in emphasis are captured in thecross-cutting themes of the Sourcebook, whichare presented briefly below. The references areto the relevant chapter of the Sourcebook.

FACILITATING POLICY REFORM

In most countries, agriculture uses more than 80percent of water resources and produces most

national food requirements, generating incomeand supporting most of the poor. Therefore, pol-icy for agricultural water management is vital: itmust deal with managing scarcity, with waterallocation, with food security, with povertyreduction, and with environmental risks. Theseissues are central to the Bank’s mandate and areat the heart of poverty reduction strategies inmost countries. The Bank should invest in agri-cultural water policy (chapter 1).

Reconciling best-practice water managementprinciples (integrated approach, basin man-agement, participation and decentralization,water as an economic good) with local physi-cal, economic, and sociopolitical realities isunlikely to be easy, and the policy reformagenda for agricultural water management isa difficult one: setting the legislative and regu-


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

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 irrigationirrigation 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.

Table 1 Agricultural Water Management: Changing Emphasis

9

latory framework; establishing an incentiveregime consistent with poverty reduction, ruraldevelopment, and agricultural goals and withtrade and macroeconomic policies; matchinginvestment and incentive policies in agricul-tural water management with broader agricul-tural policies on both the input and the outputsides; ensuring that agricultural water fitswithin an integrated, intersectoral water man-agement framework; designing institutionalmodels to separate bulk water delivery fromdistribution and to provide efficient least-costwater service; redefining the role of public andprivate sectors and of markets; and ensuring anenabling environment for private investment.Although policies cannot be uniform, success-ful reforms generally limit the role of govern-ment, decentralize responsibility to localauthorities and agencies, and to water users,promote market-based solutions and privateinvestment, and emphasize market-led growthpolicies with domestic and global trade reform.Tradeoffs between food self-sufficiency goalsand efficiency goals will be increasingly on thepolicy agenda, as water-scarce nations facedwith high opportunity costs of domestic foodproduction turn increasingly to virtual waterimports, which result in water savings forimporting countries but also real global watersavings because of the differential in water pro-ductivity between exporting and importingcountries (chapter 1).

Many water management reforms have highpolitical transaction costs. These can be absorbedat least in part by investing in participatoryprocesses of ownership building. Adjustmentlending may also help. Typically, reform islikely to take a long time, requiring staminaand consistency both from the nation and fromexternal partners such as the Bank. Under-standing the political economy of reform isessential (chapter 2).

BUILDING GOVERNANCE AND CAPACITY

The character of governance for agriculturalwater is changing everywhere. Many countriesare pursuing decentralization, participation, anddemand management policies in irrigation. In

more than 50 countries, this movement has takenthe form of participatory irrigation management,with user associations emerging as decentralizedand democratic user groups and taking responsi-bility for some management tasks. In the longrun, the transfer of irrigation management, oreven of full ownership, may be the target. Thecounterpart is the modernization of formal irri-gation institutions, tightening accountability, andimproving performance. These changes, togetherwith the development of an increasingly knowl-edge- and skills-based agricultural and irrigationeconomy, create a need for significant invest-ment in institutional development and capacitybuilding (chapter 2).

SETTING AN INCENTIVE FRAMEWORK

Investment and management in agriculturalwater are driven by incentives, and distortedincentive structures have been at the root ofpoor water management. Service providersoften have little incentive or accountability todeliver good service. Farmers have been facedwith an array of prices and markets distortedby subsidies and administrative decisions andby trade, energy, and macroeconomic policies.The results have been risk aversion andreduced private investment, slow adoption ofnew technology and diversification, low costrecovery, and groundwater depletion andother environmental degradation. Good out-comes from investment in agricultural waterrequire an incentive framework that encour-ages both service providers and farmers toinvest and to manage water efficiently andsustainably (chapter 1).

Subsidies have been used to make irrigationaccessible to farmers, to promote technologicalinnovation, to compensate for externalities, orto target the poor through watershed manage-ment, flood-risk management, or drought pre-paredness. In general, the use of subsidiesshould be limited, as good investment packageshave built-in incentives, and cost sharing cre-ates ownership and improves investment qual-ity and sustainability. If subsidies are used, theyneed to be carefully designed to achieve theirpolicy objective (chapter 1).

OVERVIEW

10

Reticence on subsidies reflects the market-driven approaches to improving agriculturalwater management developed in the Source-book. Technological solutions are generallyavailable, and ways to improve water manage-ment and farm management are known andcan be adapted. Successful investment is ulti-mately a matter of incentives—a matter ofaddressing the question, “What is the bottomline for the farmer?” The answer lies in privatemarkets, not public subsidies. New instrumentsbeing developed can offer a market-basedapproach to paying upstream farmers for goodnatural resource management in the commoninterest (chapters 2 and 3).

Water charges are often contentious, but ade-quate cost recovery to pay for good service forfarmers is a key element in improving invest-ment outcomes. This can be best achievedwhere the institutional framework makes serv-ice providers accountable and efficient andwhere user associations have a positive effecton recovery (chapter 1).

Often, lack of clear water rights, particularly forgroundwater, drives excessive consumption andoverirrigation. Definition of water rights is, in prin-ciple, a strong incentive to efficient use. If waterrights are tradable, water markets can develop,helping intersectoral transfer and optimizing eco-nomic incentives by raising the market price tomatch opportunity cost. However, there is oftendisagreement on the subject of water rights, par-ticularly where there is cultural reticence andweak governance. In most countries water rightsare a long-term solution (chapter 2).

Increasing Investment Returns

Many approaches in the Sourcebook promisemore income from better use of water; somepromise more income for less water. Some com-plementary investments such as conjunctive usepay particularly high returns. Increasing netreturns to farmers is the main incentive to invest-ment. Ultimately it is this potential to generate“more income for less water” that justifies invest-ment. Already, many farmers finance all theirown on-farm investments in, for example, micro-

irrigation. As diversification continues, driven bymarket forces, farmer investment will grow. Thus,the policy and incentive environment for privateinvestment is key (chapters 1 and 3).

Investment in large-scale irrigation should havehigh returns because of economies of scale,especially where investment is in improvementof existing systems. However, despite the avail-ability of cost-effective technology for modern-ization, results of improvement projects havenot always been satisfactory. Successful invest-ment in irrigation modernization requires a sys-tematic benchmarking approach to rankinvestments according to their contribution tothe service delivery goal of cost-effective andtimely water delivery. In the case of investmentssuch as watershed management or dams, bene-fits are too often understated, and investmentpreparation needs to ensure that all benefits aretaken into account (chapter 3).

The quality of Bank lending for agriculturalwater can be improved not only by the applica-tion of good practices, but also by the appropri-ate choice of lending instrument from the widerange available (see the section on Lessons andNext Steps below). Quality should beimproved, too, by the application of Bank safe-guard policies, which were designed not as aconstraint but as an aid to investment, to inte-grate environmental and social issues into proj-ects, and to support participatory approachesand transparency—all requirements for qualityinvestment (chapter 9).

PUTTING TECHNOLOGY TO WORK

With irrigation efficiencies worldwide wellbelow technical maxima, pressurized systemsand protected agriculture still occupying only asmall area, low-value staples predominating incropping patterns, and agricultural yields andfarmer incomes well short of potential, thescope for investing in efficiency gains is enor-mous (chapters 3 and 4).3

There is “more technology available than weknow what to do with” (box 1). Technology toimprove water service on major schemes is well


11

known and available; on-farm technologies suchas piped distribution, drip, and bubbler arewidely available and becoming more affordable;many water management and crop husbandryimprovements are known; drainage, droughtmanagement, and flood control technologies areall well developed; and technology exists forwatershed management and for even the mostunpromising of marginal rainfed systems. Muchtechnology already exists and only needs to beput to work. Adoption of water-saving technolo-gies has been slow and performance belowpotential. Adoption requires knowledge, reliablewater service, and an economic environmentthat provides undistorted incentives, manageablerisk, and access to product and credit markets.Ultimately, farmers will adopt new technologywhen it is shown to increase incomes andreduce risk, and when there is market access.However, the intensification needed to feed theworld and to raise rural incomes in comingdecades cannot rely only on existing technolo-gies; the size of the increase needed creates afuture research agenda on water and land pro-ductivity, both for irrigated and rainfed produc-tion (chapters 1, 3, 6, and 8).

OPERATIONALIZING INTEGRATED APPROACHESTO AGRICULTURAL WATER MANAGEMENT

Successful investment in agricultural waterrequires an integrated approach to the differentinputs to the production system—soil, water,agronomy. Many examples are discussed in theSourcebook—integrated water-saving approachesto on-farm management; supplementary irrigationand conjunctive use; combined water and soil fer-tility management; and integrated approaches tocombating drought, salinity, and floods. At policylevel, agricultural water management investmentsand incentives have to be integrated within over-all agricultural policy, both on the input side(with polices for research, extension, fertilizer,investment, and input support) and on the outputside (with policies for transport, market develop-ment and trade, agricultural prices, and protec-tion). Integration is also imperative at the level ofwater resources management, where bulk water,irrigation, drainage, wastewater, and floods allhave to be managed within basin plans that

ensure intersectoral coordination, allocative effi-ciency, and social and environmental protection(chapters 1, 3, and 6).

MAKING PARTICIPATORY MECHANISMS MORE EFFECTIVE

Farmers in rainfed cropping, traditional irrigation,or watershed management traditionally workedtogether, and farmer organization is recognizedas a powerful force for improving management.The Bank’s effectiveness in implementing partici-patory irrigation management and helping userassociations to develop has been rated highly byits Operations Evaluation Department (OED)(World Bank 2002). Participation is a key elementin successful investment for poverty reductionthrough agricultural water management. TheSourcebook gives many examples of how farmerinvolvement (including women’s involvement)can also improve investment outcomes in otherareas, including policy making, technologydevelopment, intersectoral transfer through waterrights and water markets, community-drivendevelopment (CDD) approaches to small-scaleirrigation and watershed management, privateirrigation (supplementary irrigation, groundwatermanagement, conjunctive use), and droughtmanagement (chapters 2 and 7).

TARGETING POVERTY REDUCTION IMPACTS

The Bank’s OED has found irrigation projects tobe effective in reaching the poor, provided thatmacroeconomic policies are conducive (WorldBank 1994). However, as intensification proceeds,it is the better-off farmers who benefit most,because they can finance on-farm investments,

OVERVIEW

• Large scheme irrigation improvement (chapter 3)• On-farm improvement (chapter 3)• Conjunctive use (chapter 4)• Drainage technology (chapter 5)• Reuse of treated waste and drainage water (chapter 5)• Supplemental irrigation (chapter 6)• Groundwater recharge (chapter 8)

Box 1. Some Technologies and ManagementPractices Discussed in the Sourcebook

12

assume risk, and access knowledge and informa-tion services. Care is needed to ensure a pro-poorelement in investment programs, because apurely market-driven approach will favor the bet-ter off. To offset this, irrigation investments can betargeted at the poor. For example, priority can begiven to small-scale irrigation and water conser-vation investments, which are more pro-poor andcharacterized by high flexibility and rapid imple-mentation (chapter 3).

Some investments (for example in supplemen-tary irrigation, infrastructure, and marketdevelopment) described in the Sourcebookalso help reduce risk for rainfed farmers.Other investments to help the poor includeimproving market access and better manage-ment of environmental risk, including water-shed management approaches and droughtand flood management (chapter 6).

MANAGING WATER FOR SUSTAINABILITY

The Sourcebook covers a range of environmen-tal investments in agricultural water manage-ment. Recovering control over groundwaterrequires user and government commitment, anincentive structure that favors conservation andefficiency, and a governance system that allo-cates and regulates rights. There are few success-ful examples of groundwater overdraft beingbrought under control, but as resource-miningproblems grow worse, this could be a significantinvestment area. In drainage, the economic logicis clear—the cost of “saving” an irrigated hectarethrough drainage is less than $1,000, comparedwith more than $6,000 to create a new irrigatedhectare. Few countries are yet awake to thiscompelling case for investment in drainage, butthose that are—the Arab Republic of Egypt andits participatory drainage program, for exam-ple—are benefiting. In watershed managementinvestments, integrated and participatoryapproaches with a focus on poverty reductionare working (chapters 4 and 5).

LESSONS AND NEXT STEPS

This section of the overview summarizes someof the lessons learned from the Sourcebook and

gives guidance on how to put the knowledge towork in policy analysis, technical assistance,and—above all—lending.

SOURCEBOOK LESSONS

Two principal areas of investigation areaddressed in the Sourcebook: policy and institu-tional reforms, and investment, technology, andmanagement practices. Much of the material isfamiliar, and the value added lies in bringing itall together in a systematic way within a singlepublication. Among the well-known elementson the policy and institutional reforms fronttreated in the Sourcebook are solutions to prob-lems of sector governance: decentralization,participation, and the emphasis on private sec-tor involvement and the role of markets. Theneed for an integrated approach in agriculturalwater investment is another familiar element,and the Sourcebook emphasizes integration notonly within the context of the whole rural mar-ket economy, but also as part of the hydrologi-cal and overall ecosystem, and as a componentof the macroeconomy. One aspect of this needfor an integrated approach is the insistencethroughout the Sourcebook on the enablingenvironment, particularly input and output mar-kets and prices, financial markets, and riskreduction for the poor: participation, landtenure, water control, disaster management.

Regarding investment, technology, and manage-ment practices, the Sourcebook confirms thatthere is a broad array of technology available.For large-scale irrigation, combinations of man-agement and investment can greatly improvethe cost-effectiveness of water service. For smallfarmers, low-cost technology is widely available,and there are technical solutions for even themost marginal land and water situations.

Some of the main lessons for investment emerg-ing from the Sourcebook are briefly summarizedin the following paragraphs.

TRADE AND MARKETS PLAY A KEY ROLE IN IMPROVING

AGRICULTURAL WATER INVESTMENT. The Sourcebookunderlines the role of trade and markets in driv-ing technology adoption, investment, andgrowth, even for smallholders. The lesson is that


13

policy for agricultural water has to be analyzedwithin an integrated framework that includestrade and market development policy, and thatinvestments may be needed to promote marketdevelopment.

ADEQUATE COST RECOVERY AND GOVERNANCE

IMPROVEMENTS ARE CRITICAL FOR SUSTAINABLE IRRI-GATION MODERNIZATION. The Sourcebook showshow adequate cost recovery is key to ensuringefficient water service, and how this has to bematched with accountability and cost-effectivewater supply on the part of the service provider.The lesson is that investments in irrigation mod-ernization need to be accompanied by both acredible cost-recovery strategy and by gover-nance improvements that ensure accountability,and by least-cost and efficient service delivery bythe service provider.

THERE ARE NEW TOOLS TO HELP IMPROVE INVEST-MENT QUALITY. Investment quality is a wide-spread concern, and the Sourcebook providessome tools and orientations to help improveoutcomes and impacts. These include a rapidappraisal benchmarking tool to help focus irri-gation modernization investment on cost-effec-tive service delivery and a tool to plan fordrainage investments integrated within a basinapproach. The lesson is that tools are avail-able—or can be developed—for an output-based approach to investment design.

INVESTMENT IN TECHNOLOGY NEEDS TO BE BACKED

BY A CONDUCIVE INCENTIVE FRAMEWORK. There isdisappointment with modernization programsin large-scale irrigation, and more generally avast gap between potential and actual perform-ance in irrigated agriculture. The finding is thatthere is a great deal of technology that can beapplied but is underused at present, both onlarge schemes and on-farm, where supplemen-tary use, conjunctive use, protected agriculture,agronomic improvements, and drainage havegreat potential for improving water use effi-ciency and farmer incomes. The Sourcebookfinds the causes less in knowledge and technol-ogy transfer capability than in distorted incen-tive frameworks and markets, which reducefarmer motivation and increase risk. The lessonis that investment in crop intensification and

diversification has to look not only at technicalsolutions, but also at the incentive structure andmarket environment.

INTEGRATION IS A KEY THEME ACROSS THE WHOLE

RANGE OF WATER INVESTMENTS. The role of wateras just one input in complex productionprocesses is reflected in the Sourcebook’s insis-tence on integration of irrigation system mod-ernization and farming intensification, on theneed to integrate technical packages (soil,water, crop management), and on integration oftechnical and market aspects. The Sourcebook’sunderlining of the need for integration in multi-purpose investments such as dams anddrainage reflects a more complex aspect ofwater: its multisectoral and multi-institutionalcharacter and the widespread externalities asso-ciated with its use. The lesson is that all agricul-tural water management investments have toconsider integration aspects within the produc-tion system and within the agricultural sector,but also integration of agricultural water usewith other uses and users and their representa-tive stakeholders and institutions, together withenvironmental and social externalities.

PARTICIPATION IMPROVES THE QUALITY OF INVEST-MENTS. Many contributions to the Sourcebookunderline the value of participation in improvinginvestment quality, developing technology, influ-encing policy, and improving ownership acrossthe board. One insight is that the social and envi-ronmental safeguards, with their transparencyrequirement, can be a mechanism to improveparticipation and ownership of investments. Thelesson is that participation, properly adapted andmanaged, improves quality and ownership acrossthe whole range of investments, innovations, andinstitutional development.

AGRICULTURAL WATER MANAGEMENT IS A VITAL

COMPONENT OF POVERTY REDUCTION STRATEGIES.The Sourcebook documents the wide availabil-ity of technologies that can help povertyreduction in both irrigated and rainfed situa-tions and the scope for making this technologyavailable and affordable for the poor. TheSourcebook also highlights the vulnerability ofthe poor to negative environmental and water-related impacts (drought, flood, watershed

OVERVIEW

14

degradation, groundwater depletion, surfacewater contamination) and the consequent highpoverty reduction impact of investing in controland mitigation. The Sourcebook also underlinesthe potential of market liberalization to drive pro-poor growth and the parallel need to target inter-ventions, because the better-off typically gainmore from free market approaches. One lesson isthat all agricultural water investments can bedesigned with a pro-poor approach but that tar-geted interventions may be needed. A second les-son is that certain types of agricultural waterinvestment such as watershed management willhave particularly high poverty reduction impacts.

NONCONVENTIONAL WATER IS AN AREA FOR FUTURE

INVESTMENT. The Sourcebook reviews the possi-bilities of harnessing nonconventional watersources such as drainage water, wastewater, andflood water. The lesson is that “unwanted water”is not necessarily a problem; it can be turned togood account as a resource, and investment islikely to increase.

Following this summary of some of the key les-sons for investment emerging from the Source-book, the next section examines ways in whichthe World Bank could put the Sourcebookknowledge to work.

PUTTING THE SOURCEBOOK INTO PRACTICE

GETTING THE POLICY, STRATEGIES, AND PROGRAMS

RIGHT. The Sourcebook describes the vital role ofpolicy and strategy processes and of governanceand incentives. It also describes how reformstake place, including the reforms’ political econ-omy aspects. Clearly, it is important for the Bankto accompany its partner countries along thesequence from policy determination to choiceof governance and incentive structures to sectorstrategy, and thus to choice of investments. Onekey instrument for following this sequence andfor adding value through policy dialogue is thenew Country Water Resources Assistance Strat-egy (CWRAS) introduced by the WRSS (seechapter 1). CWRAS links the Bank’s program tonational strategies, helps mobilize the linkagesbetween sectors, and ensures that an integratedapproach to water is incorporated into the

Country Assistance Strategy (CAS) investmentand sector work program. The agreed CWRASbecomes an agenda for a Bank-governmentpartnership in the water sector.

USING WORLD BANK INSTRUMENTS SELECTIVELY.For sector work, the range of Bank productshas widened. A CWRAS would normally pro-pose a balance among policy dialogue, capacitybuilding, technical assistance, and investmentlending. Of particular value for long-term devel-opment processes such as water sector reformis “programmatic economic and sector work”(PESW), which allows the Bank and the mem-ber government to agree on a multiannualstructured program of study and technical assis-tance, supporting reform but not necessarilytied to subsequent lending.

For lending, a broad range of instruments isavailable (table 2). As the table shows, a Devel-opment Policy Lending instrument may beappropriate for supporting policy reform. Whena reform can be better implemented graduallythrough stepwise revised regulations, a Pro-grammatic Development Policy Lending instru-ment could be appropriate. For long-terminvestment programs, the Adaptable ProgramLoan is indicated, or a Specific Investment Loanfor a free-standing investment project. If policyand investment components interact strongly, aHybrid Policy and Investment Loan, or twoindependent but highly correlated loans (suchas a Development Policy Loan and a SpecificInvestment Loan) can be used. A Learning andInnovation Loan may support pilot projects,and an Emergency Recovery Loan can be usedin the wake of disaster.

TARGETING SECTOR WORK,TECHNICAL ASSISTANCE, AND STUDIES TO STRATEGIC PRIORITIES

The program of sector work, technical assis-tance, and studies agreed by the Bank andgovernment as part of a partnership approachwill be determined by the country situation.Best-practice approaches will likely be char-acterized by a longer-term commitment onboth sides and by a structured approach to


15

issues, by a focus on governance and institu-tions, and by integration of water sectorissues with other sectors (rural development,agriculture, social, and environment). Thesecharacteristics of a Bank-government relation-ship would be mirrored within the Bank by asimilar long-term commitment to a reformprogram and by internal integration of theBank’s work on water.

The Bank and its government partners wouldalso seek and sustain partnerships with otherinternational institutions in the field of agricul-tural water management, including FAO, IFPRI,IWMI, ICID, and the International Fund forAgricultural Development (IFAD). Also impor-tant will be financing from the Global Environ-ment Facility (GEF) and partnerships withinternational institutions in the environmental

OVERVIEW

Nature of investment Instrument What does it do?

Major multi-institutional policy and Development Policy Lending It supports institutionally difficultinstitutional reforms (such as changes in (DPL) “quick-disbursing” policy reforms, agreed with thegovernance or incentive structures for tranched balance of payments government in a Letter ofagricultural 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 abe divided into phases with benchmarking. Policy Lending (PDPL) long-term reform programMay be used where issues are sensitive or through a series of DPLs overpolitical support for reform may shift. three to five years.

Investment program accompanied by Hybrid Policy and Investment Supports sector investments andreforms needed to ensure outcomes but Loan (HPIL) institutional development linked towhich 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 disbursingin 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 15to 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. Canwith monitorable outputs and outcomes. set reform conditions toReforms 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 testsubsequent scaling up. ideas for subsequent large-scale

investment.Typically rapid preparation, lighter procedures,two-year implementation period.

Source: Author.

Table 2 World Bank Lending Instruments for the Water Sector

16

field, including World Conservation Union(IUCN) and World Wildlife Fund (WWF).

REVIVING AND REORIENTING THE LENDING PROGRAM

The range of possible investments discussed inthe Sourcebook is vast (table 3). Each countrysituation will be different, but several commonapproaches can be proposed. A first investmentapproach is piloting for innovative solutions orfor adapting practice from elsewhere. For thistype of operation, the Bank has the advantageof international expertise and cross-countryexperience and a facility for learning and dis-seminating lessons. The Bank is also a develop-ment risk taker, with an appropriate lendingvehicle (the LIL). Areas suitable for pilotinginclude institutional innovations such as wateruser associations or basin committees, waterrights, and water markets. Piloting may also beappropriate for technically innovative solutionssuch as pressurized systems, integrated soil andwater management for smallholders, watermanagement by evapotranspiration quotas, andrisk management instruments such as cropinsurance or commodity risk management.

A second investment area that follows logicallyfrom a piloting approach is scaling up goodpractices and successful experiences. Here theBank’s comparative advantage is in its financingstrength and its ability to commit to longer-termprograms. Examples include work on institu-tional change, watershed restoration, integratedwater management, and new hardware andsoftware mixes.

A third area of business is in multifunctionaloperations such as drainage and wastewatertreatment and reuse, where the Bank has notonly the financial resources needed but a com-parative advantage in technical know-how andin integrating and convening power for themultiple institutions involved.

A fourth priority area for the Bank would beoperations that directly reduce poverty. TheBank has the advantage of an integratedpoverty reduction approach (in the poorer

countries through a Poverty Reduction StrategyPaper [PRSP], and in all countries through itsoperations in most sectors of the economy).Examples of poverty-reducing investmentsinclude flood and drought preparedness pro-grams, integrated programs that include supple-mentary irrigation, conjunctive-use or low-costpressurized systems, programs that integratesmallholders into the supply chain, and water-shed management programs.

A final area where the Bank can have a com-parative advantage is investment in technicalassistance at the cutting edge, for example pro-grams to evaluate water resources, groundwatermanagement programs, studies on multifunc-tional approaches to drainage, and benchmark-ing to improve irrigation service delivery.

MOTIVATING AND ENABLING BANK STAFF TOPROMOTE GOOD AGRICULTURAL WATER MANAGEMENT AND TO INVEST IN IT

Bank staff from all disciplines working on agri-cultural water management would benefit fromfocused training based on this Sourcebook.Training—and staffing—needs to be balancedbetween engineering and nonengineering con-siderations. Engineers are essential to trace outthe critical path to efficient irrigation servicedelivery, to manage the benchmarking process,to bring in technical innovations, to factor inenvironmental risks and management require-ments, and to set agricultural water manage-ment in its integrated context. Nonengineeringprofiles and skills requisites include gover-nance, institutional development, economics,environment, political economy, and social andcommunity-driven development expertise. Mostimportant, all staff should have the ability andmotivation to see agricultural water manage-ment in its bigger context of poverty reduction,growth of livelihoods, and wealth creation.

ADAPTING THE MESSAGES TO THE SPECIFICNEEDS OF EACH REGION

Analysis of the main issues in the six regions ofthe World Bank reveals that each may have aunique situation requiring a different focus and


17

OVERVIEW

Some typical operations mentioned in the Sourcebook Notes Investment type

Integration of smallholders into supply chains PilotsControlled drainageInstitutional 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 projectsWater resources development for supplementary irrigationWater retention, flood mitigation, and flood protectionDrought and salinity investmentsWatershed managementIntegrated water managementMultifunctional operations such as drainage, wastewater treatment,storage, and reuse

Water trade facilitation

Supplementary irrigation Alternative technologies withinPressurized irrigation with protected agriculture` integrated programsSmallholder irrigation under social fund and community-driven development approaches

Integrated land and water management

Policy analysis and related capacity building Technical assistanceWater resources assessmentBenchmarking to improve irrigation service deliveryCapacity building of farmer and extensionDrainage Integrated Analytical Framework (DRAINFRAME) multifunctional approach to drainage

Participatory irrigation management, water user associations, and irrigation management transfer

Water markets developmentGroundwater management programsWater rights governance systemsDrought and flood preparedness programsIrrigation and drainage researchRapid appraisals for irrigation modernizationWater swap programsMonitoring and evaluation systemsImpact evaluation

Source: Author.

Table 3. Some Investment Opportunities Described in the InvestmentNotes and Innovation Profiles

18

perhaps a different set of approaches. Table 4,based on consultations with the regions, givesan indicative picture of the messages that arepriorities in each region. The issues mentionedhave been raised by staff in the regions. Theyare, of course, not mutually exclusive, and willevolve over time and be adapted to specificcountry situations.

REFERENCES CITED

Burt, C. M., A. J. Clemmens, T. S. Strelkoff, K. H.Solomon, R. D. Bliesner, L. A. Hardy, T. A.Howell, and D. E. Eisenhouer. 1997. “Irriga-tion Performance Measures: Efficiency andUniformity.” Journal of Irrigation andDrainage Engineering 123(6): 423–42.

Jensen, M. E., ed. 1973. Consumptive Use of Waterand Irrigation Water Requirements. NewYork: American Society of Civil Engineers.

Rosegrant, M. W., X. Cai, and S. A. Cline. 2002.Water and Food to 2025: Policy Response tothe Threat of Scarcity. Washington, DC: IFPRI.

WHO (World Health Organization). 2000. “Gen-der, Health and Poverty.” Fact Sheet No. 25,June. Available on the Internet at http://www.who.int/mediacentre/factsheets/fs251/en/.

World Bank. 1994. Review of World Bank Expe-rience in Irrigation. Washington, DC: WorldBank, Operations Evaluation Department.

———. 2001. Making Sustainable Commit-ments: An Environment Strategy for theWorld Bank. Washington, DC: World Bank.

———. 2002. Bridging Troubled Waters: Assess-ing the World Bank Water Resources Strategy.Washington, DC: World Bank, OperationsEvaluation Department.

———. 2003. Reaching the Rural Poor: ARenewed Strategy for Rural Development.Washington, DC: World Bank.

———. 2004a. Agriculture Investment Source-book. Washington, DC: World Bank, Agricul-ture and Rural Development Department.

———. 2004b. Water Resources Sector Strategy.Strategic Directions for World Bank Engage-ment. Washington, DC: World Bank.

———. 2005a. “Agricultural Growth and thePoor: An Agenda for Development.” Direc-tions in Development Report. World Bank,Washington, DC. Draft, January.

———. 2005b. “Agricultural Water Manage-ment: An Agenda for Sustainable Develop-ment.” Directions in Development Report.World Bank, Washington, DC. In prepara-tion, January.

ENDNOTES

1. All references to “ton” in this Sourcebookdenote a metric ton.

2. Women form 70 percent of the rural poorand produce between 60 and 80 percent ofthe food in most developing countries(WHO 2000).

3. There are a number of water use efficiencydefinitions and measures. These are bestdiscussed and summarized in Jensen (1973)and Burt et al. (1997).


19

OVERVIEW

Middle Latin EuropeSub- East and America East Asia and

Saharan North and the South and CentralType 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 environmentLand tenure * * *Input markets and credit * *Output markets and prices * *

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.

Table 4. Some Indicative Agricultural Water Management Issues in Each Region

21

11BUILDING POLICIES AND INCENTIVES

OVERVIEW

This chapter presents a snapshot of different approaches to the many reform challenges in agriculturalwater management.There are key themes on process, particularly the need to be clear about goals and toorient 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 allprocesses; 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 aresometimes 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.

• 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

22

GETTING THE POLICY FRAMEWORK RIGHT IS ESSENTIAL

Governments are inevitably major players in thewater sector because water resources are in parta public good, because water is closely linkedto major public policy goals such as povertyreduction, and because water use creates wide-spread “externalities” (what one person doeswith water affects other people and the envi-ronment). Because agriculture is the majorwater user (80 percent worldwide and morethan 90 percent in developing countries), gov-ernment policy is critical to successful invest-ment in agricultural water management. (See IN1.1 on formulating policy and strategy, and IN1.2 on facilitating reforms with lending. See also“Preparing a National Agricultural DevelopmentStrategy,” Module 1 in the Agriculture Invest-ment Sourcebook (AIS).)

POLICIES ON TRADE AND MARKETS DRIVE GROWTH . . .

Open trade in agricultural products can con-tribute to growth in agricultural investment andincomes and promote more efficient and lesswater-intensive crop management practices andcropping patterns—fruit, vegetables, flowers.There are well-known constraints to freeingtrade internationally, particularly with the mostlucrative markets. Often, governments will cre-ate internal restraints to market development,too. Trade-driven growth needs to be accompa-nied by knowledge-intensive agriculture. Care isneeded on the environment—market prices donot reflect the social cost of soil and waterdepletion or pollution, so some regulatorymeasures may be needed.

Overall, evidence shows that properly managedliberalization drives growth and can benefit thepoor. Trade reform enhances both domesticfood security and national growth, and poorercountries benefit the most. Overall, investmentoutcomes are likely to improve where trade andmarkets are liberalized. At the household level,trade-driven modernization can be the engine ofgrowth and poverty reduction by reducing foodcosts and supply uncertainties, generatinggrowth through diversification and productivity

gains, increasing and diversifying incomes, andproviding employment. A case study from Zam-bia illustrates these effects. (See IN 1.1 on over-all growth policy, IN 1.3 on agricultural trade,and IP 1.2 on growth from smallholder irrigationin Zambia. See also “Reform of Agriculture Sub-sidy and Protection Policy,” and “FacilitatingEfficient Adjustment to Liberalized Trade” in AIS,Module 1.)

. . .AND THE INCENTIVE FRAMEWORK HAS TO MOTIVATE FARMERS

Incentives for agricultural water use are oftenidentified with water charges. But economicincentives understood, in a broader sense, as“all signals that affect farmer decisions” providethe essential framework for quality investmentin agricultural water. The incentive frameworkcan encourage water use efficiency, promoteenvironmentally friendly practices, reduce coststo government, and increase farmer income.The incentive framework should encouragefarmers to invest and manage their farms andwater resources efficiently and profitably. “Neg-ative” incentives, which increase the costs ofcurrent behavior and provide a push forchange, need to be matched with “positive”incentives, which facilitate change toward amore efficient, sustainable use of water. (See IN1.5 on economic incentives in agricultural wateruse. See also IN 3.1 on incentives for on-farmwater saving.)

COST RECOVERY CONTRIBUTES TO GOOD INVESTMENT

Properly managed, irrigation service charges area key element in ensuring good investment out-comes. Full recovery of operation and mainte-nance (O&M) costs ensures good water serviceand scheme sustainability and reduces relianceon government for subsidies or rehabilitation.However, the service provider must be heldaccountable within a well-designed governanceframework. Irrigation service charges haveproven less effective for encouraging water useefficiency. Volumetric pricing can affect use pat-terns, but it is hard to administer. (See IN 1.4 oncost recovery for irrigation.)


23

STRATEGY IS KEY TO A GOOD INVESTMENT PROGRAM

Agricultural water strategy translates pro-pooreconomic growth policies and improved effi-ciency and governance into action. Best practiceon strategy will bring all partners into a coherentframework for action. Strategy should showhow macro and sector policies are aligned; inte-grate land, water, and environmental strategies;and define institutional relations and develop-ment paths. It should set the legal agenda andmake the case for changes in the incentiveframework. Strategy should be linked to aninvestment program, which can be a means ofattracting donor and private investment. TheWorld Bank frequently takes part in participa-tory water strategy processes and has devised anew instrument—the Country Water ResourcesAssistance Strategy (CWRAS)—to link nationalstrategies and Bank programs. The CWRASshould set an agreed long-term strategic context,identify quality investments, and set out a policyand institutional agenda that will ensure soundinvestment outcomes. (See IN 1.1 on strategyand IP 1.1 on the CWRAS.)

INTEGRATION AND COORDINATION ARE VITAL

Water is a multisectoral and multi-institutionalbusiness, and integration of resource manage-ment and interinstitutional coordination arevital. For example, in China 12 separate depart-ments are responsible for some aspects of watermanagement at different levels. Coordination isvital within the Bank also, where interactionamong the various sector departments, the

country departments, and the anchor depart-ments of the Environmentally and Socially Sus-tainable Development Network requiresconstant attention. The new CWRAS is provinguseful in this kind of coordination. (See IN 1.1.For CWRAS, see IP 1.1.)

SOME TYPICAL INVESTMENTS

Investments in technical assistance couldinclude the following:

• Policy analysis

• Water resources assessment

• Capacity building

• Strategy formulation (including CWRAS)

Pilots may include the following:

• Weather-based insurance contracts

• Integration of smallholders into commercialsupply chains

• Development of financing and risk manage-ment instruments

These pilots could be undertaken in collabora-tion with the International Finance Corporation(IFC).

Project investments may include trade facilita-tion, and research and development (R&D).And finally, policy-based investments mayinclude major policy reform.

BUILDING POLICIES AND INCENTIVES

24

INVESTMENT NOTE 1.1

PREPARING A NATIONAL AGRICULTURAL WATERSTRATEGY

An agricultural water strategy (AWS) is a set of pro-grams that brings all partners into a coherent frame-work for action. It defines institutional relations anddevelopment paths, sets the legal agenda, mobilizessupport for changes in the incentive framework, setsthe investment program, attracts investment, andcreates a public-private dynamic. Participation bringsownership and strengthens prospects for implemen-tation. The strategy is a process, a product, and anaction plan. Lessons learned point to a need to bal-ance management improvements with investment ininfrastructure, to work across sectors, and to sustaindialogue over the long term.

As a multisector input with pervasive externali-ties, water requires rules and organization—legal framework, planning and allocationsystems, and economic instruments. The DublinPrinciples treat water as a social, environmen-tal, and economic resource within an integratedstrategic approach built through participatorymeans. Water overall is thus an area for publicpolicy and strategy.

Agriculture is the major water user and thereforea major component of water strategies at nationaland basin levels. An AWS is a set of medium- tolong-term action programs to support theachievement of development goals of equitableand sustainable wealth creation and povertyreduction (see box 1.1 for an example of povertyreduction as a key determinant of irrigation strat-egy in Tanzania). AWS also serves as a roadmapto assist government, civil society, and donors intranslating agricultural water policies into action.

INVESTMENT AREA

Agricultural water policies normally set sec-toral objectives in terms of macroeconomic

contribution, income and employment genera-tion, water use efficiency, and so on; define therole of the private sector (in investment andmarket development); define the public sector’srole (in planning, investment, management, andresearch); set incentive frameworks, includingcost-recovery practices; show how water useefficiency will improve,1 and guide investment,including the public investment program.

An AWS usually covers the following elements:

• National objectives and policies for agricultural water

• Resource assessment—agricultural water usein the national water resources strategy, linksto basin management, watershed manage-ment, rural-urban competition, groundwateroverdraft, water quality

• Information systems—data quality and avail-ability, monitoring and evaluation systems

• Technical aspects—improving water use effi-ciency and, where relevant, increasing supply

• Economic aspects—returns on capital, scopefor efficiency gains and efficiency incentives,supply- and demand-management instru-ments (such as water permits, volumetricwater charges, and water markets)

• Human aspects, including incomes andpoverty aspects

• Institutional and governance issues—rela-tion to governance systems for waterresources management, mechanisms forconflict resolution and intersectoral alloca-tion, water rights, public-private areas ofresponsibility, water user associations(WUAs), irrigation management transfer,local informal management groups andrules, and participation issues

• Financial aspects—investment framework,investment needs and financing, public andprivate investment, and subsidy and costrecovery


25

• Investment and implementation issues andkey constraints to future sector development

• Public health considerations, includingwater-related diseases

• Environmental aspects—covering surfacewater (stream flow variability, environmen-tal flow requirements, upstream and down-stream issues, sedimentation, groundwaterrecharge, runoff, and water quality issuessuch as drainage discharge and irrigation-related salinity); groundwater (includingdepletion, land subsidence, saltwater intru-sion, waterlogging, and groundwater qual-ity); and watershed management andrainfed farming issues

• Riparian and international issues

A successful AWS process starts with an assess-ment phase, which reviews policy goals, preparesan inventory of information and experience onthe elements discussed above, and then selects,analyzes, and ranks issues (box 1.2). It is typicallyfollowed by a review phase, in which stakeholderreaction and expert advice is brought to bear onthe assessment results. The strategy phase devel-ops and evaluates options and proposes a strat-egy, action plan, and investment program. Eachphase could take six months, and getting all part-ners to adopt a strategy may take a year. An AWSshould have a long-term vision (up to 25 years), amedium-term strategic framework (3 to 10 years),and a short-term action plan (2 to 5 years).

Good water strategy focuses on institutionalissues (including the legal framework), agricul-tural and irrigation sector organization, and pric-ing and markets but does not neglect the needfor infrastructural investment, particularly wherewater resources are undeveloped. A good AWSbalances supply and demand issues, is foundedon sound economics, and incorporates social andenvironmental aspects. It explicitly reconciles thecountry situation with the Dublin Principles in a“principled-but-pragmatic approach,” and adoptsparticipatory approaches for both preparationand action, thus strengthening ownership.


In Tanzania, water is vital to poverty reduction, food security,and growth. In the early 1990s, the country was approachingcrisis in agricultural water use.The World Bank and the gov-ernment agreed on the “TZ-River Basin Management andSmall Holder Irrigation Improvements Project,” which linkedinvestment in irrigation and basin management with participa-tory work on national water policy.

With project support,Tanzania developed a policy that treatswater as a social resource (participatory basin management), anenvironmental resource (environmental flow requirements), andan economic resource (water permits, volumetric water charges,water markets). It separated development from regulatoryfunctions. Project investments in irrigation increased wateravailability, mobilizing support for water resources manage-ment, and improving farmer incomes and cost recovery. Imple-mentation and participatory development of an irrigationstrategy are next.

Lessons from the project are summarized below:

• Linking irrigation investment to strategy developmentcreates synergies.

• Project support to strategy development provides neces-sary time and resources but requires follow-up after theproject.

• A sequence starting with water policy and followed byirrigation strategy is workable.

• An irrigation strategy can be prepared after an invest-ment period provides lessons.

Source: De Jong 2003.

Box 1.1 Tanzania’s National Water Policy and Irrigation Strategy

The strategic planning cycle can be seen as the answer to aseries of questions:

• Where do we want to be? Setting development objec-tives and key water policies

• Where are we now? Assessment and analysis of issues• How can we get where we want to be? Options and

choices• Which way is best? Strategy• How will resources be allocated? Investment plan• How do we ensure arrival at goals? Implementation and

control• How did we do? Monitoring and evaluation

Source: Adapted from LeMoigne et al. 1994.

Box 1.2 The Strategic Planning Cycle

26

Country situations indicate different paths tothe best strategy and strongest ownership. Inthe Republic of Yemen, where there is a lowlevel of governance, full participation wasessential. In Brazil’s stronger institutional envi-ronment, the Bank opted for sector work inpartnership with government (box 1.3). In Tan-zania, with uncertain prospects for dialogue,strategy work was anchored within an invest-ment project. All three approaches producedviable, well-owned strategies.

BENEFITS

An AWS brings all partners—national and exter-nal—into a framework for action. It defines insti-tutional relations and development paths, sets thelegal agenda, mobilizes support for changes inthe incentive framework, sets the investment pro-gram, attracts investment, and creates a public-

private dynamic. Participation brings ownershipand support for implementation.

Bank involvement brings cross-country experi-ence and networks, capacity building (includ-ing the World Bank Institute [WBI]), additionalfinance (including the Global EnvironmentFacility [GEF] and IFC), partnerships, andmacro- and microeconomic links. The focus ofAWSs on the Bank’s main missions—povertyalleviation, food security, governance, and pub-lic finance—leads directly into Country Assis-tance Strategies (CASs), Country WaterResource Assistance Strategies (CWRASs), andPoverty Reduction Strategy Papers (PRSPs).

POLICY AND IMPLEMENTATION

ADAPTING THE SCOPE TO THE KEY CHALLENGES.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), thestrategy covered groundwater management,rural-urban transfer, and water resources man-agement and sector governance.

METHODS OF STAKEHOLDER INVOLVEMENT. Partici-patory approaches cannot be uniform. Strategywork starts by analyzing stakeholders and waysto involve them. There are risks: when politicalor populist voices or weak national institutionsare given a forum, quality may be sacrificed toownership. Table 1.1 shows a framework forstakeholder participation.

INTELLIGENT TIMING. Timing is also crucial. In theRepublic of Yemen (box 1.4), the key step ofraising diesel prices was made in a ratchet fash-ion when the economy was prospering. In Jor-dan, irrigation sector adjustment was helped byimprovements in the regional political situation.

MULTIPLE MINISTRIES AND “SECTORS.” The DublinPrinciple—that the basin must be the unit ofanalysis and that land and water must be man-aged together—proves hard to put into prac-tice. Interests stemming from separateinstitutions and strategies for water resourcesmanagement, watershed protection, rangelandand forest management, and irrigation and


To prepare the next phase of irrigation investments in Brazil’ssemi-arid region, government, the private sector, and theWorld Bank revisited the agricultural water strategy in thelight of empirical observation and economic analysis.The Bankcontributed a study measuring returns from irrigation in termsof poverty, equity, growth, and employment.The study showedthe following:

• Irrigation took 10–15 years to reach full development.• The secondary employment and wealth impacts were

considerable.• Success depended on private management and innova-

tion.• Irrigation-related jobs demanded less investment than did

manufacturing jobs.• Irrigation investment reduced poverty and migration.• Land markets and administrative rules hindered private

development.• Research and technology transfers were inadequate to

support new crops.

From this analysis, an irrigation strategy was developed aimedat poverty, efficiency, and growth.The process set priorities tooptimize existing infrastructure, improve the institutionalframework, and promote private irrigation. It also helpeddevelop sequencing—intensification before expansion—andaction plans.

Source: Simas 2003.

Box 1.3 Brazil’s Regional Agricultural Water Strategy

27

agriculture may thwart application of the prin-ciple. Analysis of what is feasible for agricul-tural water must match broad water resourcesmanagement imperatives. In Tanzania, work-ing down from global and basin plans hassucceeded (box 1.1). In Brazil, working upfrom regional irrigation strategies has worked

(box 1.3). Managing the risk requires astuteidentification of issues and good dialoguethroughout the strategy process.

IMPLEMENTATION. Implementation has workedwell where government is committed, an over-sight body coordinates and ultimately validates, a


Level ofparticipation 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.

Table 1.1 Managing Participation

In 1996, the Republic of Yemen requested World Bank help in developing a water strategy. Given limited national capacity andthe 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 elementof the strategy.

The intervention was timely. Government was creating a water resources authority. Economic conditions were right—dieselprices, the main motor of groundwater overdraft, were rising, and a fiscal crisis was forcing a rethinking of public assistance toirrigation. Donors were promoting the Dublin Principles.

A participatory sequence began with working groups, dialogue, and analysis.Then a Bank paper was debated with supportfrom WBI. Preparation of a national strategy and an irrigation strategy culminated in a water law. Dialogue continued for fiveyears. Projects supporting the strategy were implemented in groundwater and spate irrigation, urban and rural water supplyand 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 carefullyexamined: women were consulted through the field review of rural water supply and sanitation that was carried out withinone of the supporting projects.Women’s representatives and women’s nongovernmental organizations also attended the mainworkshop at which strategy recommendations were discussed.The role of women features prominently in the strategy thatemerged 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 Bankstamina.

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.

Box 1.4 The Republic of Yemen: Strategy for Water and Agriculture

28

broad range of stakeholders participates, and anexpert team (including nationals) offers inputs.

RISK OF WORDS, NOT DEEDS. Strategy is the pointin policy making where nations allocateresources. A good AWS shapes institutionalbehavior and investment patterns. Throughoutthe process, care is needed to prioritize issues,keep solutions practical, ensure stakeholderownership, produce a viable action plan andinvestment program, and, above all, avoidvagueness.

RISK OF EXCLUSION. Even with good “participa-tion planning,” key stakeholders may be leftout. In the Republic of Yemen (box 1.4), deci-sions on groundwater are made by 100,000 wellowners. No groundwater management effortwill work if the users’ points of view are notunderstood. It is a mistake to imagine that apublic agency effectively voices their views.Special approaches may be needed. In theRepublic of Yemen, as a follow-up to a policystudy, a field pilot tested approaches to ground-water management.

RISK OF NEGLECTING SOCIAL AND ENVIRONMENTAL

ISSUES. In an AWS, analysis of the role of womenand the poor tends to be neglected. Environ-mental aspects are often discarded as too com-plex and troublesome. Inclusion of these keyaspects requires special effort.

LESSONS LEARNED ON SUBSTANCE

BALANCE HARDWARE AND SOFTWARE. Infrastructureand management have to be balanced in anAWS. This balance differs for each country. TheBank’s Water Resources Sector Strategy notesthat many countries lack hydraulic infrastructureand could invest in harnessing more availablewater, especially in Africa (World Bank 2004).This is a risky area, but an AWS should helpcountries choose and develop their hydraulicinfrastructure, putting development impact first.

ESPOUSE PRINCIPLED PRAGMATISM. Ten years ofexperience with the Dublin Principles shows thatit is hard to apply them to irrigation. Good prac-

tice points to the need for prioritized pragmatismthat aims to achieve efficiency, equity, and sus-tainability but which recognizes political process,vested interests, and implementation prospects.

KEEP AWSS LINKED TO WATER RESOURCES MANAGE-MENT STRATEGY. Because agriculture is the majorwater user, AWSs and water resources manage-ment strategies are interconnected and shouldbe developed together. This applies particularlyto arid countries such as the Republic of Yemen(box 1.4), where water demand from thirstycities and industry is growing. Mechanisms forintersectoral transfer will gain importance andmust be developed in a framework of IntegratedWater Resources Management (IWRM). Water-shed management should not be neglected.

DEMAND MANAGEMENT IS MORE THAN WATER

CHARGES. Water charges have sometimes domi-nated AWSs. In Jordan in the mid-1990s, theynearly undermined overall strategy. Balancingthis element with “positive” incentives, such astransferring ownership or management to users,should be considered.

LESSONS LEARNED ON PROCESS

AN APPROACH ACROSS SECTORS IS HARD TO PULL

OFF. Both in the Bank and in countries, generat-ing a multisectoral and integrated approach ishard. On the other hand, integrated teams docreate synergies that help implementation.

PARTICIPATION DOES STRENGTHEN OWNERSHIP.Experience with the Bank’s 1993 water strategyshows that participation does strengthen owner-ship. In Brazil (box 1.3), the demand-drivenstudy helped gain ownership of the AWS. In theRepublic of Yemen (box 1.4), the participatoryprocess and the WBI-supported disseminationprogram helped create broad support.

STAY IN FOR THE LONG HAUL. In natural resourcesmanagement, decades can pass from problemidentification to final resolution. AWS develop-ment and implementation require years ofstamina and consistency within the country andthe Bank. Governments think short term, and


29

even Bank commitments are short term. Teamschange—a CAS covers only three years. TheComprehensive Development Framework andPRSP have not resolved this problem, althoughCWRAS should help. The challenge is develop-ing context-specific, prioritized, sequenced,realistic, and patient approaches (World Bank2002). Sustained dialogue is essential. Consen-sus, once reached, must be locked in by anaction plan and investment program.

SEQUENCE PLANNING. The AWS process has tobe adapted to country situations. An AWS canbe prepared once a national water resourcestrategy is in place and after an investmentperiod provides lessons (as in Tanzania, box1.1). In other countries, an AWS is a precondi-tion for government and donors to invest inirrigation.

RECOMMENDATIONS FOR PRACTITIONERS

• General recommendations on process. Adecade of experience in AWSs suggests theneed to adapt processes to circumstances;prepare a plan to get stakeholder participa-tion; be issues oriented; prioritize; set practi-cable action plans and investment programs;start with success; adapt AWSs to broadereconomic programs (macro reforms, adjust-ment); and back champions.

• Manage the integration process within theBank, too. In preparing an AWS, it is vital tokeep the other water-using sectors involved,to ensure ownership by country departmentmanagement, and to plan for an integratedand long-term approach within the Bank. Thiscould include setting up and motivating anintersectoral team, persuading and updatingmanagement, and interacting with broaderBank processes such as CASs or PRSPs.

• Plan for social and environmental analysisas a central part of the process. Poverty,watershed management, and environmentalimplications should not just be add-ons.

• Plan for dissemination. A strategy is only afirst step in a long process toward impact.

The Bank should design disseminationplans with performance measures, budget,and a role for WBI.

• Managing subsidiarity and integration.Subsidiarity must be reconciled with theneed for an integrated approach. In anAWS, the watchwords are “think integrated”and “act pragmatically.”

INVESTMENT OPPORTUNITIES

The Bank requires that an AWS effect clarityon development goals, policy, and strategy;reconcile agricultural water use with overallwater resources management (and the DublinPrinciples); bring all partners into a long-termframework for action and investment; and bedeveloped through an ownership-buildingprocess.

In that vein, investments may include facilita-tion and dissemination, technical assistance forspecific studies, and implementation throughprojects.

REFERENCES CITED

De Jong, I. 2003. “Water and MacroeconomicGrowth in Tanzania.” Draft. World Bank,Washington, DC.

LeMoigne, Guy, Ashok Subramanian, Mei Xie,and Sandra Giltner. 1994. “A Guide to theFormulation of Water Resources Strategy.”Working Paper No. 263. World Bank, Wash-ington, DC.

Simas, J. 2003. “Social Impact and Externalitiesof Irrigated Agriculture in the BrazilianSemi-Arid Region.” Draft report for theWorld Bank, Washington, DC.

Ward, C., and A. McPhail. 1997. “Yemen: Towardsa Water Strategy.” Report for the World Bank,Washington, DC.

World Bank. 2002. Bridging Troubled Waters.Washington, DC: World Bank, OperationsEvaluation Department, Washington, DC.


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______. 2004. Water Resources Sector Strategy.Washington, DC: World Bank.

WORLD BANK PROJECTS DISCUSSED

Tanzania. “TZ-River Basin Management andSmall Holder Irrigation Improvements Pro-ject.” Closed. Project ID: P038570. Approvedfiscal 1996.

Yemen, Republic of. “Water Strategy.” Active.Project ID P041351. Approved fiscal 1996.

ENDNOTE

1. Agricultural water efficiency is defined asmeaning “more crop per drop” and includesimproved conveyance efficiency (less lossbetween source and field), improved in-fieldefficiency (more water reaches the plantroots), and economic efficiency (higherreturns per unit of evapotranspiration).

This Note was written by Chris Ward and reviewed by SarahCline,Timothy Sulser, and Mark Rosegrant of the InternationalFood Policy Research Institute (IFPRI).


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INVESTMENT NOTE 1.2

DEVELOPMENT POLICY LENDING TO SUPPORT IRRIGATION AND DRAINAGESECTOR REFORMS

Development Policy Lending (DPL) gives nationalgovernments an incentive to undertake the com-prehensive multiagency policy and institutionalreforms necessary to improve water resources andirrigation sector performance despite their highpolitical and economic transaction costs. Reformsof this nature might not be effectively addressed bysector investment projects alone, especially whenthe sector agency itself needs reform. In somecases, when there are strong cross-conditionsbetween policy and investment component dis-bursements, a Hybrid Policy and Investment Loan,or two independent loans (a DPL that is independ-ent but highly coordinated to a Specific InvestmentLoan) can be used. Moreover, if many revised regu-lations are required to achieve the reform out-comes desired, a Programmatic DevelopmentPolicy Lending instrument could be appropriate.

Water resources sector investment and manage-ment is undertaken in most developing coun-tries by large, “top-down,” “supply-driven”bureaucracies, using “command and control”organizational systems. The irrigation anddrainage (I&D) sector usually uses 60–80 per-cent of available water resources. Water is deliv-ered by costly assets under a low (or no) servicecost-recovery policy, which strains governmentfiscal capacity. The ensuing shortage of fundingfor O&M results in deferred maintenance andpremature deterioration and rehabilitation. Thissituation is often exacerbated by low personnelremuneration and chronic overstaffing, politicalinterference, rent-seeking focus on investmentprojects, and declining agency governance,accountability, and management efficacy.Addressing such problems requires a combina-tion of reforms in the policy, legislative, and reg-ulatory framework; in sector institutions andstakeholder participation; in agency structureand organization; and in economic instruments.Such comprehensive reforms are also often

needed to enable adoption of IWRM policies,strategies, and interventions. Macroeconomicpolicy and other reforms may also be requiredin other sectors for the reforms needed in thewater sector to be fully effective (for instance,for I&D affected by agricultural policies). Wher-ever “champion” leadership and political will forpolicy reforms affecting one or more sectors isstrong, the development policy lending instru-ment can be effective.

A WORLD BANK INSTRUMENT: DEVELOPMENTPOLICY LENDING

DPL CHARACTERISTICS. Development Policy Lend-ing is a World Bank lending instrument thatfocuses on policy and institutional reforms(World Bank 2004). It is regulated by Opera-tional Policy/Bank Procedure (OP/BP) 8.60,which replaced Operational Directive (OD) 8.60in August 2004 (World Bank 2004).1 It provides“fast-disbursing” deposits in tranches to a specialaccount in the national treasury as an incentiveto undertake institutionally difficult policyreforms. The government commits itself to theagreed reform program through a Letter ofDevelopment Policy (LoDP), signed by a seniorminister. The program design includes measura-ble indicators for monitoring progress duringimplementation and evaluating outcomes uponcompletion (for example, issuing of regulationsand establishment of participatory institutionsand new agencies). DPLs do not support sectorinvestments or agency expenditures but maysupport either balance of payments or specificsector-related imports such as food or agricul-tural or irrigation equipment (see Jordan in“World Bank Projects Discussed” at the end ofthis Investment Note). Consequently, DPLtranche disbursement is always conditional onthe government’s maintaining satisfactorymacroeconomic policies and performance. “Sat-isfactory” macroeconomic performance is ajudgment made by the International MonetaryFund (IMF) and/or a Bank Country Economist.Because of the complexity involved, no indica-tors are given in the Loan Agreement.

However, if a water law amendment or manyrevised regulations are required to achieve the


32

reform outcomes desired, a ProgrammaticDevelopment Policy Lending instrument,focused on a sector instead of the macroecon-omy, could be appropriate. A ProgrammaticDevelopment Policy Lending is an adaptable,medium-term approach. It involves an inte-grated medium-term framework of reforms,with notional amounts and dates linked to acountry’s policy and budget cycle. Within thisframework is a planned series of operations,phased to support the country in achieving itsreform program, with monitorable indicators ofprogress and triggers for moving from oneoperation to the next.

REFORM PROGRAM CONTENT. An agreed reformprogram outlined in a LoDP is derived from priorBank economic and sector analysis, prior sectorproject lending experience, and intensive dia-logue with the government, donors, and non-governmental stakeholders. A reform program

could include reforms such as national sectorpolicy revision; legislative and regulatorychanges; governance improvements (includingprovisions for stakeholder and gender participa-tion); institutional and organizational reform toaddress market failures; change in financialincentive regimes; improvement of monitoringand safeguard arrangements; and encourage-ment of private sector participation (box 1.5).Thus, preparation and execution of the reformprogram usually involves many other ministriesand agencies in important sector roles.

LENDING INSTRUMENT ALTERNATIVES. The selectivepolicy and institutional interventions includedin Specific Investment Loans (SILs) are limitedand not always effective because sector agen-cies cannot reform themselves and usuallyfocus on infrastructure investment componentsto the neglect of “difficult” policy and institu-tional reforms. This often occurs when the 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 reformsas follows:

• Policy, institutional, regulatory, and management information system frameworks. Revision of legislation and organization toinclude a National Water Council with stakeholder members; a National Water Resources Policy (a water rights andwater use licensing framework); representation of nongovernmental stakeholders on provincial and river basin waterresources councils and establishment of such councils in eight provinces and their river basins; a national hydrology man-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 provincialbasin management units in key basins in eight provinces; and establishment of river basin management corporations infour economically strategic basins.

• Improved water quality management institutions. Includes improved framework for water quality management and pollutioncontrol; tax incentives for corporate investment in wastewater treatment facilities; payment of effluent discharge fees bypolluters; 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 forthe establishment of empowered self-financing WUAs and WUA federations (WUAFs) and their establishment in at leasteight provinces; revision of the roles and responsibilities of provincial and district irrigation agencies to provide supportservices to WUAs and WUAFs; sustainable mechanisms for financing of irrigation O&M by government, WUAs, andWUAFs; and a “demand-based” WUA Irrigation Improvement Fund for financing of rehabilitation of networks underWUA/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.

Box 1.5 Indonesia Water Resources Sector Adjustment Loan*

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is the borrower’s main concern, while the Bankrequires governance and economic reforms toensure that investments remain sustainable. AHybrid Policy and Investment Loan (HPIL)could be used instead of a DPL if the reformsare not too comprehensive (for example, involv-ing new regulatory concepts and paradigms).An HPIL supports sustainable sector investmentprograms and improvements in institutionalcapabilities that are closely linked to policyreforms (for example, major sector issues andpolicy related to investment productivity). AnHPIL can be appropriate if the reforms are aprecursor to an investment program to ensuretheir efficacy and sustainability; and/or if policyreform and the investment can unfold together,without allowing the investment infrastructureto take precedence over and compromise thereform process. HPIL policy reforms (such asdecrees to raise water charges or reorganize anagency), if they must precede asset investments,should not take a long time. Strong cross-condi-tions between policy and investment compo-nent disbursements are needed for HPILsuccess. However, HPILs are generally “discour-aged” by Operation Policies and Country Ser-vices, since their hybrid nature makes them toocomplex and may slow down the wholeprocess. Hence, two independent but highlycoordinated loans, namely, a DPL and a SIL,may be better suited in these cases.

The effectiveness of a DPL, contrary to theBank’s sector investment instruments, residesin the fact that it allows amendment of nationalsector laws and regulations during projectimplementation. This “power” does not have tobe interpreted as a means of imposing reformsby the donor. On the contrary, the new OPinsists on “country ownership” of the reformproposal and implementation process. This iswhy a DPL involves the highest levels of gov-ernment, whose collective will can foster inter-sector coordination. The process ofintergovernmental dialogue while preparingthe reform program and reaching consensus onits content creates mutual understanding andstrengthens intergovernmental “ownership” of

the outcomes. It also facilitates coordination ofsubsequent sector lending by all donors.

POTENTIAL BENEFITS AND IMPACTS

The outcomes of a DPL in the agricultural watersector are mainly of an institutional nature,residing in the formal and informal rules andpractices affecting economic, developmental,and regulatory activities that govern, constrain,or change the behavior and actions of individu-als and organizations. Its beneficiaries are thenational or regional economies that benefitfrom improved sector performance; the sectoragencies whose operational environment andincentives are more conducive to better man-agement and quality assurance; and the variousbeneficiaries of sector investment and waterservices, as well as other stakeholders affectedby more socially and environmentally sustain-able sector management. In cases such as aWATSAL, where reforms introduce legislationand institutions for water use rights togetherwith stakeholder participation and empower-ment, social capital is created, benefiting soci-ety as a whole.

If some of the policy and institutional rootcauses of poor sector performance are not alsoaddressed (for instance, poor governance ofsector agencies), sustainable benefits may beunlikely. Policy reforms can adversely affectstakeholder groups nationwide: for example,elimination of agricultural subsidies and importprotection, together with water price increasescan reduce farmer income benefits as in the Jor-dan Agricultural Sector Adjustment Loan (ASAL)(see Jordan in “World Bank Projects Discussed”at the end of this Investment Note). Thus,reforms may have to include mitigation policies(for example, establishing a subsidizeddemand-based fund to assist WUAs to whichmanagement of unrehabilitated irrigation net-works have been transferred) or alternativeinstruments to achieve the reform.2 Wheresome reforms are implemented gradually (forinstance, incremental water charge increases), aparallel project may be used to monitor reform


34

impacts and make corrections (see Jordan in“World Bank Projects Discussed”).


LOAN PERIOD. The loan period is the maximumtime needed to deliver all outcomes listed inthe program design. For reforms that are pri-marily government administrative decisions(examples include formulation of a policy,agency reorganization, and increased waterprices), a shorter period of one to two yearsmay be adequate. For reforms requiring clear-ance of new regulations, an intergovernmentaland/or parliamentary process, up to three tofive years, is advisable.

LOAN AMOUNT. The loan amount depends on theamount of specific budget support needed. Forbalance of payments support, the loan amountmay be determined by the funding needed tosupplement other adjustment operations in theBank’s CAS undertaken in collaboration with theIMF and a country donor aid group, and by thenature of the reforms in terms of implementa-tion difficulty and political transaction costs. Forimport support, the loan amount and tranchingwould be related to the expected foreignexchange cost of the sector’s import packageneeds over the loan period. For multitrancheDPLs, the individual tranche amounts are relatedto the above considerations; however, it is pru-dent to reduce the Bank’s risks by end-loading,making the last tranche amount the largest one.

ENVIRONMENTAL AND NATURAL RESOURCES ASPECTS.According to the new OP/BP 8.60, the Bankdetermines whether specific country policiessupported by the operation are likely to signifi-cantly affect the country’s environment, forests,and other natural resources. For country policieswith likely significant impacts, the Bank assessesin the Program Document the borrower’s sys-tems for reducing adverse effects and enhancingpositive effects, drawing on relevant country-level or sectoral environmental analysis (under-taken by the country, the Bank, and thirdparties). If there are significant gaps in the analy-sis or shortcomings in the borrower’s systems,the Bank describes in the Program Document

how such gaps or shortcomings would beaddressed before or during program implemen-tation, as appropriate.

Upstream analytic work on the environmentand natural resources can be useful to supportthe preparation of development policy loans.Strategic Environmental Assessment (SEA), inparticular, concentrates on policies and institu-tions within a specific sector. SEA considers thelinkages between a given sector (agriculture,for example) and the environment and naturalresources, reviews the policy and institutionalframework for dealing with environmentalissues within the sector, assesses institutionalcapacity, and may make recommendations forreforms of policies or institutions.

This assessment should be based on a crediblenational public consultation process involvingall stakeholders. The WATSAL SEA is a “goodBank practice” example of this process andmethodology (see Indonesia in “World BankProjects Discussed”).

GOVERNMENT COMMITMENT AND SUSTAINABILITY. Toensure government commitment, it is good prac-tice to ensure that some reform actions areundertaken prior to loan negotiations—for exam-ple, the promulgation of an irrigation manage-ment reform policy or the establishment of aninterministerial coordination team. Reform sus-tainability risks are also mitigated if the reformprogram includes establishment of organizationalunits or other concrete results (such as waterprice increases) during the loan period (box 1.5).

IMPLEMENTATION ARRANGEMENTS. Policies andregulations should be prepared by a govern-ment-appointed multidisciplinary intergovern-mental task force (see Indonesia in “WorldBank Projects Discussed”).

As part of its country dialogue, the Bank advisesborrowing countries to consult with and engagethe participation of key stakeholders (includingsenior agency professionals, some representa-tives of nongovernmental organizations [NGOs],and civil society) in the country formulating thecountry’s development strategies.


35

The task force would be chaired by a “neutral”entity (such as the National Planning Board)reporting to a steering committee of heads of theministries involved, who may refer to the inter-ministerial coordination body to resolve majorpolicy issues. Such an arrangement improves thetransparency of the reform process and protectsthe interests of weaker agencies.

LESSONS LEARNED

The principal lessons learned from SECALs, suchas Indonesia’s WATSAL (box 1.5), that can beapplied to new DPL instruments are as follows.

• Reforms cannot be imposed; those that aremay create roadblocks. The Bank’s credibil-ity is harmed when it supports unrealistictargets linked to the wrong instruments. TheBank has to be sensitive to the reform’spolitical economy, acceptability, and timing.When the conditions are right for a particu-lar issue, reform can go quickly. If, by con-trast, a reform is unacceptable (owing to, forinstance, cost recovery, water rate increases,or volumetric pricing), other ways should besought to achieve the reform objective. Ifthis cannot be done, the DPL operationshould not be pursued and the Bank shouldcease sector investment support until condi-tions are conducive to reform and invest-ment support.

• Not everything can be done at once—it isbetter to have a sequence of more narrowlyfocused goals ranked according to theextent of borrower ownership. Sector oper-ations should be as simple as possible,while consistent with achieving their goals.This problem occurs when both agriculturaland I&D reforms are pursued simultane-ously, and the linkages cause adverseimpacts, as occurred with the ASAL in Jor-dan. Large reform agendas also take a longtime, and a balance must be struck betweenthe need for sector reform and the govern-ment’s desire for macroeconomic support.

• Revision of a law should be avoided, if pos-sible, unless it can be scheduled through

the use of a Programmatic DevelopmentPolicy Lending (PDPL). Details in a waterlaw should be amended, instead of draftingan entirely new law addressing all issuesand introducing new principles to enableIWRM. Presentation of a new law to parlia-ment invites extensive debate, and itsuncertain outcome may conflict with thegovernment’s prior LoDP commitments. Ifgovernment desires a new law instead ofamending the existing one (as was the casewith WATSAL in Indonesia), a PDPL frame-work should be sought for the introductionof those reforms. The regulations neededfor the new law may be issued during a sec-ond PDPL.

• A PDPL instrument should be used if polit-ical conditions are likely to change andundermine basic assumptions underlyingthe reform program. If major governmentsystem changes are likely (such as theintroduction of administrative and fiscaldecentralization in Indonesia during theWATSAL), use of a PDPL approach reducesthe Bank’s operational risks.

• Successful piloting of controversial aspectsof a reform program prior to, or during theloan period creates confidence and gener-ates political support. The chances ofreform success are enhanced if untried con-cepts (such as irrigation management trans-fer and empowered federations of WUAs)are first piloted under a parallel project or aLearning and Innovation Loan.


These lessons have implications for practition-ers—they illustrate the flow of policy from thetask force to the agencies charged with puttingpolicy into practice.

• Implementation organization. The govern-ment’s task force should have a small secre-tariat for organization, reporting to thesteering committee and assisting line agen-cies in processing outcomes of reform. Thetask force should also manage the public


36

consultation process, prepare the SEA, andhire NGOs to conduct SEA consultations.

• Reform outcome processing. According tonational law and public administration reg-ulations, the responsible line agencies willimplement the outcomes within their man-date (for example, issue of regulations andreorganization). In preparing their legalinstruments, the line agencies would usethe draft documents prepared by the taskforce and cleared by the steering and inter-ministerial committees and submit them toany formal interagency review processrequired by law.

• Funding implementation. For a majorreform program, funding is needed for taskforce expenses (examples include in-coun-try travel, lodging for working meetings,and conduct of public consultations). Thisbudget may be derived from ongoing sectorprojects, donor contributions, or a parallelTechnical Assistance Loan that comple-ments adjustment operations by supportingspecific tasks related to their preparation orimplementation.

• Consultants. Since reform “ownership” iscrucial, preparation of reform deliverables(such as draft laws and regulations) by expa-triate consultants should be avoided becauseit does not build domestic policy analysiscapacity. Expatriate resource persons shouldbe used sparingly to advise on subjects forwhich little country experience exists (forexample, a tradable water rights framework).Outcomes that are “owned,” that can beimplemented, and that will achieve their pur-pose are preferable to “cutting edge” perfec-tion in international theories or practice thatwill be shelved or disregarded.

• Bank supervision. A local expert Bank taskteam would be desirable, composed of staffand consultants fluent in the local language.This team would serve as resource personsand advisers on questions about the taskforce’s ideas and proposals. However, finaldecisions regarding Bank inputs rest with

the task force and government providedthat they are consistent with the LoDP. TheBank’s task team (and the task force)should be vigilant against unilateral last-minute “changes” to accommodate specificagency views without steering committeeapproval, which could jeopardize tranchecompletion.

REFERENCES CITED

World Bank. 2004. “From Adjustment Lendingto Development Policy Lending: Update ofWorld Bank Policy.” August, World Bank,Operations Policy and Country Services,Washington, DC.


Indonesia. 1999. “Sectoral EnvironmentalAssessment—Water Sector Adjustment Loan(WATSAL).” Inter-Agency Task Force onWater Policy Reform, Jakarta, March. Onlineat http://www-wds.worldbank.org/servlet/WDS_IBank_Servlet?pcont=details&eid=000094946_9908040537116.

Indonesia. “Water Resources Sector AdjustmentLoan Project.” Closed. Project ID: P064118.Approved: 1999. Within World Bank, avail-able at http://projportal.worldbank.org.

Indonesia. 1999. “Report and Recommendationof the President of the IBRD to the Execu-tive Directors on a Proposed WaterResources Sector Adjustment Loan in theAmount of USD300 Million to the Republicof Indonesia.” Report No. P 730 4-IND. April23, World Bank, Washington, DC. Availableonline at http://www-wds.worldbank.org/servlet/WDSServlet?pcont=details&eid=000094946_99051205341366.

Jordan. 2003. “Performance AssessmentReport—Jordan—Agriculture Sector Adjust-ment (Loan No. 3817-JO) and AgricultureSector Technical Support Project (Credit No.3818-JO).” January 31, World Bank, OED,Washington, DC. Available online athttp://www.wds.worldbank.org/servlet/


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WDS_IBank_Servlet?pcont=details&eid=000094946_03031804015520.

SELECTED READINGS

World Bank. 2004a. “OP/BP 8.60—Develop-ment Policy Lending.” World Bank Opera-tional Manual. Washington, DC: WorldBank. December. Available online at http://wbln0018.worldbank.org/Institutional/Manuals/OpManual.nsf/tocall/3371A4146FAB65F985256EEF0066C54F?OpenDocument.

______. 2004b. “Good Practice Note for Develop-ment Policy Lending.” January 6, World Bank,Operations Policy and Country Services,Washington, DC. http://web.worldbank.org/servlets/ECR?contentMDK=20338364&sitePK=388759.

ENDNOTES

1. The new OP/BP 8.60 uniformly applies toDPL as a single lending instrument: theBank has discontinued the use of specialnames and acronyms for Sector AdjustmentLoans/Credits (SECALs/SECACs), Rehabilita-tion Investment Loans (RILs), and Program-

matic Structural Adjustment Loans/Credits(PSALs/PSACs).

2. In a water-scarce economy such as Jordan’s,the linkage of adjustments in agriculturalpolicy to adjustments in water sector policyis an essential one. This linkage has, how-ever, not only positive aspects (for example,market liberalization permitting and encour-aging water conservation measures) butalso less positive ones (for example, wheremarket outlets fail to develop, it may be dif-ficult to pursue demand management forwater conservation through increases inwater charges). Where demand manage-ment through water tariff increases is prob-lematic, alternative measures that contributeto the same objective can be used, such ashanding over management responsibilitiesand costs to farmers (see Jordan in “WorldBank Projects Discussed”).

This Note was prepared by Theodore Herman with inputsfrom Richard Reidinger and reviewed by Sarah Cline,TimothySulser and Mark Rosegrant of IFPRI; and by Hagie Scherchandof Development Alternatives, Inc. Following the World Banknew OP/BP 8.60 (Development Policy Lending) the Notehas been modified with inputs from Erick C. M. Fernandes,Jan Bojo, and Nalin Kishor.


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INVESTMENT NOTE 1.3

AGRICULTURAL TRADE,WATER, AND FOOD SECURITY

In coming decades, water-scarce countries willneed to increase the value added of producegrown with irrigation water and achieve food secu-rity through exports.This switch implies replacingirrigated cereals production with irrigated horticul-tural products. But client countries see the multi-lateral and bilateral trade agendas in agriculture asself-serving.They point to the lack of market accessfor agricultural commodities in high-income coun-tries and the agricultural subsidies in developedcountries that depress world market prices andprovide a powerful rationale for maintaining sup-port for protected water-intensive activities. (Suchactivities include irrigated cereals production, live-stock, sugar, and dairy.) Investment openings thatmay exist despite these conditions are discussed inthis Investment Note.

Within two decades, one-third of the worldpopulation will live in countries afflicted bywater scarcity. In some areas, part of theincreased demand may be met through invest-ments in irrigation and water supply systemsand in nontraditional sources of supply. Inother areas such as the arid Middle East andNorth Africa region, the economic and envi-ronmental costs of developing water resourcesconstrain expansion of supply. There, devel-opment of water supplies will not meet grow-ing demands. There will be a push forinvestments in water policy and water man-

agement reforms that increase the water useefficiency of existing systems. However, evenwith substantial increases in the efficiency andproductivity of water use, many countries willnot have enough water to satisfy minimumwater requirements for domestic uses and atthe same time meet industrial, environmental,and agricultural demands for water. Since agri-culture consumes by far the largest percentageof water, most countries will take water fromagriculture, allocate it to other sectors, and relyon increased food imports to meet theirdomestic needs.

Hence, agricultural trade is linked to foodsecurity and to water management. Decliningwater availability in some regions may be off-set by openness of agricultural markets.Indeed, global trade liberalization by devel-oped and developing countries would encour-age water-scarce countries to expand importsof agricultural water-intense products (such ascereals), consequently ensuring them foodsecurity, and to pay for these imports withexports of less water-intense, higher value-added cultivations (such as horticultural prod-ucts). By the same token, water-rich regionscould grow water-intense products (such asrice and cereals) and sell them to water-scarcecountries. This would lead to an increasedeconomic efficiency in the agricultural sectorworldwide. This is often referred to as “tradein virtual water” (box 1.6).

The benefits of agricultural trade liberalizationin developing and developed countries havebeen widely documented in the literature. Moreopen trade in agriculture smoothes out thebumps in the market, rather than aggravatingthem, as many believe. More open trade allowsfood to move from places where it is in surplusto deficit areas and enhances the capacity ofdeficit regions to feed themselves. In an analy-sis of the impacts of a “pro-poor agreement”1 intrade implemented progressively through 2010,the World Bank’s Global Economic Prospects2004 report indicates that by 2015 likely gainswill be on the order of US$350 billion for devel-oping countries and US$170 billion for richcountries (World Bank 2004).


Virtual water is the amount of water that is embedded in foodor other products needed for its production.Trade in virtualwater allows water-scarce countries to import high water-consuming products while exporting low water-consumingproducts and in this way making water available for other pur-poses.

Source: World Water Council. See http://www.worldwatercouncil.org/virtual_water.shtml.

Box 1.6 The Virtual Water Concept

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INVESTMENT AREA

The linkages between agricultural trade, water,and food security have important implicationsfor agricultural development and waterresources management strategies. The issuesare broad and complex and do not readilytranslate into investments. As water becomesincreasingly scarce, ever more investmentresources are allocated to augmenting supply.These investments (for instance in groundwa-ter mining, desalinization, irrigation schemeexpansion, and transport of water throughlong pipelines) are less productive than others,both at the national and at the householdlevel; they also have negative environmentalimplications. Trade will reduce this rising tideof allocative inefficiency by switching incen-tives to less water-intensive crops in water-short countries and by directing increasinglycostly investments to more cost-effective useswithin the same sector. This reduction presup-poses an environment that enables rising pub-lic and private investment to switch from olderwater-intensive technologies to new knowl-edge-intensive ones. Such a switch will behelped by building new R&D in skill-intensiveresponses in research and extension capaci-ties, farming skills, infrastructure to developalternative crops, water management tech-niques, marketing and supply enhancement,and agroprocessing. It entails shifting to a mar-ket-based agriculture that is more water- andresource-efficient and that can therefore growand absorb labor.

Investment will ideally focus on enhancing agri-cultural productivity, improving water resourcesmanagement, and facilitating trade. Because therange of investments in each area is enormous,the recommendations for investments in thisInvestment Note are selective rather thanexhaustive or definitive.

AGRICULTURAL PRODUCTIVITY. Meeting nationaland global food security needs will require sig-nificant increases in water productivity. Keyareas of investment will include the following:

• Agricultural R&D (crop breeding fordrought and salinity resistance)

• Rainfed agriculture

• Crop diversification and creation of anenabling environment for high-value agri-culture

• Agricultural risk management—for examplerainfall-based contracts for cereals farmerscurrently being piloted by IFC in Morocco(box 1.7)

WATER RESOURCES MANAGEMENT. Enhancing waterconservation in agriculture is already imperativein many countries to meet demands fromincreasing urbanization and other sectors. Waterresources development will continue to beimportant in some regions (such as Africa) butin other regions, increasing water use efficiencyat the field and basin levels will be critical tomoving water to high-value uses. Key recom-mendations follow:

• Modernizing irrigation systems

• Inducing investment through public-privatesharing (for example the Andhra Pradeshmicro-irrigation project in India, whichinvolves Netafim and the government in a


With the advent of an international market for managingweather-related risk, the use of insurance products based on aweather index is becoming a reality. In Alberta and Ontario,Canada, insurance programs based on weather and vegetativeindexes have become mainstream insurance products forfarmers. In emerging markets, such as Mexico and South Africa,risk insurance contracts based on the weather are also begin-ning to be used. Following a feasibility study and technicalassistance by the World Bank, a weather insurance projectwith the Moroccan insurance company MAMDA, sponsoredby IFC, has developed weather insurance for cereals and sun-flower production in Morocco that will be sold to farmers forthe 2003–4 season. Likewise, a pilot project has been launchedin collaboration with public and private partners in India,where small-scale farmers have purchased insurance contractsbased on rainfall indexes.

Source: Skees,Varangis, and Siegel 2002.

Box 1.7 Innovative Risk-Management Instruments:A Rainfall-Based Contract for CerealsFarmers in Morocco

40

public-private partnership to supply micro-irrigation equipment to at least 185,000farmers working around 250,000 hectares)

• Institutional and policy reforms (such as suc-cessful regulatory reforms instituted by Jor-dan to curb groundwater overexploitation)

• Promoting IWRM

TRADE FACILITATION. Trade facilitation will beimportant for countries that need to increasetheir competitiveness, as well as for water-scarce regions that need to ensure food secu-rity. This “behind-the-border agenda” includesanything from institutional and regulatoryreform to improving customs and port effi-ciency. It is intricate and costly to implement.The World Bank attaches great importance totrade facilitation—as reflected by its portfolio of80 active projects totaling US$4.6 billion. Box1.8 offers a sample of Bank-financed projectsfor trade development in agriculture.

POTENTIAL BENEFITS

Improved water management practices andtrade in “virtual water” can help alleviate waterscarcity, release water for other uses, increaseproductivity, and ultimately reduce food pricesfor consumers. Investments in these areas can

therefore drive growth and poverty reduction,both directly and indirectly—because they mayreduce food costs and supply uncertainties,improve the diets of the rural and urban poor,raise and diversify incomes, provide employ-ment and entrepreneurial opportunities bothinside and outside cities, and induce small-holder farmers’ productivity gains, which wouldincrease their opportunities for wealth creationand better integrate them into local, national,and international markets.


AGRICULTURAL PRODUCTIVITY. Some of the coreareas to be addressed for increased water pro-ductivity are integrated farm resources manage-ment and agricultural research and extension.

Research on cereals and legumes shows that sig-nificant and sustainable improvements in waterproductivity are attainable only through inte-grated farm resources management. Water use-efficient on-farm techniques coupled withimproved irrigation management options—suchas supplemental irrigation, deficit irrigation, andwater harvesting; better crop selection andappropriate cultural practices; improved geneticmake-up; and timely socioeconomic interven-tions—can help achieve this objective.

Scientific research has allowed global food sup-plies to outpace increases in demand. Evidencefrom China and India shows that public expen-ditures on agricultural research and extensionhave the largest impact of all possible ruralinvestments on growth in agricultural produc-tivity and generate large benefits for the ruralpoor. However, investment in research usuallypays dividends only years, if not decades, afterthe decision. Some important research areasinclude crop breeding to improve adaptation tomoisture and temperature stress, and promotionof effective risk management. A necessary com-plement to scientific research for increased foodproduction is the development of a market forthe additional products and/or quantities, toensure that increased productivity is translatedinto increased income for farmers. Hence, agri-cultural trade is fundamental in ensuring the


The two largest categories of World Bank trade-related lend-ing in 2002 were loans for (1) export development (such asthe Foreign Investment and Export Facilitation Project inArmenia) and competitiveness, and (2) trade financing. In Mau-ritania, the Bank will provide support through livestock andagricultural competitiveness projects (that address standardsissues) as well as port modernization and airfreight projects toexpedite trade. In addition, the Bank is leading the Standardsand Trade Development Facility, an interagency partnershipwith the World Trade Organization, Food and AgricultureOrganization, and World Health Organization, which willdeliver technical assistance for food safety and related stan-dards.

Source:Tang 2003.

Box 1.8 Trade-Related Lending

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dividends of research. Moreover, enhancedinvestment in education, training, and ruralinfrastructure to improve the adaptive ability offarmers and the rural economy generally is ofparamount importance in complementing agri-cultural research and extension.

WATER RESOURCES MANAGEMENT. In most regions,only new conservation efforts, and new policiespromoting it, can send the signal that water isscarce. The appropriate combination of invest-ments in hardware and in policy reforms varies.Water policy reforms should balance improvedmanagement at the river-basin level withdecentralization to the private sector or commu-nity-based user groups at the subbasin level.The policies needed to improve water manage-ment include making resource allocation inagriculture more flexible by removing subsidiesand taxes that distort incentives and encouragemisuse of resources, as well as by establishingsecure property rights in land and water. (SeeIN 1.5 for a detailed discussion of economicincentives in agricultural water use.)

TRADE FACILITATION. The greatest benefits fromagricultural trade will come from a tandem ofreduced policy distortions in domestic marketscoupled with increased access to the developedcountries’ market, especially in the EuropeanUnion, United States, and Japan. This will alsonecessitate reforms in marketing and marketorganization. Box 1.9 presents an example ofhow Mali has successfully exported mangoes toEurope, displacing traditional exporters such asIndia, Israel, and Brazil.

Trade facilitation may, on the other hand, posenew challenges. Meeting these challenges willinvolve, among other things, creating a frame-work that encourages the private sector to offerrisk management tools such as microfinanceand insurance. Modernization of agriculturemay well require joint and collaborative effortswith IFC, specifically with regard to industryand sector competitiveness assessments; designand support of schemes that allow the integra-tion of smallholder farmers into commercialsupply chains; and the development of market-based financing and risk management instru-

ments in selected countries. The IFC-supportedMorocco Rainfall Insurance project is a goodexample of collaboration between IFC and theInternational Bank for Reconstruction andDevelopment (IBRD).

Trade liberalization is likely to have impacts onthe environment and poverty intermediatedthrough its effects on water demand. A WorldWildlife Fund–World Bank program (WorldWildlife Fund 2004) would contribute to theinternational development community’s under-standing of the economic, social, and environ-mental impacts of trade liberalization. Its casestudies analyses will provide the basis to iden-tify, with governments, policy and institutionalreforms that strengthen trade’s contribution topoverty alleviation and environmental sustain-ability. For instance, the Vietnam case studyexamines the expansion of shrimp aquaculturein Truong Son Mountains and its impacts onsocial communities as well as land, forest, andwater resources. In South Africa, global trade lib-eralization will present an opportunity to expand


In Mali, a pilot project to export fresh mangoes to Europe putin place an efficient supply chain managed by a not-for-profitmarketing agency and private business investors through theAgricultural Trading and Processing Promotion Pilot project(PAVCOPA—Projet d’Appui à la Valorisation et Commercialisationdes Produits Agricoles—Cr. 2737 [US$6 million]). Upstream, thepilot helped producers improve their production and theirknowledge of the marketing channels. Downstream, it estab-lished a partnership with an export company and improvedexport logistics. One innovation was setting up a multimodalshipping system directly linking the Malian production centerto the North European customer market; and coordinatingefficiently the entire supply chain.The returns to the produc-ers make this successful pilot a good example of how to con-nect farmers to ready markets, promote private investment inrural areas, and further promote multiple and cross-borderpartnerships, while supporting diversification and improvingexport logistics. Moreover, the pilot demonstrates that invest-ments can be profitable, and that constraints to marketing andexport of agricultural products can be overcome with cre-ative, adaptive, and professional approaches.

Source: Danielou, Labaste, and Voisard 2003.

Box 1.9 Linking Farmers to Markets: ExportingMalian Mangoes to Europe

42

the (water-intensive) sugar industry, with possi-ble negative impacts for water resources and forthe poor, who do not have access to water serv-ices. Hence, investments in trade facilitationshould attentively consider impacts on both therural poor and the environment.

LESSONS LEARNED

The social and political implications of foodsecurity and trade cannot be overstressed. Visi-ble and effective opposition to global trade andinvestment liberalization from civil society hasmushroomed from Seattle (1999) to Prague(2000) and Genoa (2001). Perceptions ofnational interest in food self-sufficiency toooften lead governments to hoard food stocks,artificially encourage production, and limitimports. Even where the international marketoffers an alternative source of food, the idea ofdependence on external sources is anathema tomany politicians and their constituents in theNorth and South. Food self-reliance and inde-pendence from foreign interference, even atdemonstrably higher costs to the nationsinvolved, are popular forms of nationalism(Runge et al. 2003). However, these attitudes aregradually giving way to the more enlightenedview that food insecurity is a problem causedmainly by poverty and the consequent inabilityof the poor to buy food, not by insufficientnational production. It follows that insecurity isincreased by tariff and nontariff barriers to foodimports and therefore cannot be resolved with-out an effective poverty reduction strategy.

The distributional consequences of global agri-cultural trade liberalization are complex andcountry specific. For example, if liberalizationallows previously suppressed prices of agricul-tural goods to rise to world levels, it will benefitfarmers who are net producers but will hurt con-sumers. If farmers are more likely to be poor, theliberalization will be, on average, pro-poor, butimportant distributional distortions may remainor be exacerbated. Agricultural trade liberaliza-tion will entail significant transition costs, andtiming and sequence of reforms will be critical.In sum, managing the transition politically, eco-nomically, and socially is the main challenge.

RECOMMENDATIONS FOR PRACTITIONERS ANDINVESTMENT OPPORTUNITIES

Recommendations on agricultural productivity

• Invest in agricultural competitiveness, diver-sification and technology, planning, andfeasibility studies; support agricultural andagricultural water strategies such as China’sAgricultural Technology Project and Mali’sAgricultural Competitiveness and Diversifi-cation Project.

• Invest in improving market organization.

• Invest in agricultural reform through DPLand Sector-Wide Approaches.

• Invest in research for value-added, efficientagriculture (that is, SIL). Crop-breedingresearch on varieties that are drought andsalinity resistant could have significantimpacts on rainfed agricultural production.

• Invest in increasing rainfed production(which comprises 80 percent of agricultureworldwide) to compensate for lower irriga-tion investments through crop-breedingresearch (see above); encourage technolo-gies that are inexpensive, gender sensitive,and pro-poor. These technologies, whichinclude supplementary irrigation, small-scale micro-irrigation, household and in-field rainwater harvesting, can be coupledwith management strategies to enhance soilinfiltration and water-holding capacity. (SILsare recommended.)

• Invest in vertical integration of agricultureinto processing and local industry. Becausethis can succeed only if adequate infrastruc-ture (roads, energy, water, communication) isavailable, investment in rural infrastructure iskey. (SILs are recommended.)

• Pilot weather-based insurance contracts inselected countries. (Learning and Innova-tion Loans [LILs] are recommended.)

• Improve collaboration with IFC on indus-try/subsector competitiveness assessments;design and support schemes that allow the


43

integration of smallholder farmers intocommercial supply chains; support thedevelopment of market-based financingand risk management instruments inselected countries.

Recommendations on water resources management

• Prefer Adaptable Program Loans (APLs) overcomplex project loans in the irrigated agri-culture sector. Plan Programmatic Lending tohave a first phase on feasibility analysis; asecond phase on construction, constructionsupervision, and start-up; and a third phaseon agricultural development and technicalassistance including agricultural credit pro-grams. This will avoid the tendency of bor-rowers to emphasize the construction ofinfrastructure and to divert funding from laterphases such as technical assistance and agri-cultural development to meet overruns in thecost of infrastructure.

• Promote a policy environment for adoptingwater conservation through pricing, moderntechnologies, and improvement of waterquality (for example, DPL, APLs, Sector-Wide Approaches).

• Improve irrigation system efficienciesthrough selective rehabilitation (using SILs).This will increasingly be driven by the needto tamp down rehabilitation costs anddevelop asset management strategies toenhance the life of existing hydraulic infra-structure.

• Draw on Bank and non-Bank experienceson water trading and water rights (forinstance, LILs, Chile, and Indonesia).

Finally, on trade facilitation, investments using,among others, tools, technical assistance, andother types of loans are recommended.

REFERENCES CITED

Danielou, Morgane, Patrick Labaste, and Jean-Michel Voisard. 2003. “Linking Farmers toMarkets: Exporting Malian Mangoes toEurope.” Africa Region Working Paper

Series No. 60. October, World Bank, Wash-ington, DC.

IFC Projects Website. Online at http://www.ifc.org/projects. Name of project: Société deGestion des Risques et Intempéries (ProjectNo. 10925).

Runge, C. Ford, Benjamin Senauer, PhilipPardey, and Mark Rosegrant. 2003. EndingHunger in Our Lifetime: Food Security andGlobalization. Baltimore: Johns Hopkins/International Food Policy Research Institute.

Skees, Jerry R., Panos Varangis, and Paul Siegel.2002. “Can Financial Markets Be Tapped toHelp Poor People Cope with Weather Risks ?”World Bank Policy Research Working PapersNo. 2812. World Bank, Washington, DC.

Tang, H. 2003. “World Bank Activities on Trade.”Trade Note No. 1, May 29. World Bank,International Trade Department, Washing-ton, DC.

World Bank. 2004. Global Economic Prospects2004: Realizing the Development Promise ofthe Doha Agenda. Washington, DC: WorldBank.

World Wildlife Fund (WWF). 2004. Macroeco-nomics Program Office and the World Bank.Program on Trade Liberalization, RuralPoverty, and the Environment. Online athttp://lnweb18.worldbank.org/ESSD/ardext.nsf/12ByDocName/ProjectSummary/$FILE/WWFWBresearchsummary.pdf and http://www.panda.org/about_wwf/what_we_do/policy/macro_economics/trade.cfm.


Armenia. “Foreign Investment and Export Facil-itation.” LIL. Active. Project ID: P076543.Approved fiscal 2002. Within World Bank,available at http://projportal.worldbank.org.

Mauritania. “Livestock Contribution to PovertyReduction and Economic Growth.” Active.Project ID: P077270. Approved fiscal 2002.


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Within World Bank, available at http://proj-portal.worldbank.org.

SELECTED READINGS

Ingco, M., ed. 2003. Agriculture, Trade and theWTO: Creating a Trading Environment forDevelopment. Washington, DC: World Bank.

Kirton, John, and Virginia Maclaren, eds. 2002.Linking Trade, Environment, and SocialCohesion: NAFTA Experiences, Global Chal-lenges. Burlington, Vt.: Ashgate.

Rosegrant, Mark, Ximing Cai, and Sarah Cline.2002. World Water and Food to 2025: Deal-ing with Scarcity. Washington, DC: Interna-tional Food Policy Research Institute.

World Bank. 2003. “Promoting Agro-Enterpriseand Agro-Food Systems Development inDeveloping and Transition Countries:Towards an Operational Strategy for theWorld Bank Group.” Report No. 26032. May,World Bank, Agriculture and Rural Develop-ment Department, Washington, DC.

ENDNOTE

1. Rich countries cut tariff peaks to 10 percentin agriculture and 5 percent in manufactur-ing, reciprocated by developing countries’cuts to 15 and 10 percent.

This Note was prepared by Shobha Shetty with inputs byJohn Nash, and reviewed by Sarah Cline,Timothy Sulser, andMark Rosegrant of IFPRI.


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INVESTMENT NOTE 1.4

PRICING, CHARGING,ANDRECOVERING FOR IRRIGATIONSERVICES

Many irrigation systems are deteriorating becauseof poor management and inadequate funding foroperation, maintenance, and replacement of facili-ties. Consequent poor performance leads to lowwater productivity—waste, low crop yields, andmisallocation—a common experience in WorldBank–funded projects. Properly designed irrigationservice charges directly address the funding issueand can contribute to demand management, butlimiting demand to the available supply is com-monly addressed through the careful specificationof water rights. Stakeholders (users, operatingagencies, planners, and politicians) have differinginterests that must be considered in designing asuccessful charging system. Political commitment isof primary importance.

Irrigation development, combined with thegreen revolution and increased fertilizer use,has driven agricultural production and pro-ductivity for the past 50 years. Continuedincreases in production (with more than 80percent of irrigation potential already devel-oped) depend primarily on improving theoperations of existing facilities to make moreproductive use of water resources that alreadyhave been developed.

Yet, as noted, many irrigation projects are indecline. Increasing funding for irrigation serv-ices is, however, extremely contentious. Gov-ernments are often unwilling to increasecharges—for fear of political repercussions—or to supplement current charges to meet thefull cost of service to a favored group. Farm-ers are unwilling to pay for poor service andoften believe that irrigation bureaucracies areoverpaid and inefficient. Bank-funded proj-ects in the sector have frequently failed toreach financial self-sufficiency goals, andscarce irrigation water is often wasted(Bosworth et al. 2002).

INVESTMENT AREA

Performance in the irrigation sector can beimproved through specific investments in reha-bilitation and modernization of existing projects;institutional investments to improve organiza-tion, funding, and management of the sector; orsector loans addressing all these components.Such investments should always assess thepotential role of irrigation service charges (ISCs)to contribute to project objectives.

Water resources managers face twin crises ofsustainability:

• Scarcity of the water resource itself (mani-fested by falling water tables, ecologicaldamage to estuaries and wetlands, andsevere competition among users)

• Limited funds to manage, maintain, anddevelop the facilities required to utilizewater (manifested by poor maintenanceand operational performance and therepeated need for “rehabilitation”)

Appropriate ISCs have the potential to addressboth issues simultaneously: higher chargesshould restrict demand, especially in low-valueuses, and generate revenues to fund the cost ofproviding irrigation services.

Where water is scarce, ISCs cannot be sepa-rated from the procedures for allocatingwater—water rights defined based on “senior-ity” or as a proportion of available supply;rationing and quotas; or tradable water rights.The various parameters (cost, charge, andprice) need careful specification. The costincludes operation, maintenance, and replace-ment of facilities, plus capital costs in the formof amortization charges and the cost of collect-ing ISCs. The charge includes all fees payableby the irrigator. These may be based on cropsirrigated or volume of water received—or theymay be fixed charges. The price is the marginalprice of water—how much extra the irrigatorpays per additional unit of water received.Often, with crop-based or quota systems, themarginal price is zero (even though the chargemay be high), and, after the farmer decides to


46

irrigate, there will be no marginal incentive tosave water.

In formulating appropriate ISCs, the chargingmechanism (the type of ISC proposed) must bematched to the objectives sought. Irrigators,operating agencies, and resource planners havelegitimate but different objectives: irrigatorswant a reliable, affordable service; irrigationagencies want a stable source of income andease of administration; and resource plannerswant to limit demand to the available supplyand ensure that the resource is allocated to itsmost productive uses. Table 1.2 summarizes themost common means of charging for and allo-cating water and the potential of each to con-tribute to the most common objectives. Thefarmers’ interests will generally be best served

by a system that is easily administered andencourages high productivity.

No single universal water-pricing mechanism isbest for all systems. The pricing methodselected will depend on specific governmentpolicies and institutions, local conditions, irri-gation type, irrigation infrastructure, and proj-ect objectives. If O&M cost recovery is theoverriding objective, a wide range of pricingmethods is available, ranging from a charge perhectare cultivated to a charge per unit of waterdelivered to the field. However, the range nar-rows significantly when water is scarce andreducing water use per hectare is an importantobjective. Here the charge has to be related tosomething that encourages reduced water usesuch as a charge per cubic meter of water


Productivity Demand Stability of Ease ofType 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 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.

Table 1.2 Common Water Charges and Allocation Methods

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delivered. The Armenia Irrigation Rehabilita-tion Project (box 1.10) provides a good exam-ple of how water measuring posts and metersimproved water monitoring and charging, aswell as users satisfaction. The assessmentreport by the World Bank’s Operations Evalua-tion Department (OED) also provides moregeneral lessons of outstanding importance inthe design and appraisal of irrigation projects.

As second-best solutions, if implementationcosts for volumetric water devices turn out tobe too high, a proxy for water volume can beused as a basis for pricing. Or, a crop- and area-based pricing with a higher price for water-intense cultivations can be considered.1 Forexample, in the [Arab Republic of] Egypt Irriga-tion Improvement project, water user groups

were encouraged to base cost recovery on aproxy for water volume (for example pumpingtime) rather than on a per feddan2 basis, sincethis would provide incentives to improve wateruse efficiency (Seckler 1996).

Nevertheless, analysis of the likely impact ofproposed charges on demand for water—evenvolumetric charges, set at high enough rates torecover operation, maintenance, and replace-ment costs, will often not be high enough tobring demand and supply into balance. In suchcases, additional quota constraints will beneeded to achieve balance, and the analystmust then evaluate the potential additional ben-efits against the substantial extra administrationand infrastructure costs of complex chargingmechanisms (box 1.11).


The Armenia Irrigation Rehabilitation Project, approved in 1994, focused primarily on helping to maintain irrigated agriculturalproduction at pre-independence (from the former Soviet Union) and pre-macroeconomic crisis (1991–4) levels.

The ability to monitor and bill water sales was improved after 1999 when project savings were used to purchase and install2,145 water measuring posts and 1,545 water meters in open sections of canals and pipelines. Simultaneously, hydrometriccommunication system and water management were improved using specially designed software and computer equipmentsupplied under the World Bank’s Structural Adjustment Technical Assistance II project.The project also introduced two-tariffelectricity meters so that differential day and night tariffs could be introduced. In the four irrigation schemes inspected by theWorld Bank’s OED assessment mission, water measuring devices were found to be in excellent working order, and all waterusers expressed their satisfaction with the metering and billing procedures that were now seen as objective and fair, withmeasurements at the point of sale to water user groups being jointly carried out and agreed by the water user group andagency 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 andaccurately cost O&M.

• Some simple and effective investments can greatly improve irrigation project efficiency such as the installation of manywater 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 toimprove output production and marketing.The absence of such complementary investment may jeopardize the projectbeneficiaries’ 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 ensurethat infrastructure investments give adequate attention to beneficiary ownership and their ability to contribute towardthe 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.

Box 1.10 Volumetric Water Measuring Devices in the Armenia Irrigation Rehabilitation Project

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Often a combination of interventions isrequired to limit demand, encourage productiveuse, and recover costs. The most sophisticatedintervention is tradable water rights (box 1.12).(See also IN 2.2.)

Both demand-management and cost-recoveryobjectives require that the nature of the servicebe specified: who is entitled to how muchwater, with what degree of priority, in condi-tions of normal, below-, and above-averagewater availability.

As for the objective of cost recovery, the mostimportant issue to consider is that farmers’ will-ingness to pay depends on good and reliableservice, as well as system transparency. Goodand reliable service can be ensured by financialautonomy. Without autonomy, collecting suffi-cient funds from users does not guaranteeimproved O&M services because most of therevenues from water charges do not go back tothe project itself but are commingled in the cen-tral treasury with revenue from other taxes. Aprime example of this practice is India, wherewater charges and the quality of services arenot directly related in many projects. Improvedservices will give farmers an incentive to paytheir fees and increase their ability to paybecause better services means higher farmincomes. Financial autonomy can be an impor-tant key to improved irrigation water manage-ment by providing a positive feedback systemthrough a clear financial link between farmersand water suppliers.

System transparency means farmers can seehow much water they receive, how their pay-ments are used, and how water charges aredetermined. The integrated circuit machinescase in Shandong, China (box 1.13), illustratesgood system transparency in terms of waterdelivery and payments. Farmers interviewedsaid that they were satisfied because theyreceive a precise, electronically printed state-ment each time they use the card.

The case in Sindh, Pakistan, is a counter-exam-ple. Farmers there are not willing to paybecause the financial system is not transparent,and owing to the corruption of irrigation offi-cials, the farmers do not think that the chargespaid are used in their system.

Moreover, for successful cost recovery, goodpractice requires clear objectives and politicalcommitment:

• What costs are to be recovered from whichbeneficiaries? Domestic supplies drawnfrom irrigation system facilities may pay dif-ferent rates; commercial farmers or orchardowners may get preferential services athigher rates.


Morocco has a clear policy for irrigation service charges in allmajor schemes, requiring full recovery of operation, mainte-nance, and replacement costs, plus a large part of capital costs.Charges, levied volumetrically—at US$0.022/m3 or more(equal to $100 to $200/ha)—are high by international stan-dards for surface irrigation. Even at this price, demand forwater would exceed supply, because returns on water areabout 10 times the volumetric price. Demand management istherefore achieved through quotas specified and measured atfarm level. Cost recovery is high, and most systems cover atleast O&M costs.

Source: Cornish and Perry 2003.

Box 1.11 Irrigation Charges in Morocco

In the Murray Darling Basin, water use is constrained to equalthe sustainable supply through a complex system of waterrights, defined in terms of volumes and security of supply. For-mally codifying these property rights—in systems that werealready well managed and orderly—took decades. Once thisprocess was complete, a system of trading was introduced,allowing managers the flexibility to better manage their enter-prises (in some areas 80 percent of water delivered wastraded). The water rights system also provides the basis forimproved environmental management because water can be“purchased” by the state and assigned to environmentallydesirable uses.The parallel system of charging for water serv-ices in the basin is separate from the sale and purchase ofwater rights and exists to ensure that the income of watersupply agencies covers ongoing maintenance and projectedmajor capital replacements.

Source: Don Blackmore, personal communication.

Box 1.12 Australia:Tradable Water Rights in theMurray Darling Basin

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• Who will recover ISCs?

• Who will administer ISC revenues?

• For what purposes can ISC revenues be used?

• What actions will be taken in case ofdefault in provision of service or paymentfor service?

In case of default, some suppliers strictlyenforce penalties. In Bayi Irrigation District,China, defaulters receive no more irrigationwater until they pay their debts. In Shandong,China (box 1.13), the problem of defaults doesnot arise because users must pay as they go toobtain irrigation water.

POTENTIAL BENEFITS

Well-designed ISCs will accomplish the following:

• Ensure the sustainability of irrigation facili-ties through proper maintenance

• Reduce the pressure on governments forsubsidies and repeated “rehabilitation” ofinfrastructure

• Provide incentives for improved manage-ment and increased productivity of water

• Transparently link the payment for serviceand its cost

• Encourage financial efficiency in operatingagencies because operation costs will betransparent and comparable over time andbetween systems

• Discourage wasteful use of water


For an effective cost recovery/pricing scheme, acombination of approaches could be recom-mended. As seen from many pricing reforms inthe irrigation sector, farmers should have moreauthority and responsibility over water manage-ment, usually through WUAs. In a transparentconsultation process, farmers should help todecide which costs should be recovered through

the water charges they will pay. Farmers shouldnot only agree on the fees but also realize thatthe fees collected remain within the system formaintenance and improvements. Parallel tofarmer empowerment, water suppliers shouldalso be given incentives such as the possibility ofbecoming financially autonomous. This incentiveworks to encourage water providers to improveinfrastructure, service, and collection rates.Implementation is relatively straightforwardwhen a fee structure is simple to administer andeasy for users to understand because it reflectslocal conditions and needs.


Shandong is one of the biggest agricultural provinces in northChina. Irrigation water accounts for 70–80 percent of thetotal water use, but water is scarce. Consequently, to improvewater use an automated system was adopted, where irriga-tors buy prepaid integrated circuit cards. The card must beinserted into an automated server before water is released,and the flow stops when the card is removed.After each irri-gation, the farmer receives a receipt, stating the amount ofwater used, the price paid per unit of water, and the totaldeducted from the card. All servers are connected via theInternet, so they are easy to control and monitor, and admin-istrative costs are low. Each irrigation costs 1,000 yuan(US$120), which is equal in value to the water saved annuallyunder this new system. With more than 200,000 integratedcircuit card servers across the province, Shandong savesabout 5 billion m3 of water annually.

Highlights:

• This method enables a 100 percent collection rate. If thepricing structure is designed appropriately, full cost recov-ery will be achieved, assuming no stealing.

• Administrative costs (personnel costs) are greatlyreduced. No one has to collect fees or open and closegates, and users are charged directly, thus reducing trans-actions among farmers and intermediate bureaucrats.

• The amount of water used is accurately recorded, and thecharges are transparent, greatly reducing the chance ofarguments over possible measurement errors.

• Farmers have full control over when, how, and how muchwater they use.

The water charge is on a volumetric basis, which encouragesreduced water use.

Source: Easter and Liu (2005), citing Wang and Lu (1999).

Box 1.13 An Automated Irrigation ChargeCollection System in Shandong, China

50

LESSONS LEARNED

• Failure to negotiate ISC systems that areacceptable to governments, irrigation agen-cies, and farmers has led to a vicious circleof physical deterioration, declining perform-ance, and unwillingness to pay in many irri-gation projects.

• Irrigation service charges often have impli-cations beyond the project level, requiringpolitical endorsement and support forimplementation. This, in the context of atypical Bank project, requires careful analy-sis beyond the framework of the investmentpackage.

• Linking World Bank funding to the bor-rower’s obligations to recover ISCs—andmake good any shortfalls at the expenseinvestment funds—is one approach to ensur-ing commitment to ISC objectives (box 1.14).

• In designing ISCs, the procedures for allo-cating water must be in place and opera-tional. Defining water rights is contentiousand difficult at the best of times. Wherewater is already overallocated (and “tail-enders” often get no water, or fresh aquifersare consistently overdrawn to meet current

demand), defining and enforcing sustain-able water rights is an enormous politicaland social challenge that must precede theestablishment of an ISC system.

• Water pricing in irrigation may equate sup-ply and demand, but this is more difficultthan addressing the financial sustainabilityof the irrigation system.

• The primary means of balancing supply anddemand for water resources is administer-ing water rights in a manner that is consis-tent with available supply.

• Tradable water rights offer the best oppor-tunity to encourage productive use of waterat sustainable levels, but the demandinglegal, administrative, and managerialrequirements make the approach a long-term possibility in the conditions prevailingin most developing countries.

• Simplistic interventions designed to serve asingle objective rarely succeed and mayintroduce unexpected complications. Suc-cessful ISC reforms must be evaluated overthe wide range of hydrological circum-stances that inevitably occur (box 1.15).


• Assemble the basic information. Is the spec-ified irrigation service consistent with thesustainable use of surface and groundwaterresources? What level of expenditure isneeded to finance sustainable operation ofthe system in accordance with existing orproposed government policy?

• Define and prioritize the objectives of the pro-posed ISC system. Evaluate alternative charg-ing mechanisms in terms of the objectivesand the impact on various stakeholders;evaluate the proposed system under differ-ent scenarios (such as drought, unexpectedfailure of a major structure, and inflation).

• Specify responsibilities in the implementationof the selected system, including assessing andrecovering costs, setting charges, accounting,


This project, appraised in the mid-1990s, was Haryana state’sthird major irrigation project, the first two having failed toachieve objectives related to the reform of irrigation charges.During project formulation detailed discussions with the govern-ment identified and specified the total expenditures required foroperation, maintenance, and replacement; the limited areaswhere subsidies would continue; the policy for differentialcharges between sectors; and the linkage between cost recoveryand the investment components to be financed by the project.By project-end,water services in the state were fully self-funding.

This success hinged on clear definitions of service and priori-ties for water allocation (formulated as part of a State WaterPlan under the project), a well-managed irrigation system, andan effective, legally enforced revenue collection system.

Source: India, “Haryana Water Resources Consolidation Project, “World Bank Project Appraisal Report 1994.

Box 1.14 India: Haryana Water Resources Consolidation Project

51

allocating funds, enforcing penalties in caseof failure of an agency to supply or users topay, and reassessing water availability andwater rights.


• Support to hydrological services for long-term (planning) and short-term (opera-tional) purposes

• Infrastructure to measure hydrological data

• Local and national institutional capacity toanalyze hydrological data

• Facilities to disseminate information toplanners, managers, and operators

Formalization of water rights

• Development of legal framework for sur-face and groundwater rights

• Institutional capacity to record rights

• Institutional capacity to administer andresolve disputes

Institutional capacity to provide specialist technical services

• Pollution management and control

• Advice on measurement of water diversionand consumption

• Training in new techniques, especiallyremote sensing to monitor water use

• Evaluation of options in water rights admin-istration, such as water markets and water“banks”

REFERENCES CITED

Bosworth, B., G. A. Cornish, C. J. Perry, F. vanSteenbergen. 2002. “Water Charging in Irri-gated Agriculture; Lessons from the Litera-ture.” OD145. HR Wallingford, Wallingford,U.K.

Burt C. 2002. “Volumetric Water Pricing.” Draftprepared for the Irrigation Institutions Win-dow of the World Bank, Washington, DC.

Cornish, G. A., and C. J. Perry. 2003. “WaterCharging in Irrigated Agriculture: Lessonsfrom the Field.” OD150. HR Wallingford,Wallingford, U.K.

Easter, K. W. and Y. Liu. 2005. “Cost Recoveryand Water Pricing for Irrigation andDrainage Projects.” Background Paper.World Bank, Washington, DC. In press.

Kloezen, W. H. 2002. “Accounting for Water:Institutional Viability and Impacts of Mar-ket-Oriented Irrigation Interventions in Cen-tral Mexico.” Ph.D. dissertation. Universityof Wageningen, The Netherlands.

Seckler, David. 1996. “Egypt: IrrigationImprovement Project.” Appraisal Report(1995) and “The New Era of WaterResources Management: From ‘Dry’ to ‘Wet’Water Savings.” International Irrigation Man-agement Institute Research Report No. 1.Colombo, Sri Lanka.

Wang, Xudong, and Jun Lu. 1999. “The Applica-tion of IC (Integrated Circuit) Cards in Effi-cient Irrigation Management System.” ChinaWater Resources 46 (October) (in Chinese).


In the 1990s, Mexico launched a radical program of irrigationreform—essentially transferring responsibility for system man-agement to both local and federated farmer organizations.Some donors advocated pricing systems narrowly based onvolumetric charges to encourage efficient use and limitdemand. Some farmer groups based charges entirely on volu-metric deliveries.When drought occurred, deliveries (and con-sequently revenues) fell dramatically, requiring layoffs ofoperators and putting severe financial stress on the farmerorganization. Subsequently, more traditional bases for charg-ing—combining an area-based charge to ensure income stabil-ity with a volume-based charge—were adopted.

Source: Kloezen 2002.

Box 1.15 Irrigation Management Reform in Mexico

52


Armenia. “Irrigation Rehabilitation Project.” OEDProject Performance Assessment Report.Report No.: 28847. May 2004.

Egypt. “Irrigation Improvement Project.” Closed.Project ID: P005173. Approved fiscal 1996

India. “Haryana Water Resources ConsolidationProject.” Closed. ID P009964. Approved fis-cal 1994. Within World Bank, available athttp://projportal.worldbank.org.

SELECTED READINGS

FAO (Food and Agriculture Organization). Inpress. “Water Charging in Irrigated Agricul-ture: An Analysis of International Experi-ence.” FAO, Rome.

World Bank. 1986. “World Bank Lending Condi-tionality: A Review of Cost Recovery in Irri-gation Projects.” June 25, World Bank,Washington, DC.

ENDNOTES

1. An ample discussion of the performance ofdifferent water pricing methods is providedin Easter and Liu (2005).

2. The Egyptian area measurement unit, fed-dan, equals 0.42 hectare.

This Note was prepared by Chris Perry and reviewed bySarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI.


53

INVESTMENT NOTE 1.5

ECONOMIC INCENTIVES INAGRICULTURAL WATER USE

Economic incentives are one way to improve agri-cultural water use efficiency, increase cost recovery,and “internalize” costs imposed on third parties andthe environment. A broad range of both positiveand negative instruments is available. Best practice isto analyze country needs and to develop a balancedset of efficiency incentives, emphasizing decentral-ized and market-based mechanisms.

Agriculture consumes three-quarters of theworld’s fresh water, yet less than half the waterdelivered is actually used (box 1.16). Now, aswater is becoming scarce and its cost is rising, itis important to improve the efficiency (returnsper unit of water) and sustainability of agricul-tural water use. Improving water use efficiency(WUE) is often the cheapest way to increase theavailability of water for agriculture (box 1.17); itcould meet half of the projected increase inwater demand to 2025 (Dinar 2001).

Agricultural subsidies pose a second problem.Governments frequently shoulder the cost ofdeveloping and operating irrigation schemes.Without an exit strategy, the fiscal burdenmounts. Many subsidies are not only inefficientbut also inequitable. In Punjab, India, largerfarmers (those with holdings greater than 6hectares) capture 55 percent of the electricityand canal water subsidies (Singh 2003). Tradereforms, combined with reform of economicincentives in agricultural water use such aswater-pricing reforms or promotion of watermarkets, improve welfare more than do subsi-dies (Diao and Roe 2000).

The third issue with agricultural water use is theexternalities generated during the productionprocess—costs or benefits that affect third par-ties, intentionally or not. For example, excesspumping lowers the water table, or abstractionfrom a river reduces water available to maintainecosystems, or drainage contaminates down-stream uses.

Improved WUE and “internalizing externalities”can be achieved via economic, institutional,agronomic, and engineering means. Economicincentives, which will be explored in thisInvestment Note, are increasingly used to pro-mote WUE, improve allocation, promote envi-ronmentally friendly practices, and reduce coststo government. Implementation is relativelysimple and cheap, and the impact is sustainable(Tiwari and Dinar 2000).

INVESTMENT AREA

Economic incentives are signals that affectdecisions. They can motivate water suppliersand users to manage water in line with policy


In China, in-field irrigation efficiency (percentage of water reach-ing the field that is beneficially used by plant roots) is 30–40percent, and conveyance efficiency (percentage of water fromsource reaching the field) is 40–50 percent. Thus, as little as12–20 percent of water captured may reach plant roots. InIndia, seepage loss from irrigation canals is 45 percent and inPakistan as much as 70 percent.

Sources: Qian and Xu 1994;Yoduleman 1989.

Box 1.16 Irrigation Can Be a Wasteful Water User

Economic incentives encourage delivery agencies and farmersto adopt water-conserving and efficient practices.The benefitsof WUE can be analyzed in three stages.The first benefit is enduse efficiency—meaning that the user will achieve “more cropper drop,” an increase in the economic return per unit ofwater. If mechanisms for transferring water between usersexist, additional allocative efficiency may be achieved—waterwill be transferred to the user who can achieve the bestreturns.This could be, but rarely is, done outside the agricul-tural sector. Finally, if the environmental “externalities” can be“internalized” into the incentives structure, environmental effi-ciency can be achieved.Then water use will be consistent withoverall “societal benefit”—farmers, for example, might ceasemining groundwater or would pay to clean up pollution. Thecombination of these three efficiencies is the ultimate goal,overall water use efficiency.

Source: Author.

Box 1.17 What Do We Mean by Water Use Efficiency?

54

objectives. Experience has shown that the mostimportant incentives are the following:

WATER PRICING.Water pricing is the most com-monly promoted incentive in WorldBank–financed projects (box 1.18). Watercharges are justified on the “user pays” principle,which states that individuals who benefit frompublic investment and scarce resources shouldpay. The advantage is twofold, because watercharges not only signal opportunity cost butbring in revenue. Various approaches are in use.Water pricing is a political issue, and getting theprice right is hard—in Jordan the price has beenthe object of endless debate and study fordecades. There is always the fear of a negativeimpact on poverty, although there is little empir-ical evidence in support of this possibility.

USER PARTICIPATION. Associating users in manage-ment and decisions in various forms (forinstance, WUAs managing the retail delivery ofwater) is the second most commonly used incen-tive in Bank projects (box 1.18). It reduces publiccosts and gives incentives for responsible man-agement and conservation. Where user participa-tion works well, it has reduced politicization of

water issues. Evidence from Taiwan (China)(Wade 1995), India (Nagaraj 1999), and Nepal—where 75 percent of irrigation systems are man-aged by farmers (Tiwari 1987)—shows highefficiencies and cost effectiveness.

WATER RIGHTS. Assignment of water rights cre-ates strong incentives to efficient use and canunderpin water markets that increase agricul-tural efficiency and, in some cases, permit inter-sectoral exchanges of water. Water rights maybe a share or a fixed quantum. Assignment oftransparent and stable rights, together with ameasure of accountability and transferability,requires a workable property regime, the rightecological characteristics, and clear definition ofthe resource, which is particularly hard withgroundwater.

ASSET TRANSFER. Farmer ownership of assetsincreases incentives, reduces transaction costs,and increases farmers’ willingness to invest (FAO1996). It requires a strong institutional base.

REGULATION. Regulatory instruments includebans, quotas, and permits. Regulation is typi-cally used where market or monetary measurescannot take full account of social, environmen-tal, and intergenerational costs of water use. Forexample, common property and intergenera-tional interests in groundwater can rarely bemanaged through market mechanisms.

SUBSIDIES. Capital and recurrent subsidies forirrigation have been almost universal, yet theirefficiency is questionable (see above), they arehard to eliminate, and the fiscal cost is oftenexorbitant—the annual irrigation subsidy inEgypt is US$5.0 billion (Rosengrant 1997). Inputsubsidies on agricultural water include subsi-dies on diesel fuel, electricity, or equipment.They are hard to target and usually do not pro-mote water conservation. However, subsidieson efficiency-improving technology such asdrip irrigation are increasingly being used.Though justified on grounds of encouraginginnovation and compensating for externalitiesinvolved in water conservation, these bringtheir own distortions (such as capital bias, fiscalcost, crowding out, and locking in).


In a review of the World Bank irrigation and drainage portfo-lio covering 68 projects, all but 9 promoted at least one eco-nomic incentive measure. Twenty-six projects covered threeor more instruments, usually associated with one another toincrease impact.

Water pricing was most common (52 of the 68 projects),though usually aimed at cost recovery rather than changingbehavior. Second was user participation, employed in half thesample (34 projects). Capacity building, water rights, and assettransfers to users were also common. Few projects includeddirect incentives such as new technology, or indirect economicincentives such as diesel price, water quotas, or water markets.

The review concluded that Bank projects miss a chance toharness well-designed packages of incentive measures toinvestment projects.

Source: Dinar 2001.

Box 1.18 Bank Projects Promote a Broad Range of Incentives, But There Is Room forImprovement

55

Best practice starts with a review of policyobjectives and of the existing incentive struc-ture, which is often complex and conveyscountervailing “distortions.” The review goeswell beyond irrigation water charges. It willcover irrigation development policy. Oftenobjectives beyond optimizing economic returnsare behind the existing incentive structure forirrigation—for example resettlement, povertyalleviation, and food security. The objectivesand the related incentives have to be “unbun-dled” to understand what a country is trying toachieve, its relation to WUE, and the optimalmix of incentives to achieve those objectives. Inaddition, the review examines the agriculturalincentive and trade policy framework, whichsends water users strong messages that need tobe analyzed (box 1.19). Irrigation incentive pol-icy needs to be linked to national and interna-tional market conditions, taking account ofrigidities encountered in market development.Finally, fiscal policy needs to be examined.Governments have specific revenue or spend-ing goals or constraints such as cost recoveryfor O&M or for capital costs.

The review then examines the optimal match ofpossible instruments with policy objectives andwith physical, social, economic, political, andinstitutional feasibility. This should result in an“integrated” set of measures. Some will increasecosts of current behavior and provide a pushfor change. Others will facilitate that changetoward a more efficient, sustainable use ofwater. For example, changes in water pricescould be linked to the allocation of water rights.This could make the package easier to pass andimplement.

For all “packages,” the practicalities, politicaleconomy, and likely timescale require carefulstudy; pricing changes may encounter politicalopposition, and water rights changes may taketime. Rigidities built up over years need to beovercome. Sequencing thus takes thought.Transfers of assets, management by users, andcapacity building form another powerful pack-age. Incentives to use more efficient technologyare a useful complement to all approaches. Box1.20 shows how Jordan used the tariff system

both to give incentives to water conservationand to achieve full and equitable cost recovery,while providing “positive” incentives throughtechnology transfer and investment subsidies toirrigation efficiency.

POTENTIAL BENEFITS

Economic incentives should encourage deliveryagencies and farmers to adopt resource-con-serving and sustainable agricultural practices.Benefits to individuals and society are theincreased efficiency of water use within agricul-ture, possibly increased allocative efficiency,and “environmental efficiency,” including third-party and intergenerational benefits (box 1.21).


In Jordan, agricultural pricing policy in the 1990s made bananagrowing profitable, even though bananas used a stunning20,000 m3 of water per hectare in a dry country. In the Repub-lic of Yemen, diesel for pumping at prices a quarter of borderparity and cheap credit on pumps and engines drive thegroundwater overdraft. In Morocco, border protection of 100percent on cereals helps explain why 40 percent of expensivemodern irrigation schemes are planted to low-value wheat.

Source: Ward 1997.

Box 1.19 The Influence of the Overall AgriculturalIncentive Framework on AgriculturalWater Use

Though aware that water use was inefficient, the Jordaniangovernment was reluctant in the 1990s to increase prices forpolitical reasons. An integrated approach was adoptedwhereby every farmer had a quota of water at a relatively lowprice, and a step-tariff system obliged bigger users to paymore. The tariff system was calibrated to cover the costs ofoperating and maintaining the system. A parallel program pro-vided incentives for more efficient water use through technol-ogy transfer and lower-priced irrigation improvementequipment.Thus, local physical, economic, and political factorscontributed to an integrated incentive package.

Source: Ward 1997.

Box 1.20 Every Situation Demands a Different Mix of Incentives—The Case of the Jordan Valley

56

POLICY AND IMPLEMENTATION ISSUES

WATER PRICE INCREASES MAY NEED TO BE PHASED IN

SLOWLY. Governments often fear that withhigher tariffs, agriculture will lose its competi-tiveness. Therefore, price increases may bephased in gradually while other incentives,improved services, and technology transfersallow farmers to regain competitiveness.

ECONOMIC INCENTIVES SHOULD BE SEPARATED FROM

POLICIES TO REDISTRIBUTE TO THE POOR. Policymakers often resist changing incentives, believ-ing that the poor will suffer. Most empirical evi-dence shows the opposite. In Morocco,better-off farmers gain most from low watercharges and high border protection. Studiesshould be conducted to predict the impacts ofeconomic incentives on the poor and ensurethat their needs are considered without distort-ing pro-efficiency and pro-growth impacts. Astudy on who gained from water tariffs in Jor-dan led to the introduction of a progressive steptariff, with a low “lifeline” starting rate (box1.20). While “economically suboptimal,” itaccounted gracefully and practically for con-cerns about the poor.

NOT ONLY FARMERS NEED TO IMPROVE EFFICIENCY.Losses of water through seepage from publiccanals undermine arguments for improving in-field efficiency. Changes in tariffs should beaccompanied by improvements in service. Irri-gation rehabilitation often has to precede theuse of the price instrument to promote on-farm efficiency.

DEPOLITICIZING PRICES. Water charges are often“political.” There is an advantage in “privatizing”the debate by creating water rights and transfer-ring ownership or management to user groupsor other private entities.

INDIRECT MEASURES ARE EASIER TO AGREE AND

IMPLEMENT. Water pricing is a contentious—often blunt—instrument. Countries may preferindirect price incentives (such as deprotection,as is now the case in Mexico) together with“positive” incentives such as irrigation-manage-ment transfer.

TIMING AND POLITICS ARE IMPORTANT. Reformshave to come at the right moment, after an elec-tion, perhaps, or a drought. They can be lockedin, or ratcheted up.

LESSONS LEARNED

RAISING WATER CHARGES SHOULD BE ONLY A PART

OF THE INCENTIVES PACKAGE. Water chargeincreases help improve efficiency and costrecovery, but the political cost of water pricechanges can be high. Price changes should bepart of a range of incentives that also improvesfarmer returns over time (box 1.22).

CHANGING INCENTIVE STRUCTURES HAS POLITICAL

AND TRANSACTION COSTS AND MUST THEREFORE

BE BASED ON PRIOR RATE ANALYSIS. Alteringincentive structures carries political and trans-action costs. Each situation needs evaluationto identify objectives and assess the feasibilityand efficiency of each instrument. The analy-sis should evaluate the political and technicalfeasibility of each instrument relative to policyobjectives; the relative impact to be expectedfrom each instrument; and the transactioncosts involved in implementing the reform.


The use of pricing in Germany has been effective in raising rev-enue and reducing pollution, but charges remain too low tocurtail demand. In Israel, where irrigation water is priced closeto the marginal-value product and where extensive public sup-port on technology and markets is provided, efficiency gainshave been evident as agricultural water use fell by half in the1980s, agriculture surrendered water to urban use, and prod-uct per unit of land doubled.

In China and Jordan, the use of irrigation improvement subsidiescombined with technology transfer has been quite effective. InChina, drip and sprinklers are now used on one-sixth of culti-vated land. In Jordan, a combination of incentives to adoptimproved technology and rising water prices have led to invest-ment and innovation (for example, plasticulture, and fertigation).

Experience shows that a combination of instruments is moreeffective than a single instrument and that careful design andimplementation are needed to achieve objectives.

Source: Saleth and Dinar 1999.

Box 1.21 Evidence for the Benefits of an Efficiency—Promoting Incentive Structure

57

PACKAGES SHOULD BE MUTUALLY REINFORCING AND

INCLUDE “POSITIVE” INCENTIVES. Incentives shouldbe grouped and complement one another.“Negative” incentives such as price increasesshould be supported by “positive” incentivessuch as the assignment of property rights ortransfer of irrigation management.

PACKAGES SHOULD PROVIDE INCENTIVES TO ALL

ACTORS. Government can be motivated byreduced fiscal charges and by the prospect ofprivate sector–led growth and consequentpoverty alleviation. Water suppliers can bemotivated by the prospect of improving theirperformance and reducing friction with clients.Users can be motivated by ownership of assets,water, or institutions, and by having means ofimproving productivity and incomes. Incentivepackages may be different at the local level(encouraging end-use efficiency) and at theregional or basin level (where they could alsopromote allocative efficiency).


• Base project design on careful analysis ofobjectives, political and technical feasibility,likely impact of instruments, and the trans-action costs of implementing the reform.Evaluate the best sequence of reforms,given their likely different time scale. Eco-nomic analysis should precede investment.

• Educate policy makers, managers, and userson the incentives available, how they work,and what methods can be used to imple-ment them.

• Combine different “positive” and “negative”instruments to win the support of stakehold-ers. Adapt packages to the scheme, basin,and national levels.

• Increase the use of economic incentivesassociated with Bank projects and countryprograms. Experience shows that Bank proj-ects and programs can be a powerful vectorfor change, underexploited in the past.

• Move toward decentralized, market-basedmechanisms in order to depoliticize decision

making and increase the sustainability ofWUE improvements.

• Factor product markets into thinking abouteconomic incentives for agricultural wateruse, because they are often determinants offarmers’ capacity to respond.

• Pilot any untested incentive before goingfull scale.

• Monitor and evaluate outcomes and impactsthroughout in order to show participants theresults—and to allow for corrections.


• Technical assistance inputs to reviewingpolicy objectives, the existing incentivestructure, irrigation and agricultural policy,and fiscal and trade policy

• Dialogue and iterative shared analysis tomatch possible instruments to policy objec-tives, assess feasibility, develop balancedand integrated packages combining positiveand negative incentives, and win supportfrom stakeholders

• Pilot investments to test incentive packages

• Full-scale investment projects in irrigationimprovement or water resources manage-ment, linked to an improved economicincentive structure


Good incentives will have the following characteristics:

• Be focused on objectives of WUE, environmental sustain-ability, and fiscal affordability.

• Contain an integrated set of measures that both increasecosts of inefficient behavior and facilitate change towardmore efficient and sustainable water use.

• Take account of agricultural policy and markets.• Reflect political economy and socioeconomic realities and

be feasible and effective in the country situation.

Source: Author.

Box 1.22 Requirements for a Good Incentives Package

58

REFERENCES CITED

Diao, X., and T. Roe. 2000. “The Win-Win Effectof Joint Water Market and Trade Reforms onInterest Groups in Irrigated Agriculture inMexico.” In A. Dinar, ed., The Political Econ-omy of Water Pricing Reforms. New York:Oxford University Press.

Dinar, Ariel. 2001. “Review of Active Bank Irriga-tion and Drainage Portfolio: Use of EconomicIncentives.” In F. J. Gonzalez and S. M. A.Salman, eds., World Bank Technical PaperNo. 524. World Bank, Washington, DC.

FAO (Food and Agriculture Organization). 1996.“Food Production: The Critical Role ofWater.” Technical Background Paper, WorldFood Summit 1996. FAO, Rome.

Nagaraj, N. 1999. “Institutional ManagementRegimes for Pricing of Irrigation Water.”Agricultural Systems 61: 191–205.

Qian, L. C., and D. Xu. 1994. “Sustaining Irri-gated Agriculture in China.” In SustainableIrrigated Agriculture. Dordrecht, Nether-lands: Kluwer Academic Press.

Rosengrant, M. W. 1997. “Water Resources inthe 21st Century: Challenges and Implica-tions for Action.” IFPRI 2020 Vision Dis-cussion Paper No. 20. Online at http://www.ifpri.org.

Saleth, R. M., and A. Dinar. 1999. Water Chal-lenge and Institutional Response. PolicyResearch Paper No. 2045. World Bank, RuralDevelopment Department, Washington, DC.

Singh, K. 2003. “Punjab Agricultural PolicyReview.” Draft report for the World Bank.World Bank, Washington, DC.

Tiwari, D. N. 1987. Irrigation Development andFarm Level Infrastructures. Proceedings ofthe Workshop on Efficacy of On-FarmDevelopment Works. Madras, India: AnnaUniversity, College of Engineering, Centrefor Water Resources.

Tiwari, D. N., and A. Dinar. 2000. “Role and Useof Economic Incentives in Irrigated Agricul-ture.” Paper prepared for Irrigation ReformWorkshop, December 2001, World Bank,Washington, DC.

Wade, R. 1995. “The Ecological Basis of Irriga-tion Institutions: East and West Asia.” WorldDevelopment 2041–49.

Ward, C. 1997. “Jordan Agricultural SectorAdjustment Loan, Implementation Comple-tion Report.” World Bank, Washington, DC.

Yoduleman, M. 1989. “Sustainable and EquitableDevelopment in Irrigated Environments.” InH. Jeffrey, ed., Environment and the Poor:Development Strategies for a CommonAgenda, U.S. Third World Policy Perspec-tives, No. 11. Washington, DC: OverseasDevelopment Council.

This Note was prepared by Chris Ward and reviewed bySarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI.


59

INNOVATION PROFILE 1.1

AGRICULTURAL WATER IN THE NEW COUNTRY WATERRESOURCES ASSISTANCESTRATEGIES

What is new? This Innovation Profile summarizesa World Bank water assistance program matchedwith a CAS/PRSP, integrating all sectors, recognizingboth principles and pragmatism, and agreed to bythe government. Agricultural water strategies canbe well articulated through this new instrument.

Water sector planning is difficult because sus-tainable resources management has to be rec-onciled with the interests of the water-using“sectors”—agriculture, urban and rural supply,and hydropower. As described in the WorldBank’s Water Resources Sector Strategy (WRSS;World Bank 2004), the Dublin Principle of“subsidiarity”—devolving decisions to thelowest possible level—has to be reconciledwith the principle of “integrated management”of the resource. Within the Bank, the overallwater resources strategy has to be reconciledwith the strategies and business plans of thewater-using sectors. On the whole, the Bankhas not handled this integration well. Sectoralstrategies have not been coordinated or inte-grated, and at the country level, the CAS/PRSPprocess has dealt summarily with the com-plexities of integrated water resource issuesand tended to focus on selected sectoralissues. Therefore the WRSS identified a needfor a cross-sectoral CWRAS to integrate therange of Bank programs that have an impacton or are affected by water resources.

The problem of irrigation, drainage, and agri-cultural water management within the WRSS isan acute example of this problem of “matrixmanagement.” In addition to the need to alignagricultural water policy with overall resourcemanagement policy, agricultural water typicallycomes under several different institutions andcan even be treated as several different “sec-tors”—such as basin planning, dams, irrigation,agriculture, and watershed management.

OBJECTIVES AND DESCRIPTION

The core objective of CWRAS is to produce anoperational plan for Bank involvement in thewater sector. Preparation involves analysis, dia-logue, and decisions that pinpoint a country’swater challenges and opportunities; set thosechallenges and opportunities within a frameworkin which long-term objectives, together withpolitical, social, and economic constraints; DublinPrinciples; and CAS/PRSP are reconciled in astrategy; and set out the action plan agreed to bythe government in question and the Bank. Theresulting CWRAS is a Bank strategy, but setwithin the national strategy. CWRAS is a “waterCAS, making the Bank/Government water con-tract explicit and tailored.”

Given the predominance of agricultural wateruse in overall water use and the role of irriga-tion in food production, income creation, andpoverty eradication, agricultural water will bean important component of CWRAS.

The CWRAS Equation

National Policy + Bank Water Resources Strategy + CAS/PRSP + Sectoral Strategies = CWRAS

In January 2003, the Bank’s Water ResourcesManagement Group (WRMG) developed someinterim CWRAS guidelines for practitioners. Theguidelines describe a CWRAS process in threeparts: internal Bank consultation and review,engaging all Sector Directors and CountryDirectors working on water; a consultativeprocess with country stakeholders, focusing onBank role and choices; and agreement withgovernment on the CWRAS as a framework forBank water interventions.

Describing CWRAS as a “a rolling ten year planfor the Bank in water, linked to CAS goals,” theguidelines set out the recommended content ofa CWRAS: analysis of critical water challenges,goals, policies, and strategy in the country; eval-uation of the Bank’s comparative advantage as adevelopment partner; assessment of the rele-vance to the country water situation of theBank’s “overarching” contract through the CAS;assessment of the impact of Bank water inter-ventions on growth and poverty reduction; a


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reconciliation of the country situation with Bankglobal water principles; an assessment of thepolitical economy of reform and a sequencedprioritized set of Bank activities supportingreform; and a program of Bank lending andnonlending activities.

The guidelines are well reflected in the 2002Philippines CWRAS (box 1.23).

During fiscal 2004, financing of US$200,000 perregion was provided through the Bank-Nether-lands Water Partnership Program to support thePhilippines CWRAS.

ASSESSMENT

CWRAS imposes a more integrated approachon water programs. It links principles, oppor-tunities, and action, and leads directly toinvestments. CWRAS also links parallel objec-tives to water, particularly poverty reduction,through its obligatory link to PRSP and the Mil-lennium Development Goals. It works best

where there has been previous dialogue, as inChina and the Philippines. In the Republic ofYemen, with a long and sustained dialogue,the CWRAS team has adopted a more ambi-tious approach (box 1.24).

Agricultural water use has figured prominentlyin CWRASs produced to date. In the ChinaCWRAS, agriculture water issues includegroundwater management, irrigated agriculture,basin management, watershed management,environmental flows, water pollution control,hydropower linkages, and flood control andprotection. The Republic of Yemen’s CWRAShas a major focus on groundwater and surfaceirrigation, groundwater management, and waterquality issues.

OUTPUT AND IMPACTS

The CWRAS output is a program of Bank lend-ing and nonlending support for water schemes,agreed with the government, set within astrategic framework, and broken down by sec-tor (box 1.25). It explicitly addresses the rangeand consistency of Bank activities as a mecha-nism of poverty reduction (table 1.3). It is aninput to—or at least consistent with—the CASand the PRSP.

The Philippines CWRAS (box 1.25) is expectedto have impacts on Bank water work, includingimproved coherence between sectors (requiringclose work across sector directors), better fit ofwater work with the CAS (requiring close workwith the country director), and improved quality(for example, by bringing the Water ResourcesManagement Group into country work).


The objectives of the Philippines’ CWRAS were to define aframework and overall strategy for the World Bank’s water pro-gram, including a review, prioritization, and recommendations forchanges in existing and planned water- related activities in light ofthe new Bank strategy, Bank corporate goals, and foreseennational challenges in water. The CWRAS was prepared by aBank team, in consultation with the government.

Source: Philippines CWRAS.

Box 1.23 Objectives of the Philippines CountryWater Resources Assistance Strategy

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.

Table 1.3 Country Water Resources Assistance Strategy:Analytic Framework for Poverty Impacts through Water Programs

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LESSONS AND ISSUES FOR REPLICABILITY

The Bank teams have grasped the CWRASinstrument in some very different ways, rangingfrom a focused Bank-only strategy (Philip-pines), through a broader, issues-orientedapproach (China), to what is essentially anupdate of the national water strategy (theRepublic of Yemen). Although variety and flex-ibility are good, teams would welcome an eval-uation and some clearer guidelines.

Early examples have been able to mobilizeintersectorally within the Bank quite effectively,but the process is still led by one “sector” oranother. In the Republic of Yemen, waterresources and agriculture lead, and water sup-ply and sanitation take a back seat. The “inte-gration” between water resources managementand the sectors is still imperfect, especially invery large countries such as China, where theCWRAS is essentially a list of issues rather thana comprehensive framework.

Most teams have stuck to the “Bank-only”approach, which is in line with the concept.Including more stakeholders and other donorsbecomes very ambitious and is probably realis-tic only in smaller countries with a history ofgood dialogue (for example Jordan or theRepublic of Yemen).

In China, the approach has historically beenfragmented (regionally, sectorally, and withinthe Bank, where seven different units handlewater). The CWRAS has been seen as a chanceto bring the strands together in an issues-ori-ented, problem-solving approach. Agriculturalwater issues figure prominently. For the firsttime, the China CWRAS covers water resourcesmanagement as the “missing” theme that bringsthe analysis together. The lesson is that CWRASis a good opportunity for agricultural wateranalysis and for integrating agricultural waterinto the big picture.

CWRAS requires a good partnership amongCountry Directors and Sector Directors, sus-tained dialogue with government, and a goodappreciation of the political economy of reform.Other factors include a good intersectoral and

integrated approach and monitorable indicatorsof success, together with a related monitoringand feedback process. Best results will proba-bly come where monitoring and dialogue aresustained by annual Bank budgets for follow-up (essentially a Programmatic Economic andSector Work approach).

Finally, all the early efforts suggest the need forflexibility and country adaptation of the CWRASapproach within the common objective of acooperation framework over a short- andmedium-term horizon.

REFERENCE CITED

World Bank. Water Resources Sector Strategy:Strategic Directions for World Bank Engage-ment. 2004. Washington, DC: World Bank.


The 2004 the Republic of Yemen CWRAS can be summarizedas follows:

• It is a joint exercise among government, donors, and theWorld Bank.

• It updates a national strategy and investment plan.• It adopts a fully participatory approach through stake-

holder working groups and workshops.• Its objectives include deepening relationships with local

actors, and building local capacity.

Source: Author.

Box 1.24 A Broader Approach:The 2004 Republic ofYemen Country Water ResourcesAssistance Strategy

1. Water resources base, uses, and challenges2. Government institutional, legal, and policy framework3. Implications for the CAS, including review of Bank and

other donor programs and lessons learned 4. Evaluation and priorities for the CWRAS—what the

Bank should do more, less, or better

Source: Philippines CWRAS.

Box 1.25 The Chapters of the Philippines CountryWater Resources Assistance Strategy

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Yemen, Republic of. “CWRAS.” Author’s per-sonal communication. Scheduled for deliv-ery and external dissemination in the thirdquarter 2005.

USEFUL LINKS

Country Water Resource Assistance StrategiesWeb page: http://lnweb18.worldbank.org/ESSD/ardext.nsf/18ByDocName/StrategyCountryWaterResourceAssistanceStrategies.

This Profile was prepared by Chris Ward and reviewed bySarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI.


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ENABLING SMALLHOLDERPROSPERITY: IRRIGATIONINVESTMENTS FOR READYMARKETS

What is new? Now that irrigation technologiesare affordable, individual, and modular, linkingAfrican smallholders to markets is the next chal-lenge. How can the production of a dispersed pop-ulation of small producers be channeled towarddomestic and foreign markets? A successful case ofbilateral donor support to agribusiness companiesthat link up with smallholders is discussed in thisInnovation Profile.

Agriculture holds the greatest promise for Zam-bia’s prosperity. The country’s vast tracts of fer-tile soil, tropical climate tempered by altitude,good rainfall, and access to more than 45 per-cent of Southern Africa’s water resourcesendow its farmers with considerable compara-tive advantages. Zambia’s pursuit of economicliberalization and structural reform holds prom-ise for transforming the country into a moreopen market economy.

In the absence of appropriate irrigation strate-gies, an overwhelming proportion of Zambianfarmers still depend on rain for production, andproduce one crop of maize a year. When rain-water is not sufficient, smallholder farmers inthis water-rich nation irrigate their crops usingsmall cans or buckets to fetch water fromnearby streams or wells. It takes 6 to 8 hours toirrigate a quarter-hectare plot using thismethod. This technique is practiced by 85 per-cent of Zambia’s farmers, of whom 600,000 aresmallholders.

Acknowledgment that Zambia’s great waterendowment offers high potential for economicgrowth led to the formation of the WaterResources Action Program (WRAP). But whathinders the advancement of irrigated agricultureis primarily the lack of appropriate investments.Reluctance to address irrigation directly and

innovatively in a more commercially orientedenvironment has deprived smallholder farmersof improved livelihoods and saddled them withfood and income insecurities. Not surprisingly,Zambians live on one of the lowest per capitaincomes of the continent (US$350).


In August 1999, a bilateral donor created theZambia Agribusiness Technical Assistance Cen-ter (ZATAC). Its aim is to help break the cycle ofpersistent rural poverty and food insecurity andincrease smallholder household income byapplying commercial approaches.

ZATAC focuses on wealth creation throughcommercialization of smallholder production.Its market-based and demand-driven approachto smallholder production, combined witheconomies of scale through outgrower schemesdirectly linked to ready markets, has increasedhousehold incomes for smallholders. ZATAC’sstrategy involves evaluating the commercialpotential of smallholder production, then liftingconstraints to commercialization by whatevermeans—for example, by helping smallholdersshift from bucket-watering to pump irrigation orintercrop high-value crops to maximize returnson land and labor. ZATAC also aims at strikingdeals and establishing linkages between small-holder outgrower schemes and agribusinessesseeking to enhance their supply volume andcompetitiveness in domestic and export mar-kets. This strategy gives small growers anopportunity to increase household cash flowquickly while becoming partners in the valuechain. It offers agribusinesses a chance toincrease their supply base and benefit fromeconomies of scale without the associated capi-tal investment.

Central to the strategy is the identification ofaffordable, appropriate, and efficient systems thatadd value so that smallholders can work them-selves out of poverty. For example, in exportvegetables, ZATAC helped override the waterconstraint by providing credit for irrigation equip-ment to make water work for smallholders. Theaccess to credit for irrigation equipment that


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ZATAC provided enabled smallholders to betterutilize the resources they own: land and labor. Asa result, smallholders are producing more cyclesof crops, growing higher-value crops, and spend-ing less time watering while expanding produc-tion. Some smallholders earn as much asUS$8,000 a year on a 2-hectare plot, producingexport vegetables.

The simple provision of irrigation credit, tiedwith ready buyers, has unleashed the farmers’potential. This type of market linkage not onlyincreases real income for smallholders but alsoprovides an avenue for repayment of the credit.With ZATAC assistance, the equipment credit ischanneled to smallholders through their pro-ducer groups, and further guaranteed by theready markets or agribusinesses that ultimatelypurchase the product. As part of the relation-ship, the agribusinesses help remit repaymentsto ZATAC for producer groups and their mem-ber producers.

Under the ZATAC Integrated Coffee Program,smallholder farmers intercrop specialty coffeewith vegetables for the local market andpaprika for the export market. Paprika produc-tion is linked to a local processor and exporters,while coffee is exported through the local cof-fee growers association. ZATAC also providesirrigation credit to these smallholders throughtheir cooperative enterprise for the purchase oftreadle pumps, which has enabled smallholdersto tap Zambia’s water resource more effectivelythan they would have with the bucket tech-nique. The switch to treadle pumps has meantthat farmers now need an hour or less to wateran area that used to take 6 to 8 hours. Treadlepumps cost less than US$100 on average.ZATAC applies interest and a service fee onthese kinds of credit but adjusts the terms tohelp smallholders manage their debt burden. Aswith export vegetables, ZATAC rallies agribusi-ness assistance in establishing a repayment sys-tem to reimburse ZATAC for credits disbursed.

In addition to credit, ZATAC provides technicalassistance, business development services, andtraining in production and processing, both at

the farm and company levels. It does so directlyand through alliances with other donors,research institutions, the ministries, as well asthe agribusinesses themselves.

OUTPUT AND IMPACT

Participating smallholders now earn more andgrow more cycles of crops and more varietiesof products than ever before. Smallholder agri-cultural practices are changing, and in theprocess, farmers feel encouraged to upgradethemselves by using improved technologies,better-variety seeds, and labor-saving mecha-nization that all help them break free from theirdependence on rain and from poverty.

For the first time in the history of Zambia,smallholders are growing fresh vegetables forEuropean markets, thanks to the alliancebetween smallholder producers and agribusi-nesses. In 2003, 300 smallholder farm familiesexported close to 300 tons of fresh vegetablesto the United Kingdom. This example showshow this type of linkage not only increasesincome for smallholders but also contributes tothe nation’s economic growth.

ISSUES FOR WIDER APPLICABILITY

Because of the success of the programs, themodel has been replicated across other subsec-tors and provinces. ZATAC now operates in 5out of 9 provinces and manages smallholderoutgrower schemes in dairy, coffee, paprika,honey, cashew, and essential oils. To date,ZATAC has worked with 10,000 smallholdersand rural entrepreneurs linked to more than 15agribusinesses.

With less than 15 percent of Zambia’s arableland under agricultural production and notmore than 12 percent of the nation’s irrigablearea under irrigation, the potential is enormousto expand food production for domestic andforeign consumption. Constraining fuller utiliza-tion of this opportunity is access to credit, orlack thereof, particularly for smallholder farm-ers without the collateral to secure loans from


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financial institutions. For irrigation credit towork, production activities must be tied toready markets that ensure a reasonable return.The ZATAC approach provides that linkage.

USEFUL LINKS

The ZATAC Web site: http://www.zatac.org/

This Profile was prepared by Bagie Sherchand of Develop-ment Alternatives, Inc., and reviewed by Sarah Cline,TimothySulser, and Mark Rosegrant of IFPRI.


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22DESIGNING INSTITUTIONAL REFORMS

OVERVIEW

Together with public policy (chapter 1), institutions create the enabling environment in which marketsguide the allocation of resources for efficient outcomes.This chapter examines key institutional reformsthat 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. Watersector reform is a complex, multisectoral challenge, with many stakeholders and sometimes highassociated political transaction costs. The process requires investment—of time, political capital,and financial resources (for studies, capacity building, and institutional development). Reformchampions are needed, and experience shows that participatory approaches, though sometimesrisky, strengthen ownership. Irrigation management transfer in Australia is an example of successachieved under conditions of well-developed governance, political commitment, skilled anddevoted stakeholders, and extensive investment at every level in learning and participation.

• 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

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Another example (from South India) showshow farmer irrigators were brought into thepolicy reform process and made it more farmeroriented. (See IN 1.4 on stakeholder interests,IN 1.1 and IN 1.2 on the political economy ofreform, IP 2.1 on coalition building in Australia,and IP 2.2 for the South India case. See also“Strengthening Farmer Organizational Capacityto Influence Agriculture Policy,” in AgricultureInvestment Sourcebook (AIS), Module 1.)

FOR DIFFICULT REFORMS, ADJUSTMENT LENDING MAY

BE SUITABLE. Policy-based loans can provide anincentive for governments to undertake com-prehensive, multisectoral policy and institu-tional reforms despite their high politicaltransaction cost. Using a policy-based lendinginstrument focuses attention on a specific high-profile reform agenda and musters a con-stituency within government and civil society toimplement it. It also has a democratic and“inclusive” nature, because program publicitystirs public debate throughout the nation. (SeeIN 1.2. See also “Adjustment Lending for Agri-culture Policy Reform,” in AIS Module 1.)

IN AGRICULTURAL WATER INVESTMENT, DECENTRAL-IZATION, DEMAND DRIVE, AND PARTICIPATION ARE

ROUTES TO IMPROVE EFFICIENCY. About half of theirrigated area in the world has been developedand managed by governments, but inherentstructural problems have sent government-owned irrigation schemes into a spiral of degra-dation. On these schemes, irrigators do notgenerally have a sense of ownership andresponsibility for the system or for efficientwater use. Service is often poor, and the systemscannot mobilize adequate resources to financecosts. Governments have become increasinglyreluctant to pay subsidies. As a result, the condi-tion of infrastructure and the quality of waterservices have declined. This poor experiencehas led to a shift of emphasis away from gov-ernment and toward a new public-private para-digm in recent years. The private sector—in theform of contractors, private investors, water userassociations (WUAs), community organizations,nongovernmental organizations (NGOs)—is tak-ing on more responsibility for irrigation manage-ment and financing. The key message is that

investments are more efficient when accompa-nied by decentralization, demand drive, andparticipation (see IN 2.1). Other chapters discussthe power of participation in private irrigationimprovement (IN 3.3); multipurpose operationssuch as dams and groundwater management (IP4.1); community-driven approaches to small-scale irrigation and watershed management (IN7.1); and supplemental irrigation, watershedmanagement, and drought and flood manage-ment (IN 6.1, IN 6.2, IN 8.1, IN 8.2).

WATER USER ASSOCIATIONS ARE AN IMPORTANT

INVESTMENT AREA. WUAs in irrigation can playmany roles along a sequence from the mostbasic cooperation at the turnout (tertiary, qua-ternary) right up to managing irrigationschemes. As the degree of transfer of responsi-bility grows along the sequence, investmentswill be needed to build institutions and capac-ity. The approach has proven successful andpopular. WUAs can also help the inclusion ofwomen and the poor in discussion and deci-sion making, and even in leadership, on waterrights and management. Participatory irrigationmanagement (PIM) has been adopted in morethan 50 countries since the 1980s. Investmentin a well-designed PIM strategy can bring manybenefits: reduced cost to government,increased cost recovery and farmer investment,improved maintenance, more equitable andefficient water distribution, improved waterquality, fewer water conflicts, and improve-ment in government services. Participatoryapproaches and user associations are also nowbeing introduced for drainage, for example inthe Arab Republic of Egypt. But there are risks,too. The cost of water to farmers may increase;water productivity may not rise quickly; localelites may capture control; and governmentmay reduce its support too quickly. The mostcommon causes of failure are inadequatepreparation of the enabling framework, weakpolitical and civil society support, and a hastytransfer without capacity building. (See IN 2.1for WUAs and participatory irrigation manage-ment. See IP 5.5 for participatory drainage inEgypt. See also “Investments to EmpowerFarmers to Manage Irrigation and Drainage Sys-tems” in AIS, Module 8.)


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AS AGRICULTURAL WATER MANAGEMENT MOVES

FROM AN ENGINEERING PHASE TO A TECHNOLOGY-AND MANAGEMENT-INTENSIVE PHASE, INVESTMENT IN

CAPACITY BUILDING BECOMES MORE AND MORE

ESSENTIAL. As the technical challenges of scarcityand environmental degradation grow, and asstakeholder involvement becomes more impor-tant, skill needs change. Capacity building isneeded at all levels—from farmers to govern-ment, covering the whole range from adaptiveresearch to hands-on management coaching forWUAs. The cost of adequate capacity buildingworldwide has been estimated at US$1 billion ayear, but actual investment does not come closeto that amount. (See IN 2.3.)

INVESTING IN A WATER RIGHTS SYSTEM CAN HELP

IMPROVE WATER MANAGEMENT, BUT ESTABLISHING A

RIGHTS-BASED SYSTEM IS FAR FROM EASY. Wherewater rights are not secure, management is ineffi-cient. If water is treated as a public or commonresource, incentives to efficient management andallocation are dulled. Management will also beinequitable, because use of water without a for-mal rights system results in exploitation by themost politically and economically powerful.Finally, water management without a clear rightssystem is unsustainable: absence of rights pro-vokes irresponsible use through the law of

capture and abuse of a common pool resource.A system of rights has proven to be an efficient,equitable, and sustainable water managementoption, promoting efficient water use andincreasing cost recovery. Water rights are also aprerequisite for the development of water mar-kets, which can allow intrasectoral and intersec-toral transfers. However, introducing rights-basedsystems can be politically contentious, particu-larly where there is cultural reticence and weakgovernance. A long-term participatory approachis essential. (See IN 2.2.)


Investments in technical assistance could includethe following:

• Capacity building (for sector management,farmer associations, and the like)

• Institutional development (water rights,PIM, Irrigation Management Transfer, law,water markets, and so on)

Project investments could focus on irrigationand drainage research. And finally, pilot invest-ments could include pilot projects for PIM andwater markets.

DESIGNING INSTITUTIONAL REFORMS

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INVESTMENT NOTE 2.1

INVESTING IN PARTICIPATORYIRRIGATION MANAGEMENT

Unable to finance and manage the large irrigationschemes they built and now own, governments areseeking to transfer management authority to users.Transfer shifts the government role mainly to regu-lating operation and maintenance (O&M) by build-ing the capacities of WUAs, providing supportservices, and piloting the decentralization of man-agement of river basins and aquifers.WUAs may, inturn, contract private sector entities to providemanagement services. Both levels of transferrequire agreements, new incentives, and new meth-ods to ensure inclusiveness and accountabilityamong stakeholders. They require investments inbuilding institutions and human capacity. Maturenetworks of WUAs could enhance the prospectsfor reforms such as volumetric allocation, waterpricing, and conflict resolution.

Irrigation systems are a vital resource for foodproduction, rural livelihoods and income, andincreasingly, fisheries and rural industry.About half the world’s irrigated area has beendeveloped and managed by government. Insuch systems, water users generally do nothave a sense of ownership and responsibilityfor the system or its water. Moreover, manyirrigation systems cannot mobilize adequateresources to finance costs. As a result, the sys-tems’ infrastructure and the quality of waterservices rapidly decline. In addition, competi-tion for water and pressure on the environ-ment are growing.

Under these circumstances, the key challengebecomes how to put the limited resources offarmers, governments, the private sector, andinternational development agencies to best usefor optimal water productivity and sustainabilityof irrigation systems. Empowerment of waterusers is essential to meet this challenge becausestrategies that promote active participation andfarmer investments show potential for increasingthe returns on public investment. Collectivelythese approaches are called Participatory Irriga-

tion Management (or PIM, as noted above), andthey are generally implemented through WUAs.These associations can also be a fundamentalmeans for empowering women, thus contribut-ing to Millennium Development Goal 3 (pro-mote gender equality and empower women). Invarying degrees and ways, participatory irriga-tion management has been adopted in morethan 50 countries since the 1980s, including mul-tiple states or provinces in India and China.

INVESTMENT AREA

In the 1970s and 1980s, PIM was often viewedas farmer contributions to management ratherthan farmer empowerment and governmentreorientation. Recent reforms in Mexico,Andhra Pradesh (India), and Indonesia, haveupdated the concept to mean the empower-ment of WUAs to govern the management andfinancing of public irrigation systems. The keychallenge is increasingly recognized asaccountability: building incentives (rewards),sanctions, and transparency into water serviceorganizations to induce them to meet stan-dards set by the governing body of users, therepresentative of the owner government, andother stakeholders.

The following are the main potential investmentareas in PIM:

• Policy, legal, and institutional frameworkfor WUAs

• Restructuring government and building itscapacity in sector regulation, buildingWUAs, and providing support services

• Creating and building governance and man-agerial and financial capacity of WUAs

• Restructuring the water supply, irrigation,and agricultural agencies to improve theway irrigation management, rehabilitation,and upgrading are decided and financed,with greater cost sharing and incentives forfarmers

• Empowering women and the rural poor,through membership rights and inclusion in


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local water forums; introducing water rightsat the farm level; and enhancing leadershipcapacity for poor women and men in WUAs.

• Enabling the private sector to provide sup-port services to WUAs for both irrigationand agriculture

Future investments in PIM will need to belinked to broader irrigation sector reform andefforts to increase the productivity of irrigatedagriculture, especially for the rural poor,through innovations in credit, technology,demand-driven extension, and group-basedagribusiness and marketing.

POTENTIAL BENEFITS

A well-designed PIM strategy has proven poten-tial to increase farmer investment in irrigationmanagement, improve the productivity of waterused for agriculture, improve the sustainabilityof irrigation systems, promote development ofdemand-driven support services, and improvethe cost-effectiveness of government regulationand responsiveness of its services.

Evaluations show that PIM yields a mixture ofpositive and negative results. Box 2.1 summa-rizes the most commonly reported benefits—and risks, if PIM is not designed properly. Mostproject and research documents report reducedgovernment expenditures for irrigation, as inMexico and Andhra Pradesh, in keeping withthe objective. Farmers’ irrigation costs oftenrise, but this rise may eventually be offset byincreases in water productivity through moreresponsive management, improved supportservices, and better market access. Adoption ofPIM in Mexico, Andhra Pradesh, and Malibrought about an increase in investments,including farmer investments, in maintenanceand rehabilitation.

PIM also generates other benefits. The forma-tion of WUA federations in Indonesia and Mex-ico has enabled farmers to participate in riverbasin forums, which deal with water competi-tion and environmental concerns. In Mexico,Colombia, and Nepal, WUA federations andnational networks provide support for political

issues, extension, and conflict resolution. InShaanxi province in China, the private sectorhas invested in irrigation rehabilitation. Insome countries, PIM has expanded the areaserved. PIM implies the creation of WUA feder-ations, as well as partnerships with the privatesector, that offer farmers new options to organ-ize group input provisioning, agribusiness, andmarketing. Hence, as PIM evolves to includeWUA federations and the private sector, itenables WUAs to interact more with thesocioeconomic, environmental, and politicalforces around them.

Innovation and change to empower women islikely to have a strong impact on irrigation per-formance. In Africa alone, women provide dailylabor for irrigated production—especially inwoman-headed households, which account forbetween 25 and 35 percent of smallholder irri-gators (Chancellor 1997). The experiencereported in box 2.2 shows how female leader-ship can foster local economic developmentand improved living conditions.


Key policy and institutional decisions to bemade in PIM programs are as follows:


Benefits

• Reduced cost of irrigation to government • Increased cost recovery• Improved coverage and quality of maintenance• Better water distribution equity and efficiency • Fewer water conflicts

Risks

• Cost of water to farmers may increase• Water productivity may not rise quickly• Local elites may capture control• Government may reduce support too much• Rehabilitation financing remains unresolved

Source: Author.

Box 2.1 Benefits and Risks of ParticipatoryIrrigation Management

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• How should the roles, services, and author-ity for irrigation management be realignedbetween farmers, government, and the pri-vate sector?

• What organizational arrangements andmodes of farmer participation are appropri-ate for irrigation system governance, man-agement, financing, and sector regulation?

• What type of capacity building is neededfor effective functioning of WUAs, espe-cially their women members?

• What should farmers’ responsibility be infinancing different aspects of irrigation,including management, rehabilitation, mod-ernization, and construction?

• What incentives and accountability mecha-nisms are needed to make stakeholders fol-low irrigation-related agreements andregulations?

• What legal, regulatory, and institutionalchanges are needed for PIM to work?

• How should such changes be phased in andimplemented?

Such questions normally require strategic plan-ning exercises that include key stakeholders;they may also require research and pilots. Acomprehensive strategy should emerge thatincludes building and maintaining political sup-port, incentives, and accountability mechanismsto maintain and increase stakeholder support.The strategy should also target sustained capac-ity building and financing.

In parallel with the legal and institutionalarrangements for creating PIM, most irrigationand agricultural services providers need toundertake major institutional reforms to meet thenew demands posed by these newly dynamiccustomer relationships. Without that, WUAs’expectations may be raised while the govern-mental agencies remain inadequate to respondat the basin, district, or branch canal level. Thechallenge lies in getting irrigation and agricul-tural institutions to work together with WUAsand the private sector, when in most cases thereis no history of cooperation. On institutionalreforms, a lesson that comes out of recent expe-rience in Sri Lanka is that WUAs significantlychange the dynamics among farmers, water sup-ply services, and agricultural service providers(box 2.3). Farmers organized into groups offermany opportunities that did not exist before theformation of WUAs. One of the lessons from SriLanka is that, once this new dynamic is estab-lished, the private sector becomes interested indealing with farmer groups.

Approaches and division of responsibilities

Experience suggests that reform requires a com-prehensive, strategic, and participatory process ofstakeholder consultations, dialogue, participatorydecision making, awareness campaigns, imple-mentation, monitoring, and adjustment. In thepast, investments have focused mainly on infra-structure and modestly on institutions, with inad-equate attention to incentives and accountabilityarrangements that would ensure stakeholder sup-port and compliance with new institutions andrules. In the future, more attention should be


In 1995, in Gujarat, India, the Self-Employed Women’s Associa-tion, a trade union of 215,000 poor, self-employed women,launched a 10-year water campaign in nine districts of Gujarat.Watershed committees were set up at meetings where everyvillager from user and self-help groups was present. Out of atotal of 11 members, 7 were women.

Under the program, the committees constructed 15 farmponds, recharging 120 tubewells.Through soil and moisture con-servation work, the salinity of the land decreased. With moreproductive land, the women began earning higher and more sus-tainable incomes.About 3,662 hectares were thus treated. Nowthey grow cash crops using organic farming. On panchayatwasteland, community pasture land, and private land, about5,000 trees have been grown and grass planted on 3,500 squaremeters of field bunding for better retention of water.This hascreated a green belt in the area and generated employmentopportunities for about 240 women. About 2,500 hectares ofland that once supported only rainfed agriculture have been irri-gated, and the supply of drinking water is also ensured.

Source: Maharaj et al. 1999.

Box 2.2 What Women Can Do:An Indian Experience

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given to incentives and accountability measuressuch as farmer empowerment, irrigation serviceplans and agreements, management audits, sec-tor regulation, and linkage of support and assis-tance to audit results.

The debate between “big bang” versus incre-mental approaches should be recast in terms ofconcern about which changes need to bedesigned and adopted rapidly (such as strategyand legal framework) and which aspects needan incremental approach (such as developingoptimal levels of management transfer andaccountability mechanisms). Experiences inMexico, Turkey, and Andhra Pradesh suggestthat the big bang approach generated basicsupport for reform. But they also indicate thatthe initial reforms are incomplete and furtherchanges are needed: service plans, audits, assetmanagement, financing, and support services.Proponents of PIM should expect and encour-age the original PIM policies and arrangementsto evolve in a long-term process of monitoringand evaluation through stakeholder workshops.

Risks and implications

There are risks related to the way irrigation sec-tor reform is designed and implemented. Anexample is rapid implementation of physicalconstruction works without proper capacitybuilding in institutional and managerial aspects.Vested interests may limit development of newaccountability mechanisms and adequatefinancing between service provider, governingauthority, and sector regulator. Resistantbureaucracies may slow down or sabotagetransfer of responsibilities. They may refuse todownsize or relocate staff. If management trans-fer is too rapid, WUAs may not yet be capableof taking over management. Local elites mayassume undue influence in new WUAs. As gov-ernment increases its role in regulating WUAsand service providers, underpaid employeesmay become vulnerable to bribes.

A key challenge is to include incentives andaccountability mechanisms that ensure WUAcompliance with government regulations, serv-ice agreements between WUAs and service

providers, and WUAs’ own rules. PIM mayinvolve an increase in investment or expendi-tures by water users. This is often offset eventu-ally by increases in the profitability of irrigatedagriculture caused by both improvements in themanagement of irrigation systems and innova-tions in cropping, marketing, and agribusiness(the lattermost may require parallel invest-ments). It may be beneficial to design loan pro-grams to include tranche-based benchmarkingof essential but sensitive aspects of reform suchas indicators of political support, managementtransfer, and empowerment of WUA federationsand networks.

WHEN IS INVESTMENT APPROPRIATE?

Investment in PIM is appropriate when a coun-try has both a policy need for such investment


WUAs were formed and fostered under the Mahaweli Restruc-turing and Rehabilitation project (MRRP) in Sri Lanka. Usuallyonly 1.0 hectare of land is allocated to each farmer. Farmers inthe project area, subject to the Mahaweli Authority of SriLanka, had little say in the decision. However, after 330 to 400farmers formed a “community of common concern” with somemanagement authority over irrigation water, they were able toconcentrate on increasing agricultural productivity and diversi-fication. As a group, they decided what and when to grow.Under this farmer management, water use decreased, and pro-ductivity in the cropped area increased. Private sector involve-ment unleashed a new dynamic and brought economies ofscale.What happened next was remarkable.The WUAs organ-ized bulk purchases of fertilizer, high-quality seed, and otherinputs at competitive prices. On the output side, agro-indus-tries dealing in soybean, chili, chicken meat, and fresh vegetablesfound that they could talk with groups of farmers controllinghundreds of hectares. In the soybean industry, for instance, theindustry reached agreement with groups of farmers to growsoybeans under contract.The industry wanted quality and highvolume; the farmers were interested in price and quantity.Theindustry supplied them with high-quality seed and the exten-sion expertise to ensure quality and high volume, and farmersentered into forward contacts for their crop.The partnershipsstarted modestly with about 70 farmers and 70 hectares butsoon grew to thousands of hectares.

Source: Geoffrey Spencer (personal communication); MRRP Imple-mentation Completion Report (n. 28927/LK).

Box 2.3 The Mahaweli Restructuring and Rehabilitation Project in Sri Lanka

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and the political capacity to make such invest-ments effectively. Key signs of need for PIMinvestments are governmental inability to eitherfinance irrigation O&M or collect fees fromfarmers; poorly managed irrigation systemsdominated by ineffective, inefficient, and/orunaccountable government bureaucracies;heavy dependence by rural society on revitaliz-ing irrigated agriculture for livelihoods andpoverty alleviation; and potential for significantimprovements in agricultural water productivityand irrigation sustainability through increasedparticipation and empowerment of water users.

A country and donors have the optimum capac-ity to effectively invest in PIM and irrigationsector reform when high-level political commit-ment to it makes them feasible, when farmersstand to benefit economically, and when keystakeholders are willing to work together in aprocess of strategic change. So far, such condi-tions have often been lacking in PIM-relatedinvestments. They may be facilitated throughlinking up with pro-reform constituencygroups, conducting pilot experiments, holdingpublic consultations, and combining investmentand adjustment loans. Financial options are dis-cussed in the Investment Note on DevelopmentPolicy Lending to support Irrigation andDrainage Sector Reforms (IN 1.2).

LESSONS LEARNED

CAUSES OF FAILURE. The most common causes offailure in PIM programs are listed here roughly inorder of frequency of occurrence across coun-tries: inadequate policy, legal, and regulatoryframeworks and political support; lack of a last-ing coalition of pro-reform constituency groupscapable of overcoming resistance to reform bysome government agencies; insufficient attentionto capacity building of WUAs and reorientationof government agencies; attempts to transferresponsibilities to WUAs without necessary legalpower or financial resources, restricting thescope for reform so narrowly, such as only creat-ing WUAs, that it fails to address significantincentive and accountability problems betweenWUAs, government, and other stakeholders; andfinally, unprofitable agricultural conditions.

MEASURES FOR AVOIDING FAILURE. Failures of PIMprograms can be avoided, minimized, or cor-rected if the World Bank and its partners pursuea process that involves all significant stakehold-ers, each at its own level, in strategic planning,consultations, and negotiation; tests arrange-ments and pays attention to incentives andaccountability challenges; and monitorsprogress and allows course correction.

CONDITIONS FOR SUCCESSFUL INVESTMENTS. Themost important conditions for successful PIMprograms are listed here by priority: high-levelpolitical commitment backed up by a strategyto maintain a solid stakeholder coalition; farmerdissatisfaction with present management per-formance and a PIM strategy that enables WUAsto make desired adjustments; a comprehensiveproposal from the Bank and its partners forreform that includes reforms in irrigation serv-ice planning, government agencies, and a pri-vate sector role in service provision andsupport services; building capacity and supportservices; and significant potential to increasethe profitability of irrigated agriculture.

EFFECTIVE CHANGE PROCESSES. Experience withBank-supported programs for PIM suggests thatthe most important elements of an effectivechange process (listed by priority) are compre-hensive, strategic, and participatory planning,monitoring, and adjustment; facilitation ofchange through participatory dialogues aboutagricultural and irrigation improvement strate-gies; WUA involvement in making investmentsjointly with the government; parallel assistanceto revitalize irrigated agriculture (through mod-ernizing extension, marketing, and agribusi-ness); and, where needed, modernization ofland and water rights (that is, water rights at thefarm level, including rights for women and therural poor) paralleling PIM reforms.


Seven elements should be in place for PIM toresult in sustainable and productive irrigation:

• Functional infrastructure that is compatiblewith accepted water use rights and local


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management capacity. Approaches to reha-bilitation toward supply-driven design andoperations (as in India) suggest that bring-ing system design, water use rights, andmanagement capacity into harmony isessential for sustainable PIM reforms.

• Empowerment of farmers to share authorityover system policies, rules, selection of lead-ers and staff, service plans, and fees. Suchempowerment in PIM programs in the UnitedStates, Mexico, Andhra Pradesh, Madagascar,the Dominican Republic, and Indonesia havebeen a powerful incentive for farmers to sup-port PIM and improve the performance ofirrigated agriculture. Early efforts that did notinclude significant farmer empowerment, asin the Philippines, Sri Lanka, and Thailand,were not sustainable.

• Gender-sensitive irrigation design. It is cru-cial that irrigation development take intoaccount the prominent part that womenplay in producing irrigated crops, appreci-ate their needs, and enable them to selectappropriate technology to improve produc-tivity. Additionally, it should be appreciatedthat returns on investment in women, interms of social and economic objectives, arepotentially enormous (Chancellor, Hasnip,and O’Neill 1999).

• Institutional mechanisms to ensure account-ability to regulations and agreementsamong farmers, WUA leaders, water supplyand agricultural services agencies, and gov-ernment officials. Institutional tools such asperformance contracts among government,agency, and users should be used to createeffective individual and group accountabil-ity and incentives for meeting agreed objec-tives. Though central to institutional design,such tools have often been overlooked.

• Capacity to mobilize sufficient resourcesto cover management and capital replace-ment costs. Reform programs should pro-vide the basis for ensuring the physicalintegrity of irrigation systems. This can beachieved only if reform design addressesthe means of financing every aspect of irri-

gation system construction, management,rehabilitation, and modernization. Thesewill usually include farmer financing ofroutine management and other cost shar-ing by users. (See IN 1.4 on Pricing,Charging, and Recovering for IrrigationServices.) Public financial assistanceshould be designed to support adequateinvestment in irrigation.

• Responsive governmental and private sectorsupport services for WUAs. As WUAs takeover responsibility for irrigation managementand financing, they need institutional, mana-gerial, and financial capacity building forboth irrigation system management and agri-cultural development. Setting up a supportsystem for locally managed irrigation isessential to make PIM viable and sustainable.

• Parallel efforts to make agriculture moreprofitable and environmentally sustainablefor farmers. Without economically and envi-ronmentally viable crop production, PIMwill not be sustainable. Efforts to make agri-culture more profitable for farmers—and toprotect watersheds—will be essential tomake PIM work.


PIM reforms offer opportunities to invest inthe following:

• Capacity building for board members, WUAs,WUA personnel, and agency staff members

• Testing formulas for management and gov-ernance improvement

• Strong economic and agronomic programsto raise water productivity

• Building high-level political commitment

• Preparing the agency for new roles in usercapacity building, support services, and reg-ulation

• Developing new cost-sharing arrangementsfor O&M, rehabilitation, and modernization


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• Hardware improvement following adoptionof new policies for farmer co-investment

• Defining a clear and strong legal status forWUAs

• Codification of water rights for WUAs andindividual users

These elements should be designed in partici-patory forums to fit local conditions and beincorporated into policies, legislation, regula-tions, WUA constitutions and by-laws, criteriafor cost sharing and assistance, and irrigationservice plans and agreements.

REFERENCES CITED

Chancellor, F. 1997. “Developing the Skills andParticipation of Women Irrigators.” U.K.Department for International Development(DFID), Report OD 135. Available online athttp://www.dfid-kar-water.net/w5outputs/electronic_outputs/od135.pdf.

Chancellor, F., N. Hasnip, and D. O’Neill. 1999.“Gender-Sensitive Irrigation Design—Guid-ance for Smallholder Irrigation Development.”U.K. Department for International Develop-ment (DFID), Report OD 143(Part 1). Avail-able online at http://www.dfid-kar-water.net/w5outputs/electronic_outputs/od143pt1.pdf.

Maharaj, N., K. Athukorala, M. Garcia Vargas, andG. Richardson. 1999. “Mainstreaming Genderin Water Resources Management—Why andHow.” Background Paper for the WorldVision Process. IRC International Water andSanitation Centre, United Nations Develop-ment Fund for Women (UNIFEM), Interna-tional Information Centre and Archives for theWomen’s Movement (IIAV), InternationalWater Management Institute (IWMI). Availableonline at http://www.un.org/womenwatch/daw/forum-sustdev/francis%20paper.pdf.


Sri Lanka. “Mahaweli Restructuring and Rehabil-itation Project.” Active. Project ID P034212.Approved: April 1998. Within World Bank,available at http://projportal.worldbank.org.

SELECTED READINGS

International Water Management Institute(IWMI). 2003. Gender Analysis and Reformof Irrigation Management: Concepts, Casesand Gaps in Knowledge. Edited by DouglasMerrey and Shirish Baviskar. Availableonline at http://www.iwmi.cgiar.org/policy/gender_pubs.htm.

Ostrom, Elinor. 1992. Crafting Institutions for Self-Governing Irrigation Systems. San Francisco:Institute for Contemporary Studies Press.

Subramanian, Ashok, N. Vijay Jagannathan, andRuth Meinzen-Dick, eds. 1997. “User Orga-nizations for Sustainable Water Services.”World Bank Technical Paper No. 354, WorldBank, Washington, DC.

Vermillion, Douglas L. 1997. “Impacts of Irriga-tion Management Transfer: A Review of Evi-dence to Date.” IIMI Research Report 11.International Irrigation Management Insti-tute, Colombo, Sri Lanka.

Vermillion, Douglas L., and Juan A. Sagardoy.1999. “Transfer of Irrigation ManagementServices: Guidelines.” FAO Irrigation andDrainage Paper No. 48. Food and Agricul-ture Organization, Rome.

USEFUL LINKS

International Network on Participatory Irriga-tion Management: http://www.inpim.org/

International Water Management Institute (IWMI):http://www.iwmi.cgiar.org/


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Training Kit on Gender and Irrigation: http://web.idrc.ca/en/ev-5427-201-1-DO_TOPIC.html

World Bank Electronic Learning Guidebook onParticipatory Irrigation Management: http://www.worldbank.org/wbi/pimelg/

This Note was prepared by Doug Vermillion and Joop Stout-jesdijk, with inputs from Arunima Dahr, Eija Pehu, and WendyE. Wakeman of the Gender and Rural Development The-matic Group, David Groenfeldt of the Indigenous Water Ini-tiative, and Geoffrey Spencer. It was reviewed by Maria Salethof IWMI.


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INVESTMENT NOTE 2.2

INVESTING IN WATER RIGHTS,WATER MARKETS,AND WATERTRADE

This Investment Note discusses investment in thedevelopment of a legal framework for water enti-tlements, in the issuance of such entitlements, andin the use of market-based mechanisms that permitvoluntary adjustment by owners and users to meettemporary or permanent changes in demand. Cul-tural and political attitudes toward water, and therole of the government in its allocation and man-agement, must be taken into account when consid-ering such investments. By itself, such a system ofentitlements and market-based transfer does notguarantee good water resources management, butit is an important component of improved watersystem management.

Use of water without a formal framework forentitlements may result in the exploitation ofthis resource by the most politically and eco-nomically powerful users. A legally recognizedand regulated entitlements system has provenan equitable and sustainable water manage-ment option.

After the initial issuance, entitlements need to beable to be adjusted to deal with changingdemand, particularly where water supplies arelimited or subject to droughts. Such adjustmentsmay be for the short or the long term. Histori-cally, readjustment was frequently based on gov-ernment fiat, prompted by political pressures oras an improvised response to a crisis. The cost ofsuch readjustments usually fell on poor smallfarmers. Experience in both donor and clientcountries shows that market-based, voluntarytemporary, or long-term adjustments yield moreequitable outcomes, because they compensatethose giving up water supplies or entitlements.

INVESTMENT AREA

Investments in new or existing hydraulic infra-structure and irrigation projects provide achance to introduce the basic concepts needed

for the issuance of water entitlements. Often,issuance requires changes in the legal and insti-tutional framework, the cultural and politicalattitudes toward water, and the role of the gov-ernment in its allocation and management.

Inclusion of water entitlements and a well-designed legal and institutional framework inlending for water sector infrastructure are neces-sary to make the investment sustainable and totarget the poor inhabitants of the borrower coun-try. Implementation requires strong long-termcommitment from both lender and borrower. Asystem of entitlements and market-based transferdoes not, by itself, guarantee good waterresource management. It is only one componentin an entire program. It presupposes an alreadysound water allocation and water entitlementssystem. Without solid legal protection, lack ofconfidence will prevent a market in those entitle-ments from developing.

POTENTIAL BENEFITS

A system of water entitlements, defined volu-metrically, enforced through measurement andmonitoring, and coupled with market-basedmechanisms for transfer or trade may producethe following benefits:

• Equitable distribution of water resourcesamong users and among sectors of use

• An equitable base for the collection of wateruse charges that reflect actual O&M costs

• A base for measuring use efficiency and forcreating incentives to install new technolo-gies that maximize the use of the resource

• An equitable method of adjusting entitle-ments to meet changing demand and short-ages in a voluntary manner that compensatesthose giving up water supplies and shifts theopportunity cost of additional water to thoseacquiring it

• Elimination of ad hoc water allocation deci-sions by government in reaction to politicalor emotional pressures or short-term eco-nomic expediency


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• Registration of the allocation and use ofwater supplies that provides a foundationfor water sector planning and conservationon a river basin or regional level


Many countries regard water as a free good towhich all citizens are entitled and one thatshould be allocated and managed by the govern-ment. This view and the government authoritythat it implies are jealously guarded by the man-agement agency. Its personnel tend to believethat users are not competent to participate inwater allocation or management. This view hasproduced inefficient management and uncom-pensated expropriation of low-priority users dur-ing drought or periods of changed demands. Ithas also resulted in poor planning, unrestricteduse, and infrastructure deterioration.

Assigning water rights can effectively addressthese problems. They can be used either asnontradable or as tradable entitlements to waterabstraction and use. If tradable water rights canachieve higher levels of economic efficiency onone hand, their application implies major socialand institutional changes on the other. Hence,

where the institutional environment is not con-sidered mature enough to implement a watermarket, nontradable water rights can be aneffective first step in that direction. The legalprovision and application of water rights do notguarantee success in solving problems of over-exploitation, inefficient water use, or water con-flicts. The design of the water rights frameworkhas to be based on sound hydrological, eco-nomic, and social impact analyses. The lack ofsound background studies can cause the systemto fail, as was the case in Mexico until 2003when the Water Rights Adjustment Program(WRAP) was initiated, with the Bank’s assis-tance (box 2.4).

Water markets have many advantages for waterreallocation with respect to nontradable permits,but the property rights structure has to bedesigned specifically for water transactions. Oth-erwise these markets are unlikely to work effi-ciently (Matthews 2004). Water markets can betteraddress the issue of water resources sustainabilitywhen the traded rights are volumetric entitle-ments. Volumetric entitlements encourage users tomanage the resource and to maintain the infra-structure in a sustainable manner. In combinationwith access to market-based, voluntary exchange


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 tomeet the needs of their era and with the hydrological information then available, are now redesigned.The problem is worsein the case of groundwater because over the years the storage of many aquifers has been compromised. Excessive concessionof water use rights, owing to a malfunctioning concession system, has compounded this problem.

In 1992, the National Water Law was approved to formalize water rights entitlements and record them in the Water Rights PublicRegistry.The application of the law caused the issuance of concession entitlements that far exceeded national water availability.Thereason was that concessions were granted for 10 years, for the volumes that users said they were using, without any calculationsmade on the basis of water availability. Indeed, the objective of the norm was not to give concessions that would be sustainable butto enforce the registration of all water users in order to collect information for future planning and water allocation.

The Water Rights Adjustment Program (WRAP, or PADUA as it is known in Spanish) was launched in August 2003 to recoverexcessive concessions of water by means of economic incentives—and to contribute to refining water rights and turningthem into a true instrument for integrated, sustainable management of water resources.The program has been initially appliedin Sonora state. Useful lessons learned have been identified in a World Bank–funded study.The main recommendation of thestudy is to integrate the WRAP with other (already existing) regulatory measures, as well as social participation and economicincentives, so that it will be able to reconcile water user rights in Mexico with the actual availability of water resources.

Source: Author.

Box 2.4 The Role of the Water Rights Adjustment Program in Water Sustainability in Mexico

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of water entitlements, volumetric entitlementsgive users economic incentives to use their enti-tlements and supplies efficiently. On the otherhand, volumetric entitlements imply the setup ofcostly equipment (that is, measurement devicesfor pumped groundwater or abstracted surfacewater) for water measurement at each userabstraction node. When this is not possible (fortechnical or economic reasons), a proxy of thevolume of groundwater used can be calculated byapplying formulas based on the energy con-sumed (as in Mexico) or on pumping time. A dif-ferent approach that does not need volumetricmeasurements at each consumption node isbased on a priori allocation of water rights towater user groups. In Chile, an annual distributionof water is made to WUAs based on historical cri-teria. Most WUAs maintain their own registries inorder to distribute water to rights owners effec-tively, even if these rights do not imply legal title,and hence do not permit water trade by an indi-vidual user (Hearne and Donoso 2005).

During shortages and periods of changingdemand, high-priority users can compete in thewater market, and those who voluntarily giveup their entitlements are compensated at a ratedetermined by the market value of those sup-plies. This process automatically factors in thecosts of modifying delivery and distribution sys-tems and the higher value of the resource to thebuyers. Two case studies in South Africa (Nieu-woudt and Armitage 2004) show that watermarkets are effective in transferring water fromfarmers with lower return per unit of water tofarmers with higher return—for instance, large-scale table grape growers. Where crop prof-itability in the area is similar for potentialbuyers and sellers, water trade is unlikely totake place, because there are no willing sellersof water rights.

Water markets can be an effective way for allo-cating water not only within the agriculturalsector, but also among different sectors, namelyfrom 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-ences are those of South Africa and Australia.An important aspect to be considered in inter-sectoral water allocations through water tradingis how to ensure that environmental require-ments are met, guaranteeing, for example, aminimum flow to preserve endangered speciesor protect wetlands. A pioneering attempt canbe found in the Council of Australian Govern-ments (COAG) Water Reform Framework. Thisframework dictates that not all water is avail-able for transfer, since enough water for envi-ronmental needs has to be preserved, accordingto the principles listed in box 2.5.

Market-based opportunities to improve environ-mental flows are also being considered in somedeveloped countries but they are still at the levelof feasibility studies (Siebert, Young, and Young2000; Burke, Adams, and Wallender 2004).

The existence of water markets does not neces-sarily mean that equity and social impacts havebeen adequately addressed. The privatization ofwater resources, without management and


• States, in formally allocating entitlements to water, have toinclude allocations for the environment as a legitimateuser of water.

• Environmental requirements are to be determined usingthe best scientific information available and with regard tointertemporal and interspatial water needs.

• In the case of overallocated or stressed rivers, substantialprogress has to be made in achieving a better balance inresource use and allocating water to the environment inorder to restore the health of the river system.

• Jurisdictions would consider establishing environmentalcontingency allocations that provide for a review of theallocations five years after their determination.

• Where significant future irrigation activity or dam con-struction is contemplated, environmental requirementshave to be adequately met before any harvesting of thewater resource occurs.

• Give high priority to research necessary to advance theimplementation of the strategic framework, including con-sistent methodologies for determining environmentalflow requirements.

Source: High Level Steering Group on Water,Australia 1999.

Box 2.5 Australia COAG Water Reform:Key Elements Concerning Environmental Allocations

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monitoring by appropriate institutions, can turnout to empower a few rich groundwater ownersat the expense of poor farmers. Evidence fromPakistan’s Punjab state indicates that monopolypower in the groundwater market resulted in asubstantial misallocation of resources (Jacoby,Rehman, and Murgai 2001). However, poorfarmers would rather pay a higher price for asecure groundwater supply, even if it is monop-olized by rich landlords, than pay minimal feesfor an unreliable supply of canal water regu-lated by government agencies (Saleth 1998 andMeinzen-Dick 1998).

Moreover, market-based transfer mechanisms donot necessarily consider the impact of transferson third parties, including the local economy. Asan example, losses incurred by the providers ofagricultural inputs and products may not beconsidered when water is transferred from agri-cultural use to a different use. In addition, onearea’s tax base may grow at the expense of thatof another area that loses the water. In the U.S.state of California, community resistance in theselling regions has soured a number of water-trading deals over the late 1990s and early 2000sand has likely prevented others from being pro-posed. In addition, many of California’s ruralcounties have introduced ordinances thatdirectly restrict groundwater exports and indi-rectly restrict the sale of surface water (Hanak2003). Hence, any system of market-based per-manent transfers needs a regulatory authoritythat ensures that third-party impacts are consid-ered and that the purchaser of the water entitle-ment bears at least a portion of the third-partyimpacts or losses. In addition, institutionalmechanisms for preventing and resolving socialconflicts need to be put in place.

Flexibility must be built into the law to allowadjustments and provide for a system of market-based transfers and trades. Borrowers are usuallymore comfortable with the concepts of annualtemporary transfers and rental of entitlementsthan with provisions permitting permanent trans-fers. Confidence can grow only as the systemdevelops. It would be rare to be able to imple-ment every desired aspect of a water entitlementlegal framework at the outset. The primary goal

should be the implementation of a legal frame-work that provides for issuance of volumetricentitlements to the users as usufructuary rights.The legislation should specify the role of govern-ment in issuing, enforcing, and protecting theuse rights represented by the entitlements,adjustment that may be instituted during periodsof scarcity, use priorities, and compensation forloss of supplies during water shortages.

Any system of permanent market-based watertransfer mechanisms should be designed to min-imize or mitigate third-party impacts. Each coun-try requires a custom-tailored approach, becausecultural, political, and social situations differ.Reforming the water sector involves politicaltradeoffs, institutional tradeoffs, and accommo-dations to historic precedents and philosophicalrigidity. Development of a strong governmentalpolicy requires a long-term program of educa-tion, marketing of ideas, and a strong championwithin the governmental structure.

Boxes 2.6, 2.7, and 2.8 illustrate the diversity inthe implementation of water sector reform.

LESSONS LEARNED

The major lessons learned from Bank and non-Bank projects are as follows:

• A legally and operationally solid water enti-tlement program is the foundation forsound water management and for watercharges to support sustainable managementand maintenance of water resources.

• Such an entitlement program is a precursorfor a system of voluntary transfer of waterentitlements to meet temporary and perma-nent changes in demand.

• Water rights and markets by themselves arenot sufficient to guarantee beneficial effectson water allocation, economic efficiency,and poverty reduction. Only well-conceivedinstitutional mechanisms can avoid unin-tended negative distributional and socialeffects from the application of sound eco-nomic principles.


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• Initial issuance of entitlements should bebased on rational beneficial need and his-toric use or carefully identified near-termdevelopment. Initial issuance should notpermit monopolies on future entitlementsor entitlements for largely speculative pur-poses.1 It should also guarantee a minimumflow for environmental purposes.

• Adoption of a legal framework and imple-mentation of a system of water entitlementscan threaten entrenched interests and evoke

strong political opposition. If intense social orpolitical conflicts occur, specific measures areneeded to build confidence among stake-holders. Because it cannot be assumed thatsuch legislation will pass, lending requiringsuch legislation should not be appraised untilthe laws have tacit governmental approval,and passage is imminent.2

• Implementation of water entitlements, par-ticularly if coupled with the introduction ofmarket-based transfer mechanisms, is an


Maharashtra state in India took bold and innovative action in 2002 and 2003.The World Bank was a knowledge partner whenthe Maharashtra government initiated a program to restructure water resources management functions. The programincluded 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 acttransforming the irrigation development corporations into river basin agencies.The FMIS Act mandated the transfer of O&Mof minor canals and facilities to users, the transfer of upper level canals and reservoirs to the ULAs where rational, and theissuance 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 andadministration 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 willhave 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, theminister of irrigation, and the secretary of irrigation.With inputs from the Bank and its consultants, Maharashtra state craftedan 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-basedtransfers.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, andoperation 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-

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.

Box 2.6 India: Maharashtra Restructuring and Policy Reform

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evolutionary process that may take manyyears. Long-term follow-through should beanticipated, with strong technical assistanceand capacity building to continue after theloan ends.


• Explore the historic system and identify keyareas that may be retained or modified to

further the acceptability of entitlements andmarket-based transfer mechanisms.

• Analyze the existing legal framework toascertain the least change needed to accom-modate the desired sector restructuring.

• Discuss the concept of water entitlementswith leaders in the public and private sec-tors to gauge acceptability and to identify


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 volumetricwater transactions and a permanent transactions market for buying and selling water rights. In the spot market, volumes ofwater are traded. In the permanent market, the purchases and sales of water rights take place over time. In the spot marketduring the 1999–2000 season, about 14 percent of the allocated water was reallocated through trades. In the dry 1995–6 sea-son, that figure reached 21 percent. In the permanent market, from 1981 through 2000, more than 27 percent of water rightswere exchanged independently of land transfers.

These figures support the hypothesis that, when efficient legislation allows private decision making, a water market can be anactive mechanism for water reallocation.These facts should provide policy makers with strong incentives for considering theadoption of market mechanisms as effective tools for reallocating entitlements. In Chile, a water code that allows transfers ofwater rights, independent of land titles, has contributed to the development of an active market for water entitlements.TheLimarí 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, theyare 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 theexchanges 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 ofwater are transferred among associations.This generates a significant flow of internal water transfers from farmers with lowermarginal 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 1980–2000 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 periodrequired by a permanent transactions market, in this case almost 10 years. In the spot market, what is exchanged is a knownvolume of water during a specific season. A permanent market transaction transfers an asset that delivers variable volumes ofwater over time.

Conclusion

Both the spot market for temporary transfer or rental of water allocations and the permanent market for the transfer ofwater entitlements evolved after the enabling legislation was adopted.These still-evolving markets have become key tools inadjusting water allocations to changing demands and changing climatic conditions.

Source: Azevedo et al. 2000.

Box 2.7 Chile: Market-Based Transfer System for Water Rights

84

stakeholders, potential opponents, andpotential advocates.

• Identify ways to win over opponents (forexample, confidence building programs)and enroll advocates to improve chancesfor acceptance of changes in the legal andinstitutional framework.

• Begin a long-term program of education,negotiation, diplomacy, and public relationsto sell these concepts to the key players inthe public and private sectors.

• Support the drafting of key legislation andregulatory provisions with inputs by experi-enced and knowledgeable consultants over

a time frame that allows numerous iterationsand discussions.


Any investment in the supply side of waterresources offers an opportunity to invest inthe development of the legal and institutionalaspects of the management of the supply-side development and for the evolution ofsound demand management. These include astrong system of water entitlements, theadministration and enforcement of thoseentitlements, and a mechanism to allow thatsystem of entitlements to adjust to meetchanging demand patterns.


In the early 1990s, Ceará state in Brazil embarked on a program to transform its system of water resources management intoa 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 availableon a first-come, first-served basis with no limit on the volume or timing of use. In the late 1980s and early 1990s, the statebegan 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 andaccompanying legislation were the work of experts in water resources management and water law from the state, the federaluniversity, and outside consultants.

Evolution

The plan was developed under pressure from growing industrial and tourism sectors demanding a stable and reliable watersupply. 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 FortalezaMetropolitan 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, andnegotiations with the World Bank were started to finance a water resources sector reform.The state’s political and waterresources management leadership had participated in an intensive Bank-funded study tour of water resources systems in theUnited States in 1993.The tour instilled an appreciation of the potential outcomes of reform.The reform process was fortunateto 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 ofa rational program of allocation of the available water resources. SRH developed rules and regulations for the issuance ofwater 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 waterrights process—and the development of awareness, along with the users and stakeholders, of the value of the concept.Thestate 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.

Box 2.8 Brazil: Ceará Water Entitlements Program

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Any supply-side investment also offers a chanceto develop entitlements and market-basedmechanisms as a part of that investment.

REFERENCES CITED

Azevedo, L. G. T., A. Baltar, O. Cristi, and S.Vicuna. 2000. “Markets for Water Used forIrrigation: An Application to the PalomaSystem of the Limarí Water Basin, Chile.”Note prepared for the World Bank TrainingSeminar on Water Rights, March 27–28,Washington, DC.

Burke S. M., R. M. Adams, and W. W. Wallender.2004. “Water Banks and Environmental WaterDemands: The Case of Klamath Project.”2004. Water Resources Research 40(9).

Hanak E., 2003. “Who Should Be Allowed toSell Water in California? Third-Party Issuesand the Water Market.” Public Policy Insti-tute of California, San Francisco. Availableonline at http://www.ppic.org/content/pubs/R_703EHR.pdf.

Hearne R. R., and G. Donoso. 2005. “WaterInstitutional Reforms in Chile.” In R. M.Saleth, A. Dinar, and M. Samad, Water Insti-tutional Reforms: Theory and Practice.(Water Policy, special issue on InstitutionalReforms).

High Level Steering Group on Water, Australia.1999. “Progress in Implementation of theCOAG Water Reform Framework.” Availableonline at http://www.affa.gov.au/content/output.cfm?ObjectID=D2C48F86-BA1A-11A1-A2200060B0A05637.

Jacoby, H. G., U. S. Rehman, and R. Murgai.2001. “Monopoly Power and Distribution inFragmented Markets: The Case of Ground-water.” Research Working Paper No. 2628.World Bank, Washington, DC.

Matthews, O. P. 2004. “Fundamental Questionsabout Water Rights and Market Realloca-tion.” Water Resources Research 40(9).

Meinzen-Dick, R. S. 1998. “Groundwater Mar-kets in Pakistan: Institutional Development

and Productivity Impacts.” In K. W. Easter,M. Rosegrant, and A. Dinar, eds., Marketsfor Water—Potential and Performance.Boston: Kluwer Academic Publishers.

Nieuwoudt, W. L., and R. M. Armitage. 2004.“Water Market Transfers in South Africa: TwoCase Studies.” Water Resources Research 40 (9).

Saleth, Maria R. 1998. “Water Markets in India:Economic and Institutional Aspects.” In K. W.Easter, M. Rosegrant, and A. Dinar, eds. Mar-kets for Water—Potential and Performance.Boston: Kluwer Academic Publishers.

Siebert, E., D. Young, and M. Young. 2000.“Market-Based Opportunities to ImproveEnvironmental Flows: A Scoping Paper.Report to Environment Australia.” Availableonline at http://www.deh.gov.au/water/policy/envflows.html#1.

Simpson, L. 2003. Integrated Water ResourcesManagement, Ceará. Brazil. Fortaleza: SRH,State of Ceará.

World Bank. 2003. “Sri Lanka Mahaweli Restruc-turing and Rehabilitation Project.” Imple-mentation Completion Report, Draft. WorldBank, Washington, DC.

SELECTED READINGS

Grantham, J., and S. Lautenschlager. 1999. Syn-opsis of Colorado Water Law, Colorado Divi-sion of Water Resources. Denver: State ofColorado, March.

Haisman, B. 2003. “Impacts of Water RightsReform in Australia.” International WorkingConference on Water Rights: InstitutionalOptions for Improving Water Allocation.Hanoi, Vietnam, February 12–15. Availableonline at http://theme5.waterforfood.org/pubs/200302conf/papers/35australia.pdf.

Marino M., and K. Kemper. 1993. “Pre-requisitesfor Market-Based Entitlement Transfers.” Tech-nical paper presented at Loveland, NorthernColorado Water Conservancy District.

———. 1999. “Institutional Frameworks in Suc-cessful Water Markets: Brazil, Spain and


86

Colorado, USA.” World Bank TechnicalPaper No. 427. World Bank, Washington,DC.

———. 2001. Market-Based Water Rights Trans-fer, Angat Basin, Philippines. Manila: Bank-Netherlands Water Partnership Program.Available online at http://www-esd.world-bank.org/bnwpp/index.cfm?display=dis-play_activity&AID=1&Item=17.

———. 2002. Legal Framework for Water Mar-kets. Washington, DC: World Bank.

Simpson, L., and K. Ringskog. 1997. “WaterMarkets in the Americas.” Directions inDevelopment report. World Bank Group,Washington, DC, December.


Brazil. “Ceará Urban Development and WaterResources Management Project.” Project IDP006436. Implementation Completion Report,2001.

India. “Maharashtra Water Resources RegulatoryAuthority Act.” Bank-Netherlands WaterPartnership Program. Available online at

http://www-esd.worldbank.org/bnwpp/index.cfm?display=display_activity&AID=47&Item=7.

Mexico. “Water Rights Law and RegulatoryTechnical Assistance.” Bank-NetherlandsWater Partnership Program. Available onlineat http://www-esd.worldbank.org/bnwpp/index.cfm?display=display_activity&AID=396&Item=17.

ENDNOTES

1. In Chile, water entitlements were initiallyissued based on beneficial need and historicuse. Subsequently, an auction was held forthe future use of surplus water resources.The main winners of this auction were thewealthy mining and energy sectors, whichnow hold a virtual monopoly in somebasins on the future water supplies that canbe developed.

2. See the Implementation Completion Reportfor the “Sri Lanka Mahaweli AuthorityRestructuring and Rehabilitation Project”(World Bank 2003).

This Note was prepared by Larry Simpson and reviewed byMaria Saleth of IWMI.


87

INVESTMENT NOTE 2.3

INVESTING IN BUILDINGCAPACITY IN AGRICULTURALWATER MANAGEMENT

Many borrowing countries are located in arid andsemi-arid areas where the productivity of the agri-cultural sector is highly dependent on the provisionof water for irrigation.A key investment target fordeveloping this sector is therefore building capacityin agricultural water management.

With agriculture using more than 80 percent ofthe world’s available water, improvement in theefficiency of water use is urgently needed.Growing populations around the world in thenext 20 years will greatly increase demand onwater for crops (SIWI/IWMI 2004). A great dealof water is being misused or mismanagedowing to weak institutions and poor water poli-cies. The solution entails taking human andinstitutional processes and capacities more intoaccount in the design and operation ofhydraulic devices and infrastructure.

INVESTMENT AREA

The solution involves providing the right know-how to the stakeholders and improving institu-tions (IPTRID 2003). It requires capacity buildingat every level—from farmers to government. Anintegrated approach is needed that goes beyondtraining and brings wider issues into the picture:applied research and demonstration, technologytransfer, community participation, effective gov-ernance, technical assistance, and institutionaldevelopment. Capacity-building programs toassist developing countries in formulating sus-tainable agricultural water management strate-gies are a most important strategic investmentneed for international funding agencies becausethey act as seed funding for stable and sustain-able economic growth.

Current thinking in most international financingagencies is that investment in a programmaticapproach will lead to strong domestic driversfor investment. In line with this reasoning, this

Investment Note argues in favor of investmentin the development of agricultural water man-agement capacity. Capacity building should bepart of an overall reform program with full pol-icy support. Only a strong commitment by pol-icy makers can create the conditions fortrainees to use their new knowledge once theyreturn to work.

POTENTIAL BENEFITS

The benefits of capacity-building programs inagricultural water management are outlinedbelow:

• Higher irrigation efficiency and productivityfor irrigated agricultural production (“morecrop per drop”)

• Enhanced sustainable livelihoods for peo-ple involved in irrigated agriculture

• Protection for soils and reduction of water-logging and salinization

• Protection for people and land againstwater damage through flood mitigation

• Collection of runoff through water harvesting

• Better water resources management to con-serve water supplies and quality


Building capacity should always start by identi-fying needs and gaps in current capacity so thatthe best responses for specific needs can beselected. A brief description of possibleresponses for effective capacity building fol-lows. The strategy will be most effective if itcombines the right mix of interventions at dif-ferent levels, according to the identified needs.

Training

Building capacity involves “in-depth” invest-ment in graduate and postgraduate education inwater resources management, focused on tech-nical aspects (box 2.9) as well as on institu-tional issues (box 2.10).


88

Knowledge transfer for water management

Multilateral and bilateral projects may createnational capacity-building networks betweendonor and client countries. These networks canhelp match growing demand for capability withinitiatives to build capacity, to develop educa-tional services, and to promote knowledgeabout reforms needed in the water sector.

Research

Better linkages are needed between researchand development (R&D) organizations andfarmer groups. An example is the “Water Savingin Irrigation” research program implemented inTunisia to respond to the challenges of overex-ploitation of shallow groundwater and irrigationwith marginal quality water (box 2.11). Theprogram has achieved research results but,more important, has built capacity in the broadsense and forged partnerships among Tunisianinstitutions. This has resulted in training for pro-gram staff and improved linkages betweenresearch and extension.

Institutional strengthening

Transferring irrigation management responsibil-ity from government to WUAs demands theprovision of sufficient support, and a compre-hensively prepared capacity-building program(box 2.12).

Gender mainstreaming

Giving women a voice in the management ofirrigation systems leads to more sustainable


The EIER-ETSHER Group (schools for agriculturalengineering and water) was established inOugadougou, Burkina Faso, to support developmentin 14 countries in West and Central Africa. Nearly2,500 technicians and graduates have passedthrough their training courses, and the group is asuccessful example of integrated cooperationbetween countries to support capacity building. Aprincipal local constraint is insufficient capacitybuilding, which limits the development and manage-ment of irrigation systems.Thus the development ofhuman resources, as provided by this group, is a keycomponent in projects to improve food productionand to reduce poverty. This initiative is a goodresponse to the problems in training and educationsuch as limited curricula, high operation costs,restrictions on the needs addressed (especially fornonscientific courses), and shortage of jobs suitablefor new graduates.

Source: Compaore 2003.

Box 2.9 EIER-ETSHER Schools in West and Central Africa

Some of Indonesia’s capacity-building activitieshave focused on the development of capableinstitutions for sustainable water resources andirrigation management. This is a consequence ofpresent government policy to transfer watermanagement to farmers. The initiative hasfocused on the following:

• Socializing the consequences of decentralizationpolicies, of introducing water resources manage-ment at the level of new river basin organiza-tions, and of transferring management to WUAs

• Defining new roles for government organizationsto be more service oriented, and for bettercoordination of stakeholders through improvedmanagement mechanisms

• Strengthening the new organizations to be moreeffective in their new roles (provision ofaccountability mechanisms and managementtransfer tools).

Source: Hofwegen 2003; Dedja 2003.

Box 2.10 Indonesia:Water Sector Management

Research initially financed as a World Bank investment project(using an Agricultural Sector Investment Loan during 1992–7)was supplemented by a Water Sector Investment Loan(PISEAU). Seventeen R&D projects were selected and rankedby priority during a joint mission to Tunisia by the World Bankand the International Programme for Technology and Researchin Irrigation and Drainage (IPTRID).The research results wereto be integrated with the national research program, linkedwith international research, and integrated with the main gov-ernment agency.To facilitate uptake, an integrated managementsystem was created and multidisciplinary teams formed.

Source: Bahri 2003.

Box 2.11 Tunisia:The “Water Saving in Irrigation”Research Program

89

livelihoods in irrigated agricultural regions. Byintegrating irrigation, gender, and nutrition asissues, improvements can be made in house-hold food security, vulnerability of poor fami-lies can be reduced, and capacity can be builtup in rural areas (box 2.13).

LESSONS LEARNED

Capacity development means much morethan “training.” Unless farmers are givenenough back-up, handing irrigation systemsover to them will not work. When looking forthe best opportunities in this sector, investorsmust take this and other key considerationsinto account.

Capacity-building strategy

Capacity building must address the needs of, andbe “owned” by, the beneficiaries. It is stronglyinfluenced by the policy environment andshould always be in the center of developmentstrategies. Identifying needs and gaps in capacityis difficult, especially if there is a local shortageof experts. Hence, this is a job for interdiscipli-nary experts who can work at a high level andwith the full participation of stakeholders. Thefirst step should be targeting priorities, based onanalysis of the needs of the beneficiary govern-ment, authority, or community. To facilitate suchanalysis and priority setting, IPTRID and theFood and Agriculture Organization (FAO) aredeveloping a generic methodology applicable tothe agricultural water management sector.

Donor-recipient partnership

The role of donors in capacity building is tobroaden thinking and to stimulate positive impactover the long term. Capacity building withinexisting institutions calls for improvements inlocal managerial capability and skills. Managerialcapacity building should be a long-term activitywith gradual, sustained change, especially in gov-ernmental settings. Making institutional changesis difficult because of low salaries, inappropriaterecruitment policies, and slow organizational cul-ture. For project success, international consultantssent to work on institutional modernization proj-ects should have sufficient ability to implement

management change over a long-term, difficultprocess. People working on these projects need,in addition to their own specific expertise, a par-ticipatory-minded outlook. The local organizationacts as the point of contact for the donor andavoids the creation of new institutions (Walbeekand Vlotman 2003).

Education

Education is essential to develop the skills ofthe professionals who will become the future


Insufficient provision for the transfer of irrigation administrationfrom the Ministry of Agriculture to user organizations in Peruresulted in inadequate organization of user groups, lack ofknowledge about water use regulations, demise of systematicirrigation planning, and failure to collect fees. The immediateresult was deterioration of schemes for lack of money to payfor maintenance. The Subsectoral Irrigation project (SIP) waslaunched in 1997 to solve these problems. It involved improvingthe irrigation infrastructure, strengthening WUAs, improving feecollection, assisting with modernization, and ensuring safety atfour upstream dams. The SIP was funded by loan agreementswith the World Bank and Japanese Bank for International Coop-eration.The investment area of the SIP covered 10 provinces, 45valleys, 64 user boards, 622 WUAs, more than 300,000 waterusers, and an irrigation area of about 900,000 hectares in Peru’scoastal provinces. Successful training exercises for user boards,WUAs, and users resulted in the start of effective irrigationmanagement and the collection of fees that now enable the sys-tem to be self-financing.The training programs were carried outby SIP Coordination Centers in conjunction with the users.

Source: Ledesma 2003.

Box 2.12 Peru: Subsectoral Irrigation Project

The Women Irrigation Network (WIN) project used problemidentification through participatory constraints analysis, com-munity action planning, district stakeholders workshops, mul-tisectoral WIN teams, participatory training and extension,and district-based monitoring frameworks. Outcomes wereas follows:

• Increased capacity in government and community • Synergy from partnering with NGOs• Strengthening of local community groups• Rural women’s participation in water resources management• Preparedness for drought, flood, and critical food insecurity.

Source: Phiri 2003.

Box 2.13 Zambia:Women Irrigation Network

90

managers, leaders, and capacity builders. Thisprocess should start with universities andhigher education establishments.

Research

Research to solve the problems of irrigation anddrainage can be most successful when linked toinvestment projects and can show its valuedirectly. A good example of this has been theresearch project in Pakistan between the Inter-national Waterlogging and Salinity ResearchInstitute (IWASRI) and the International Institutefor Land Reclamation and Improvement (ILRI)(IPTRID 1997), addressing the functioning offarmer organizations and of horizontal and ver-tical land drainage. This research was shown tohave saved millions of dollars in investmentthrough improved advice on the technologiesto be adopted.

Enabling environment

Farmer management of large-scale irrigationsystems is unrealistic. Water management hasto be structured so that governments areresponsible for the main infrastructure, andfarmers are responsible to local bodies such asWUAs and distributary boards. In this perspec-tive, training farmers for water management isessential (box 2.14).


Table 2.1 summarizes the activities that can betailored into capacity-development projects.


Investment in capacity development

Investment in capacity development has to buildon water management strategies that go beyondtraining and construction. Such strategies willhelp governments tackle poverty in rural areasby strengthening technology transfer and helpbuild capacity to increase the technical andmanagerial know-how of farmers, farmer associ-ations, and service providers. Identifying capac-ity constraints and helping governments and theprivate sector lift them is one effective waydevelopment institutions can help. Capacity hasto be developed to measure, research, andunderstand; educate and create awareness; leg-islate and regulate; and provide appropriateinfrastructure, services, and products.

Investment in responsible water management

Providing the knowledge and skills to use andmanage water responsibly and efficiently tofarmers, farmer associations, service providers,and government bodies, is essential to reducewastage and increase water productivity. Theproblems in meeting growing water needs stemnot only from water scarcity, but also from thinwater management capacity.

Public aid investment in capacity building

Large areas in developing countries still sufferseverely from poor water management; ineffi-cient irrigation and drainage practices and tech-nologies; lack of knowledge and know-how onthe part of farmers, farmer associations, andservice providers; and institutional weaknesses.As a response, integrated capacity-buildingprojects are needed, instigated either by com-munities through self-generated realization anddesire for betterment or by outside actors. Bothare valid, and both feed into local governmentdecision making. However, neither will succeedif the government departments from which sup-port is needed do not have sufficient capability.


The participatory training and extension approach is based onanalysis by the farmers themselves of their constraints andopportunities. The approach involves group-based extension,training to enhance farmers’ skills and capacities, and capacitybuilding of extension staff. It is a tool to improve farmer watermanagement that involves and supports farmers. To achievethis, farmers need training and support in introducingimprovements and new technologies.

The approach was developed within FAO’s Food Security Spe-cial Program and was tested in Zambia, Nepal, Cambodia, andBangladesh.The tools used include farmer field schools, staff-training methodologies (such as the Farmer Water TrainingProgram in Indonesia), and farmer water management at thefarm level (such as organizing water control).

Source: van Keulen, Smith, and Renault 2003.

Box 2.14 Participatory Training and Extension Program

91

A good example is the water managementtransfer in Peru.

The types of project urgently required includethe establishment of more training centers,experimental fields, demonstration sites, fieldguides, monitoring systems, water managementunits, and planning units, as well as the enhanc-ing of local research, producing of training mate-rial, development of systems for monitoring anddecision support, and strengthening of capacitiesfor water management and planning. Withoutany exaggeration, capacity building in agricul-tural water management will require more thanan estimated US$1 billion a year in investments.

Investment in capacity building of local institutions

As public development assistance moves towarda program approach and budget aid, bottleneckswill arise owing to gaps in local institutionalcapacity. These institutions are key players andneed support in needs assessment, research,strategic planning, project identification, projectdesign, project management, and evaluation.Without such support, they face considerable

difficulty in achieving the high standards in proj-ect proposal preparation demanded by invest-ment institutions—particularly to ensure thatprojects are technically feasible, economicallyand financially viable, designed and plannedaccording to professional standards, andintended to produce visible and sustainable out-puts. They should fit into coordinated programs,follow a sector strategy, and contribute to povertyreduction and environmental conservation.

Developing countries need support in preparingnational agricultural water management strate-gies, but they also need assistance in projectplanning and fundraising negotiations.

Development institutions also need local adviceon needs assessment for capacity building and onappropriate investment strategies in the sector.

REFERENCES CITED

Bahri, A. 2003. “Strengthening Capacity for Irri-gation and Drainage Research in Tunisia.”Food and Agriculture Organization (FAO)/


Trainers and Government andActivity 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.

Table 2.1 Capacity-Development Project Activities

92

International Commission on Irrigation andDrainage (ICID), International Workshop onCapacity Building, September 16, Montpel-lier, France.

Compaore, L. 2003. “The Role of Training andEducation in Capacity Building, EIER-ETSHER.” Food and Agriculture Organiza-tion (FAO)/ International Commission onIrrigation and Drainage (ICID), Interna-tional Workshop on Capacity Building, Sep-tember 16, Montpellier, France.

Dedja, Y. 2003. “Capacity Building for Water UserAssociations in Albania.” Food and Agricul-ture Organization(FAO)/ International Com-mission on Irrigation and Drainage (ICID),International Workshop on Capacity Build-ing, September 16, Montpellier, France.

Hofwegen, P. 2003. “Capacity Building for Waterand Irrigation Sector Management in Indone-sia.” Food and Agriculture Organization(FAO)/ International Commission on Irriga-tion and Drainage (ICID), InternationalWorkshop on Capacity Building, September16, Montpellier, France.

IPTRID (International Programme for Technologyand Research in Irrigation and Drainage).1997. GRID Newsletter No. 9. “IWASRIResearch—Value for Money.”

______. 2003. IPTRID Partnership Programme—An International Programme on CapacityBuilding for Sustainable Agricultural WaterManagement. Rome: IPTRID/FAO.

Ledesma, A. 2003. “Institutional Strengtheningof Users Associations in Peruvian CoastalValleys.” Food and Agriculture Organization(FAO)/ International Commission on Irriga-tion and Drainage (ICID), InternationalWorkshop on Capacity Building, September16, Montpellier, France.

Phiri, M. 2003. “Gender Mainstreaming in WaterManagement—Chipapa Irrigation Scheme,Zambia.” Food and Agriculture Organiza-tion (FAO)/ International Commission onIrrigation and Drainage (ICID), Interna-tional Workshop on Capacity Building, Sep-tember 16, Montpellier, France.

SIWI/IWMI (Stockholm International WaterInstitute/International Water ManagementInstitute). 2004. “Water—More Nutrition perDrop.” 12th Session, UN Commission onSustainable Development Special Event,April 20, New York. SIWI, Stockholm.

van Keulen, A., M. Smith, and D. Renault. 2003.“Capacity Building in Farmers’ Water Man-agement: The FAO Experience.” ICID 9thInternational Drainage Workshop, September10–13, Alterra-ILRI, Utrecht, The Netherlands.

Walbeek, M., and W. F. Vlotman. 2003. “Institu-tional Strengthening in Egyptian Develop-ment Aid Projects.” ICID 9th InternationalDrainage Workshop, September 10–13,Alterra-ILRI, Utrecht, The Netherlands.

This Note was prepared by Geoff Pearce, with inputs by AdelBichara, and reviewed by Maria Saleth of IWMI. .


93


DRIVERS OF PUBLICIRRIGATION REFORM INAUSTRALIA

What is new? The policy rationale for reform ofthe public irrigation sector is rarely sufficient toimplement it. Rather, implementation usually needsimpetus from powerful domestic stakeholdergroups in society at large that pursue goals requir-ing reform of the governance and management ofgovernment-owned schemes.

Before its reforms, the government of NewSouth Wales, like other Australian state gov-ernments, built schemes, allotted landholdingsand water rights, set water prices, and man-aged water distribution. In earlier times, thegovernment even told farmers what and howmuch to plant. The two main social goals thatdrove scheme building were to increaseinland settlement and reintegrate soldiersdecommissioned after major wars. Most farmswere sized to maintain a family but only withintensive irrigation. This type of scheme takesin around 30 percent of all irrigation water inAustralia. The departments responsible for theschemes had a monopoly on service provisionand little compulsion to put their customersfirst. The department in New South Walesserviced more than 400,000 hectares throughworks that today would cost more than US$1billion to build.

The government and the irrigation-schemecommunities were uncomfortably settled in anantagonistic relationship. Officials perceived theirrigators as recipients of government largessein the form of sizable but hidden subsidies forO&M. The irrigation communities perceived thegovernment as using yesterday’s costly methodsand resented the paternalism of agency offi-cials. There was little meaningful communica-tion: the irrigators opposed price increasesbecause they believed efficiencies could befound—and fearing a price war, the agency didnot introduce new technologies.


About 1980, three challenges arose. Massiveexpenses loomed for the renewal of the aginginfrastructure. The quality of land and water wasdeteriorating because of rising water tables andsalinity, and aquatic environments lacked suffi-cient water inflow owing to intake by irrigation.

At that time, too, Australia traded its economicpolicy of protectionism and subsidization for apolicy of openness and economic rationalism.To compete on global markets, the businesscommunity needed a reduction in the govern-ment’s share in the economy, and consequentlya reduction of the sizable hidden subsidies thatwent to public irrigation schemes.

As evidence emerged that irrigation land usepractices were ecologically unsustainable, anenvironmental lobby arose that promotedawareness of the deteriorating water situationamong state and local governments, irrigators,and voters. The lobby advocated changes tomake more water available for environmentaluses by restricting water for irrigation.

Irrigators and industrial and environmentalusers were finding that the reliability of thewater supply, critical for the profitability of live-stock and production, decreased as irrigationdevelopment increased.

The combined impact of the business commu-nity, environmental groups, and expansionforced government and irrigators to seek a newinstitutional paradigm. The nonirrigation stake-holders shaped the new institutional framework,which revolved about irrigation corporationswith licenses defining environment targets.

OUTPUTS AND IMPACTS

Water management in New South Waleschanged in response to these drivers. In theearly 1980s, the government introduced tempo-rary and permanent trading in water allocations.In the late 1980s, it established irrigator-drivenmanagement boards for the irrigation schemes.In the early 1990s, it corporatized its metropoli-tan water utilities.


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A suite of agreements entered into by COAGreflects the direction of reform in Australia. The1995 agreement included the following commit-ments:

• Full cost recovery for water services

• Water allocations and property rights

• Promotion of water trading

• Introduction of environmental water alloca-tions and assurance that all new projectswould be environmentally sustainable

• Institutional reform promoting integratednatural resources management, separationof services from water resources manage-ment, and promotion of local managementresponsibility

The Commonwealth government offered sub-stantial tranche payments to each state thatdemonstrated sufficient and timely reforms interms of the agreements. These agreementsenshrined the initial concerns of the businesscommunity and the environmental groups andare powerful drivers for change. Similar insti-tutionalization of new stakeholder positionscan be observed in Mali and Mexico (boxes2.15 and 2.16).


By dealing with each irrigation scheme as thebulk entity, the New South Wales governmentcould keep the regulatory regime simple, givingeach irrigation corporation flexibility on how toachieve its supply, drainage, and environmentaltargets. Communities have greater trust in com-panies they own and managements they electthan in government agencies. Irrigators aremore accepting of the rules set in an environ-ment they can influence than in rules set wheretheir views count for little.

As a result, policies supporting sustainability aremuch tougher than government regulationwould achieve. Examples are the ceiling onaverage water application of 4,000 cubic metersper hectare per year, and compulsory testing ofsoil suitability for rice growing. Before thereforms, an “us and them” attitude meant thatirrigators made a sport of breaching governmentrules. Now irrigators see abusers as “ripping usoff.” Peer pressure among farmers, help withemergencies, and companionship obtain com-pliance more easily than government enforce-ment but are available only to governments thatform healthy coalitions with local communities.

Several factors contributed to these negotiatedoutcomes. The process was not rushed, and


In 1978, the government of Mali requested the World Bank to expand its 45,000-hectare rice scheme.The Bank and bilateraldonors responded that reform should precede expansion.The agency lacked financial transparency and accountability to theusers, and the users lacked incentives to produce, because they were forced to sell their paddy to the agency.The governmentopposed reform.The donors built support by trading funding for canal rehabilitation against small reform steps such as thecreation of canal and credit associations. One donor also entered into a temporary alliance with the single political party tointroduce movable threshers, which made the farmers independent of the agency’s industrial threshers, and movabledehullers, 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, thegroup helped a new government decide to consolidate these reforms into law. Now farmers have performance contracts, anddonors fund expansion.

Source: Aw and Diemer 2005.

Box 2.15 Mali: Coalition Building for Reform

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public participation in planning for change waswell managed. Despite initial antagonisms, thedialogue among key players was meaningful andled to commitments for change. Governmentefforts to build trust at every level fostered coop-eration over time because trust and cooperationwere reciprocated and not misused or exploited.

A general message that can be derived from theAustralia, Mali, and Mexico cases concerns theimportance of building coalitions among stake-holders to drive policy reforms in the irrigationsector. Donors can have a major role in thecoalition-formation process by facilitating dia-logue and participation of stakeholders in thenegotiation phase. These coalitions can takevarious forms and involve parties with differentobjectives but common means. For example:

• Coalitions of different nonirrigator stakehold-ers (such as industrial and environmental lob-bies), using their political pressure to inducethe government to implement reforms

• Coalitions of donor(s) and political partiesor other lobbies for the introduction of step-by-step reforms

• Joint committees made up of farmers andagency representatives to manage O&M ofirrigation systems

• Coalitions of water agencies with rankingpolitical leaders in an effort to reach broadeconomic and political objectives throughimproved water management

REFERENCES CITED

Aw, Djibril, and Geert Diemer. 2005. “Making aLarge Irrigation Scheme Work: A Case Studyfrom Mali.” Directions in DevelopmentPaper. World Bank, Washington, DC.

Rap, Edwin, Philippus Wester, and Luz NereidaPerez-Prado. 2004. “The Politics of CreatingCommitment: Irrigation Reforms and theReconstitution of the Hydraulic Bureaucracyin Mexico.” In Peter Mollinga and AlexBolding, eds. The Politics of IrrigationReform, 57–95. London and Burlington, Vt.:Ashgate.

This Profile was prepared by Tony McGlynn, with input fromPhilip Keefer.


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, wasmerged with the Ministry of Agriculture.The bureaucracy lost its financial and administrative autonomy, and the service feeswere incorporated into rural development district programs. Farmers realized that they no longer had an incentive to pay, andthe systems deteriorated.

The dilapidation of the infrastructure helped the agency argue for the restoration of its authority with the president-elect, whosought to transform the long-ruling Institutional Revolutionary Party’s (PRI) economically inefficient patronage structures byencouraging private investment and economic liberalization. In 1989, the agency convinced the president-to-be to direct thewater bureaucracy to create and run an innovative fiscal system for integrated water resources management to respond toMexico’s water woes.The agency also sought authority to operate and maintain the irrigation systems again but, in line with hisobjectives, the president limited the agency’s role to oversight and opted to transfer irrigation management authority to userassociations. 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.

Box 2.16 Mexico: Drivers Shaping Irrigation Reforms

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INVESTING IN FARMERNETWORKS FOR INCLUSIVEIRRIGATION POLICYPROCESSES IN SOUTH INDIA

What is new? By forming state-level networksregistered as societies or NGOs, representatives ofWUAs attempt to play a larger, structural role inirrigation policy formulation and implementation.By getting themselves included in these policyprocesses from which they are normally excluded,farmer-irrigators hope to accelerate reform, makeit more pro-farmer, and increase the accountabilityof government.

Irrigation reform and larger participation offarmers in irrigation management has been onthe Indian policy agenda since the 1970s, butprogress has been slow, and reform design con-fined to a narrow circle of senior bureaucratsand some water academics and professionals.The lack of a broad-based consultation of allrelevant stakeholders has made the reformprocess vulnerable to personnel changes. Also,the content of the reforms scarcely questionsthe exclusive government control over alloca-tion and distribution of water and otherresources—a questioning that is necessary formanagement practices to improve. The strategicanalysis of the actors in this innovation profilewas that, unless farmer-irrigators activelydemanded and shaped the reform, progresswould be slow and haphazard.


In 1997, some water professionals set up anorganization called Sahayoga [work together].They planned to act as brokers betweenfarmer-irrigators and government using theirwide experience and varied networks. Thegroup held meetings with farmer-irrigators inthe large irrigation systems of the South Indianstate of Karnataka, where they presentedSahayoga’s analysis. Asked whether they

would be interested in taking action, thefarmer-irrigators responded affirmatively—andenthusiastically. Quickly, system-level federa-tions of WUAs were formed in eight major irri-gation systems.1 Interactions with governmentand ministers started around specific issuessuch as whether to register WUAs as societiesor cooperatives subject to some governmentcontrol and the implementation of mainte-nance contracts.

Sahayoga succeeded in placing a farmer who waswell versed in tank systems on the technical com-mittee of the Society for Water Resource Develop-ment, Karnataka’s implementing agency of aWorld Bank–supported project for community-based tank restoration.

The idea of an “intermediary organization ofwater professionals,” which also had farmermembers, worked for several years, but theorganization ran into disagreements among thewater professionals. The farmer membersdecided that they wanted their own organiza-tion to allow them to interact directly with thegovernment. In 2002, they formed Pragathi[Farmers’ Society for Rural Studies and Devel-opment], which continued the activities, withone nonfarmer executive director based in thestate capital acting as facilitator. Pragathi pub-lishes a newsletter in English and Kannada thatreports on its activities and in which membersreport their experiences.

Karnataka’s ministers for water resources andagriculture acknowledge and appreciate theactive involvement of Pragathi members in pol-icy matters. The chairperson and secretary ofPragathi are nominated members of the Kar-nataka State Agriculturalist Society. Negotiationsare also on to include farmer-irrigators asresource persons to train farmers at the Waterand Land Management Institute. As a regularcourse of action, Pragathi attempts to ensurefarmer participation in workshops and confer-ences at all levels in water- and agriculture-related issues.

Karnataka adopted a dual approach in imple-menting the community-based tank restoration


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program—the state department implements it ina different way from the World Bank–supportedproject. Pragathi is mobilizing district-level tankfederations to address issues such as structure,functions, and sustainability of tank user soci-eties, which the irrigation law does not definewell (table 2.2).

In 2003, farmers from Andhra Pradesh andTamil Nadu discussed the possibility of formingsimilar networks in their states, each with itsown obstacles in the irrigation and waterresources reform process. Farmer-irrigatorspresented papers on the status of irrigation

reform in their state; new issues in water man-agement such as environment and gender; andthe possible role of farmers in interstate waterdispute resolution. Again, the response wasenthusiastic. Formation of farmer networks inAndhra Pradesh and Tamil Nadu is ongoing,and a South Indian federation called Jala Span-dana [South India Farmers Organisation forWater Management] has been formed and reg-istered. The International Network on Partici-patory Irrigation Management supportsstrengthening (as of 2004). The objective is toformulate state-level farmer water policies bythe end of the project.


Year(s) Project title and activities Budget(s)a (Indian Rs.)

1997–2002 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

2002–3 Farmers,Water and Political Process of Policy Reforms—Role of Farmers’ NGO in Water Resource Development in Karnataka 192,937

Supported by Technology, Labor Organization and Development,The Netherlands (completed)

2003– Information Framework for Water Management 79,500

Supported by Management Studies Department, Indian Institute of Science,Bangalore (ongoing)

2004– Compendium of Water 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 for Water 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 tothree 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.

Table 2.2 Projects Implemented by Pragathi

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APPROACH

• The networks are farmer organizations,with only farmer-irrigators as members. Themembers decide the agenda, priorities, andthe pace of activities.

• Facilitation is provided by individuals withsubstantive field research experience in irri-gation and water management, as well as insocial mobilization and advocacy.

• The organizational infrastructure of the net-works is light, and partly uses existingfarmer and water user organizations.

• The perspective is long term, even whenconcrete activities center on immediateissues.

• The networks started with large irrigationsystems, then moved to cover tanks, lift irri-gation, and watershed and farmer-managedsystems, with the scope broadened toinclude land and water management issues.The social constituency of the networks willalso be broadened. Everybody knows thatreforming the governance and managementof water resources will be a long, perhapsneverending, process.

• The idea is that taking NGO-style initiativesfor improved local water management isnot enough. Local issues have to be raisedto the policy level to accomplish thechanges in policy that will allow local initia-tives to work and last.

OUTPUT AND IMPACT

The main focus has been to get government toacknowledge the need for and feasibility of alarger role for farmer-irrigators in policy formu-lation and implementation. This effort has cen-tered around issues such as the legal status ofWUAs in government policy (societies with fullfarmer control versus cooperatives with morepossibilities to influence government) and whoshould implement local maintenance contracts(contractors identified by the governmentagency or WUAs). Extensive direct interactionhas been triggered between farmer-irrigatorsand water resource ministers.

An open question still is the institutionalizationof such interaction. In Karnataka, WUA federa-tions at system and state levels are now part ofthe new policy, which may be the beginning ofmore inclusive policy processes. However, achange from a fully government-controlled pol-icy system to a multistakeholder situation is aconceptual, institutional, and political leap thatwill take years to consolidate.

The network and federations are now players tobe reckoned with in the state of Karnataka, butthis achievement requires continuous reproduc-tion and harbors several contradictions. The for-mulation of water policies will be an interestingtest of the ability of the system to work with pol-icy processes that include the irrigator-farmers.

WIDER APPLICABILITY

If it is true that irrigation and water sectorreforms are hampered by the exclusion ofdirect stakeholders from policy formulation,there is wide scope for farmer organizations toparticipate in policy reform. So far, programsfor participatory irrigation management havebeen largely government focused and haveviewed water users and irrigators as recipientsof policy, not as agents in the policy process. Ifpolitical will for reform has to be generated,direct stakeholders would logically have to be aprimary constituency, generating, in coalitionwith others, momentum for change. (See alsobox 2.15 in IP 2.1 on reform drivers.)

An important device for network building is theestablishment of a communication device forthe members—a newsletter, in this case.

Farmer networks for water sector reform haveto be rooted in the farmer-irrigator community,not externally imposed. This requires small-scale, strategic, and patient support of emerginginitiatives, rather than time-bound, project-wise,external approaches dominated by “experts.”

Intensive field research leading to detailedknowledge of field situations is an essential ele-ment in the preparation of initiatives and sup-port and in building credibility in thefarmer-irrigator community. A logical step in


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the empowerment of the networks would be tocreate a facility for research defined by farmerwater users (a water users’ research facility) togenerate the knowledge base for engagementin the policy process.

ENDNOTE

1. The systems are Krishnaraja Sagar, Harangi,Hemavathy (Cauvery Basin), Upper KrishnaProject, Tungabhadra, Bhadra, Malaprabha,and Ghataprabha (Krishna Basin).

This Profile was prepared by R. Doraiswamy and PeterMollinga, and reviewed by Maria Saleth of IWMI.


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33INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS

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 alsocovers 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’sirrigation already developed, and with very high costs for new development, the challenge is to getmore 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 isused 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

• 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 to Assess 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

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of a successful modernization package in aWorld Bank–financed irrigation project (Burtand Styles 1999). Successful modernizationinvestment requires attention to economic, tech-nical, managerial, and market considerations—within an integrated approach. Only after a clearvision has been established for developing anarea’s agricultural potential can investmentobjectives be set. The diagnostic phase using theRapid Appraisal Procedure (RAP) can then beapproached with the real future objectives ofirrigation systems in mind. (See IN 3.2, IN 3.5,and IN 3.7. Other chapters cover the incentiveframework [IN 1.5, IN 1.4] and the market envi-ronment [IN 1.3]. For on-farm improvements,see IN 3.1 and IN 3.3. For irrigation moderniza-tion technology, see IP 3.1.)

THE GOAL IS TO IMPROVE WATER USE AND FARMER

INCOMES, THUS CREATING A “VIRTUOUS CIRCLE.”Investment in irrigation improvement is justi-fied—and risks for farmers reduced—only if thesystem delivers the high and reliable level ofservice that allows users to optimize water useand diversify into higher-value production.Farmers well-served by irrigation systems canimprove efficiency and incomes and can affordwater charges. This is the “virtuous circle,” theopposite of the old downward spiral of poorservice, low cost recovery, system degradation,low-risk and low-value cropping, and ultimateneed for rehabilitation. (See IN 3.2 and IN 3.7.See also “Investments in Irrigation for CropDiversification,” in Agriculture InvestmentSourcebook [AIS], Module 8.)

IRRIGATION MODERNIZATION HAS TO FOCUS ON

DELIVERING COST-EFFECTIVE SERVICE TO FARMERS.The recent focus in large-scale irrigation invest-ment has been (correctly) on improved gover-nance and on system upgrading to improvewater control. Yet these investments havefocused on major capital projects such as canallining and on computer modeling, rather thanstepping back and looking at the problem to besolved—poor service to farmers and its eco-nomic and environmental consequences. Anew benchmarking tool using RAP has beendeveloped to help select investments. RAP firstanalyzes internal processes such as operating

rules, budgetary processes, and hydraulic struc-tures. It then benchmarks those internalprocesses along external indicators such as irri-gation efficiency, crop yield, and the environ-ment. The last step is to prioritize the internalprocesses that must be improved throughinvestment to affect the external indicators. (SeeIN 3.7 and IP 9.4.)

INTEGRATED INVESTMENTS STAND THE BEST CHANCE

OF SUCCESS. Many factors affect water use pro-ductivity. These include soil characteristics (soilfertility, fertilization, drainage, soil salinity andsodicity, breeding); agronomic factors (plantvariety, cropping patterns); crop managementpractices (tillage, weed control, soil moisturemanagement); irrigation practices (irrigationscheduling, deficit irrigation, irrigation technol-ogy and technique); and inputs, credit, markets,and prices. Investment packages should inte-grate “hardware” improvements with improvedirrigation management, better crop selectionand management, and access to profitable mar-ket outlets. (See IN 3.1, IN 3.3, and IN 3.6.)

PHYSICAL SYSTEMS MAY NEED TO BE ADAPTED. Asfarmers diversify, they are confronted with thetechnical challenge of adapting a rigid and uni-form irrigation system to a more varied crop-ping pattern. Higher-value crops needguaranteed, controlled-flow water deliverydirectly to the plot, together with gooddrainage. Soil management and land consolida-tion may be necessary, too. Physical systemsmay have to be adapted, for example fromopen channel to pressurized pipes. Investmentsneed to incorporate an integrated approach.(See IN 3.7 for diagnosing the problem, IN 3.2and IN 3.4 for technical solutions, and IN 3.5 formanagement approaches.)

USERS HAVE TO BE PARTNERS IN MODERNIZATION

PROGRAMS. The cooperation of users is critical tosuccessful outcomes from modernization invest-ments. There should be a clear up-front agree-ment on service levels, technology, and rolesand responsibilities. For example, where farmersinstall field irrigation system improvements suchas micro-irrigation, they have to work withscheme management to agree on technology


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and on subsequent management of the inletstructures. Already farmers on many schemesfinance all their own on-farm investments inmicro-irrigation and the like. As diversificationcontinues, driven by market forces, farmerinvestment will grow. And as farmers share moreof the costs and take on more of the responsibil-ity, their share in driving change will grow. Thisparticipation underlines the value of the wateruser associations (WUAs) discussed in chapter 2.(See IN 3.4. On participatory irrigation manage-ment and user associations, see IN 2.1.)

MANY INVESTMENTS CAN CONTRIBUTE TO ON-FARM

WATER SAVING—BUT IN THE END IT WILL ONLY HAP-PEN IF THE FARMERS THEMSELVES ARE BOTH MOTI-VATED AND ENABLED. On-farm technologies suchas piped distribution, drip, and bubbler arewidely available, and can cost as little asUS$250–$500/hectare. Treadle pumps that canirrigate up to 0.5 hectare using family labor costonly $50–$100. A wide range of water manage-ment and crop management improvements isknown. Yet adoption of water-saving technolo-gies has been slow and performance belowpotential. Investment in water saving will beoptimal in the private and public interest onlywhere both available technology and favorableincentive and institutional structures are pres-ent. In the end, the incentive structure is thekey: if water is too cheap, markets are dysfunc-tional, or water rights are insecure, and farmerswill not save water. In the end, only theprospect of higher farmer net income and lowerrisk will drive investment and water saving.(See IN 3.1 and IN 3.3. On the role of marketsand incentives in general, see IN 1.5.)

COMPLEMENTARY INVESTMENT IN MARKET DEVELOP-MENT MAY BE NEEDED. The objective is a sustain-able increase in farmer incomes. Thus, theavailability of profitable crops and markets is animportant element in the success of moderniza-tion. Some complementary investments may beneeded to develop product markets, financialmarkets, and market information and to buildinfrastructure (for example postharvest invest-ments, or rural and farm access roads). (See IN3.2. See IP 1.2 on linking smallholders to inter-national markets. See also “Market-Driven

Diversification,” in AIS, Module 4, and “Sup-porting Market and Supply Chain Develop-ment,” in AIS, Module 6.)

IRRIGATION INVESTMENT, COMBINED WITH OTHER

FACTORS, SHOULD BRING MORE INCOME FOR LESS

WATER. Better control of irrigation water, com-bined with the other factors listed above, shouldresult in higher cropping intensities, higher-valuecrops, and higher farmer incomes. One projectdescribed in this Sourcebook specifically targetsmore income for less water as its objective (theHai Basin project), using ET quotas to assignrights and working with farmers not only on irri-gation, but also on a broad range of improve-ments in agronomy, crop husbandry, andgeneral management practices. The project usessatellite imagery to determine quotas and tomonitor use. Output in the area is likely to bemaintained, and expanded after completion.This is an optimal investment outcome of moreincome for less water—and it is sustainable. (SeeIN 3.1 on the benefits of water control, and IN3.6 and IP 8.1 on ET quotas and the use of satel-lite imagery, including the Hai Basin project.)

CARE IS NEEDED TO ENSURE A PRO-POOR ELEMENT

IN MODERNIZATION INVESTMENTS, BECAUSE A

PURELY MARKET-DRIVEN APPROACH WILL FAVOR THE

BETTER-OFF. An element of inequity pervades allirrigation, because the very poor do not controlwater resources. Diversification does createemployment, but the better-off farmers benefitmost, because they can finance on-farm invest-ments, assume risk, and access knowledge andinformation services. To offset this, investmentscan be targeted toward the poor. For example,priority can be given to small-scale irrigationand water conservation investments, which arepro-poor, highly flexible, and rapidly imple-mented. Conversion of public surface irrigationschemes may also be a pro-poor investment.For the very poor, investment in treadle pumpshas allowed farmers in Africa and Asia to morethan double their income. (See IN 3.1 and IN3.3. Other chapters cover inequitable resourcedistribution [IN 7.1] and innovative ways tobring irrigation to the poor [IP 1.2]. See also“Targeting Agricultural Investments to MaximizePoverty Impacts,” in AIS, Module 11.)

INVESTING IN THE IMPROVEMENT AND MODERNIZATION OF IRRIGATION SYSTEMS

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Investments in technical assistance projectsinclude the following:

• Performance-oriented rapid appraisals forpublic irrigation

• Technical benchmarking

• Customer satisfaction surveys

• Development of operation and mainte-nance (O&M) plans

• Data collection and ET measurement

Individual investment projects include the fol-lowing:

• Modernization of water distribution systems

• Water measuring devices

• Advanced technologies for water control

• Desilting works

• Canal lining

• On-farm development

• Micro-irrigation, greenhouses, tunnels, andmulching

• Pressurized irrigation and protected agricul-ture: sprinklers, localized and piped, and drip

Finally, possible pilot investments include pro-poor smallholder irrigation programs, and otherrelated investments include extension, andfinancial and credit service development.

REFERENCE CITED

Burt, C. M., and S. W. Styles. 1999. “ModernWater Control and Management Practices inIrrigation. Impact on Performance.” WaterReport 19. Food and Agriculture Organiza-tion (FAO), Rome. Available online athttp://www.watercontrol.org/publica-tions/publications.htm.


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INVESTMENT NOTE 3.1

LENDING FOR ON-FARMWATER-SAVINGTECHNOLOGIES

Water saving on farms located on public irrigationschemes has lagged behind saving on private farmswith their own source of water.The few programsintroducing field-level modern water-saving irriga-tion technology and management practices on pub-lic irrigation systems have had limited success.Experience in Tunisia, the Republic of Yemen, andelsewhere demonstrates that a mix of farmerinvestment with government subsidies has thegreatest impact on both water saving and incomesthrough switches to more rewarding crops andreduced pumping costs (FAO 2003).

Government-owned irrigation systems performpoorly in terms of water productivity. This isdue to poor irrigation water management onboth the scheme and the farm (FAO 2001a).Inefficient surface irrigation methods still pre-vail (box 3.1). Overall irrigation efficiency in 93developing countries was estimated at 45 per-cent in the late 1990s, which means a loss ofmore than half the water mobilized for irriga-tion. Part of this loss returns to the system; therest is captured uselessly. The best opportuni-ties for producing more with less water requireshifting to demand-driven water managementand using improved on-farm water manage-ment hardware and software.

INVESTMENT AREA

The amount of water that could be saved by2025 by achieving 70 percent irrigation effi-ciency on the world’s gross irrigated area couldmeet about half the demand for additionalwater supplies (FAO 2001b). Such savings arethe main option for addressing water shortagechallenges in many developing countries.

Irrigation technologies and management toolsthat permit high water use efficiency openavenues for water saving. On-farm irrigationinfrastructure and equipment include improved

surface irrigation methods and sprinkler andlocalized piped systems that come in a multitudeof versions. The management tools comprise allthe ingredients necessary to ensure that the sys-tems are adequately operated and maintained.

The adoption of such water-saving technologiesand practices has been slow. The initial capitalinvestments for these systems vary according tothe method of irrigation and type of installation,in addition to regional variations. The averagecosts of piped irrigation systems range from lessthan US$500 to more than US$6,000 per hectare.These costs are lower for piped surface meth-ods, followed by conventional hand sprinklers,and higher for micro-irrigation fixed installa-tions. Capital costs are generally recovered fromthe benefits within two to seven years.

Affordable micro-irrigation technologies havealso proven cost effective and competitive.They are adapted to smallholdings, raiseincomes, and stimulate the development oflocal markets, particularly in Sub-SaharanAfrica and mountainous regions in Asia andLatin America. In semi-arid regions, the cou-pling of low-cost irrigation technologies withwater conservation and harvesting technolo-gies allows better control of limited waterresources and results in much higher returnsto farmers. Small-scale, low-cost irrigation issimple and can be supported and easily man-aged by farmers in an efficient and sustainablemanner. Investment costs in small-scale, low-cost irrigation range between US$200 andUS$500 per hectare. The rates of return can besubstantial (see IN 3.3).


Public investment in irrigation used to mean building waterconveyance and distribution networks to deliver water to thefarmgate, not promoting on-farm water-saving technology.Moreover, investment focused only on infrastructure andequipment at the expense of farm-level management. Theseinvestments now constitute sunk funds that can generate prof-its by upgrading the technology, improving management, andinvolving the private sector.

Source: Author.

Box 3.1 Old-Style Water Investments

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POTENTIAL BENEFITS

The main expectations from investment inimproved on-farm irrigation techniques are thebenefits derived from saving large amounts ofwater, lower operational costs, higher crop yields,and better produce quality. The benefits oftenalso include substantial savings in irrigation labor,better weed control, reduced risk of waterloggingand salinization, less drainage effluent, less mobi-lization of contaminating salts and nutrients, andlonger life expectancy for pumping equipment.Moreover, better control of irrigation water usu-ally results in higher cropping intensities andmore rewarding cropping patterns. If farmers arewell connected to markets, these benefits trans-late into economic returns to farmers, and bene-fits for regional and national economies. Whenirrigation projects for improved on-farm irrigationtechnologies are well designed, properly imple-mented, and adequately managed, the invest-ment returns are comparable to investments insectors such as industry (FAO 2004). These bene-fits stem from the many advantages thatimproved irrigation techniques offer over tradi-tional irrigation methods (box 3.2).


Important policy and implementation measuresinclude technical support services for farmers

and institutional reforms that encourage privatesector involvement and prompt farmers toinvest in improved technologies and better agri-culture water management practices.

Investments in irrigation have a better chanceof success if they are integrated with a widearray of elements such as sound agriculturalpractices, crop and food diversification, humanresource development, infrastructure improve-ments, and marketing. On-farm irrigation tech-nology investments should be integrated withthese elements, and not just focused on watermanagement inputs.

Projects to improve on-farm water managementshould be demand driven, based on the needs ofbeneficiaries who should be committed to oper-ating efficient production systems. Participantsshould be trained in the O&M of their irrigationsystems and be willing to help pay the relatedcosts. To this end, institutional arrangements,including the establishment of WUAs on publicschemes, should be an integral part of the invest-ment. The public sector has proven unable tosustain the O&M of the installed on-farm irriga-tion systems or provide the necessary supportservices. Strengthening the capacity of the pri-vate sector to provide services such as spareparts and skilled maintenance and advisory serv-ices is necessary to lift this limitation (box 3.3).

Incentives including subsidies (box 3.4) to pro-mote on-farm water conservation technologyhave been effective in enhancing the adoption ofthis technology. However, several measures areneeded to ensure the achievement of water con-servation and sustainability goals. A demand-driven approach is necessary with active farmerparticipation in O&M and in capital-cost financ-ing. Introducing the economic cost of water inany form encourages water saving and increasesdemand on water-saving equipment.

The capacity of existing institutions to provideadequate services for project implementation,management, and O&M should be assessedduring the project appraisal and study phases. Ifpossible, a monitoring mechanism with quan-tifiable indicators should be set up.


• Control of the amount of applied water and irrigation tim-ing. Piped systems allow the application of small amountsof water in a timely manner to fit crop needs.This facilityin system manipulation allows a potential crop yieldincrease of 10–45 percent and improved produce quality.

• Operation and maintenance. Improved systems needonly a tenth to a quarter as much labor as used for opencanals.The complete system requires annual maintenancethat costs only about 5 percent of the initial investment.

• Cost. The use of thermoplastic pipes and fittings, madefrom unplasticized polyvinyl chloride (better known asrigid PVC), low-density polyethylene, high-density poly-ethylene, and polypropylene, which are manufactured inmost countries, has drastically cut the cost of piped irriga-tion installations, while open canal networks are becom-ing increasingly expensive to maintain.

Source: Phocaides 2001.

Box 3.2 Main Advantages of On-Farm Modern Irrigation Technology

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An important benefit of improved on-farm tech-nologies is their ability to reduce on-farm waterlosses and thus reduce the salinization thatinevitably accompanies waterlogging in semi-arid and arid regions. But adequate drainage,natural or human-made, remains a key to sus-tainable irrigation.

Controlled drainage also saves water and reducesleaching of nutrients from the soil (see IP 5.2).

LESSONS LEARNED

Evaluation of projects intended to save water byintroducing irrigation technology reveals multi-ple causes of failure. Often the failures stemfrom the way these projects were designed andmanaged. Fortunately, most if not all of thesecauses can be avoided.

Project success also hinges on the extent towhich irrigation professionals, equipment deal-ers, and public and private extension agents havesufficient incentives to work closely with farmersto ensure proper O&M. It is important for irriga-tion projects to have quantifiable objectives thatfacilitate evaluation of their success or failure bymeasuring results against pre- or no-project situa-tions. Switching to performance-oriented schememanagement and modernization generates moregains than do new schemes, if the lessonslearned from the degradation of the schemes aretaken fully into account in the process (see alsoIP 9.4).

Hardware improvement on government-ownedirrigation schemes should reward farmers forthe use of water-saving irrigation technology.But the billing rules may have to be changed.In Morocco, for instance, the replacement ofcollective water-measuring devices by individ-ual water meters for each farm induced greaterwater conservation under the same water tariffs(box 3.5).


Investments in on-farm water-saving technologiescan be highly productive owing to the multipleeconomic, social, and environmental benefits that

can accrue from more efficient use of water incrop production (box 3.6). Such investmentsshould therefore be promoted. Where the poten-tial exists, investment programs should give pri-ority to small-scale irrigation and waterconservation, because these increase flexibilityand can be rapidly implemented.


Irrigation advisory services relate to all information and sup-port provided by governmental, nongovernmental, and com-mercial services to introduce techniques and technologies andimprove capacity, leading to more efficient and better-per-forming irrigated crop production.

Traditionally, governments have supported farmers throughagricultural extension services, but they have concentrated oncrops, fertilizer, and pesticides rather than water.Where gov-ernments have focused on water management, they havelooked at the engineering and management of the main distri-bution systems, not at what happens on the farm. Where anattempt has been made to provide water management serv-ices, resources have often been inadequate to do the jobproperly.Water management services are usually underfundedand staffed with inexperienced people and do not have theresources to reach farmers. Any successes have usually beensupported by external aid, and their sustainability, once thesupport ends, is not certain.

Source: FAO 2002.

Box 3.3 Irrigation Advisory Services

To overcome the drawbacks of past policies, many countriessubsidize part of the cost of water-saving irrigation technologyto promote use on their irrigated lands. This is the case, forinstance, in the following countries:

• Tunisia—between 30 and 40 percent of modern irrigationsystems’ capital cost

• Morocco—between 40 and 60 percent of modern irriga-tion systems’ capital cost

• Syrian Arab Republic—free studies and interest-free softloans for 1 hectare per farmer

• Republic of Yemen—free studies for between 30 and 40percent of piped conveyance network, 70 percent ofbooster pumps and modern irrigation systems, forselected projects

Source: Author.

Box 3.4 Subsidies to Promote On-Farm Modern Irrigation

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In formulating new projects, the following actionsare recommended:

• Assess the enabling environment for thesuccessful introduction of on-farm irrigationtechnologies, particularly country policieson agricultural water use, existing regula-tions and institutional capacities, and thepotential benefits from the technologies.

• Assist in reviewing policy and regulatoryframeworks and reforming institutions to

enable private investment and capacity tointroduce and manage adapted on-farm irri-gation systems. Promote hardware improve-ment on government-owned surfaceschemes so as to enable and facilitate theirconversion to modern water-saving irriga-tion methods.

• Where groundwater is used for irrigation,develop mechanisms for the sustainablemanagement of aquifers to encourage theuse of modern technologies to managedemand.


When a group of farmers using sprinklers on a scheme in Morocco were billed as a group, they responded to a 21 percenthike 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 relativemethod 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 billedindividually. 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 3.5 Water-Saving Technologies in a Group Context

In the mid 1990s, the government of the Republic of Yemen launched a program to raise the productivity of irrigation fromgroundwater.The most important part of the program was the Land and Water Conservation project financed by the Inter-national Development Association and the World Bank.The irrigation component of this project was based on the promotionof irrigation technologies consisting of PVC and galvanized-iron pipes for transport and distribution, and drip, sprinkler, andbubbler 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, theaccuracy of the system design and installation, the capacity of farmers to operate and maintain their systems, the soil type, andthe crop.At the regional level, the average water savings represented no less than 20 percent and nearly 35 percent in thenorthwest 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 switchto 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 15–20 percent of this volume to expand their irrigated area, and the rest remained inthe aquifer.The total volume of water savings corresponded to that of 475 dams each with an 80,000 cubic meter capacity, thesame capacity as the average small dam in the Republic of Yemen, 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.

Box 3.6 Water Conservation and Income Generation in the Republic of Yemen

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• Build capacity in government and privateagencies to provide technical support andadvisory services to farmers on irrigationtechnology.

• Develop public sector capacity to establishnational standards and control mechanismsof irrigation equipment and water allocation.

• Build capacity in the private sector to man-ufacture, import, and market irrigationequipment and to provide reliable servicesfor users.

• Support farmer investments in water-savingtechnologies through the careful use of sub-sidies and soft loans.

REFERENCES CITED

Bazza, M. 2001. “Improved On-Farm Participa-tory Water Management to Reduce Mining ofGroundwater in Yemen.” Contribution to astudy on Farming Systems conducted by theFood and Agriculture Organization for theWorld Bank. FAO Regional Office for theNear East, Cairo, Arab Republic of Egypt.

Bazza, M., and M. Ahmad. 2002. “A Compara-tive Assessment of Links between IrrigationWater Pricing and Irrigation Performance inthe Near East.” Paper prepared for delivery

at the World Bank Conference on IrrigationWater Policies: Micro and Macro Considera-tions, Agadir, Morocco, June 15–17.

FAO (Food and Agriculture Organization).2001a. Crops and Drops: Making the BestUse of Water for Irrigation. Rome: FAO.

———. 2001b. “Proceedings, Regional Consul-tation on Investment in Land and Water inthe Near East.” FAO Regional Office for theNear East, Cairo.

———. 2002. “Proceedings, Workshop on Irri-gation Advisory and Training Services in theNear East.” FAO Regional Office for theNear East, Cairo.

———. 2003. “Investir dans la maîtrise de l’eaupour l’agriculture et le développementrural.” Preliminary report. FAO, Rome, June.

———. 2004. “Impacts macro-économiques del’agriculture irriguée au Maroc.” Preliminaryreport. FAO, Rome.

Phocaides, A. 2001. Handbook on PressurizedIrrigation Techniques. Rome: FAO.

This Note was prepared by M. Bazza of FAO, and reviewed byJack Keller of International Development Enterprises (IDE).


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INVESTMENT NOTE 3.2

INVESTING IN IRRIGATIONFOR CROP DIVERSIFICATION

Farmers’ efforts to grow crops other than cerealsare frequently hampered by their surface irrigationsystem. Diversification in irrigated agriculture oftenrequires new or improved technologies for surfacewater delivery and drainage that allow flexiblewater application and drainage.

The green revolution and the rapid expansionof irrigated areas between 1960 and 1980 cre-ated grain surpluses that depressed prices indomestic and world markets. Market-orientedfarmers responded by seeking alternatives tothe cultivation of cereals. They were encour-aged by the availability of advanced irrigationtechnology; the development of improved high-value crops; the increased domestic andregional demand for fruits, vegetables, and live-stock products; the growth of private agribusi-ness in processing and marketing; and theremoval of distorting policies.

However, many farmers in rice-based systemswere constrained by the irrigation infrastruc-ture, management practices at the farm level, anadverse policy environment, and a lack of sup-port services. Because of the importance of rice,many issues in this Investment Note deal withthe diversification of rice-based cropping sys-tems but apply also to the increasing productiv-ity of other irrigated agricultural systems.

INVESTMENT AREA

WATER DELIVERY. Paddy and nonpaddy cropsrequire different irrigation management. Bothexcess water and deficits curtail nonpaddycrop yields, whereas rice does well with con-tinuous irrigation and/or field-to-field irriga-tion, the dominant method of irrigation in mostof South and Southeast Asia. Basin irrigation,the method used for irrigated rice, is also usedfor crops such as groundnuts, maize, and soy-beans, but it is not suited to crops sensitive towet soil conditions or to soils that form crusts.

Delivery of irrigation water to nonpaddy cropsat discrete, variable intervals with precise flowsis more complex than continuous delivery forrice. Flow rates must be carefully controlled toirrigate nonpaddy crops whether surface orpressure systems are used.

ON-FARM IRRIGATION AND DRAINAGE NETWORKS.Many irrigation projects designed for rice pro-duction have a low density of irrigation ditchesand farm drains because they were supposed tobe used for field-to-field irrigation. Nonpaddycrops, in contrast, require direct plot access toirrigation and drainage that provide intermittentwater supply and prevent soil saturation frominhibiting crop production.

DRAINAGE. Improved drainage reduces water-logging and salinization, allowing a widerchoice of crops and encouraging crop diversifi-cation. Complementary on-farm drainage facili-ties for removing excess water fast andlowering the water table may need to beinstalled and integrated with the main drainagesystem. Some farmers provide these facilitieswith rudimentary but costly systems of dual-purpose field ditches and raised beds, a tech-nique widely used in delta areas in SoutheastAsia. These systems, though effective, take upconsiderable productive land area.

SOIL MANAGEMENT. Often, land can be convertedfrom rice to nonpaddy cultivation only at greatcost because the high clay content of heavysoils that are excellent for rice cultivation resultin low infiltration rates and poor suitability forother crops and hence impose large powerrequirements for land preparation. Diversifica-tion from rice to other crops therefore hasgreatest potential on lighter soils.

LAND CONSOLIDATION. Construction of the densesurface irrigation and drainage system neededfor crop diversification cannot reasonably beimplemented where randomly shaped farmplots are scattered throughout the irrigatedarea. A land consolidation program is oftenneeded as a basis for a cost-effective layout foran on-farm irrigation system suited to efficientwater management. Farm plots should be


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rearranged in a geometric grid that determinesthe layout of irrigation and drainage systemsand farm roads. In Japan, the Republic ofKorea, China, and Taiwan (China), economieswhere diversification is common, irrigation sys-tems were systematically developed in conjunc-tion with land reform, providing irrigation anddrainage access for each plot and crop. Failureof land consolidation programs has been com-mon, and political commitment (sometimessupported by external stimuli (has been impor-tant in driving land reform.

POTENTIAL BENEFITS

Agricultural diversification creates opportunitiesfor higher and more stable rural incomesthrough more efficient use of resources and theexploitation of comparative advantage in cropproduction. Diversification generally implies ashift from cereals to other field crops or high-value horticultural crops. These may requireless water but offer opportunities for greateremployment, higher incomes, and more value-added processing.

Two World Bank–supported projects—a suc-cess story in Brazil (box 3.7) and an unsatisfac-tory result in Thailand (box 3.8)—illustrate theimportance of irrigation system design, accessto markets, and farmer training in enhancingcrop diversification.


GROUNDWATER DEVELOPMENT. Deficiencies inwater delivery from surface irrigation systemshave spurred farmers to tap other sources ofwater, primarily from drains and groundwater(box 3.9). This has sometimes led to overex-ploitation of groundwater resources, posing amajor threat to health and the environment. Adecline in groundwater levels increases pump-ing costs, affecting the sustainability of ground-water supplies and the profitability of newcropping systems.

COMPLEMENTARY INVESTMENTS. Agricultural diver-sification is an evolving process that requiresappropriate policies, technologies, road and


In Brazil, the Upper and Middle São Francisco Irrigation Project,appraised in 1985, consisted of the rehabilitation of seven publicschemes and construction of a new scheme,“Formosa.” Irriga-tion systems were designed to provide high-quality service toeach user,with the possibility of adopting sophisticated, pressur-ized on-farm applications.The expected area of crop diversifica-tion was greatly underestimated at 13 percent as the area nowdevoted to fruit crops (mainly banana and mango) averages 61percent in the rehabilitation sites and 32 percent in the newscheme. Improved market access via a new highway to Brasíliagreatly enhanced prospects for output growth in Formosa, andthe project has generated considerable off-farm employment.

Source:Brazil, “Upper and Middle São Francisco Irrigation Project,”1986.

Box 3.7 A Successful Project in Brazil

In Thailand in 1977 at project appraisal, it was expected thatduring the dry season about half of the Lam Pao Schemeunder the Northeast Irrigation Project II would be croppedwith high-yielding rice varieties, with the rest under peanutsand mung bean. More than 20 years later, cropping intensityduring the dry season averages about 32 percent. Dry seasonvegetables are grown mostly near the larger canals. Expansionof diversified irrigated agriculture is constrained by the lack oftertiary canal service to individual fields and the unreliability ofcanal water, in addition to seasonal migration of rural labor tourban centers and poorly organized markets in the area.

Source: Burt and Styles 1999.

Box 3.8 An Unsuccessful Project in Thailand

During the last 20 years, with low development costs, the useof groundwater resources for irrigation has increased dramat-ically. Canal water distribution is often erratic or rigidly sched-uled, and large variations between planned and actualallocation of water hamper the cultivation of nonpaddy crops.Farmers quickly realize the potential operational advantage ofgroundwater over surface water.

Groundwater development in Thailand has largely solvedwater supply problems. In a project in Phitsanulok, access togroundwater gives farmers freedom over crop calendars andchoice of crops because they choose the best time to plant fortheir own situations and markets and can give their crops andsoil all the water they need.

Source: Mainuddin, Loof, and Abernethy 2000.

Box 3.9 Groundwater and Crop Diversification:“Farmers Vote by Drilling”

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transport infrastructure, and services (Bargh-outi, Garbus, and Umali 1992).

LESSONS LEARNED

The pace of crop diversification in irrigated ricesystems is determined by markets and policies.Private investment usually grows gradually, asfarmers gain experience with new markets andproduction systems. Market information sys-tems and market access are critical to promot-ing diversified cropping. Diversification is mostadvanced where farmers have easy access toreliable water in river delta and alluvial areas,where explosive development has occurred ingroundwater resources. In other surface irriga-tion systems, diversification will remain con-strained if investments support only urgentlyneeded rehabilitation without upgrading irriga-tion infrastructure to meet the requirements ofdiversified agriculture.


Diversification in irrigated areas may requirethe improvement of main canals and distribu-tion systems and construction of a tertiary (on-farm) irrigation and drainage system to meetprecise water delivery requirements of diversi-fied crops. This may need to be complemented

by land consolidation and improvements inmain drainage and flood control systems.

Improvement of irrigation and drainage facilitiesis a prerequisite to crop diversification, butshould be complemented by other support serv-ices. Governments should encourage investmentsfor modernizing marketing facilities as well as forimproving roads, communication systems, andstorage. Extension programs with information onirrigation, agronomic practices, and economicshelp farmers decide which crops to grow. A guar-anteed and stable market, and readily availableinputs and credit, are also essential to sustaincrop diversification, as demonstrated in the Mid-dle East and North Africa (box 3.10).

Before initiating a crop diversification program,detailed studies should be done to determine thequality of irrigation service and its suitability fordiversified crops and to assess the potential mar-kets and the available level of services and tech-nology. The in-depth diagnosis of the irrigationsystems should go beyond an evaluation of theindicators of hydraulic, financial, agricultural,and environmental performance; it should evalu-ate the potential for participation by women andpoor people in their efforts to diversify, espe-cially their access to credit and markets.


• Modernization of the water distribution sys-tem to provide reliable and flexible delivery

• Tertiary and on-farm development (includ-ing irrigation, drainage system, and farmroads) serving each farm plot

• Micro-irrigation

• Greenhouses, tunnels, and mulching

• Marketing and food processing facilities

• Extension and financial services

REFERENCES CITED

Barghouti, S., L. Garbus, and D. Umali, eds.1992. “Trends in Agricultural Diversification:


The agricultural sector in countries in the Middle East andNorth Africa region has witnessed remarkable change andmodernization.This has been especially remarkable in the irri-gation subsector, which has benefited from a variety ofadvances in water management, crop improvement, marketing,and processing. Changes were often led by private companiesthat introduced modern production technology such as plasticgreenhouses, tunnels, mulches, improved hybrid varieties, dripirrigation systems, soluble fertilizers and herbicides, modernmarket information systems, and refrigerated transport equip-ment for long hauls.

Source: Author.

Box 3.10 Diversification in the Middle East and North Africa

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Regional Perspectives.” Technical Paper180. World Bank, Washington, DC.

Burt, C. M., and S. W. Styles. 1999. “ModernWater Control and Management Practices inIrrigation. Impact on Performance.” WaterReport 19. Food and Agriculture Organiza-tion (FAO), Rome. Available online athttp://www.watercontrol.org/publications/publications.htm.

Mainuddin, M., R. Loof, and C. L. Abernethy.2000. “Operational Plans and Performancein the Phitsanulok Irrigation System, Thai-land.” International Journal of WaterResources 16(3): 321–42.


Brazil. “Upper and Middle São Francisco Irriga-tion Project.” Closed. Project ID: P006362.Approved: 1986. Within World Bank, avail-able at http://projportal.worldbank.org.

Thailand. “North Irrigation Improvement Pro-ject.” (02). Closed. Project ID: P004699.Approved: 1977.

SELECTED READINGS

Plusquellec, H. 1987. “Crop Diversification in Irri-gated Agriculture: Water Management Con-straints.” In T. J. Davis, and I. A. Schirmer,eds. Sustainability Issues in AgricultureDevelopment: Proceedings of the SeventhAgriculture Sector Symposium. Washington,DC: World Bank.

———.2002. How Design, Management andPolicy Affect the Performance of IrrigationProjects: Emerging Modernization Proce-dures and Design Standards. Bangkok,Thailand: FAO.

World Bank. 2002. “Implementing the NewRural Development Strategy in a CountryDriven Process: Agriculture and RuralDevelopment Project Profiles.” Presentationat the Country Director/Rural Sector BoardLearning Event, September 8–10, sponsoredby the World Bank, Antalya, Turkey.

This Note was prepared by Hervé Plusquellec with inputsfrom Walter Ochs, and other irrigation and drainage special-ists in the Irrigation and Drainage Network of the WorldBank. It was reviewed by Jan Bron of Royal Haskoning.


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INVESTMENT NOTE 3.3

INVESTING IN SMALLHOLDERIRRIGATION

Smallholder irrigated horticulture has proven aviable and attractive option for poor farmers indeveloping countries. Returns from intensive irri-gated horticulture, even on tiny plots, can greatlyexceed returns from rainfed cereals production.Private ownership of simple pumping technologieshas avoided collective action problems related tolarger public or communal schemes. To promoteexpansion of smallholder irrigation, poor farmersmust have access to cost-effective technologiesthat provide a rapid return on investment, a reli-able and quality supply of water and other inputs,land for expansion, and markets to absorbincreased production.

In many developing countries, irrigation iscounted on to increase production, reducereliance on unpredictable rainfall, and providefood security, income, and employment to poorfarmers. Large schemes, which the World Bankfinanced for decades, have often lacked sustain-ability; frequently used to produce uncompeti-tive cereals for import substitution, such largeschemes typically suffer from the inability ofgovernment or parastatals to maintain the infra-structure. Smaller, communal schemes workwell in many countries but can be plagued bycollective action problems, although the basicrules for success are well documented (Ostrom1992). Elsewhere, there is considerable scopefor the expansion of small, privately ownedpumping technologies that benefit small farm-ers, particularly for production of high-valuecrops such as horticulture.

INVESTMENT AREA: FOCUSING ON THE PRIVATE SMALLHOLDER

Throughout the developing world, many small-holders produce vegetables on irrigated plotsduring the dry season as a hedge against a rainyseason crop failure and as a source of cashincome and food. These plots may be very small:

surveys have shown that garden size rarelyexceeds 0.1 hectares and is often less than 0.05hectares (500 square meters). With nonmecha-nized systems using ropes, buckets, and water-ing cans, irrigation of even such small areas canbe extremely labor intensive. The labor con-straint often limits increased production simplybecause the farm family lacks the time andenergy to provide sufficient water for the crops.Moreover, the distance to water points has beenshown to decrease the likelihood of girls’ attend-ing school because they are often responsible forcollecting water (WHO 2003).

The first hurdle to expanded smallholder irri-gation, therefore, is to demonstrate and pro-vide access to labor-saving technologies forpumping and distributing water. Mechanizedtechnologies such as small gasoline or dieselpumpsets often exceed the means of poorfarmers—both in terms of investment cost($300 to $500) and of operating costs of fuel,oil, and spare parts. Moreover, the small sizeof many gardens may preclude economicaluse of a motorized pump. The treadle pump,on the other hand, has been shown to providean economically viable solution for water lift-ing that is within the financial means of small-holders in Africa and Asia and may allow afarmer to irrigate 0.5 hectares using only fam-ily labor and investing US$50–$100. Scaling upfrom traditional systems to treadle pumps andfurther to motorized irrigation systems requirescareful thought and an incremental approach(box 3.11).

BENEFITS

Smallholder irrigated horticulture can providesignificant returns to farmers and increase localmanufacturing capacity while creating employ-ment. Surveys have shown that many farmersincrease their land under cultivation by threetimes within two years after the purchase of atreadle pump, more than doubling their annualincomes (boxes 3.12 and 3.13).

Benefits do not stop at the farmgate. Whenlocally made treadle pumps are used, the arti-san sector may be stimulated. Small metal shops


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learn new skills and develop their ability tosolve local problems. Local products may bepreferred to externally produced pumps, as theartisans are closer and more accountable forquality and repair.

The quality and quantity of food for local andhousehold consumption is also important, andirrigated horticulture addresses household

food security concerns. Many of these benefitsare perceived by women farmers, who areable to augment garden production. House-hold drip irrigation systems, supplied fromperiodically filled buckets or drums, oftenwith a treadle pump, to water household gar-dens or small plots of vegetables or fruit treesare particularly important for women as wellas men.


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 makebest use of a motorized pump, an average farmer would need immediately to increase the size of his or her garden by 14times (for example, from 0.05 hectares to 0.7 hectares) to ensure viability.This transition may easily surpass the technical andmanagement capacity of the farmer, who will require more labor, inputs, and markets for the produce, which helps explain whymany 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 maybe 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 mayobserve 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 expansionin 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 distributionsystem with buried PVC pipes.

• Years 4–6: 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 orbreakdowns.The farmer may later want to explore the micro-irrigation systems discussed in IN 3.1, the Investment Noteon on-farm water saving.

Source: Author.

Box 3.11 Scaling Up with Improved Technology Takes Time

In West Africa, projects implemented by Enterprise-Works Worldwide in Senegal, Mali, Niger, Benin,Burkina Faso, Côte d’Ivoire, and Ghana have pro-moted private sector sales of more than 8,000 trea-dle pumps and more than 1,000 low-cost tubewells.More important, these technologies have resulted inhigher incomes for more than 80 small fabricationworkshops and thousands of small-scale gardeners.The annual increase in income for gardeners varieswidely between countries and within countries, but itranges from $290 in Niger to $584 in Senegal.

Source: Author.

Box 3.12 The Benefits of Smallholder Irrigation in West Africa

Treadle pump technology can be a powerful tool for povertyreduction in Asia. It self-selects the poor, puts to productiveuse the region’s vast surplus family labor, and is claimed toraise the annual net household income by US$100 on average.For a marginal farmer with $12 to $15 to spare in this region,there could hardly be a better investment than a treadle pump,which has a benefit-cost ratio of 5, internal rate of return of100 percent, and payback period of a year. It thus ideally fillsthe needs of marginal farmers.The challenge lies in its market-ing; exceptional ingenuity seems to be required to put thetreadle pump in the hands of millions of rural poor.

Source: Shah et al. 2000.

Box 3.13 Experience with Pro-Poor Irrigation in Asia

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Several policy and resources conditions mustbe met for successful implementation of small-holder irrigated horticulture.

Access to adequate irrigable land

Improved water-lifting technologies have ahigher discharge than traditional methods, andtime saved in irrigating may be used to expandsurface area if suitable land is available. Landtenure systems are a potential impediment to theexpansion of irrigated horticulture because, iffarmers do not own the land, they will be reluc-tant to invest in permanent improvements suchas tubewells. Conflicting land use can also be aproblem, especially when dry season irrigationencroaches on land traditionally used by herders.

Existence of sufficient water of suitable quality

Expanded irrigated horticulture requires ade-quate supplies of ground- or surface water tomeet the requirements of the crops beinggrown because the most productive small-holder irrigation is performed during the dryseason (when insects and plant diseases arescarce and when rainfed cereals productiondoes not compete for labor). Irrigation water ismost economical if subsurface water suppliesare within 7 meters of the surface or if surfacewater supplies are within 50 meters of theplants. Water quality is also important becausesalinity can become a major problem, especiallyin arid climates, even when concentrations ofsalts in irrigation water are relatively low. Tech-nical advisory services would then be neededto advise on selecting salt-tolerant crop varietiesand saline irrigation practices. (For groundwa-ter governance issues, see IN 4.4.)

Availability of ample labor supply

Although rural household labor is frequently inshort supply during the rainy season, whenfarmers focus on staple crops, it is usually rela-tively abundant during the dry season whenirrigated horticultural activities are performed.Labor productivity can be increased signifi-cantly through higher yields and expanded irri-gated surface areas through the use of

mechanized water lifting, piped distributionsystems, and improved surface irrigation or dripirrigation systems.

Availability of nonirrigation inputs

Fertilizer, seed, and pesticides need to be ade-quately supplied by the commercial sector onthe basis of market prices. If not, farmers pro-duce their own seed, leading to reduction inyields as seed quality deteriorates. Vegetableseeds adapted to the prevailing environmentalconditions are an important input that is fre-quently lacking. Subsidized inputs, typically fer-tilizer, have been shown to make these itemsless accessible to smallholders, because thesebenefits tend to be captured by larger farmers,creating scarcity.

Market conditions

Market outlets for irrigated production areimperative for a successful smallholder irrigationsubsector. Proximity to markets or reliable trans-portation linkages must be present, particularlysince horticultural products are perishable. Pricecycles often accompany horticultural produc-tion, which may require additional investment invalue-added production (such as drying) or bet-ter storage to smooth out supply. Of course,access to market information is also important.

LESSONS LEARNED

Two important lessons are reviewed here:development of supply chains for sustainableimpact and the importance of a market-ledapproach for financing technology acquisition.

Supply chain development

Low-cost productive technologies must beavailable to smallholders in terms of both loca-tion and price and must correspond to theirneeds. A variety of ways of providing small-holders with access to these technologies havebeen used, ranging from importing treadlepumps to manufacturing items locally (box3.14). For market-driven sustainable develop-ment to occur, all parties in the supply chainmust make a profit. In the case of treadle


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pumps, tubewells, and improved piped waterdistribution systems, the manufacturers,installers, and the gardeners all benefit. Treadlepump manufacturers earn $15 to $25 profit perpump, tubewell installers earn $12 to $18 perwell, and the plumbers installing buried PVCpipe distribution systems earn roughly $0.20per meter of pipe installed.

Financing technology for a market-led approach

In many countries, the uptake of technologies bysubsistence gardeners is hindered by the lack ofinstitutions that provide rural finance. Althoughthe development of low-cost technologies hasreduced up-front costs, farmers typically requirefinancial assistance, ideally through a pump sup-plier credit or other commercially viable creditmechanisms. Subsidized programs are riskybecause of market distortions, and should beinvestigated only if there are no rural financeinstitutions or it is felt that cost reduction isrequired for a “demonstration effect” wherepumps are unknown. Therefore, coordinationamong donors in the irrigation sector is essentialfor mutual understanding of the long-term bene-fits of encouraging farmers to invest in a technol-ogy that will pay for itself in its first season ofuse. Poorly managed credit programs hurt thevery people they are designed to help in thelong term. Instead of developing sustainablelocal capacity, these programs leave smallhold-ers dependent on foreign aid and waiting for agift rather than investing in their own future.However, the smallholder market approach onlyworks well when the technology being pro-moted has a short payback period (one or twoseasons), and the initial cash payment is withinthe smallholders’ reach.


• Use privately owned technologies to avoidcollective action problems and reliance ongovernment assistance. This increases thelikelihood that irrigation assets will bemaintained.

• Consider simple technologies such as trea-dle pumps and drip irrigation kits. Theseself-select for poor households.

• Ensure that a minimum set of resource andmarket conditions are satisfied before pro-moting irrigation.

• Develop supply chains that are dominatedby private entrepreneurs such as pumpmanufacturers and repair shops.

• Rethink the definition of smallholder-irrigatedagriculture in view of market gardening.Many farmers, particularly the poorest, irri-gate plots smaller than one-tenth of a hectare.

• Recognize that rapid introduction of mecha-nized technologies can easily overwhelm apoor smallholder in terms of capacity. Scalingup to mechanized pumps has been demon-strated successfully but may take time.

• Make sure there are markets for the outputs,or help create them, to ensure thatincreased production is profitable.

REFERENCES CITED

Ostrom, Elinor. 1992. Crafting Institutions for Self-Governing Irrigation Systems. San Francisco:Institute for Contemporary Studies Press.


Certain principles are generally accepted as key to establishinga viable supply chain, including the following:

• Private sector actors, motivated by profit, are more suc-cessful than public sector entities.

• Extremely judicious use of subsidies can promote initialintroduction.

• 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-mise future sustainability by performing functions that themain actors in the chain cannot assume.

There are two schools of thought for the best design of a supplychain: decentralized manufacture (small workshops close to themarkets) and centralized mass manufacture (several large manu-facturers with a distribution network). Both methods haveadvantages and disadvantages.The choice will depend both onthe project planners’ goals and on the available infrastructure.

Source: World Bank 2003.

Box 3.14 Developing a Supply Chain for Pumps

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Shah, T., M. Alam, M. D. Kumar, R. K. Nagar,and M. Singh. 2000. “Pedaling Out ofPoverty: Social Impact of a Manual Irriga-tion Technology in South Asia.” Interna-tional Water Management Institute ResearchReport No. 45, 2000, Colombo, Sri Lanka.

WHO (World Health Organization). 2003. Rightto Water. Health and Human Rights Publica-tion series, No. 3. Geneva.

World Bank. 2001. “Implementation CompletionReport for Private Irrigation Promotion PilotProject (IDA 2707 NIR).” July, World Bank,Washington, DC.

———. 2003. “Treadle Pump Supply ChainWorkshop Report.” Water and SanitationProgram-Africa. In French. Available onlineat http://wsp.org/08_Region_output.asp?Region=Africa.

SELECTED READINGS

Enterprise Works, Association Nigérienne dePromotion de l’Irrigation Privée, AssociationFrançaise de Volontaires de la Paix. 2001.“Irrigation Guide: Guide for the Selection ofAppropriate Smallholder Irrigation Tech-nologies.” Niamey, Niger.

Kay, Melvyn, and Tom Brabben. 2000. “TreadlePumps for Irrigation in Africa.” IPTRIDKnowledge Synthesis Report No. 1. Octo-ber, International Programme for Technol-ogy and Research in Irrigation andDrainage, Rome.

This Note was prepared by Jon Naugle of Enterprise Worksand Daniel Sellen, and reviewed by Jack Keller of InternationalDevelopment Enterprises.


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INVESTMENT NOTE 3.4

SELECTING TECHNOLOGIESFOR THE OPERATION ANDMAINTENANCE OFIRRIGATION SYSTEMS

Appropriate technologies for the O&M of irriga-tion systems are essential for the service deliveryexpected of them. Technologies for operation(which are related to the structures in a system)have to be distinguished from technologies formaintenance (which are related to all componentsof a system, that is, all the structures, canals, andfields). Some key issues in the selection of the righttechnologies for the job are reviewed in thisInvestment Note.

System modernization will be a focal point ofirrigation debate in coming years, especially indeveloping countries. The construction of newirrigation systems may also be expected insome of the least developed and emergingeconomies and in quite a few areas with rain-fed cultivation. As an integral part of the inves-tigation and design processes, appropriatetechnologies for O&M will have to be selectedto be able to use these systems properly. Ittakes several years after installation of an irri-gation system for the benefits to show up:improved yields, crop diversification, andhigher farmer income. At that point, goodO&M becomes crucial, if improvements are tobe retained.

Three main considerations should govern theselection of O&M technologies. First of all, theymust fit the type of service that irrigation usersexpect. Second, the technologies have to be inbalance over the system components: inlet,main and distributary system, and field system.For balanced performance, appropriate O&Mtechnologies must be selected for each compo-nent. Third, the most cost-effective solutionshould be selected (see IN 3.5).

INVESTMENT AREA

Responsibilities and funding sources must beidentified for each of three actors involved inirrigation O&M:

• Government. Government’s responsibilitiesare defined by policy and legislation. Theyusually encompass oversight and mainte-nance of nationally important water bodiesand major structures such as dams. Expendi-tures are covered from the national budget.

• Agencies. Public, semi-public, and privateagencies (and sometimes WUAs) are usuallyresponsible for the main and distributarysystems. Expenditures are funded throughfees charged to farmers and paid from theirown resources. Subsidies paid from thegovernment’s recurrent budget may supple-ment this funding.

• Water user associations and farmers. WUAsand individual farmers are usually responsi-ble for field systems. Operation and main-tenance is funded by farmers with theirown money or labor (see IN 1.4 and IN 2.1)and may be financed through loans fromprivate banks.

For system operation, all kinds of technologiesare on the market. They run the gamut fromsimple tools for manual operation to fully auto-mated systems. Availability of technology is gen-erally not the problem, but rather the selectionof the most appropriate technology for the job.The selection of the control system (upstream ordownstream) and the definition of operatingrules are crucial. This is true at every level of theirrigation system, from the inlet to the main anddistributary system, and to the field. The choiceof appropriate technologies at each level shouldby made by whichever actor is in charge ofO&M at point of service. Overall agreement isimportant, however, because there is stronginteraction among the levels of the system. Suchan agreement should be reached during thedesign phase for new installations or thepreparatory phase for system modernizations.


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Canal maintenance activities focus on shape,dimensions, and flow resistance. In most cases,aquatic vegetation is the predominant mainte-nance factor. For lined irrigation canals, the lin-ing has to be kept up. An unlined irrigationcanal is, by definition, in a very young phase inthe vegetation succession and has to stay freeof vegetation to retain its hydraulic function.The best time for canal maintenance is usuallyjust before the start or during the irrigation sea-son. Irrigation water is supplied in more or lessknown volumes, so maintenance can beplanned around releases. Irrigation frequenciesalso have an impact on maintenance, of whichthere are four types:

• Routine maintenance—vegetation control(once or a few times per year)

• Periodic maintenance—cross-sectional con-trol and maintenance of structures (onceevery 5 to 25 years)

• Emergency maintenance

• Modernization

The first two are the focus of this InvestmentNote. The third, effective emergency mainte-nance, depends on a clear decision-makingprocedure and the financial wherewithal toallow more than one choice of technology. Thesolution chosen depends on the nature of theemergency. Modernization is outside the scopeof this note.

O&M of the inlets has always received closeattention, and a body of experience has accu-mulated from around the world. After thehydraulic properties of the inlet structure, thesediment control function is crucial to preventsediment from choking off the irrigation canals.Regarding the main and distributary systems,some less successful developments need to bementioned. All the necessary tools are availableto design, construct, operate, and maintainsuch systems and can very well result in soundcanal networks. However, the word “sound”should be interpreted carefully. It refers to thelevel of service that can be realized within asystem, not just to the technical soundness of

its design. Only when an irrigation system isoperated and maintained properly does it ben-efit farmers by enabling them to get a goodyield from their crops.

When groundwater is the source, the irrigationsystem is generally smaller. It consists of a wellthat abstracts groundwater from the aquifer andpumps it into open irrigation canals or a pipedsystem. In a tubewell, the well itself, the filter,and the pump need maintenance. After mainte-nance, the operation of the pump has to becarefully planned and monitored. Farmers oftendo this themselves.

In traditional irrigation systems, water rightsbecame established over years in certain areas,so that each user had some idea of how muchwater to expect. The operation of modern sur-face irrigation systems, however, is more com-plex. Their size and layout preclude theapplication of traditional water rights. Theresultant tensions often culminate in bunds anddike cutting and other activities that impair sys-tem functioning.

Groundwater irrigation poses lesser manage-ment problems, because farmers can clearlysee the relation between the system and thebenefit, although this perception does notalways prevent groundwater mining or excessenergy consumption. The introduction of vol-umetric water measurement devices, wheneconomically and technically feasible, can bean appropriate response to this problem (seeIN 1.4). The joint benchmarking initiative bythe World Bank, the International Water Man-agement Institute (IWMI), the IPTRID, theInternational Commission on Irrigation andDrainage (ICID), and the FAO can help iden-tify adequate indicators of system perform-ance, which may help in choosing the bestimprovement options and technologies forO&M.

Most lined canals need inspection and minorroutine maintenance work (local cleaning)annually. Aquatic vegetation in unlined canalscan be controlled mechanically, chemically, andbiologically. Mechanical control can be manual


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or mechanized. Manual reshaping of canalsmeans heavy work and a low output perworker. Mechanized control may be done bycutting or dredging. Cutting leaves stubble andweed regrowth, but the stubble protects thebottom or bank of the canal from erosion.Dredging removes a portion of the plants,buried in mud at the bottom. When there is arisk of erosion, aquatic plants should be mownor cut. A further distinction can be madebetween harvesting and nonharvesting mechan-ical control, using different kinds of equipmentfor different purposes. Much of the equipmentcan be tractor mounted. For other types of spe-cialized equipment, mowing and sweepingboats have been developed, but they cannot beused in narrow or shallow canals and have topass obstructions (bridges, culverts, weirs) inlarger canals. Much of the equipment devel-oped for vegetation control can also be used fordesilting and reshaping activities. Special equip-ment is available for maintenance dredging ofsilt and vegetation.

For biological control, selective agents orpolyphagous organisms can be used. Selectiveagents attack one or only a few weed species.Their effects are similar to those of selectivelyapplied herbicides: one weed species decreasesand other plant species take its place.Polyphagous organisms reduce the growth ofnearly every species present to acceptable lev-els. Examples of biological control include Chi-nese grass carp, which consume all species ofaquatic plant, although they prefer submergedplants; goats and sheep, which keep down theweed growth if they are allowed to graze on thebanks and maintenance paths; and shade,which can be provided by allowing broad-leaved plants to grow in the water and by plant-ing suitable trees along canals.

To reduce the deposit of silt, the canal can befitted with sediment traps.

Chemical control implies the use of herbicides,some more selective in killing vegetation thanothers. The application of herbicides should belimited, however, because they can have seri-ous negative effects on the environment;

because they can easily damage the vegetationgrowing along canals just above the water level;and because they do not kill weeds immedi-ately, which means that half-dead vegetationmay clutter the canal after application.

As long as desirable and unwanted effects arekept in balance, chemical control of aquaticweeds can be applied on a limited scale.

Aside from the widely used traditional field irri-gation methods, such as basin and furrow irri-gation, there have been some importantinnovations in field irrigation systems. All kindsof micro-irrigation systems have been devel-oped. Farmers are usually completely responsi-ble for the O&M of field irrigation systems. Thisimplies that O&M technologies selected for usein the inlet structure and the main system haveto be attuned to the technology that farmersselect for their field system.

POTENTIAL BENEFITS

A wise choice of O&M technologies shouldresult in a well-operated and well-maintainedirrigation system. The services delivered by thesystem should enable farmers to improve theircrop yields or obtain other benefits.


The key policy decisions are the following:

• Selecting the type of control approach(downstream, upstream)

• Determining the level of service to beexpected from the irrigation system

• Determining the O&M activities requiredto keep the system in the envisaged con-dition and allocating responsibility forthose activities

• Selecting O&M technologies that are appro-priate for the O&M activities

• Monitoring implementation

• Devising a mechanism for corrective actionif a party reneges on its responsibilities


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O&M technologies should be selected duringthe preparatory or the design phase. At thesame time, the willingness of all parties to dotheir share in O&M must be established.

Before an irrigation project starts, all partiesmust understand the following:

• What is to be operated and maintained,how this has to be done, and when

• Who is to operate and maintain which partof the system (in other words, the divisionof O&M responsibilities between farmersand the agency should be clear)

• How, in case of a transfer, financial respon-sibility will be shifted from the governmentto the agency or the farmers

Reaching such an understanding requires delin-eation of the parts for which government willbe responsible, clear guidelines for the agencyor WUAs and individual farmers on standards tobe maintained, and adequate legislation speci-fying executable control and sanctions.

LESSONS LEARNED

Parties at every level must make a commitmentto fulfill their O&M responsibilities. When sucha commitment is present, irrigation systems willbe operated and maintained adequately. Rou-tine O&M inspection practices may prove costeffective in identifying early deterioration.

Transparency in decision making is importantto achieve overall agreement on O&M tech-nologies, which should be proposed at eachlevel by whichever actor is in charge of O&M ata specified point of service. Only technologiesthat can be operated and maintained underlocal conditions should be selected.


The following recommendations for a success-ful selection of technologies for the O&M ofirrigation systems may be useful:

• Select technologies that fit the type of serv-ice that irrigation users expect. Make surethat these technologies are in balance overthe system components (main, distributarysystem, and field system) and are the mostcost-effective solutions.

• Make sure that all parties agree on who is incharge of the O&M technologies selectedfor each part of the system.

• Make sure that the farmers will be willing topay their share of O&M costs to maintainthe envisaged level of service.

• Have ready for use a mechanism to resolvedisputes concerning responsibilities andpayments.

SELECTED READINGS

Fowler, L. C. 1996. Operation and Maintenanceof Groundwater Facilities. American Societyof Civil Engineering Manuals and Reportson Engineering Practice No. 86. New York:ASCE.

INCID (Indian National Committee on Irrigationand Drainage). 1994. Guide for Preparationof Plans of Operation and Maintenance ofIrrigation Systems. New Delhi: INCID.

Johnston, W. R., and J. B. Robertson. 1991.Management, Operation and Maintenanceof Irrigation and Drainage Systems. Ameri-can Society of Civil Engineering Manualsand Reports on Engineering Practice No. 57.New York: ASCE.

Malano, H., and M. Burton. 2001. Guidelines forBenchmarking Performance in the Irriga-tion and Drainage Sector. Rome: IPTRIDSecretariat.

This note was prepared by Bart Schultz with inputs from JoopStoutjesdijk and was reviewed by Jan Bron of Royal Haskoning.


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INVESTMENT NOTE 3.5

COST-EFFECTIVE OPERATIONAND MAINTENANCE OFIRRIGATION AND DRAINAGEPROJECTS

High-quality design, planning, and construction min-imize O&M costs. Rehabilitation projects designedto “fix the bad spots” without addressing thecauses of poor performance may not have long-term effects. Rehabilitation and modernization—based on performance monitoring and in-depthdiagnosis of operational and management prac-tices—have high potential to improve the costeffectiveness of O&M.

O&M is a postconstruction activity—but shouldnot be an afterthought. It is at the core of plan-ning and design, particularly in hardwareupgrades intended to lower management costand improve irrigation services. Such projectsshould be based on in-depth analysis of actualoperation practices, comprising both hardwarefeatures and staff incentives. They must incor-porate the goals and requirements of desiredfuture O&M, and the appropriate technologiesshould be selected based on considerations ofsystem balance and expectations of irrigationusers (see IN 3.4). Design understood only asstructural design fails to address essential oper-ational questions.

INVESTMENT AREA

Ideally, the preparation of a rehabilitation ormodernization project is based on a multiyearassessment of the hydraulic, agronomic, finan-cial, and environmental performance. In-depthdiagnosis of infrastructure and operational andadministrative procedures helps to identify thephysical and administrative changes that mustbe included in the project. A methodology forrapid appraisal has been developed (Burt andStyles 1999; see also IN 3.7) and has beenused to plan a World Bank irrigation project inVietnam.

Irrigation projects require planning, implemen-tation, and monitoring of O&M. Therefore,managers should propose a rolling O&M plan.

OPERATION. Seasonal or short-term planning ofthe operation of large irrigation systems to matchexpected supply with demand can be a complexand laborious process, requiring the collectionand tabulation of climatic and crop data. Differ-ent methods can be used for the actual distribu-tion of water: proportional, rotation, arrangeddemand, canal rotation and free demand (as inthe Arab Republic of Egypt), and centralizedscheduling. A water delivery method does notnecessarily imply a specific design and technol-ogy. But technologies such as nonadjustablestructures (flow dividers) limit the flexibility ofwater distribution. Some other technologiesrequire frequent adjustments of control struc-tures, up to two or three times daily, to meet thestated objectives of reliability and flexibility ofdelivery. Additional evaluations are needed onthe possible impacts of operation on related fac-tors such as potential salinity, waterlogging, andenvironmental and social conditions.

A wide range of technologies is available toimprove the quality of service to users (flexibil-ity, reliability, equity) and to reduce the cost ofoperation. Some technologies use simple prin-ciples of hydraulics (long-crest weirs) orhydraulically operated automatic equipment.Progress in communications and electronics hasmade possible the development of modernequipment for the operation of canal irrigationsystems. New technology includes local auto-mated controllers, supervisory control mecha-nisms combining local automation undermaster supervisory control, remote control sys-tems, and, ultimately, central automated controlsystems for large and complex water projects.

These modern systems allow reductions in thefrequency of field visits for visual observationsand eventual adjustments. Some of them (down-stream control, dynamic, central control) elimi-nate the need for a complex planning process.

MAINTENANCE. There are many examples of tra-ditional irrigation systems, built and managed


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by users, that have been operating for cen-turies. These systems illustrate the point that, ifproperly maintained, irrigation schemes canbenefit many generations. A maintenance serv-ice needs good planning of the different typesof maintenance:

• Routine and preventive maintenance, nor-mally done annually, includes all the workrequired to keep the irrigation and drainagesystem in satisfactory condition.

• Renewal work includes the replacement ofinfrastructure that has reached the end of itsexpected life span.

• Special maintenance includes the repair ofdamage caused by major disasters such asfloods, typhoons, and earthquakes, whichare unforeseeable.

The O&M plan should be based on an inven-tory of all the infrastructure work and includean asset management plan defining the fre-quency of routine maintenance and life of thework. This plan should be the base for assess-ing the annual maintenance budget.

Silt deposition, weed infestation, and malfunc-tioning structures make it practically impossi-ble to operate irrigation systems to deliverwater equitably and reliably. These same fac-tors affect the drainage system and can result inadditional salinity, waterlogging, and otherenvironmental problems.

Four main problems are associated withunlined canals: weed infestation, silting, slopeerosion, and water leakage. These problems areindicative of poor design, inefficient mainte-nance, or improper operation. Corrective meas-ures may be costly and sometimes severelydisrupt irrigation service. Engineering solutionsexist to alleviate or solve these problems:

• Eliminating silting: Special canal intakes toskim the upper, less loaded waters fromrivers (Coello, Colombia); silt and sandextruders (Nara Canal in Sindh, Pakistan);desilting basins (Saldana in Colombia;Guilan in the Islamic Republic of Iran)

• Battling weed infestation: Chemical andbiological methods (used in developedcountries and tested in Egypt and Sudan)

• Canal cleaning: Mechanical methods usingspecialized equipment—not constructionequipment left over after completion ofconstruction (Mexico irrigation districts)

Reduction of maintenance cost is one of thereasons for lining earth canals.

Lined canals should need little maintenance, ifthey have been properly constructed and ade-quate solutions have been provided for anypotential problems studied (gypsum, swellingsoils, subpressure, permafrost). However, thecosts of repairing poorly constructed concretepanels that crack a few years after constructionare beyond the financial capacity of many agen-cies. The effectiveness of canal lining to controlseepage losses depends on the lining technol-ogy used and the age of the lining. There isnow strong evidence that hard surface liningscan deteriorate in a few years to the pointwhere there is as much seepage as from anunlined canal.

The geosynthetics industry (geomembranes,geotextiles, geocells, geomats) offers manyopportunities to improve the effectiveness ofcanal lining by using geomembranes to controlthe erosion of canal slopes. New materials havepotential for savings in installation costs andtime, an important consideration for canalsunder operation. Irrigation districts in theUnited States claim that the cost of a recentlydeveloped technology, installation of field-fab-ricated material, can be as little as one-third thatof concrete lining.


Borrowing countries frequently limit mainte-nance activities to essential works to keep gov-ernment-managed systems operating andperform rehabilitation works only every 15–20years, mostly through external financing. Thispractice should be strongly discouraged, becauseit requires massive injections of money, several


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times more than what is needed with well-designed asset management plans.

Adoption of high or advanced technology wouldreduce the labor requirements for the O&M ofirrigation schemes. However, high technologyrequires higher labor skills. Cost-effective O&Mthrough rehabilitation and modernization mayrequire the retrenchment of unskilled staff, inten-sive training, or both (box 3.15).

Modern water control technologies can beintroduced in steps starting with simple modifi-cations of cross-regulators, adoption of localcontrollers on a pilot basis, and simple informa-tion technology. Once users are comfortablewith the new systems, they can scale up tomore sophisticated control systems, includingremote control. Most irrigation districts in theU.S. state of California are engaged in a long-term process of modernization using their ownfinancial resources

POTENTIAL BENEFITS

The benefits expected from the above actionsfor effective O&M include the following:

• Better irrigation service to users, whichencourages crop diversification; cultivationof high-value, water-sensitive crops; andhigher use of nonwater inputs

• Substantial water savings, and positiveimpacts on the environment and on salineand waterlogged land

• Increased life of irrigation infrastructure andpostponement of the need for major projectoverhaul

• Higher motivation of the management enti-ties’ personnel

• Less conflict between users and the man-agement entities


Irrigation agencies often strictly adhere to theirold design standards and are reluctant to adopt

techniques that they consider too costly and toosophisticated. They are unaware that their cur-rent standards are deficient and that someadvanced technologies could be appropriate fortheir irrigation projects. Changing practices is along-term process. Operational staff shouldencourage potential borrowers for irrigation toorganize eye-opening training and to carry outsome time-consuming surveys of canal condi-tions long before starting project preparation(box 3.16).

Most borrowers propose that earth irrigationcanals be lined under development assistanceprojects. Lining costs may account for morethan 50 percent of the total investment. Givenbudget limitations, borrowers should beencouraged to limit lining to sections wherenecessary and to further invest in moderniza-tion work that could improve the effectivenessof O&M activities. This work accounts for asmall percentage of total costs.

High quality standards are required at everyphase of project implementation: planning,design, and construction. Project consultantsshould have in-depth experience in advancedtechniques to improve O&M. Budget and humanresources for supervision by the Bank should beadjusted to the complexity of such projects.


Major reforms in the agricultural and water sector were car-ried out to improve the sustainability and profitability of irriga-tion in the state of Victoria, Australia. The renewal of theirrigation infrastructure, dating to the 1930s, provided theopportunity to redesign the irrigation systems by introducingnew technologies.

The shortfall of revenues was reduced from US$66 million to$13 million over a period of 10 years (1984–94). Some 62 per-cent of the improvement in financial performance came fromefficiency gains in O&M and 22 percent from price increasesfrom the irrigators. The number of staff was substantiallyreduced and staff productivity increased by replacing unskilledpersonnel with young graduates familiar with new technologies.

Source: Langford, Forster, and Malcolm 1999.

Box 3.15 Australia: New Technology ImprovesFinancial Performance

126REFERENCES CITED

Burt, C. M., and S. W. Styles. 1999. “ModernWater Control and Management Practices inIrrigation. Impact on Performance.” WaterReport 19. Food and Agriculture Organiza-tion (FAO), Rome. Available online athttp://www.watercontrol.org/publications/publications.htm.

Langford, K., C. Forster, and C. Malcolm. 1999.“Towards a Financially Sustainable IrrigationSystem. Lessons from the State of Victoria,Australia, 1984–1994.” World Bank TechnicalPaper No. 413. World Bank, Washington, DC.

SELECTED READINGS

ICID (International Commission on Irrigationand Drainage). 1997. “Planning the Manage-ment, Operation, and Maintenance of Irriga-tion and Drainage Projects. A Guide for thePreparation of Strategies and Manuals.”World Bank Technical Paper No. 389. WorldBank, Washington, DC.

Plusquellec, H. 2002. How Design, Manage-ment and Policy Affect the Performance ofIrrigation Projects. Bangkok: FAO,Bangkok Regional Office.

______. 2004. “Application of Geosynthetics inIrrigation and Drainage Projects.” ICID,New Delhi, India.

Sagardoy, J. 1982. Organization, Operation andMaintenance of Irrigation Schemes. Rome:FAO.

This Note was prepared by Hervé Plusquellec with inputsfrom Hassan Lamrani and reviewed by Jan Bron of RoyalHaskoning.


Before starting project preparation

• Make an in-depth diagnosis of the performance of eachsubproject, using RAP.

• Conduct short training seminars on RAP and irrigationmodernization concepts for key personnel in the agenciesinvolved.

• Measure seepage rates from lined and unlined canals.

Potential investments

• Adopt, selectively, advanced technologies for water control.• Construct works (basins, extruders) to reduce the cost

of desilting canals.• Develop a conservation program to reduce erosion and

sediment transport.• Consider using advanced techniques to reduce installa-

tion costs and disruptions of irrigation, and adopt long-lifesolutions employing geosynthetics, if canals have to berelined or renovated.

• Purchase specialized maintenance equipment.• Buy modern office and communication equipment.• Build all-weather roads.• Seek technical assistance to upgrade the skills of local

consultants, construction industry, and O&M personnel atthe irrigation entities.

• Seek technical assistance for the preparation of O&Mplans for each subproject; an action plan for retrenchmentand staff training; an action plan and schedule for gradualincreases in irrigation service fees, collections, and cover-age; and reforms in the allocation of collected water fees.

Source: Author.

Box 3.16 Checklist for Irrigation Project Planners

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INVESTMENT NOTE 3.6

USING SATELLITES TO ASSESSAND MONITOR IRRIGATIONAND DRAINAGE INVESTMENTS

Recent research breakthroughs in remote sensingenable the quantification of water consumptionand crop production without agrohydrologicalground data. These measurements provide a vehi-cle for assessing farm management in terms of landproductivity, water productivity, irrigation effi-ciency, environmental degradation, and farmerincome. Nonmanipulated information from satel-lites has the power to reveal the real need forWorld Bank loans, monitor the progress of projectexecution using the “eye in the sky,” and evaluatequantitatively the impact of previous or currentwater management improvement projects.

Appraisal of investment in public irrigation sys-tems has faced at least four key challenges:

1. Indisputable data are often lacking toassess the validity and reliability ofhydraulic performance data presented tojustify rehabilitation funding or to assessthe sustainability of the performanceimprovement resulting from earlierrehabilitation investment on other parts ofthe system.

2. Numerical data are lacking to assess thescope for raising the productivity of awater scheme.

3. Numerical data are lacking to assess thescope for raising basinwide beneficialtranspiration in order to release water forunderallocated uses.

4. Data may be lacking to calculate the size ofsalinized areas that could be reclaimed andthe total area that may subsequently be irri-gated if farmers change cropping patterns.

World Bank projects in the Indus, Ganges, Tarim,Hai, Nile, and Amu Darya Basins recently utilizedremote-sensing data to enrich the customarily

available data. Satellites measure spectral radi-ances that can be converted into processes in thesoil-water-vegetation-atmosphere continuum. A2001 Wageningen expert consultation concludedthat remote-sensing technologies have pro-gressed far enough to offer products that can beimplemented. The IWMI recognized that“remotely sensed data remain underutilized bypracticing water resource managers” (Basti-aanssen, Molden, and Makin 2000, 1).

INVESTMENT AREA

Satellites measure hydrological systems in detail(spatial resolution of 1 to 30 meters) across vastareas (millions of hectares) at regular intervals(half daily to monthly repeat cycles). An analystmay survey the spatial variation of the parame-ters (box 3.17) across secondary and tertiary irri-gation and drainage systems using just onesatellite image. Satellites provide consistent,unbiased, and politically neutral information thatis accessible to all through the public domainsatellite data archives. Users can be ensured thatdata are not manipulated and reflect real landsurface processes (Bos et al. 2001).

Irrigation and drainage performance indicatorscan be computed by combining remote-sensingparameters with field measurements such asflow-through irrigation and drainage canals(Bastiaanssen and Bos 1999; Menenti 2000).Groundwater extraction and recharge can besimilarly determined by combining ground and


Remote sensing Remote sensingapplication applied to technology outcome

Irrigated area Soil moisture

Crop types Soil salinity

Land use Crop water needs

Waterlogging Crop water use

Crop growth Crop yield

Source: Author.

Box 3.17 Basic Remote-Sensing TechnologyOutcomes Useful for Irrigation andDrainage Projects

128

satellite data, thus avoiding labor-intensive fieldsurveys of tubewell operations (Ahmad 2003).

POTENTIAL BENEFITS

Remote-sensing yields data that complementfield interviews and conventional hydrometeo-rological point measurements. These dataallow retrospective studies, because satellitedata are archived from the early 1980s on. Forinstance, the impact of management transferand institutional reforms over a 10-year time-line could be studied. The other examples, intable 3.1, were selected from recent Bank andnon-Bank remote-sensing projects in agricul-tural water management. They show howsatellites help obtain strategic data on changesand trends that may help confirm or contestcertain views.


CROP WATER PRODUCTIVITY. The advantage ofexpressing productivity per unit of water con-sumed is that it comprises all water resources,thus including water originating from precipita-tion, irrigation, groundwater, and soil mois-ture–storage changes. Moreover, evaporatedwater cannot be recycled for downstream users,so the depletion should be associated with pro-ductive use. Satellite images have been used tocompute crop water productivity in World Bankprojects in India, Pakistan, China, and Egypt ona scale that is not feasible with traditional fieldsurveys and field campaigns (box 3.18).

INTEGRATED WATER AND ENVIRONMENTAL MANAGE-MENT PLANS. These plans strive toward a desir-able water balance that meets the environmentalflow requirements. Such an ideal water balancecan be achieved if the comprehensive ET fromcatchments and basins (including ET depletionfrom irrigated crops, soils, forests, and cities) isless than the rainfall, leaving the rainfall surplusavailable to feed natural streams. Irrigation fieldsmay have to go out of production through anearly land retirement program or undergo a“real water saving” program that reduces ET.

A satellite study determined comprehensive ETin the North China Plain in 2002. It was the onlyway to quantify the amount of water resourcesdepleted because all earlier water balance stud-ies had a field scale. It allowed policy makers toidentify all counties with severe overexploita-tion of groundwater (box 3.19) and single themout for maximum attention to reduce waterdepletion during the Hai Basin Integrated Waterand Environment Management project. Anexample is presented in figure 3.1. Outcomes ofremote-sensing technologies allow the identifi-cation of huge water consumers and discussionof options with water user groups to tempergroundwater pumping.

LAND RECLAMATION AND CROPPING PATTERN ADJUST-MENTS. Granting user groups water rights andwater quotas is a way to deal with water scarcityin agriculture. Fixed river diversions provide aguarantee for user groups to plan their longer-term allocations and shares. The Tarim Basin


The Indo-Gangetic plain may be considered a single agro-ecolog-ical zone.The surface energy balance remote-sensing algorithmwas used to assess the full spectrum of wheat yield–ET combina-tions and to quantify the variations in crop water productivity(yield/ET) on a pixel-by-pixel basis.The average difference in pro-ductivity between India (Punjab and Haryana) and Pakistan (Pun-jab and Sindh) for an 18-year period is 65 percent, in favor ofIndia. The data show that sound agricultural policy positivelyaffects water productivity and that water productivity can beraised through manageable factors such as seed quality, pesti-cides, and fertilizers. The conclusion is that Pakistan may savehuge amounts of water by increasing crop water productivity.

Water productivity of wheat (kg/m3) in India (Punjab and Haryana) and Pakistan(Punjab and Sindh)

Period Pakistan India Difference

1984–5 0.76 1.15 51 percent

1994–5 0.64 — n.a.

1995–6 0.57 1.23 116 percent

2001–2 1.00 1.28 28 percent

Source:WaterWatch 2002.

—. Not available.

n.a. Not applicable.

Box 3.18 India and Pakistan: Using Satellites toAssess Crop Water Productivity

129

project of the World Bank East Asia and PacificProgram involves managers and water usergroups in adapting land use and cropping pat-terns to maximize profit from their water quotas.The project encourages land reclamation byleaching saline land. Key questions were whatareas could be reclaimed and what impact crop-ping pattern adjustments would have on waterresources management (box 3.20). These couldbe answered only with remote-sensing data.

AID TO APPRAISAL AND EVALUATION STUDIES. Reha-bilitation projects for irrigation and drainage areoften appraised with limited field data or dataselected by the recipient country to support therequest. Not infrequently, these data are biasedand stem from an unrepresentative sampledesigned to curry favor with Bank decisionmakers. A more comprehensive and truthfulimpression can be obtained from satellite dataduring the preappraisal and appraisal phases,


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 endof 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 Basinowing 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 the Yellow 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).

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.

Table 3.1 Some Remote-Sensing Applications

130

often without extensive field surveys. A descrip-tion of a mid-term evaluation study in the Mid-dle East and North Africa region is presented inbox 3.21.

LESSONS LEARNED

Water professionals who favor technologicaladvances may accept remote sensing faster thanengineers who demand convincing evidence.Going through a trust-building phase at the verybeginning of any new agricultural water man-agement project is recommended. Experience

has shown that local validation (“check first inyour own backyard”) is essential for acceptanceof the technology. This phase must be executedwith local agricultural research institutes anduniversities that have expertise and their ownfield data on agricultural water management.These local institutes should lead the confi-dence-building phase and therefore beequipped with appropriate field devices.

Timely involvement of local stakeholders isessential to guide solutions to the irrigation anddrainage problems, in other words, a bottom-upapproach. Satellite data can help local manage-ment authorities explain to WUAs and agenciesresponsible for water distribution why certainfeatures identified on the images occur and howshortcomings can be improved. Project benefitsrely on stakeholder awareness, commitment,and timely action to remedy problems.

Task managers should invest a little extra in theappraisal studies on data collection throughremote-sensing technologies (approximatelyUS$20,000 to $100,000, depending on the detailrequired 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 watermanagement projects. These costs are only asmall fraction of the total loan and can signifi-cantly facilitate the identification of the problemand the solutions chosen to mitigate adversefield conditions.


• Verify the conditions in the project area andappraise the hypotheses and needs of anew Bank irrigation and drainage projectthrough remote-sensing techniques.

• Define the type of outcome of using remote-sensing technologies such as real water sav-ings, uniformity in crop water consumption,water productivity, irrigation performance,groundwater extraction, or environmentaldegradation.

• Agree with the recipient organization on therequired time (daily, monthly, seasonally,


Beijing Province Shenzhoushi County

Hebei Province Jingxian County

Hebei Province Hengshuishi County

Hebei Province Jizhoushi County

Source: WaterWatch 2003a.

Note: Overuse is defined as greater than 450 mm/year.

Box 3.19 Counties in the Hai Basin with SignificantOverexploitation of GroundwaterResources, 2002

FIGURE 3.1 ANNUAL EVAPOTRANSPIRATIONFOR FEIXIANG DISTRICT, HEBEIPROVINCE, NORTH CHINA PLAIN

Source: WaterWatch 2003a.Note: The map, with a 30-meter spatial resolution, is based on 24Moderate Resolution Imaging Spectroradiometer (MODIS) imagesand 3 Landsat images captured during 2002. Groundwater overex-ploitation is a serious concern in this area.Areas shown by pixelscorresponding to overexploitation exceeding 700 millimeters willbe selected for a water-saving program.

131

annually) and spatial scales (1 m, 5 m, 30 m,250 m, 1,000 m) of the remote-sensing dataoutcomes.

• Design the link between remote-sensingdata outcomes and auxiliary data sourcessuch as land use maps, geographic informa-tion system (GIS) databases on appliedwater, soil maps, and slope maps.

• Define the level of capacity building requiredto interpret and process satellite images.

• Include a local university or agriculturalresearch institution in the process for inde-pendent validation of the remote-sensingresults.

• Devise early on an appropriate strategy todisseminate the results to targeted users.


• Acquire additional information on current irri-gation and drainage practices from satellitesthrough the execution of quick scan studies.

• Discuss with local agencies the need for irri-gation and drainage projects using unbiasedsatellite data.

• Launch capacity-building programs toendow recipient countries with geographi-cal data and information systems thatenhance the local knowledge base.


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 wasconducted to estimate the ET of all land use and crop classes for the summer season.The study was based on high-resolutionLandsat 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=721mm) requires an additional 645 mm (6,450 m3/ha) of water. The reclaimed area could be 9.2 percent larger if trees andorchards were planted instead of cotton, since cotton’s ET is 9.2 percent higher than that of perennial trees.

Source: WaterWatch 2002.

Seas

onal

wat

er c

onsu

mpt

ion

(mm

)

Irrigatedcrops

Waterbodies

Treesand

orchards

Wet-lands

800

700

600

500

400

0

Sparselyvegetatedgrassland

Naturalgrass-land

Reclaimedwasteland

Bush-land

Water-logged

soil

Salinesoil

Baresoil

Sanddunes

300

200

100

Box 3.20 Impact of Land Reclamation and Crop Selection on Depletion of Aerial Water Quota

132

• Use satellite data by involving local insti-tutes in monitoring the progress and impactof the water management interventions.

• Identify subregions with good and bad agri-cultural water management practices andinitiate farmers-train-farmers programs.1

REFERENCES CITED

Ahmad, M. D. 2003. “Estimation of Net Ground-water Use in Irrigated River Basins UsingGeo-Information Techniques.” Ph.D. disser-tation. Department of Water Resources,Wageningen University, The Netherlands.

Bastiaanssen, W. G. M., and M. G. Bos. 1999.“Irrigation Performance Indicators Based onRemotely Sensed Data: A Review of Litera-ture.” Irrigation and Drainage Systems 13:291–311.

Bastiaanssen, W. G. M., D. J. Molden, and I. W.Makin. 2000. “Remote Sensing for Irrigated

Agriculture: Examples from Research ofPossible Applications.” Agricultural WaterManagement 46(2): 137–55.

Bos, M. G., S. Abdel-Dayem, W. G. M. Basti-aanssen, and A. Vidal. 2001. “Remote Sens-ing for Water Management: The DrainageComponent.” World Bank Expert Consulta-tion, organized by ICID, IPTRID, Interna-tional Institute for Land Reclamation andImprovement (ILRI), and WaterWatch, inEde-Wageningen, The Netherlands, May15–16.

Menenti, M. 2000. “Irrigation and Drainage.” InG. A. Schulz and E. T. Engman, eds. RemoteSensing in Hydrology and Water Manage-ment, 377–400. Berlin: Springer Verlag.

WaterWatch. 2002. “Remote Sensing Monitoringin the Awati Pilot Area.” Technical Report,Wageningen, The Netherlands.


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, andincrease 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 areoperational.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.

Box 3.21 Egypt: Project Impact Evaluation

133

———. 2003a. “SEBAL-Based ET Analysis for2002 in Hai Basin.” Technical Report,Wageningen, The Netherlands.

———. 2003b. “Monitoring Summer Crops underChanging Irrigation Practices—A RemoteSensing Study in the Northwestern Nile Deltafor the Irrigation Improvement Project1995–2002.” Technical Report, Wageningen,The Netherlands.

SELECTED READINGS

Kijne, J. W., R. Barker, and D. J. Molden. 2003.Water Productivity in Agriculture: Limitsand Opportunities for Improvement. Walling-ford, U.K.: CABI Publishing.

ENDNOTE

1. This information comes from WaterWatch(2003a, 2003b).

This Note was prepared by Wim Bastiaanssen and EdwinNoordman of WaterWatch. Input was received from ShawkiBarghouti. The note was reviewed by Aly M. Shady of theCanadian International Development Agency.


134

INVESTMENT NOTE 3.7

PRIORITIZING LENDING FORPUBLIC IRRIGATION SCHEMESWITH THE RAPID APPRAISALMETHOD

A rapid, performance-focused appraisal of irriga-tion systems can give a pragmatic description ofthe status of both the internal process and theexternal input/output indicators of a system orsector. It allows identification of investments thatcan quickly improve water delivery service andfinancial stability, and mitigate environmentalimpacts. It presupposes an environment thatrewards improvement.

Most public irrigation investments are directedtoward improving existing schemes rather thanbuilding new ones. Such investments are diffi-cult to prioritize, and their results have histori-cally fallen well short of the impact predictedby feasibility studies. During the 1990s, mostWorld Bank projects looked to governancereform to achieve fiscal sustainability andadministrative autonomy (for example irrigationmanagement transfer to WUAs, cost recovery).They were generally accompanied by hardwareinvestments assumed to improve the controlla-bility of water. The irrigation agency or ministryof irrigation generally gave priority to hardwareinvestments, and they had the most clout in the

irrigation arena: they controlled the budget andhad the best access to the government. Theirfavorite choices were canal lining and rehabili-tation to put structures back to design shape.

Once a government-owned irrigation systemachieves, or begins to achieve, sustainabilityand autonomy, the basic question becomeshow to select investments that improve the con-trollability of water and give users the bestvalue for their money. This Note discusses theusefulness in client countries of a procedurethat evolved on 60 public irrigation schemes inthe western United States where users self-finance O&M. This procedure has been adaptedto client-country conditions and incorporated inthe holistic benchmarking toolkit developed byIWMI. It has been applied in Mexico, Nepal, thePhilippines, Thailand, Vietnam, and elsewhere.

INVESTMENT AREA

The procedure is known as rapid appraisal(RAP, as noted above). Consisting of office andfield work and taking several weeks, RAP hasthree components:

• Several hundred questions, framed in a stan-dardized Excel format, address topics suchas water supply, personnel management,canal structures, and level of water deliveryservice throughout the system. Evaluatorsmust personally travel from the dam to theends of main, secondary, and tertiary canals,until they reach the farmer turnouts.

• The values of a large set of external andinternal indicators are computed (box 3.22).

• Objectives are defined, and results of theprocedure are used to target investments toaccomplish those objectives (boxes 3.23and 3.24).

One goal of investment is to break, or stay outof, the rehabilitation-deterioration cycle. Invest-ing only in rehabilitation is therefore illogical.Instead, a modern approach to investment isneeded. Or rather, what is needed is a total rev-olution in irrigation agriculture with much morefocus on improving the performance of existing


External indicators express forms of efficiency.They may relateto budgets, water, or crop yields.They require only knowledgeof project inputs and outputs—but by themselves provide noinsight into what to do to improve performance. They haveoften provided the basis for conventional public irrigationinvestment decisions. Internal indicators examine the hard-ware and processes that move, sell, and schedule waterthroughout the system hourly, daily, and seasonally.


Box 3.22 Indicators Used in a Rapid Appraisal Procedure

135

irrigation facilities and providing client-focusedirrigation service (World Bank 1998).

This view emphasizes that investment is abouttechnical, managerial, and organizational upgrad-ing—not merely physical rehabilitation—of irri-gation schemes, to improve resource utilization(labor, water, economics, environmental) andwater delivery service to farms (Wolter and Burt1997). Such modernization investment focuses onthe details of the inner workings of an irrigationproject—in contrast to traditional, simple, andbroad-brush investments in canal lining or reha-bilitation. Modernization is a process that setsspecific objectives and selects specific actionsand tools to achieve them. Planners and engi-neers for irrigation projects frequently equatemodernization with practices such as canal liningand computerization. If improved performance isthe objective, such investments should often beassigned the lowest priority.

Modernization pivots around service to thefarm. Irrigation systems must serve the farmerswell enough so that they attain high on-farmproduction and irrigation efficiencies and canafford to pay the water service fee. An irrigationsystem is typically a series of layers through

which water passes. Each layer has an obliga-tion and needs incentives to provide good serv-ice to the layer immediately below (Burt andStyles 1999).

POTENTIAL BENEFITS

Public irrigation systems account for about halfof the world’s irrigation. Adopting a radicallydifferent approach to irrigation investment willhelp secure the world’s food supply and pro-mote social stability as well as help mitigate thesystems’ impact on the environment.


Plans had been made to conserve water within theBeni Amir project, Morocco, to expand the irrigatedarea. A simple water balance conducted as part ofRAP showed that all inefficiencies were being recy-cled in the form of groundwater pumping for irriga-tion, either within the project or outside the projectboundaries.Therefore, there was little or no water to“conserve.” It was determined that improving first-time usage of irrigation water in this case could offerbenefits in terms of reduced groundwater pumpingbills, higher crop yields (owing to better flexibility),and improved fertilizer usage, but investment wouldnot result in an increased supply for expanding irri-gated acreage. Proper application of RAP in this caseavoided a waste of investment money.


Box 3.23 Morocco:The Rapid Appraisal Procedure Can Prevent Waste of Investment Money

The Cau Son–Cam Son irrigation scheme in Vietnam under-went an RAP in March 2002, conducted by the Food and Agri-culture Organization (FAO), the Irrigation and TrainingResearch Center (ITRC), and local irrigation specialists. Ini-tially, the local participants believed that canal lining was thebest investment of World Bank funds. After the procedurethey drafted detailed—and quite different—investment rec-ommendations ($1US = 15,500 VN dong), and also distin-guished between immediate and long-term investments.

Short term (US$2.6 million)

• Repair and rehabilitate turnout gates (10 billion dong)• Rehabilitate destroyed secondary canal, including regula-

tors (5.5 billion dong)• Establish WUAs (1 billion dong) • Improve communication (initially, telephones)

(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)

Long term (US$7.1 million)

• Complete planning for entire system (2 billion dong)• Upgrade reinforcement of two weirs: Cau Son and Quang

Hien (8 billion dong)• Upgrade secondary and tertiary canals with better cross-

regulators (70 billion dong)• Redevelop system operating procedures (0.5 billion dong)• Upgrade pump stations for irrigation and drainage, dredge

drains (20 billion dong)• Construct small and medium-size regulating reservoirs

(10 billion dong)

Source: ITRC 2002.

Box 3.24 Vietnam: Impact of Performance-OrientedRapid Appraisal Procedure on anInvestment Program

136

A successful modernization approach consoli-dates WUAs by reducing risk factors such asinequitable and unreliable water deliveries. Italso creates the conditions for higher water pro-ductivity. Water saving becomes possible onlywhen farmers feel secure about water delivery.As long as they do not, they will store water inthe soil as back-up and allow it to percolate orevaporate when their crops do not need it.


One of the bigger challenges to implementationis the scarcity of specialists who understand theservice concept and the hydraulic principlesinvolved in managing unsteady water flow.

A second major challenge resides in the natureof loans and grants, as outlined below.

• Technical details are often dismissed as “mat-ters to deal with later” and considered unim-portant compared to the broad goals. Yet wenow know that the lack of attention to inter-nal details is a major cause of poor perform-ance. Many internal details must be definedearly in a project—which requires a shift inthe way loans and grants are administered.

• A large human element is involved inchanging internal processes. Local irrigationengineers and managers will not immedi-ately understand how to design and man-age new processes and structures. Farmersmay object to higher fees and delivery prac-tices they may experience as less reliable.Loan and grant programs have short lives,which leaves staff and farmers little or notime to field-test new ideas.

• Modernization costs more than most peoplethink. As an example, the 200,000 hectareImperial Irrigation District in California,United States, recently spent more thanUS$100 million on modernization. It alreadyhad excellent communications, roads,canals, training, attitude, and irrigationscheduling. Yet the total investment in mod-ernization will probably approach US$500million. This demonstrates that lenders and

borrowers should not entertain high expec-tations from investment if it is minimal andtherefore quickly implemented.

LESSONS LEARNED

The greatest impediment to successful applica-tion of RAP is the lack of qualified irrigation spe-cialists to conduct the procedure. Few irrigationexperts adequately understand the concepts ofwater balance, efficiency, and water control toboth conduct RAP and develop realistic recom-mendations. Intensive training and follow-up byexperienced professionals are mandatory. Thelimited training that has occurred has not beenfollowed up. Local participants must thoroughlyunderstand the concepts and buy into theinvestment program if it is to be sustainable.

An RAP was done on the Yaqui Irrigation proj-ect in Obregon, Mexico, in November 2002 as aprelude to a large investment (table 3.2). Theproject depends on both surface water andwellwater. During 2002–3, no surface water wasdelivered—creating an emergency but alsoopening a window for construction.

The initial choice of project personnel was tospend about 80 percent of the budget on canallining. The water-balance analysis done in thecourse of the procedure showed that net canalseepage losses were relatively small. Local par-ticipants in the two-week RAP training pro-gram, run by ITRC and the World Bank,developed the following set of investment pri-orities within budget.


• Become acquainted with RAP concepts.

• Contact the few individuals at the WorldBank and FAO who have been personallytrained and involved in RAPs.

• Assign a significant training budget for localindividuals to study and learn to conductand follow up RAP. This will take time, butit will improve the investments’ probabilityof success.


137


US$ US$ US$

CumulativePriority 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

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.

Table 3.2 Outcomes of a Rapid Appraisal Procedure in Mexico

138

• The project definition must incorporate rec-ommendations from RAP—rather thanassuming that the procedure should be con-ducted after initial designs have been made.

• Local experts trained in RAP must be givenauthority to conduct a stringent review ofdesigns provided by consultants—at severalstages throughout the design process. Thiswill add time to the design process, and achange in consultants may be required ifsatisfactory plans cannot be developed.

• All hardware designs must be accompaniedby a description of the overall water manage-ment and operation strategy for the completesystem, not just for specific structures. Spe-cific descriptions must be provided for man-aging structures as part of the overall strategy,for correcting problems, and for modifyingdesigns if problems are encountered.

• Implementation should be staged over fiveto six years after completion of designs. Theproject must have sufficient flexibility toshift designs, locations, and tasks to makecourse adjustments.

REFERENCES CITED

Burt, C. M., and S. W. Styles. 1999. “ModernWater Control and Management Practices inIrrigation. Impact on Performance.” WaterReport 19. FAO, Rome. Available online athttp://www.watercontrol.org/publica-tions/publications.htm.

ITRC (Irrigation Training and Research Center).2002. “Cau Son-Cam Son, Vietnam, Rapid

Appraisal Process and Modernization Train-ing, Final Report.” ITRC, San Luis Obispo,Calif.

Wolter, H. W., and C. M. Burt. 1997. “Concepts forIrrigation System Modernization.” Proceedingsof the Expert Consultation on Modernizationof Irrigation Schemes: Past Experiences andFuture Options.” Bangkok, Thailand, Novem-ber 26–29, 1996. Water Report 12, RAP Publi-cation 1997/22. FAO, Rome.

World Bank. 1998. “India—Water ResourcesManagement Sector Review. Report on theIrrigation Sector.”: World Bank, Rural Devel-opment Unit, South Asia Region, NewDelhi. Ministry of Water Resources, India.

SELECTED ADDITIONAL SOURCES

Facon, T. 2001. “Performance Evaluation ofMakhamthao-Uthong Project with a RapidAppraisal Procedure.” Water and EnergyInternational 58(2).

FAO Web page related to the RAP. Online athttp://www.watercontrol.org/news/news.htm.

ITRC Web site. Based in San Luis Obispo, Cali-fornia, ITRC presents technical informationon RAP in the form of reports and papers,as well as dates of scheduled training pro-grams. Online at http://www.itrc.org.

This Note was prepared by Charles M. Burt of CaliforniaPolytechnic State University and reviewed by Jan Bron ofRoyal Haskoning.


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INVESTING IN AUTOMATIONAND CENTRALLY OPERATEDIRRIGATION SYSTEMS

What is new? Appropriate automation helps proj-ect managers provide water to users flexibly, reliably,and equitably. If appropriate structures and remotemonitoring are used, project efficiency and waterdelivery service can improve simultaneously. Canalbreaks, lining damage, and spills can be reduced, andbetter service enhances social harmony.

Modernization of centralized irrigation systems isa process of technical and managementimprovements in measurable goals related toproject efficiency, crop yields, water deliveryservice to farmers, economics, and the environ-ment. A key tool is automation. Automationimplies that, once set, structures maintain desiredflow rates or water levels in canals without man-ual intervention.

Burt and Styles (1999) found that the quality ofwater delivery service in irrigation projects isinversely proportional to the number of fieldemployees per delivery point. Regardless ofwhat performance might be theoretically attain-able with a large staff and minimal hardware,the evidence shows that properly designed,located, and installed structures greatly enhancestaff performance with fewer personnel. This isespecially important during the night andwhere communications are poor.


Irrigation projects (described simply) have fivelevels of automation, which should functioncontinuously.

LEVEL 1—APPROPRIATE combinations/designs ofstructures that do not move automatically, butthat control water levels or flows well despiteconstantly changing flows. The most commonsuccessful example is a combination of long-crested weir (which controls canal water level)

and a manual undershot (orifice) gate on theside to provide a constant flow rate to users.

In successful modernization of dozens of west-ern U.S. irrigation districts by ITRC and the U.S.Bureau of Reclamation, canals of 10 cubicmeters per second are almost “automated” withthis simple and appropriate hydraulic combina-tion that requires no electricity or computers.

An example of an inappropriate Level 1 struc-ture widely used in international projects is the“distributor” or “flow rate module” that was suc-cessfully used on the elevated canal systems inNorth Africa in the 1950s. After examiningscores of projects that have used distributormodules for automated flow control on canalturnouts (off-takes), the author has concludedthat virtually none of them functions satisfacto-rily—even though these are a cornerstone ofmany automation projects. They worked wellhistorically on elevated aqueducts, but they areinappropriate for typical canal systems becauseof installation problems, high expense, suscep-tibility to submergence on the downstreamside, and improper control of canal water levels(Burt and Styles 1999).

LEVEL 2—HYDRAULIC GATES. These are gatesplaced in the canal to maintain a desiredwater level—thereby protecting the canalbanks and providing steady flow rates to off-takes. The Neyrtec float gates are the classicdesign used throughout the world. For smallercanals with sufficient drops in the westernUnited States, the inexpensive, locally fabri-cated ITRC Flap Gate has been installed inseveral hundred structures.

LEVEL 3—REMOTE MONITORING. This involvesmonitoring water levels or flow rates at keypoints throughout a project, and archiving anddisplaying that information at a central office. Theinformation should be designed to improve man-agement decisions on a real-time basis. Typicalmonitoring points are at the heads of key canalsfor flow rates and tail ends for water levels aswell as flows. Flow rate monitoring requiresexcellent flow meters. Remote monitoring is aprecursor to successful Level 4 computerized


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automation. It involves electronic sensors, com-munications (usually radio), and office hardwareand software.

LEVEL 4—COMPUTERIZED GATE MOVEMENT. Thistype of automation can be effective on largestructures to maintain a water level in a canal ora desired flow rate into a canal. It is generallyaccompanied by both Level 1 and Level 3investment.

Hundreds of electromechanical (precomputer-ized) automatic gates installed in the westernUnited States before 1995 are being convertedto PLC (programmable logic controller) automa-tion, which uses electronics rather than elec-tric/mechanical mechanisms. However, thefailure rate of PLC-controlled canal systems hasbeen extremely high in the United States andinternationally. A checklist of prerequisites forLevel 4 automation is presented in box 3.25.

If all of the prerequisites in box 3.25 cannot bemet, PLCs should not be used. One of thebiggest mistakes for PLC-based automation is to

underestimate the requirements for success andthe long learning curve it takes. Numerous irri-gation projects in Mexico, including the WorldBank–funded Cupatitzio (Apatzingan) districtwere intended to demonstrate PLC-based con-trol. Irrigation experts in Mexico now recognizethat almost all PLC-based automation in Mexicohas failed.

LEVEL 5—CENTRALIZED AUTOMATION. This comesin various forms, but all of them depend on acentral computer to calculate required gatemovements and automatically send those valuesto the field. While the literature has ample dis-cussion of such control logics, there are only afew successful, sustained projects of this type inthe world. In the western United States, there areno successful examples of this type of automa-tion in irrigation projects, although research is inprogress in a few irrigation districts.


Irrigation projects are plagued by a recurringcycle of investment and deterioration. In addi-tion to the repeated need for rehabilitation,other impacts include lower-than-expectedcrop yields jeopardizing investment yield anduser ability to pay fees, haphazard collection ofuser fees, and degraded river water quality andvolume. Typical “modernization” projects oftenfocus only on institutional issues or canal lining.Those are important, but in the end, the waterin a project must be physically manageable—simply and easily.

Appropriate automation to make water moremanageable can be simple (as describedabove)—and it is essential. Appropriate automa-tion removes the “art” and uncertainty from canaloperation and allows the institutions to respondto conditions that change hourly. Today’s irriga-tion projects do not have that capability.

The question, then, is not “Why automate?” but“Which types of automation are appropriate forthis project?” The cost of improved water con-trol is not small, but it is typically a small frac-tion (10 percent or so) of the total project cost.


• Excellent electricity availability • Protection from vandalism • Availability of high-quality electrical sensors, actuators,

PLCs (developing “local” electronics is a common mistakethat almost always guarantees failure)

• Existence of a permanent, well-trained staff that can trou-bleshoot and repair all components

• Availability of an experienced integrator company with atrack record of installing such systems in irrigation projects

• Dedicated well-trained local staff with excellent mobilityin all weather, night and day

• An adequate, guaranteed long-term maintenance budgetfor labor and parts

If numerous structures are to work automatically in series (thatis, a whole canal), proper simultaneous modeling of the canalpools and gates with the appropriate algorithms must be doneby experienced persons who can give the correct and com-plete information to integrators for the PLC programming.

Source: Author.

Box 3.25 Prerequisites for Level 4 Automation

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REFERENCE CITED

Burt, C. M., and S. W. Styles. 1999. “ModernWater Control and Management Practices inIrrigation. Impact on Performance.” WaterReport 19. FAO, Rome. Available online athttp://www.watercontrol.org/publications/publications.htm.

WORLD BANK PROJECT DISCUSSED

Mexico. “Irrigation Apatzingan Project.” Closed.Project ID: P007557. Approved: 1980. WithinWorld Bank, available at http://projportal.worldbank.org.

This Profile was prepared by Charles M. Burt of CaliforniaPolytechnic State University, with input by Shawki Barghouti.The Profile was reviewed by Aly M. Shady of the CanadianInternational Development Agency.


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44INVESTING IN GROUNDWATER IRRIGATION

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 forthe 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 complementarysource to surface water or rainfall. Groundwater irrigation can be developed through shallow wells(drilled or hand-dug wells less than 30–50 meters deep) or with deeper tubewells. Groundwater irri-gation is attractive to farmers because they can control it to irrigate virtually “on demand.” Water isoften of good quality and is available close to the point of use. Groundwater offers natural storage

• 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 of Yemen’s Sana’a Basin Water Management Project

144

capacity, reduced evaporation losses, improveddrainage, and secure supply, even duringdroughts. Economically, groundwater irrigationis generally more productive than surface waterirrigation, with crop yield per cubic meter up tothree times as high. Even the higher cost bringsan advantage in incentives to efficient use.Groundwater investment, particularly in lower-cost shallow wells, can have poverty reductionimpacts, providing improved water supply fordomestic use as well as for gardens and crops.(See IN 4.1, IN 4.2, and IN 4.4. On povertyreduction benefits, see also IN 3.1 and IN 3.3.See also “Investments in Shallow Tubewells forSmall-Scale Irrigation,” in Agriculture Invest-ment Sourcebook (AIS), Module 8.)

CONJUNCTIVE USE INVESTMENTS PAY HIGH RETURNS.Conjunctive use is the simultaneous use of sur-face water and groundwater. For example,farmers with access to canal water may also usegroundwater. Investment in conjunctive useraises the overall productivity of irrigation sys-tems, extends the area effectively commanded,helps prevent waterlogging, and can reducedrainage needs. Conjunctive use is growing aswater becomes scarcer. Ideally, this type of useis a component of an overall basin-level inte-grated water resource investment and manage-ment plan. It is institutionally challengingbecause it requires coordination among variouspublic institutions, and usually a “public-privatepartnership” because tubewells are usually pri-vate. Retrofitting planned conjunctive manage-ment on existing schemes entails changing thehydraulic structures and operating systems to fitnew water use patterns. Other forms of con-junctive use investment include conjunctive usewith saline groundwater to maintain water andsalt balances, conjunctive use with poor qualitywater such as urban wastewater, and ground-water recharge from surface water for laterabstraction. (See IN 4.3.)

THE CHIEF PROBLEMS OF GROUNDWATER ARE OVERAB-STRACTION AND DECLINE IN QUALITY. Despite theadvantages of groundwater investment, thebiggest problems are overabstraction and the

related water quality problems. The poor are par-ticularly vulnerable, because the richer farmerscan pump out deeper and faster. Experienceshows that the only workable groundwater man-agement systems are those with intensive userinvolvement and user-government partnerships.A governance system is needed that establishesclear and monitorable entitlements and allowsself-management by user groups supported bygovernment in resources assessment, regulation,and dispute resolution. Energy prices have to beset at unsubsidized levels, or they will encouragedepletion. Groundwater management is likely tobe a significant investment area as resource min-ing problems grow worse. (See IN 4.4. On theincentive structure, see IN 1.5.)


Typical investments in technical assistanceinclude the following:

• Building capacity of irrigation system man-agers for improving main system manage-ment for better conjunctive use

• Evaluating groundwater and monitoringsystems

• Developing groundwater governance struc-tures and user associations

Project investments include the following:

• Improving hydraulic infrastructure for opti-mal conjunctive use

• Enhancing recharge from precipitation andsurface water imports to sustain groundwa-ter use

• Investing in wells and efficient conveyanceand on-farm irrigation systems for smallerfarmers

• Investing in extension and training

Other related investments include the develop-ing of credit systems.


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INVESTMENT NOTE 4.1

INVESTING IN SHALLOWTUBEWELLS FOR SMALL-SCALE IRRIGATION

Small tubewells, also called shallow tubewells orshallow wells, pumping shallow groundwater, satisfyboth domestic and irrigation needs. Their smallengines also power boats, hand tractors, and otherfarm machinery. Shallow wells offer new choices incropping and improve economic and social condi-tions.They cause conflict if owners overexploit thesupply or contribute to salinization of groundwa-ter. Investments in the assessment of the supplyand quality of groundwater, in the regulation of wellbuilding, and in technical support to farmers aretherefore vital to allow shallow wells to go onreducing poverty.

Tubewells are a cost-effective source of irriga-tion water for many small farmers wheregroundwater is available at less than 20 metersbelow the surface. They can irrigate up to 5hectares, depending on the soil, crop, andwater conveyance losses. The technology is notcomplicated, and acceptance by farmers andpoor rural communities is rapid. Tubewells canbe one of the better investments for povertyreduction where groundwater levels are closeto the surface and soils are productive. Shallowtubewells are already common in Asia, Africa,and many other parts of the world.

Shallow tubewell irrigation generally results insome form of crop diversification for home orlocal consumption or for export. Niger, for exam-ple, has developed a good export market forgreen beans shipped by air to Europe, with muchof the crop water from shallow tubewells. Con-junctive use of mostly shallow tubewell water tosupplement supplies of surface water to optimizecrop production is also common in Pakistan,India, and many other countries (box 4.1).

INVESTMENTS

Shallow tubewells can be drilled by hand withsimple soil auger-type tools, by power rotary

drilling, or with a drilling method called “jet-ting” or “washboarding.” Tubewells are an inex-pensive way of supplying water for drinkingand irrigation. In Bangladesh, wells are typi-cally hand drilled, even to depths of 60 meters,and cased with galvanized iron or plastic pipethat is slotted to allow water to enter whilekeeping the aquifer material out of the well.Wells are normally equipped with centrifugalsurface-mounted pumps with 5–10 horsepowerdiesel engines.

In the semi-arid Sahelian Zone of southernNiger, groundwater depth is 6 to 8 meters.Annual rainfall of 400–800 millimeters providesgroundwater replenishment of about 500 millioncubic meters. Most villages have at least one dugwell for domestic water supply and some irriga-tion. Some tubewells have been installed with3–5 horsepower portable gasoline-poweredpumps, hand-operated pumps, or bucket andrope bailer systems (see also IN 3.3). The areairrigated by these tubewells is 0.3–0.5 hectares,depending on the lift needed and the waterlosses during transport to the field.

BENEFITS

Shallow tubewells provide substantial povertyreduction benefits owing to improved water sup-ply for domestic use as well as gardens andcrops. Increased production and family incomeslead to improved diets and better health. Enginesused to pump tubewells represent about two-thirds of the cost of the tubewell. Because theseare also used to power boats, hand tractors, and

INVESTING IN GROUNDWATER IRRIGATION

About half of India’s total irrigated area depends on groundwa-ter wells, and about 60 percent of irrigated food production isbased on groundwater. In 1994, of the 10.5 million wells dug inIndia, 6.7 million were shallow tubewells.The number of shal-low tubewells roughly doubled every 3.7 years between 1951and 1991. Groundwater irrigation at least doubles yield com-pared to surface-watered crops. However, some states in Indiaare facing severe problems of declining water level because ofoverexploitation.

Source: Singh and Singh 2002.

Box 4.1 India: Groundwater Wells

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other farm machinery, they improve the qualityof life in rural communities and are a low-costway of providing economic benefits in poorareas with high groundwater levels (box 4.2).

Increased production from tubewells alsoreduces pressure on marginal lands andincreases land values, thus providing incentivesfor conservation. Benefits from tubewells caninfluence water markets as well. In Pakistan, forexample, tubewell owners are sometimes activewater sellers to neighbors. Well productivity,delivery potential, and the cost of operationand maintenance (O&M) have a significantimpact on the price of water.


SUSTAINABILITY. In the past, the issue of ground-water resource sustainability was ignored.Insufficient investments (sometimes none at all)were made in groundwater resource assess-ments and local management institutions.Pumping from shallow aquifers by many wells,in an attempt to irrigate a larger area than pos-sible given the average groundwater recharge,can reduce the water supply of neighboringtubewells, lower water tables, diminish eco-nomic returns, degrade water quality, compactthe soil, and increase soil salinity (box 4.3).Policies to calibrate the spread of wells to thegroundwater recharge potential are critical tosustainability. It is normally the responsibility ofgovernments to monitor and evaluate ground-water and develop rules that control wells. Thesimplest regulation consists of promoting andenforcing a socially accepted compact for mini-mum spacing and maximum pump capacity,rather than a full-fledged groundwater userights and obligations system separated fromland ownership rights.

WATER QUALITY. Groundwater quality is impor-tant because deterioration from salt or mineralbuildup can affect the water’s usefulness. Gov-ernment policies should require evaluation ofgroundwater quality and the likelihood ofchanges in quality over time—before wellinstallation. Water quality evaluation is alsoimportant to minimize future maintenance costssince poor-quality water can increase encrusta-tion and corrosion. In dry climates, tubewellstend to recycle irrigation water, and in morearid climates, salts leached from crop rootzones degrade the water. Over time, dissolvedsalts and nutrients build up, and the extracted


Nigeria’s Fadama project was centered on developing small-scale irrigation through extraction of shallow groundwaterwith low-cost gasoline-driven pumps for tubewells. About30,000 hectares were irrigated using the complete tubewell-pump package, and 30,500 pumps were distributed to farmers.This resulted in a boost to farmer income and significantpoverty reduction.The economic rate of return was estimatedat 40 percent. Additional benefits were the development of asimplified well-drilling technology, training of farmers to helpother farmers construct wells, infrastructure for transporta-tion and storage of products, establishment of the FadamaUser Association, and development of an extensive monitoringand evaluation system. Today’s improved welfare of Fadamafarmers can be traced directly to this project.

Source: World Bank 2002.

Box 4.2 Nigeria: National Fadama Development Project

Groundwater has become the major source of irrigation inNingjin county, China, since the reduction in the volume of Yel-low River water.A rapid increase in irrigated areas has resultedin overexploitation of the groundwater resource, causing seri-ous environmental problems. Tubewell density has reachedmore than one per 5 hectares, and average depth to waterlevel in the wells has increased from 3.7 to 7.5 meters over thelast 30 years. About a tenth of the wells go dry in summer.Farmers have reduced on-farm losses by using plastic tube tocarry water to their farms, but they still use an inefficientmethod of basin irrigation.Application of water is about twicethe standard volume for north China, and irrigation accountsfor 30 percent of all production costs.

Overexploitation of groundwater has resulted in a progressivedecline in profitability owing to an increase in suction lift; it hasalso led to less, and poorer quality, water. Salt in groundwateris raising soil salinity. Wheat, a major crop, is moderately salttolerant, but the other major crop is maize, which is moder-ately salt-sensitive and can fail if irrigated twice using salinegroundwater. The area thus faces a critical groundwaterrecharge problem, and the present situation is unsustainable.Reversing this trend will require adopting water saving tech-nologies, changing cropping patterns, and enforcing laws andregulations, or reducing the number of wells.

Source: Zhen and Routray 2002.

Box 4.3 China:Water Overexploitation in Ningjin County

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water gradually declines in quality and con-tributes to soil salinization. This is what is hap-pening in large portions of the Indus RiverBasin in Pakistan.

LESSONS LEARNED

Public-private division of responsibility is impor-tant in formulating policy for shallow tubewelldevelopment. Tubewell investments are a pri-vate good that should be the responsibility of thebeneficiaries of the investment. The public sectorrole should generally be limited to establishing apolicy and institutional environment conduciveto investment. Direct subsidies for tubewelldrilling and operation are best avoided unlessthere is a compelling poverty reduction argu-ment for the subsidies. One-off matching grantsmay be useful in situations of great poverty andpoorly functioning financial markets.

Water user associations (WUAs) in areas wheregroundwater irrigation predominates are valu-able for organizing hardware and infrastructuremaintenance; they can represent users, for exam-ple, by holding a community water right andoverviewing water use. For resource manage-ment, by contrast, appropriately scaled aquifermanagement organizations are needed on whichirrigation WUAs should be represented. In areaswhere surface water irrigation predominates andcanal WUAs are established, WUAs are oftenunwilling to address the interests of groundwa-ter-only irrigators, because these irrigators do notwant to pay the WUA a fee without receivingany surface water supply benefits. In this casealso, aquifer management organizations underthe umbrella of the river basin committee orauthority is probably the best way forward ongroundwater resource management.

Surveying, drilling test wells, water sampling,and water level monitoring are useful for build-ing a database and tracking long-term trends.The rational management of the groundwaterresource is difficult without a basic understand-ing of the distribution and yields of aquifers andtheir vulnerability to pollution and overdraft.These monitoring activities are usually a gov-ernment responsibility, but local authorities orcommunities can carry out some of the work.

Legislation and regulations are generallyneeded to control groundwater exploitation(box 4.4). However, lack of political will andlack of awareness among some farmers, butalso active farmer opposition and lobbying,have been major constraints to implementingthis type of legislation in many countries.Important issues to consider for national orregional legislation are the following:

• A system of licensing for extracting andusing groundwater

• Registration of current groundwater usersand penalties for noncompliance withlicensing provisions

• Arrangements to protect the rights of shal-low tubewell users from more influentialfarmers who can drill and power deep wellsthat lower the water table and deprive thesetubewell users of access to water

Training and extension are critical to facilitategood installation, operation, and maintenanceof tubewells and for the development of localcapacity for maintaining and repairing wellsand pumping equipment. To optimize the ben-efits of tubewell investments, extension andtraining will be needed for irrigation watermanagement, improved agricultural technology,and marketing systems.


The Punjab Private Sector Groundwater Development pro-ject’s experience with introducing groundwater regulationoffers these lessons:

• A public awareness program must precede groundwaterregulation.

• Where groundwater is a significant source of poor farm-ers’ livelihoods, a regulatory framework must address thelinkage of groundwater to surface water rights and actualsurface water deliveries and the involvement of ground-water users in groundwater monitoring and “socialrecharge” (voluntary self-regulation).

• When groundwater abstraction will be curtailed as aresult of regulation, poverty alleviation interventions mustaccompany regulation to help identify and create alterna-tive means of income for the affected communities.

Source: Usman Qamar (personal communication).

Box 4.4 Groundwater Regulation

148


Successful shallow tubewell systems requiregovernment promotion and regulation toensure that tubewell investments are legallyprotected from overexploitation by excessivedrilling or by other users of the same aquifer(see Investment Opportunities below).

Experience with shallow tubewell projectsemphasizes the need for investments to addressthe following:

• Evaluate the groundwater hydrology andmanagement to be certain that the ground-water recharge potential is in balance withprojected water use.

• Monitor groundwater quality to ensure suit-ability for irrigation, and make realistic pro-jections on water quality change with time.

• Establish monitoring systems and laws andregulations to ensure sustainable develop-ment and operation of tubewell irrigationsystems.

• Ensure provision of technical assistance,training, and extension services to helpfarmers properly install, operate, and main-tain the systems to optimize agronomic ben-efits. Marketing products that are new ormore abundant in the area may also requireadvisory services.


• Evaluate groundwater resources and quality.

• Reform policy and regulations to govern shal-low tubewell development and operation.

• Strengthen water user organizations to man-age shallow tubewell systems.

• Develop systems for monitoring water tabledepth and groundwater quality.

• Provide financial services to enable produc-ers to finance drilling tubewells by hand,power rotary drilling, or jetting; pumpsetswith engines, hand pumps, or bailer systems;

small canals or pipe to distribute water tofields; and micro-irrigation (such as drip orminisprinkler set-ups) if justified by the cropvalue.

• Provide training and extension to helpfarmers install, operate, and maintain shal-low tubewell systems.

• Provide guidance in irrigation water man-agement, agronomy, and marketing throughextension and training.

REFERENCES CITED

Singh, D. K., and A. K. Singh. 2002. “Ground-water Situation in India: Problems and Per-spectives.” International Journal of WaterResources Development 18(4): 563–80.

World Bank. 2002. “Implementing the NewRural Development Strategy in a Country-Driven Process: Agriculture and RuralDevelopment Project Profiles.” Presentationat the Country Director/Rural Sector BoardLearning Event, September 8–10, sponsoredby the World Bank, Antalya, Turkey.

Zhen, L., and J. K. Routray. 2002. “GroundwaterResource Use Practices and Implications forSustainable Agricultural Development in theNorth China Plain: A Case Study in NingjinCounty of Shandong Province, PR China.”International Journal of Water ResourcesDevelopment 18(4): 581–93.

SELECTED READINGS

Foster, S., and K. Kemper, eds. 2002–4. “Sus-tainable Groundwater Management: Con-cepts and Tools.” World Bank GW-MATEBriefing Note Series. Available online athttp://www.worldbank.org/gwmate.

Foster, S., J. Chilton, M. Moench, F. Cardy, andM. Schiffler 2000., “Groundwater in RuralDevelopment: Facing the Challenge of Sup-ply and Resource Sustainability.” WorldBank Technical Paper 463. World Bank,Washington, DC.


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Kahnert, F., and G. Levine, eds. 1993. Ground-water Irrigation and the Rural Poor:Options for Development in the GangeticBasin. Washington, DC: World Bank.

Koegel, R. G. 1985. “Self-Help Wells.” FAO Irri-gation and Drainage Paper 30. Food andAgriculture Organization, Rome.

This Note was prepared by Walter Ochs, with inputs byHervé Plusquellec and Usman Qamar. It was reviewed byOhn Myint, Ijsbrand de Jong, and Stephen Foster of Bank-Netherlands Water Partnership Program Groundwater Man-agement Advisory Team (BNWPP GW-MATE).


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INVESTMENT NOTE 4.2

DEEP TUBEWELL IRRIGATION

This Investment Note summarizes the technical,socioeconomic, and institutional factors that gointo investment decisions for deep tubewell irri-gation. Groundwater irrigation has some advan-tages over surface water in ensuring good qualityand reliable supply, but it also poses importantchallenges and risks, as past projects show. Cor-rect resources assessment and adequate institu-tional capacity are especially important forsustainability.

As pump technologies improve and costs drop,millions of farmers have been deciding to irri-gate their crops with groundwater from wells.Some countries rely very heavily on groundwa-ter for irrigation because of its many advantagesover other irrigation water sources (table 4.1).

Deep tubewell irrigation has unique strongpoints where extensive aquifers with sufficientrecharge allow for large-capacity wells. Avail-ability at the point of use, drought resilience,suitability for user O&M, rewards for efficientwater use, and the possibility of switching tohigh-value crops make deep well irrigation anattractive alternative or complement to surfacewater irrigation. But without government guid-ance on resources assessment and local man-agement, the risk of diminishing returns andnegative environmental side effects is high.

INVESTMENT AREA

Pumping wells abstract groundwater from anaquifer. They are called “shallow” when the drillsor picks and spades do not excavate deeper than50 meters. They are called “deep” when the well,in that case nearly always drilled, reaches a depthof 40–200 meters and discharges 100–1,000 cubicmeters a day. The pump engines are diesel orelectricity driven, and the well diameter mayrange from 200 to 600 millimeters.

Farmers may apply groundwater where there isno surface water but also use groundwater tocomplement surface water (or as a back-up).Depending on the number of hours of operationand the type of irrigation (full or supplementary),a deep tubewell may irrigate 10–200 hectares.

Groundwater from major aquifers is usually ofgood quality, available at the point of use, andoffers the option to phase development of theirrigation infrastructure. Other advantages arethe natural storage capacity and droughtresilience of aquifers and the possibility forunderground storage and reuse of excess waterfrom surface water irrigation and irrigationreturn flow, a practice widespread in India.

In a deep aquifer, drilling wells should alwaysallow large short-term well yields, mainlybecause of large “available well drawdown.” Butdrilling finds new or additional groundwaterresources only where regional sedimentary orvolcanic aquifers have major unexploitedrecharge areas, usually distant. Where the alluvial


Country Period Irrigation water use (million m3/year) Groundwater (percent)

Bangladesh 1990–5 12,600 69

China 1993–5 407,770 18

India 1990–3 460,000 53

Pakistan 1990–1 150,600 34

Mexico 1995–7 61,200 27

Source: United Nations–FAO Aquastat Database.

Table 4.1 Importance of Groundwater in Irrigation

151

aquifer systems are small, they will be intercon-nected with deep aquifers and depend on thesame recharge area.

It is important to distinguish between the scalesof groundwater irrigation, because the extent ofexternal impacts is largely determined by scale:

• A smallholder operating a low- or medium-capacity tubewell, sometimes as an extensionin the bottom of a dug well using a centrifu-gal pump

• A group of 20–100 farmers sharing one high-capacity deep tubewell and organized in aWUA

• Large farmers or agricultural companies thatown one or more high-capacity tubewells

Deep tubewell irrigation can be applied underdifferent conditions. Some examples follow:

• As a complement to rainfed agriculture orprotection of vulnerable high-yielding crops

against dry spells or unreliable delivery ofsurface water

• As an alternative to, or extension of, shal-low dug well irrigation

• As a supplement to surface water irrigationduring reduced supply (tail-end users) togrow an extra harvest during dry season orto mitigate the impact of changes in landuse or climate

• As the original water source in new irri-gated agricultural projects such as landreclamation projects

Each case has specific requirements in address-ing such issues as knowledge and managementof the resource, reaching the main poverty goal,establishing WUAs, and raising incomes (prof-itability, markets, switches to high-value crops).The assessment and evaluation of these pre-tubewell conditions is an important startingpoint in exploring the feasibility of investmentsin deep tubewell irrigation (table 4.2).


Pre-tubewell Social andconditions 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 anddetermined 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 expandirrigation sustainable yield to be a change in tasks and agricultural production

determined in relation to organizational structurechanges in recharge)

No irrigation, as in Aquifer characteristics and No social infrastructure. Agricultural productionland 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.

Table 4.2 Issues Related to Pre-Tubewell Conditions

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POTENTIAL BENEFITS

Groundwater is more productive than most sur-face water: it is abstracted at the point of useand suffers few transport losses; it offers theindividual farmer “on demand” irrigation thatfew surface systems can match; and it bringsincentives to maximize application efficiencybecause of the cost of lift.

On groundwater-irrigated farms in India, cropyield per cubic meter is 1.2–3 times as high as onfarms irrigated with surface water (Dhawan1989). Similar findings come from Spain. Theexplanation is economic. In response to the highcost of groundwater lift, irrigators often usesparse, life-saving irrigation instead of aiming forthe maximum production per unit area throughfull irrigation, which is at the basis of the irriga-tion practices of surface water irrigators, and ofthe water requirement recommendations ofagronomists. In so doing, groundwater irrigatorsachieve more crop per drop than do their sur-face water colleagues and, at the same time,increase yields per unit area compared to rainfedcultivation. Some irrigators in South Asia pur-chase water from well owners at US$0.10–$0.14per cubic meter, while their canal irrigator col-leagues pay only a fraction of a cent. Even someof the poorest irrigators make a living payingthese groundwater rates.

Groundwater development is more amenablethan large surface systems to poverty targeting.The design of large systems is driven by topog-raphy and hydraulics. Groundwater develop-ment has become the central component oflivelihood creation programs for the poor inAfrica and Asia (Shah 1993 for India; Kahnertand Levine 1993 for the GBM basin; Calow etal. 1997 for Africa).

The benefits of deep tubewell irrigation can besummarized as follows:

Economic benefits

• Energy costs give incentives to raise yieldper unit of water, raising income throughswitches to higher-value crops.

• Reliability during drought and its lack ofsediment allow use of water-efficient irriga-tion technology.

• Reliability opens access to new markets, forit protects high-value crops and inputsagainst dry spells.

• Groundwater allows tail-end users on sur-face systems to cope with shortages in irri-gation water supply.

• Groundwater suffers little from evaporationlosses.

• Groundwater pumping can improve drainage.

• Investment risk can be reduced throughphased construction of the hydraulic infra-structure.

Social benefits

• Groundwater management requires decen-tralized aquifer management, and henceinstitutional strengthening of farmers.

• Groundwater enables small farmers toinvest in irrigation, individually or as groupmembers, through rural credit programs.

Environmental benefits

• Groundwater pumping has mitigated andprevented waterlogging and salinization onsurface systems in the Arab Republic ofEgypt and Pakistan.


Policies need to create enabling environmentsto manage and use the resource. Managementof the resource presupposes the following:

• Knowledge of the aquifer and naturalrecharge and the amounts of water that canbe safely withdrawn without undesired sideeffects

• Monitoring of abstraction rates and ground-water levels


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• Regulations with sanctions for abstraction ofmore groundwater than planned and agreed

• Institutions such as aquifer associations andcourts empowered to enforce regulations

• Controls on energy subsidies in order toavoid overabstraction

• Licenses stipulating abstraction quotas

• Registration and licensing of drilling con-tractors to prevent illegal drilling and toensure the quality of well construction

• Definition of technical standards for equip-ment and infrastructure

Use of groundwater resources presupposes thefollowing:

• Credit facilities to enable investments

• Local commercial services for supply andrepair of equipment

• Definition of social criteria for the formationof WUAs

• Clarity of water rights

• Extension and agricultural research insti-tutes to test new cash crops

• Equal access and voting rights for male andfemale farmers

LESSONS LEARNED

Groundwater abstraction depends on a seam-less web of technologies and institutions. Abreak anywhere in this web causes the projectto fail and the system to eventually shut down.Useful lessons can be learned from past, unsuc-cessful projects for groundwater development(box 4.5).

After construction, a main cause of failure isuncontrolled increase of abstraction, whichcauses water tables to drop, especially whererecharge is limited. Overabstraction has resulted

from the introduction of mechanical pumps, incombination with energy subsidies and weakregulations concerning impact monitoring anddemand management. Overabstraction hasmany consequences: water quality deterioratesbecause low-quality water fills the void; landsubsides; small farmers’ wells run dry becauseonly rich farmers can deepen their wells; andthe base flow to rivers and wetlands diminishes.

Another main cause is poor standards of wellconstruction, impairing system reliability andincreasing pumping costs when wells clog.Regenerating clogged wells is expensive andmay not lead to a full recovery.

A third cause is recirculation when fertilizer-and pesticide-laden runoff reenters the aquifer,reducing groundwater quality.

Customary water rights, local rivalries, and dis-putes over land may prevent the establishmentand operation of aquifer associations andWUAs. In the projects in Pakistan, governmentoperation of deep tubewells was costlier butless user responsive than private operation.

Finally, the absence of markets and the lack ofsupport structures to provide spare parts forpumping equipment and interruptions in elec-tricity supply may cause failure.


Investments in deep tubewell irrigation must beaccompanied by facilities to invest in water-sav-ing irrigation techniques and by effectiveaquifer management, based on a good under-standing of the resource base. Potential invest-ments in deep tubewell irrigation shouldstrongly support this approach (box 4.5).


Potential investments in deep tubewell irriga-tion include the following:

• Evaluating groundwater resources, quality,and sustainable yield


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• Reforming policy and regulations governingdeep tubewell irrigation systems

• Strengthening WUAs to manage deep tube-well systems

• Developing and implementing systems formonitoring groundwater levels and ground-water quality

• Providing financial services to enable produc-ers to finance the drilling of deep tubewells

and purchase of pumping equipment, con-struction of distribution canals, and installa-tion of micro-irrigation options such as dripand sprinkler

• Training WUAs to operate and maintain thedeep tubewell systems

• Providing guidance in irrigation water man-agement, agronomy, and marketing throughextension and training.


The major objective of the Indonesia Groundwater Development project was to develop groundwater irrigation in less-developedregions 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 fortwo 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 andstrengthening of WUAs 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 networksby constructing and equipping observation wells, providing water quality monitoring equipment, and training provincial waterresources 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 thesewere significant cost overruns in groundwater exploration and the construction of wells, poor or untimely procurement ofequipment, and development of wells with low water outputs.The World Bank seriously considered closing down the projectin 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 tosignificant upfront investment commitment, proven groundwater aquifers, and responsive farmers.As a result of the decisionto concentrate on two provinces, the main focus of the project shifted to achieving economic and technical success, withdiminished 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 tooambitious 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 ofcapacities and roles of the government, private sector providers, and users; and lack of demand-driven implementationled to faulty siting of many wells, less than optimal adoption and utilization of the technology, and procurement of inferiorquality equipment and installations.

• Quality control and assurance of tubewells must be rigorously pursued by project management. Because critical structures oftubewells are underground, repairs and replacement are difficult after installation. Provision should be made for assessingimplementation capacities and for requiring technical assistance to be structured to support capacity building so thatclient agencies and private sector service providers can meet industry standards. The pumps and engines selected shouldbe the ones preferred by the farmer groups that will manage them if spare parts will be available locally.

• Government must transfer ownership of equipment and wells to WUAs, in addition to O&M responsibility, after providingadequate guidance and training, and consider the establishing of a locally administered asset replacement fund in order toprolong sustainable O&M of installed works beyond the expected project period.The transfer of management and assetsto users is considered essential to establishing ownership and responsibility for longer-term operational sustainability.

Source: Indonesia “Groundwater Development Project” Implementation Completion Report 2000.

Box 4.5 Lessons Learned from the Indonesia Groundwater Development Project

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REFERENCES CITED

Calow, R. C., N. S. Robins, A. M. Macdonald, D.M. J. Macdonald, B. R. Gibbs, W. R. G. Orpen,P. Mtembezeka, A. J. Andrews, and S. O.Appioh. 1997. “Groundwater Management inDrought Prone Areas of Africa.” Interna-tional Journal of Water Resources Develop-ment 13: 241–61.

Dhawan, B. D. 1989. Studies in Irrigation andWater Management. Delhi: CommonwealthPublishers.

Kahnert, F., and G. Levine. 1993. “GroundwaterIrrigation and the Rural Poor—Options forDevelopment in the Gangetic Basin.” WorldBank Colloquium on Groundwater Irriga-tion, 1989. World Bank, Washington, DC.

Shah, T. 1993. Groundwater Markets and Irri-gation Development: Political Economy andPractical Policy. Oxford: Oxford UniversityPress.

United Nations FAO (Food and AgricultureOrganization). Aquastat Database Online athttp://www.fao.org/ag/agl/aglw/aquastat/main/index.stm.


Indonesia. “Groundwater Development Project.”Closed. Project ID: P003999. Approved: 1993.Implementation Completion Report (2000).

SELECTED READINGS

Foster, A. O. 2000. “Groundwater in RuralDevelopment, Facing the Challenge of

Supply and Resource Sustainability.” WorldBank Technical Paper No. 463. WorldBank, Washington, DC.

Foster, S. 2000. “Sustainable GroundwaterExploitation for Agriculture: Current Issuesand Recent Initiatives in the DevelopingWorld.” Papels Del Proyecto Aguas Subter-raneas, Serie A, No. 6. Fundación MarcelinoBotín, Santander, Spain.

GW-MATE. 2003. “Economic Instruments forGroundwater Management: Using Incen-tives to Ensure Sustainability.” Briefing NoteNo. 7. Bank-Netherlands Water PartnershipProgram, World Bank, Washington, DC.

IWMI (International Water Management Institute).2000. The Global Groundwater Situation:Overview of Opportunities and Challenge.Colombo, Sri Lanka: IWMI.

______. 2003. “Sustaining Asia’s GroundwaterBoom: An Overview of Issues and Evi-dence.” Issues of Water Management inAgriculture: Compilation of Issues. Colombo,Sri Lanka: IWMI.

Briefing Notes by GW-MATE are also useful refer-ences because they are written for Bank taskmanagers and are only six pages long. PDFfiles are available at http://www.world-bank.org/gwmate.

This Note was prepared by Albert Tuinhof with inputs fromUsman Qamar. It was reviewed by Stephen Foster ofBNWPP GW-MATE.


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INVESTMENT NOTE 4.3

CONJUNCTIVE USE OFGROUNDWATER ANDSURFACE WATER

Conjunctive water use refers to simultaneous useof surface water and groundwater to meet cropdemand. Each day, hundreds of thousands of farm-ers in canal, tank, and other surface irrigation sys-tems combine surface water with groundwater.They do so in an individual manner, uncontrolled byany scheme or basin-level entity. Conjunctive man-agement, by contrast, refers to efforts planned atthe scheme and basin levels to optimize productiv-ity, equity, and environmental sustainability bysimultaneously managing surface and groundwaterresources. In many systems and basins, such plan-ning is needed to raise crop water productivity.

Users of surface irrigation systems install tube-wells as part of a strategy to avoid yield losscaused by unreliable water delivery. Tubewellirrigation water is costlier but offers controland helps save input investments. Farmertubewells raise the productivity of irrigation

systems (box 4.6), extend the area served, andhelp prevent waterlogging. In some situations,they reduce public investment in drainage byproviding vertical drainage. High-incomecountries have finely developed conjunctivemanagement to even out spatial and temporalvariations in regional water availability(Blomquist, Heikkila, and Schlager 2001).

Conjunctive management occurs when systemadministrators control ground- and surfacewater simultaneously. It may be achieved bymodifying the configuration of the surface sys-tem and its operating procedures (box 4.7). It isless widespread than conjunctive use because itrequires institutions and coordinating mecha-nisms that few client countries yet have. Con-junctive management is complex and can becontroversial. Nevertheless, it can be para-mount, particularly in water-scarce regions andin times of drought, because failure to integrateconjunctive water resources can result ingroundwater overexploitation (see IN 4.4).

Because surface irrigation practices directlyinfluence groundwater recharge, improvedmain system management is key to conjunctivemanagement of surface and groundwaterresources. These improvements may requirechanges in the infrastructure but are more aquestion of building technical capacity, adapt-ing the organizational and institutional frame-work for more efficiency, and improvinginformation and communication systems.

INVESTMENT AREA

Five areas of investment opportunities appro-priate for different conditions need to be con-sidered; these are summarized below.

RECONFIGURING SURFACE IRRIGATION PROJECTS.Many surface irrigation projects were designedunder a slew of antiquated assumptions aboutcropping patterns and hydraulic infrastructure inthe command. One such assumption concernsthe density of groundwater structures in the com-mand area, which commonly is much higherthan before the system was commissioned.Reconfiguring the main system, rationalizing the


Mushrooming wells changed the profile of water use in Mulacommand in Maharashtra, India. Indirect benefits of canal irri-gation through groundwater recharge are even greater thandirect benefits from flow irrigation. Dhawan and Satya Sai(1988) found that area irrigated per well rose from 1.4hectares to 2.6 hectares; land productivity increased from 17to 50 quintals of food grains per hectare; and the number ofwells in the canal command rose from 6,000 to 9,000.The ben-efits of conjunctive use were also reflected in canal irrigationin Punjab, as summarized in the table.

Direct land Indirect land Total landproductivity productivity productivity

Command (qtl/ha) (qtl/ha) (qtl/ha)

Mula command,Maharashtra 21 33 54

Punjab 35 51–72 86–107

Source: Dhawan and and Satya Sai 1988.

Box 4.6 Conjunctive Use by Default: Punjab andMula Command, Maharashtra, India

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operating rules and practices, and training systemmanagers to operate the modernized system in aconjunctive management mode offer a majorinvestment opportunity.

GROUNDWATER RECHARGE TO SUPPORT INTENSIVE

GROUNDWATER IRRIGATION. A new developmentin densely populated areas of Asia is intensifica-tion of well irrigation in regions where rainfallprecipitation is the only source of groundwaterrecharge. Western and southern India haveexperienced this phenomenon on a significantscale. In those two regions the number ofgroundwater wells has increased from fewerthan 100,000 in 1960 to nearly 12 million today(Shah, Singh, and Mukherjee 2004). With fallingaquifers and erratic rainfall, local communitiesand governments are turning to constructinglocal water harvesting and recharge structureson a massive scale with the primary objective ofincreasing groundwater availability forimproved drinking-water security, droughtproofing, and protecting rural livelihoods. Evi-dence suggests that these community-basedinvestments significantly stabilize livelihoods inregions that may never benefit from large sur-face irrigation projects (Shah 2003), especially ifaccompanied by investments in demand-sideirrigation management through real waterresources savings (Foster et al. 2002) .

CONJUNCTIVE USE WITH POOR-QUALITY WATER. Dif-ficulties and costs involved in disposing ofwastewater often present new opportunities forconjunctive use. Growing wastewater use inperiurban agriculture in cities around the worldare a case in point. Research by IWMI in severalcities in India, Pakistan, and Mexico points toingenious practices developed by periurbanfarmers to use urban wastewater and ground-water conjunctively for irrigation (Buechler andDevi 2003). However, in water-scarce situa-tions, some industrial wastewater also offersopportunities for livelihood creation throughirrigation (box 4.8).

CONJUNCTIVE MANAGEMENT OPPORTUNITIES IN

TOWNS. Rapid urbanization in many parts of theworld have created new threats for periurbanagriculture. However, conjunctive management

of rainfall, surface water, and groundwater cre-ates new opportunities to meet these threats(box 4.9).

CONJUNCTIVE USE WITH SALINE GROUNDWATER. Inregions with primary salinity—such as the IndusBasin in Pakistan and northwest India, the NileBasin, and the Yellow River Basin in NorthChina—conjunctive use of surface and ground-water presents unique challenges and opportuni-ties. In such places the objective of conjunctivemanagement is to maintain both water and saltbalances. In this situation, system managersrequire great control and precision in canalwater deliveries to different parts of the com-mand to maintain an optimal ratio of fresh andsaline water for irrigation (Murray Rust and Van-der Velde 1992). In many systems, it makes senseto divide the command areas into surface waterirrigation zones and groundwater irrigationzones, depending on the aquifer characteristics


River diversion systems often use lined canals to removeexcess floodwaters during monsoon. However, simple modifi-cations in infrastructure and the operating system can trans-form this waste into wealth. Uttar Pradesh had a network ofdisused earthen surface drains constructed in the 1950s tocontrol waterlogging and floods. After the 1950s, intensifica-tion of groundwater use created new opportunities for con-junctive management by building check structures at suitableintervals to promote groundwater recharge with monsoonfloodwaters. In course of a 10-year collaborative study, scien-tists from IWMI, Roorkee University, the Water and Land Man-agement Institute, and the Uttar Pradesh IrrigationDepartment found that using these modified drains for mon-soon flood irrigation produced the following benefits:

• A 26 percent increase in net farmer income • A decrease in average depth of groundwater from 12

meters in 1988 to 6.5 meters in 1998• Annual energy savings of 75.6 million kilowatt hours and

pumping cost savings of Rs. 180 million• An increase in canal irrigation from 1,251 hectares in

1988 to 37,108 hectares in 1998• A 15-fold increase in rice area• A 50 percent reduction in conveyance losses in canals

Source: IWMI 2002.

Box 4.7 Benefits of Conjunctive Management in Madhya Ganga Canal Project, Uttar Pradesh, India

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and water quality parameters. In others, provid-ing recharge structures within a surface system isoften a useful component of a rehabilitation andmodernization package. It is a risky business andrequires a sound conceptual model of the fate ofthe salts mobilized, if it is not to cause moreproblems than it solves (box 4.10).

POTENTIAL BENEFITS

Conjunctive water management strategies helpreduce evaporation losses from reservoirs, fortheir storage can be drawn down more quickly ifgroundwater can be relied on to meet water

needs later in the year. Conjunctive managementcan also add to drought proofing. Surface waterstorage varies far more than groundwater storagein response to interyear variations in precipitation.As a result, groundwater can play a powerfuldrought-mitigating role when surface and ground-water are managed and used conjunctively.

In the situations identified above, the key benefitsof investing in conjunctive use are the following:

• Enhanced yield of past investments in sur-face water irrigation projects throughincreased irrigated area, improved water


Most Indian cities face massive urban groundwaterdepletion because municipal authorities can neitherkeep pace with growing water demand nor check run-away growth in urban groundwater structures.To meetgrowing demand, cities begin to compete for waterwith periurban farmers. In the Indian state of Kar-nataka, the government plugged the sluices of irrigationtanks surrounding all towns and cities to counterurban groundwater depletion. In this case, farmers losttheir water rights without any compensation. How-ever, informal water markets—in which periurbanfarmers give up irrigated agriculture to become watersellers—create other negative externalities. Suchwater suppliers play an important role in bridging thedemand-supply gap. In Chennai, for instance, they add21 percent to the municipal supply; and in Indore andJaipur, they add 12 percent and 10 percent, respectively.

Municipal authorities also draw water from periurbanwell fields. Chennai’s Metrowater draws water fromwells drilled on common or government land so thatit does not have to buy water rights from farmers,making them vulnerable to water resources deple-tion. In Panjetty village near Chennai, of the 69 wells,13 are leased out to Metrowater, which pumps themdaily. As a result, water tables have fallen, and wellyields have declined (Londhe et al. 2004). Since citiescommonly have to import surface water to meetgrowing urban water demand, there are great oppor-tunities for conjunctive management of imported sur-face water and urban and periurban groundwater.

Source: Londhe et al. 2004; IWMI 2002.

Box 4.9 Conjunctive ManagementChallenge of Towns and Cities

Disposal of mine wastewater is a problem wherever there arecoal and gold mines, as in South Africa. High concentrations ofsalt make the wastewater unsuitable for direct discharge intorivers except in periods of high rainfall.The potential for irri-gating with mine water in suitable soils is increasingly viewedfavorably as a way of solving the twin problems of wastewaterdisposal and shortage of irrigation water. How big the oppor-tunity is depends on the availability of suitable soils nearby, theresultant soil water and salt balance for different cropping sys-tems, the choice of irrigation management strategies, and theimpact of the irrigation drainage on local and regional waterresources. The approach is inherently conjunctive, becausepolluted mine water is used to complement inputs from rain-fall and stream flows.

In a field trial in South Africa during 1997–2000, three centerpivots were set up for irrigation with coal mine waste-water—one in virgin soil (unmined) and two in mine-rehabil-itated land. Several crops were successfully irrigated withgypsiferous mine water on a commercial scale. Excellentyields were obtained for wheat on both virgin and rehabili-tated land, and also short-season maize grown on virgin land.The yields of sugar beans were reasonable and higher thanwith dry land cropping. Problems that caused yield reduc-tions were not related to irrigation with gypsiferous minewater and were recognized as surmountable with experiencein the management of the system. Research is continuing,using catchment-scale computer modeling to assess theimpact of scaling-up on the volume and quality of surfacewater and groundwater.

Source: Olufemi Idowu and Simon Lorentz, University of Kwa ZuluNatal, with inputs from IWMI,Africa.

Box 4.8 Conjunctive Use with Poor-Quality Water:Irrigation with Mine Water in South Africa

159

productivity, and expanded production,employment, and incomes

• Improved sustainability of groundwater irri-gation in regions of intensive groundwateruse with inadequate availability of runofffor recharge

• Use of poor-quality water to increase agricul-tural production, employment, and incomes

• Enhanced long-term environmental sustain-ability of irrigated agriculture in salinity-dominated environments by improving saltbalances and sustaining the productivity ofirrigated agriculture

POLICY AND INSTITUTIONAL ISSUES

CONJUNCTIVE MANAGEMENT REQUIRES A BASIN PER-SPECTIVE. Where practiced, conjunctive manage-ment is often confined to the irrigation-systemlevel. Overall gains from conjunctive use can beenhanced by managing resources at the river-basin level, but this cannot be done until theriver basin becomes the unit of water and landmanagement.

REFORM OF WATER RESOURCES MANAGEMENT INSTI-TUTIONS. A major obstacle to conjunctive man-agement is the fragmented structure ofgovernmental institutions entrusted with vari-ous water management roles. Typically, themain system is managed by irrigation depart-ments, groundwater by groundwater depart-ments, and energy supply for groundwaterpumping by an electricity utility. Seldom isthere any coordination among these linedepartments. These roles must be coordinatedif conjunctive water management is to succeed.

MONITORING AND INFORMATION SYSTEMS. Improv-ing monitoring of groundwater behavior and usepatterns in the conjunctive management domainis a priority. Most developing countries have poormonitoring infrastructure. This precludes spatiallycoordinated use of groundwater and surfacewater that is critical in a saline environment. Geographic databases with data on cropping pat-terns, evapotranspiration, groundwater levels,

and canal alignments would be a valuable aid tounderstanding where canals contribute mostseepage to groundwater, where water-intensiveperennial crops are grown, where soil salinity isinherent or due to waterlogging, where soil salin-ity could be controlled by leaching with irrigationwater, and where waterlogging is caused byimproper surface drainage.

PUBLIC-PRIVATE PARTNERSHIP. In many surface irri-gation systems, public tubewells are used toarrest waterlogging and secondary salinizationdue to surface irrigation. Experiments with theSalinity Control and Reclamation project tube-wells in Pakistan and the Satjej-Yamuna Canal innorthwest India have shown, however, that pri-vate tubewells often do the same job as well or


Rehabilitation and modernization programs to save wateroften neglect the influence of surface water management ongroundwater levels. During 1982–98, net aquifer extractionwas predicted to result in an average static water level declineof 2.12 meters a year, compared to a 1.81 meters a year his-torical average in 398 wells in six aquifers in the basin. Eightalternative scenarios (producing average declines between0.00 and 3.21 meters a year) were generated to show that fea-sible changes in grain and vegetable cropping patterns andwater management are unlikely to bring static groundwaterdepths back to historical levels. Decreasing the relative watersupply of surface irrigation (defined as the ratio of total sur-face water supply to crop demand) by 10 percent, as forinstance through surface irrigation system rehabilitation, wassimulated to result in an additional average decline of 0.91meters a year (combined average 3.03 meters a year). Increas-ing the relative surface water supply by 10 percent (equivalentto increasing reservoir releases by 25 percent) was simulatedto reduce average decline to 1.21 meters a year. Increasingsurface water supply by 23 percent (increasing reservoirreleases by 57 percent, a level considered unfeasible [Scott andGarcés Restrepo 2001]) was simulated to produce zero aver-age decline.The results indicate that, in water-short basins, thesustainability of groundwater trends is inextricably linked tothe management of surface water—and is highly sensitive tothe area and type of crops irrigated, as well as surface watermanagement practices.

Source: Scott and Garcés Restrepo 2001.

Box 4.10 Conjunctive Management in Lerma Chapala Basin, Mexico

160

better. The problem is lack of coordination inprivate tubewell development. Since surface sys-tems are managed by government departmentsand tubewells are operated by independentfarmers, opportunities arise for mutually gainfulpublic-private partnerships with better coordina-tion and an appropriate policy framework.

REHABILITATION AND HARDWARE IMPROVEMENT.Reshaping the hydraulic infrastructure is criti-cal where groundwater levels are shallow,soils are saline but still favorable, soils arecoarse rather than fine, and canal seepage isabundant. Remote sensing can be used toidentify such areas. Hardware improvementshould improve control of water levels in mainand branch canals; automate flow measure-ment and control in distributaries, minors, andwater courses; and upgrade the distributionnetwork and field channels.

LESSONS LEARNED

• Conjunctive use of groundwater and surfacewater often occurs by default. Big opportu-nities to enhance its gains lie in introducingplanned conjunctive management throughcoordinated strategies at various levels fromriver basin down.

• To achieve effective conjunctive manage-ment, planned investments are required inhardware (system modernization andimproved infrastructure), software (improveddatabase), planning and management capac-ities, and institutional reform.

• Improving main system management is cen-tral to better conjunctive management; andwater level control is critical for better mainsystem management. Often, level control canbe greatly improved by replacing gates byovershot weirs or duckbills. New technolo-gies offer big opportunities. For instance,expensive communication infrastructure canbe replaced by low-cost cell phones.

• Conjunctive management in a poor water-quality environment presents more difficult,and often unique, technical and manage-ment challenges requiring higher investment.

A key challenge is to create strong incentivesfor conjunctive management among differentstakeholder groups. Typically, perverse incen-tives through faulty pricing of surface irrigation,electricity for pumping, and investment ingroundwater structures undermine gains fromconjunctive water management.


• Even where river basin institutions areabsent or underdeveloped, planning of con-junctive management seems best donewithin a river basin framework.

• The biggest new opportunities for improv-ing food security and livelihoods arise indensely populated agricultural regions thatrely on intensive use of groundwater in agri-culture. In such cases, conjunctive manage-ment requires a paradigm shift. The needand pressures are for augmenting and con-centrating groundwater recharge—throughrecharge structures to increase percolationfrom rainfall and runoff as well as fromimported water—in pockets of groundwa-ter-intensive use.

• Conjunctive management investmentsshould strike a balance between improvinginfrastructure and building conjunctive man-agement capacities—through improvedmonitoring systems, institutional reform,improved management practices, and greaterincentive compatibility.


• Capacity building of irrigation system man-agers to improve main system managementfor better conjunctive use

• Reshaping hydraulic infrastructure of large-and small-surface systems for optimal con-junctive use

• Enhancing recharge from precipitation andsurface water imports to sustain intensivegroundwater use in tubewell-irrigated areas

• Institutional and organizational develop-ment, including investment in the capacities


161

of local governments to lead on participa-tory groundwater management and inte-grated water resources management.

REFERENCES CITED

Blomquist, W., T. Heikkila, and E. Schlager.2001. “Institutions and Conjunctive WaterManagement among Three Western States.”Natural Resources Journal 41(3): 653–84.

Buechler, S., and G. M. Devi. 2003. “The Impactof Water Conservation and Reuse on theHousehold Economy.” Proceedings of theEighth International Conference on WaterConservation and Reuse of Wastewater,Mumbai, September 13–14.

Dhawan, B. D., and K. J. Satya Sai. 1988. “Eco-nomic Linkages among Irrigation Sources: AStudy of Beneficial Role of Canal Seepage.”Indian Journal of Agricultural Economics43(4): 569–79.

Foster, Stephen, Albert Tuinhof, Karin Kemper,Hector Garduno, and Marcella Nanni. 2002.“Groundwater Management Strategies.” GW-MATE Briefing Note 3. Sustainable Ground-water Management: Concepts and Toolsseries. Online at http://www.worldbank.org/gwmate.

IWMI (International Water Management Insti-tute). 2002. “Innovations in GroundwaterRecharge.” IWMI-Tata Water Policy Briefing,No. 1. Available online at http://www.iwmi.cgiar.org/waterpolicybriefing/files/wpb01.pdf.

Londhe, A., J. Talati, L. K. Singh, M. Vilayasseril,S. Dhaunta, B. Rawlley, K. K. Ganapathy,

and R. P. Mathew. 2004. “Urban-HinterlandWater Transactions: A Scoping Study of SixClass I Indian Cities.” Paper presented atIWMI-Tata Annual Partners’ Meeting,Anand, India, February 17–19.

Murray Rust, H., and E. Vander Velde. 1992.“Conjunctive Use of Canal and Groundwa-ter in Punjab, Pakistan: Management andPolicy Options.” Advancements in IIMI’sResearch 1992. A Selection of papers pre-sented at the Internal Program Review.Colombo, Sri Lanka: International IrrigationManagement Institute.

Scott, C. A., and C. Garcés Restrepo. 2001.“Conjunctive Management of Surface Waterand Groundwater in the Middle Río LermaBasin, Mexico.” In A. K. Biswas and C. Tor-tajada, eds. Integrated River Basin Manage-ment. Oxford: Oxford University Press.

Shah, T. 2003. “Decentralized Water Harvestingand Groundwater Recharge: Can These SaveSaurashtra and Kutch from Desiccation?”IWMI-Tata Water Policy Program, Colombo,Sri Lanka.

Shah, T, O. P Singh, and A. Mukherjee. 2004.“Groundwater Irrigation and South AsianAgriculture: Empirical Analyses from a Large-Scale Survey of India, Pakistan, Nepal Terai,and Bangladesh.” Paper presented at IWMI-Tata Annual Partners’ Meeting, Anand, India,February 17–19.

This Note was prepared by Tushar Shah of IWMI with inputsby Karin Kemper. It was reviewed by Stephen Foster ofBNWPP GW-MATE.


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INVESTMENT NOTE 4.4

GROUNDWATER GOVERNANCEAND MANAGEMENT

Groundwater management is becoming more andmore a must in developing countries to forestalloverexploitation and to foster sustainable use ofthe water resources. Nevertheless, sound manage-ment of groundwater requires an efficient institu-tional and regulatory framework, which only thefull commitment of the government can ensure.This Investment Note deals with the laws, regula-tions, and institutions involved in the governance ofgroundwater resources and with management andenforcement of these rights for the public good.

A stored water resource available in most coun-tries, groundwater has long been treated as aninfinite resource that can be endlesslyexploited. The idea that groundwater, though acommon good, belongs to the overlyinglandowner has shaped thinking about water,even in the developed world. Only after thisresource has been overexploited and polluteddo governments and users begin to worryabout managing its use. Attempts to allocategroundwater and manage these entitlements ina sustainable manner have achieved only lim-ited success and still pose a major challenge tothe water sector.

INVESTMENT AREA

The World Bank considers investments ingroundwater and its governance worthwhile.Because groundwater is invisible and erraticallydeveloped, many governments ignore the needfor its regulation and management. As the con-cept of integrated water resources managementis now a primary policy, a detailed understand-ing of groundwater within a river basin and itsinteraction with surface resources becomesimperative. Because the use of groundwater inmost developing countries is largely unregu-lated, well digging and water abstraction fromwells in those countries frequently overexploitthe resource and cause hardships, especially forsmall users and the poor. Investment in ground-

water governance is needed to manage thisresource in a sustainable manner and to edu-cate users and governments about the need fora sound system of entitlements and allocation,based on a factual knowledge of the aquifersand systemic geohydrology.

A recent Bank investment program in Mexico(box 4.11) and a potential lending project in theRepublic of Yemen focus on the sustainabledevelopment and management of groundwater.These programs are breaking new ground ininvestment for groundwater governance andwill address entrenched exploitation of theresource. The continued overexploitation andpollution of critical groundwater resources inmany countries creates a critical need for multi-lateral investment in the legal and institutionalframework for groundwater governance toensure sustainable management over the longterm for the public good.

POTENTIAL BENEFITS

The efficient use of groundwater, either con-junctively with surface water supplies or as asole source, requires the development of aquiferparameters, modeling of hydrologic characteris-tics, and development of a sound entitlementand management system. Investment in thesemanagement tools can result in a reliable andstable source of water for economic develop-ment, drought alleviation, and an effective andeconomic water supply complement to surfacewater. Little of the water stored in aquifers is lostthrough evaporation. Use of groundwater there-fore has significantly less impact on river sys-tems and riparian and lacustrine habitat thandoes use of surface water. It provides a reliablebuffer to cyclical or annual shortages of surfacesupplies; recharge during wet years and extrac-tion during dry years can limit the impact ofcyclical droughts. Groundwater can provide areliable source of water for small users to helpalleviate rural poverty.


The governance of groundwater requires a strongpolicy decision at the highest governmental


163levels to create the legal and institutional frame-work for sustainable use. Groundwater isviewed in most countries as belonging to theoverlying landowner, not to the sovereign, andresistance to regulation of its use can be strong.Adoption, monitoring, and enforcement of enti-tlements will therefore require major policydecisions, strong laws and regulations, and for-mation of a participatory institutional frameworkto carry out those policies.

A successful groundwater governance policydepends on a country’s physical, political, andcultural setting. The physical parametersinclude hydrogeology, aquifer endowment, andthe use made of the water supply. Best practicein groundwater development, regulation, andmanagement is still evolving, but there aresome excellent, time-tested examples of well-

organized and regulated groundwater gover-nance, as in the U.S. states of California andColorado (boxes 4.12 and 4.13).

Management policy must deal with two majorcategories: groundwater that is conjunctive withthe surface water (that is, tributary aquifers), andgroundwater that is extracted from aquifers notconnected to surface supplies (that is, nontribu-tary aquifers). Nontributary aquifers can be fur-ther split into aquifers that have reasonablerecharge from outlying recharge areas andaquifers that receive such limited recharge as tobe considered nonrenewable, where waterextraction can be considered mining of an non-renewable resource. Depending on the ground-water situation, the appropriate level ofaggregation of water resources management hasto be chosen. To monitor and manage quality,


Groundwater has historically been overexploited in Mexico. In the Mexico City area and many other regions, it has resultedin subsidence, lowered groundwater tables, increased pumping costs, shortages, and aquifer pollution.The country has beenattempting to resolve overextraction for many years and has passed enabling legislation that provides the legal framework fordealing with the groundwater management problem, but overexploitation has continued.This can be partially attributed to acontinuation of energy subsidies. In addition, the administration and enforcement of the groundwater entitlement system hasbeen 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 Bank–financed 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 theconcepts of decentralized aquifer management through volumetric entitlements, measurement of extractions, and extractionlimitations based on the safe yield of the aquifer. It will utilize the local user-oriented technical commissions of water (ComiteTecnico de Aguas Subterraneas—COTAS) as a primary factor in the management of the aquifer, attempting to involve usersthrough 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 incoastal 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 financialassistance, 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 organizationsin order to transfer groundwater administration and management in specific aquifers to those who have the greatest vestedinterest in sustainable use of the resource. Care must be taken to assure all users of the equal treatment of all, regardless ofuser size, political connections, or wealth. Failure to secure trust in the reciprocity of sacrifices made for the good of all willperpetuate unregulated overexploitation of the aquifers.

Source: Garcés-Restrepo 2001; Garduno 1999; Mexico “Water Resources Management Project”; Foster and Garduño 2002.

Box 4.11 Mexico: Groundwater Management

164 nontributary groundwater basins should be man-aged at the spatial level corresponding to hydro-geological aquifer boundaries. The appropriatelevel of management for tributary groundwater isnot straightforward, because surface waterresources are generally best managed at the riverbasin level, with authority aggregated to riverbasin commissions or other administrative bod-ies. To avoid water management conflicts andinconsistencies in policies addressing groundwa-ter and surface water management, regulationand agency reforms have to be coordinated.

Policy for managing these conjunctive resourcesmust also be coordinated. If it is not, a dispro-portionate share of the available water maycome from wells, particularly during droughts.The allocation and management of entitlementsin a tributary system must be designed so that

the groundwater and surface water are treatedas an integrated supply, and a safe yield ofgroundwater extraction is part of the integratedannual sustainable yield of water from the basin.

Groundwater management policy for nontribu-tary aquifers requires a solid understanding ofthe aquifers and their hydrogeologic characteris-tics. The management of these types of aquifersnecessitates a hydrologic model of the aquiferfor estimating the finite amount of extractablewater that is available within the aquifer. Thisallows the determination of an annual safe yieldfrom the aquifer, or the determination of theannual volume of water that may be extractedover a preselected finite life for the aquifer. Theselection of the finite life is a combination ofeconomic and political policy decisions by usersand government. Once this annual extractable


Groundwater is still a key source of water for Southern California, although imported water supplies have become the mainsource.The state’s procedures for the issuance, administration, and management of groundwater entitlements suggest someuseful 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 relativeanarchy 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 toenforce and manage them.The decision led to a practice whereby each well was entitled to a proportional annual volumetricextraction, 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. Extractionbeyond an allocation was punishable by fines.Trading of annual allotments was permitted so that users needing more watercould 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’shydrological seasonality, surface water was stored in the upper reaches of the San Gabriel River for later use, and groundwateruse had minimal effect on the rights of surface users. However, groundwater overexploitation resulted in a major drawdown ofthe aquifer and caused saline intrusion along the Pacific Coast.The Los Angeles County Flood Control District developed majorgroundwater recharge basins in the main San Gabriel Basin to capture winter and spring runoff that would otherwise be lost tothe 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 intrusionand pollution of the aquifer by urban chemicals, lawn and yard pesticides, and pollutants from petroleum and other industries.

Source: DWR-CA 2000, 2003a, 2003b.

Box 4.12 Southern California: Groundwater Management

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volume is determined and the finite life of theaquifer is set, reliable investment decisions canbe made regarding use of the water supply. Thisallows a monitoring, measurement, and man-agement system to be designed to manage theavailable resource equitably and to provide forreserves for future development.

Experience has shown that the most successfulmanagement systems have strong, participatoryself-governance by user organizations, with reg-ulatory oversight by the government or the courtsystem (see IN 2.1). The policy decision to incor-porate participatory management is frequentlymet with resistance from entrenched bureaucra-

cies and by people who think water users can-not manage their own affairs. The most success-ful examples of the management ofnonrenewable groundwater aquifers have beenthose managed by a commission of electedwater users, operating under the guidance andoversight of a state-level regulatory authority.This peer-level management is more acceptableto the user community. An independent entity isneeded to certify the hydrologic data regardingthe aquifer and to assure users and the publicthat the aquifer is being managed in accordancewith agreed criteria. If nonrenewable supplyis to be relied on as the sole source of supplyfor a developing economic region, long-range


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 priorityalong 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 associationof groundwater users, must develop an augmentation plan through the purchase or rental of surface entitlements or throughgroundwater recharge schemes that must be approved by the state engineer. During a recent drought, the Colorado SupremeCourt decided that the use of annually rented water was not sufficient and that augmentation plans had to have assurance ofa 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 thedrought, right when the use of this valuable reserve water resource should have been maximized.This demonstrates howwell-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 asnontributary, 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.Theallocations 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 SEOconducts 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 forregulating licensed well drillers and the abandonment of wells, so that illegal wells do not threaten the integrity of the aquifersand 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.Whileany system of groundwater management must have a system of dispute resolution and last recourse appeal, care should betaken 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.

Source: CRS 2003; SEO 2003.

Box 4.13 Colorado: Groundwater Administration

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planning for this development must consider thatthe finite life of the water supply may similarlyshorten the economic life of that region. Long-range planning must give serious attention to thedevelopment of alternative water sources if theregional economic base is to be maintained.

LESSONS LEARNED

• Groundwater has historically been consid-ered a common good, but its use has notbeen easily regulated by governing bodiesor self-regulated by individual users. Thisdilemma has an impact on the managementof many natural resources.

• Only in the past century has there beensome success in the formulation of legal, reg-ulatory, and institutional framework to man-age groundwater.

• A program of groundwater governance mustbe tailored to each region’s political, cul-tural, and geologic circumstances.

• Most users want to maximize their ownwater extractions and have little confidencethat other users will collectively limit theirextractions to a theoretically safe yield. This“dog-eat-dog” attitude can be modifiedonly if all water users can have confidencein the equity of the water allocation andmanagement system so that they are con-vinced that all users equally share scarcityand limitations.

• Experience in areas of water scarcity andoverexploitation, such as Colorado andCalifornia in the United States, Mexico, andthe Middle East has shown that a stronglegal framework, without a similarly stronginstitutional framework at the user level,cannot resolve the problem of overex-ploitation. This job becomes even moredifficult when dealing with a multitude ofusers large and small.

• Peer-level management at the user levelwith governmental oversight has the bestchance of success.

• To allocate and manage groundwater intelli-gently, sound knowledge is needed aboutresources, reserves, recharge, and safe yield.This knowledge should be coupled withreliable monitoring of extractions, water lev-els, and water quality, in that order. Invest-ments should include the development andmaintenance of such an information system.

• Because of cultural bias and the complexi-ties governing groundwater, attempts todevelop and implement a program willrequire a strong governmental commit-ment, a strong legal framework, supportingregulations, a participatory process of gov-ernance, a well-designed and transparenteducation and public information program,an equitable allocation system with regis-tered entitlements, a sound hydrologicinformation system, and a dispute resolu-tion system with peer-level enforcementthat creates incentives, instead of justpenalizing infractions.

• To control overexploitation, there must be astrong program to regulate and license own-ership and use of well-drilling equipment,with criteria for new well construction.

• The development of a successful program ofgroundwater governance will not be easy; itwill require extremely strong leadershipwithin the government. The developmentand implementation of an effective watersystem will be an evolutionary process thatmay take generations to become acceptedand effective. Realistic expectations musttherefore be maintained concerning anywater investments.

• Any investment in this area must stronglyemphasize the legal and institutional devel-opment, as well as development of capacityat the user level, and should start in pilotareas where scarcity has created sufficientconcern among users that they are ready toaccept the new ideas. This will provide aplatform for testing the management con-cepts to show that they work in the politicaland cultural context.


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The following recommendations are providedfor the consideration of planners attempting toprepare an investment project in the area ofgroundwater management and governance.

• Make sure that the development and imple-mentation of a governance system has strongsupport from the political leadership of boththe government and the water sector. Iden-tify champions in political, bureaucratic, andprivate sectors who can ensure the necessarynational and local commitment.

• Analyze the region’s historical and culturalbackground to identify any strong biases orimpediments to the implementation ofgroundwater entitlement and management,and devise a strategy to deal with them.

• Analyze the existing legal and institutionalframework for groundwater use, entitle-ments, and management, and recommendmodifications to adapt modern managementideas for use in the particular situation.

• Analyze knowledge about the aquifers’physical parameters, sustainability, anddegree of exploitation. Incorporate in theinvestment project a plan to augment thisinformation with additional data collection,modeling, and studies in order to develop astrong estimate of the safe yield of eachaquifer and a plan for sustainable exploita-tion. This process should have strong inputand participation from the user community.

• Develop a participatory program of equi-table entitlements that considers historicbeneficial use, safe yield of the aquifer, thegeologic parameters of well interaction, andthe cultural and socioeconomic impacts ofthe entitlement program.

• Implement the basic legal, institutional, andadministrative frameworks to support theproposed entitlement program in advanceof the investment appraisal to make surethat the proposed project does not dieawaiting political action.

• Provide sufficient infrastructure investmentcomponents in the investment package tocreate incentives for espousing the newmanagement ideas. However, tie the sched-ule for building infrastructure to benchmarksof progress in the legal and institutionaldevelopment components to ensure priorityfor the institutional components.

• Identify and incorporate a pilot componentthat provides a realistic test of the proposedprogram and that also provides somedegree of optimism about achieving suc-cess. Provide a roadmap for using pilotresults for expansion to the entire region.

• Maintain a strong and transparent informa-tion, education, and participatory programduring project implementation to gain theconfidence of the users and political lead-ership in the program’s basic directionsand fairness.

• Be realistic. The introduction of modernmanagement ideas will represent a majorchange in the historic and cultural approachto groundwater governance and will meetwith resistance from vested interests andothers that may feel threatened by any formof groundwater resources regulation.

REFERENCES CITED

CRS (Colorado Revised Statutes). 2003. CRS 37-90-106, Denver.

DWR-CA (Department of Water Resources, Cali-fornia). 2000. “Water Masters for AdjudicatedBasins.” DWR, Sacramento, September.

———. 2003a. “San Gabriel Basin GroundwaterQuality and Remediation Plan.” DWR, Sacra-mento, April.

———. 2003b. “Groundwater Management inCalifornia.” DWR Bulletin 118, Sacramento.

Foster, S., and H. Garduño. 2002. “Mexico,manejo sostenible de agua subterráneo.”GW-MATE, World Bank, Washington, DC.


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Garcés-Restrepo, C. 2001. Irrigation Manage-ment Devolution in Mexico. Rome: Food andAgriculture Organization.

Garduno, H. 1999. Case Study, Mexico. Rome:Food and Agriculture Organization.

SEO (State Engineer’s Office, Colorado). 2003.Colorado, Files of the State Engineer’sOffice, Duties of the Groundwater Commis-sion, Denver.


Mexico. “Water Resources Management Project”(Project Programa de Modernización delManejo de Agua Project). Active. Project ID:P007713. Approved: 1996.

Yemen, Republic of. “Groundwater and SoilConservation Project.” Active. Project ID:P074413 . Approved: 2004.

SELECTED READINGS

Foster, S., and K. Kemper, eds. 2002–4. “Sustain-able Groundwater Management: Conceptsand Tools.” World Bank GW-MATE Briefing

Note Series, World Bank; Washington, DC.Online at http://www.worldbank.org/gwmate. (The GW-MATE Case Profile Col-lection on the same Web site provides morereadily accessible information on some spe-cific examples.)

Foster, S., J. Chilton, M. Moench, F. Cardy, andM. Schiffler. 2000. “Groundwater in RuralDevelopment: Facing the Challenge of Sup-ply and Resource Sustainability.” WorldBank Technical Paper 463. World Bank,Washington, DC.

Scott, C., and T. Shah. 2003. “Energy Pricing andSupply for Groundwater Demand Manage-ment.” IWMI Research Highlight. Colombo,Sri Lanka, International Water ManagementInstitute.

Thompson, Barton H. 2000. “The Obstacles toGoverning the Commons.” Working Paper187. Stanford University Law School, PaloAlto, Calif.

This Note was prepared by Larry Simpson and reviewed byStephen Foster of BNWPP GW-MATE.


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THE REPUBLIC OF YEMEN’SSANA’A BASIN WATERMANAGEMENT PROJECT

What is new? The Republic of Yemen, at thesouthern tip of the Arabian Peninsula, facesextreme water shortages.The Sana’a Basin WaterManagement project aims to both increase thevolume and lengthen the useful life of the availablewater resources within the Sana’a Basin, wherethe country’s capital city is located. To reach itsgoals, the project seeks to increase the efficiencyof agricultural water use, accelerate aquiferrecharge, and buy time for a gradual shift to a lesswater-based economy.

Water availability in Sana’a, the capital, is one ofthe lowest in the world. Bringing in water fromoutside the basin is highly uneconomical—thecost would exceed US$1 per cubic meter, andcould go as high as $8 per cubic meter—andsocially controversial.

The project has to contend with the followinghydrological facts:

• There is no perennial surface water any-where in the Republic of Yemen.

• Annual average precipitation in the Sana’aBasin is 700 to 800 million cubic meters(MCM), and only 5 percent of it infiltrates inthe soil. The remaining 95 percent evaporates.

• Another 40 MCM to 80 MCM seeps into theground from irrigation and sewage returnflows.

• Total recharge is estimated between 80MCM and 120 MCM.

• Total abstraction is about 250 MCM a year,which is 100 percent to 150 percent higherthan recharge.

• More than 80 percent goes to irrigation, andthe balance to domestic and industrial use.

• Water abstraction is uncontrolled, unmetered,unlicensed, and unpaid for.

• In August 2002, there were 13,000 wells inthe Sana’a Basin, and this number was grow-ing rapidly. Of these, only about 70 werestate owned for public water supply.

• The simplified groundwater configurationconsists of a shallow aquifer (alluvium andvolcanic), at depths of 30 to 80 meters and adeep aquifer, known as the Tawilah aquifer,at depths of less than 100 meters to morethan 1,000 meters.

• There is no perceptible recharge from theshallow to the deep aquifers. Horizontaltransmissivity is minimal. The Tawilah wateris practically a fossil aquifer.

• The water resources database is poor.

• According to estimates derived from earlierstudies, the economically exploitable deepaquifer stock is between 2 billion cubicmeters (BCM) and 3 BCM.

The Sana’a wastewater treatment plant wascompleted in mid-2000, but the quality of thetreated effluent has been variable. The plant isoften bypassed, especially during peak flows,owing to energy blackouts, when oil andslaughterhouse waste arrives with sewage. Theplant then releases untreated effluent into thewadi. The effluent, treated or untreated, is usedby about 600 farmers to irrigate about 300hectares of crops, including vegetables. Thispractice poses a high risk of aquifer contamina-tion and endangers the health of both farmersand vegetable consumers. Infiltration from cesspits and inadequate treatment of urban sewageresult in heavy biological contamination in theshallow alluvial aquifer under Sana’a and oftencauses flooding in parts of the city.

The water law of August 2002 is a step in theright direction but still allows water abstractionwithout license up to 80 meters. It imposes nei-ther water abstraction metering nor a levy forirrigation. At this writing, bylaws or regulationswere still pending.


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About half of the irrigation water and half of theirrigated area in the basin are used to grow qat,a leaf from a tree or bush with stimulatingeffects when chewed. Qat chewing is sociallycontroversial, because it devours up to half ofan average family’s income. Cultivation posessevere health hazards linked to uncontrolledpesticide spraying. A qat pest-management planis foreseen under the project. The project doesnot support qat but cannot ignore it. Water sav-ing from improved qat irrigation could make abig difference in the basin’s overall water bal-ance. Qat cannot therefore be excluded fromthe project. Besides, next to selling water to thecity, no activity is as profitable for farmers.


The government and the Bank have concludedthat tackling these complex issues requires aninnovative and programmatic approach. Theyhave agreed on an Adjustable Program Loan(APL) with three phases during a 12-yearperiod. They do not pretend that this high-riskand high-reward operation will reinstate awater balance. Many methods are untested inthe Republic of Yemen and require close moni-toring. Their joint use amounts largely to a trial-and-error approach.

Key triggers for passage from phase one tophase two of the project include (1) a well-functioning O&M system for the demand andsupply management components; (2) consider-able reduction in the diesel subsidy thatencourages unlimited pumping; (3) compliancewith effluent standards by Sana’a’s wastewatertreatment plant; (4) conversion of two-thirds ofthe project-targeted areas to improved irrigationsystems by December 31, 2006; and (5) a halt toexpansion of irrigated zones.

Total program cost is estimated at US$120 mil-lion at 2002 prices, with a first phase of US$30million and a first phase International Develop-ment Association (IDA) credit of US$24 million.

Out of about 110,000 hectares of arable land,24,000 hectares are irrigated. About 12,000hectares are in the project area of phase 1 of the

APL, of which about 4,000 hectares are the firsttargets for improved irrigation.

The project aims at increasing the volume andlengthening the useful life of water within theSana’a Basin by raising the efficiency of agricul-tural water use (demand management) andaccelerating aquifer recharge (supply manage-ment). These measures will buy time for therural economy to gradually decrease its depend-ence on water. The project is demand driven andcommunity based.

The project has four components, outlinedbelow.

DEMAND MANAGEMENT—expose farmers to equip-ment and methods that may save up to 40 per-cent of water; change pumping and water usebehavior through a comprehensive informationand public awareness campaign to reach everysegment of the basin population.

SUPPLY MANAGEMENT—accelerate recharge, andsave precipitation runoff from evaporation bybuilding 5 small retention dams and rehabilitat-ing 11 dams; gain better understanding of thehydraulic situation, through systematic monitor-ing of precipitation and water use, to improvewater management.

INSTITUTIONAL DEVELOPMENT—build a strong andsustainable legal and regulatory base for centraland local water basin management, includingwater regulation and enforcement, planning,and water allocation that can be replicated inother basins.

ENVIRONMENTAL MANAGEMENT—the project fallsunder environment category “A,” which meansit requires a detailed environmental assessmentand mitigation plan; therefore, its implementa-tion and monitoring is a project component.

OUTPUT AND IMPACT

The main beneficiaries of this project would bethe people in the project area, including theinhabitants of Sana’a, where nearly all of thebasin’s 1.5 million people live. The expectedresults may be summarized as follows:


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Benefits

• Extended useful life of groundwater resources

• Increased value of agricultural production perunit of water pumped

• Decreased likelihood of human and socioe-conomic losses due to dam failure

• A model for basin management applicableelsewhere in the Republic of Yemen andthe Middle East and North Africa region

Risks

• Government does not put adequate institu-tional arrangements in place or theapproach fails. For example, staffing maybe inadequate in the participation section ofthe Sana’a branch of the National WaterResources Authority; water management,regulation, and enforcement may not bedelegated to stakeholders (delegation isessential because central enforcement isimpossible owing to the absence of a regu-latory system and sufficiently trained staff);the partnership approach to water manage-ment and self-regulation may not work.

• No water is saved from improved irrigationbecause farmers may use water saved toincrease their irrigated area, or becausefarmers may not be interested in investingin water-saving irrigation technologies andstick to their tradition of unlimited freeaccess to groundwater.

• Phase one of the program does not achieve“triggers” for basinwide expansion.

• Outsiders see the project as favoring qatproduction and attack it for that.


The program is a fully integrated waterresources management operation. In theYemeni context, it presents innovations in atleast four domains:

• Water rights—the program recognizes exist-ing groundwater rights, and regulates future

abstraction through well registration, licens-ing, and metering.

• Institutional partnership—the programestablishes a partnership between centraland local authorities.

• Decentralized water resources managementand self-regulation—the program marshalspeer pressure through WUAs to achieveself-regulation of water use.

• Incentives and regulations—the programwages an intensive information and pub-lic awareness campaign; it subsidizeswater saving irrigation equipment (andeligibility means commitment to reducepumping and not expand irrigation); andwater users are involved in regulation andenforcement.

LESSONS LEARNED

Implementation had just begun at the time ofwriting, so it is too soon to evaluate programsuccess. Some lessons have, however, beenlearned from the design stage. They includethe following:

• Participation and ownership are essential atall levels.

• Staff continuity and adequate staff remuner-ation are essential. Their absence in theRepublic of Yemen slowed and disruptedproject preparation.

• A realistic institutional and legal frameworkis important for this approach to work. Inthe Republic of Yemen, it has to be built upfrom scratch.

• A well-developed database on availablewater resources and current uses is a must.The Republic of Yemen’s database ismediocre and has to be improved duringproject implementation.

This Profile was prepared by Peter Koenig and reviewed byKeizrul Abdullah of the International Commission on Irriga-tion and Drainage.


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55INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT

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. Floodsaffect more people—140 million in an average year—than do all other disasters put together, andthe 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. Thecosts 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 tothe benefit of the poor. Drainage and urban wastewater flows represent precious extra resources,and floods can contribute to recharge and irrigation resources.

• 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

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The innovations described in this chapter havebeen proven beneficial. An integrated approachis needed for these investments because waste-water management involves several sectors andtheir institutional structures: urban utilities, agri-culture, public health, environmental protection,and treatment and reuse must be agreed on andcoordinated. Drainage water reuse requires alsoan integrated approach to irrigation design andmanagement. Flood management requires abasin approach and multisectoral investments.(See IN 5.1 and IP 5.2 on waterlogging andsalinity, IN 5.3 on urban wastewater, and IN 5.2for reuse of agricultural drainage water. Onfloods, see chapter 8, especially IN 8.2.)

WATERLOGGING AND SALINIZATION HAVE BECOME

CRITICAL CONSTRAINTS, WITH AT LEAST 20 MILLION

TO 30 MILLION HECTARES REQUIRING DRAINAGE

INVESTMENTS. Irrigated land may becomewaterlogged and salinized as water tables riseand salts build up. Most drainage projectshave produced good rates of return andimproved farmer incomes, yet investment hasdwindled as projects have concentrated onupstream irrigation and farming. Investmentcosts are generally low, ranging from on-farmsurface drainage systems at US$100 to $200per hectare up to US$1,000 per hectare forpipe drainage in arid areas. Beyond individualeconomic benefit, drainage can contribute tooverall land and water management and theenvironment. Drainage is a proven butdemanding discipline and technology. Bestinvestments are often highly case and site spe-cific, and careful research and piloting arerequired. Integrated approaches address allon-site and off-site impacts of drainage.Although governments usually have to takethe initiative, investment sustainabilityrequires farmer involvement, as experiencefrom pilots has shown, for example, in theArab Republic of Egypt. (See IP 5.1 and IN5.1. For a case study on Egypt, see IP 5.5. Seealso “Investments in Waterlogging and SalinityControl,” in Agriculture Investment Source-book (AIS), Module 8.)

DRAINAGE IS A COMPLEX, MULTIFUNCTIONAL INVEST-MENT THAT HAS TO BE CONSIDERED WITHIN AN INTE-GRATED WATER RESOURCE MANAGEMENT FRAMEWORK.Drainage is a complex phenomenon with multi-ple impacts, positive and negative, on otherfunctions of the resource system. Integratedresource management requires a new focus ondrainage, which has to be analyzed within thecontext of a hydrological unit such as a basin,using an integrated approach and addressing allpositive and negative impacts of drainage on andoff site. A new methodology (“DRAINFRAME,”an acronym that stands for Drainage IntegratedAnalytical Framework) is described in this chap-ter. It shows how a participatory planningmethodology looking at every aspect of theresource system and all the stakeholders canuntangle the multiple impacts, costs, and bene-fits; prioritize investments; and begin to locatebenefits and mitigate side effects. (See IP 5.1 ondrainage and on DRAINFRAME. See IP 9.1 onassessing costs and benefits.)

THERE HAVE BEEN SIGNIFICANT INNOVATIONS IN

DRAINAGE TECHNOLOGY RECENTLY. Several entriesin this chapter describe these innovations. Onediscusses how controlled drainage can be usedfor water table management. Land drainage sys-tems often allow water to move too quicklythrough the soil profile. Controlled drainageslows down the loss through the drainage sys-tem. A second innovation described is the useof evaporation ponds. Costs are low, useful lifecan be up to a half century, and environmentalproblems are largely manageable. Finally,biodrainage can be used to remove excesswater by using the uptake capacity of vegeta-tion, especially trees. (See IP 5.2 for controlleddrainage, IP 5.3 for evaporation ponds, and IP5.4 for biodrainage.)

INVESTMENT IN REUSE OF TREATED WASTE AND

DRAINAGE WATER CAN OFFSET WATER SCARCITY.Investment in reuse of poor quality water inagriculture can offset water scarcity and pre-serve better-quality water for higher-valueuses. Both wastewater reuse and drainage


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water recycling represent an important agri-cultural water management investmentopportunity. Large and reliable volumes ofdrainage water are available close to reusesites, and investments to enable reuse arelow and can be added on to existingschemes. In Egypt, reuse of agriculturaldrainage water became national policy in the1980s, and now reuse is practiced on 90 per-cent of the irrigated area. Investment in reuseof both resources often disproportionatelybenefits the poor, contributing to livelihoodsand household food security. (See IN 5.2 fortreated wastewater and IN 5.2 for reuse ofagricultural drainage water.)

A WIN-WIN SCENARIO IS ELUSIVE IN INVESTING IN

NONCONVENTIONAL WATER, AND GOOD POLICY,PLANNING, AND PARTICIPATORY APPROACHES ARE

INDICATED. Inevitably, some conflicts and down-side risks are connected with drainage and useof low-quality water in irrigation. Environmen-tal aspects need careful attention. Tradeoffsbetween different users may be essential, costrecovery is problematic, and technical innova-tions may be hard to accept culturally and diffi-cult to manage, all of which underlines theneed for good policy and planning and for inte-grated and participatory approaches. (See IP5.1, IN 5.3, and IN 5.2.)

TYPICAL INVESTMENTS

For technical assistance investments, the follow-ing should be considered:

• Research, capacity building, and institu-tional development for drainage

• Flood mapping and flood management plans

• Research on reuse

• DRAINFRAME for a participatory approachto drainage

Project investments may include the following:

• Drainage on the estimated 20 million to 30million hectares of irrigated land in thedeveloping countries badly affected bywaterlogging

• Wastewater treatment and storage

• Measures for water retention, flood mitiga-tion, and flood protection

Policy-based investments may include waterswap programs.

Finally, an option for pilot investment is con-trolled drainage and biodrainage.

INVESTING IN DRAINAGE AND WATER QUALITY MANAGEMENT

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INVESTMENT NOTE 5.1

INVESTING IN LAND DRAINAGE

In an arid zone, combating waterlogging and salin-ization of irrigated land remains a priority. Somedeveloping countries in the humid tropics are alsoready for prudent investments in drainage for rain-fed agriculture. Without such investment, thegrowth of a more diversified and competitive typeof farming in parts of Asia and Central and SouthAmerica may stagnate. Drainage development cangreatly enhance the well-being of the populationand further environmentally appropriate land use.These three functions make drainage investment ahighly suitable instrument for broad-based ruraldevelopment and integrated land and waterresources management.

In Europe and North America, 30–40 percent ofthe agricultural land has land drainage systems(box 5.1), but in the developing countries thisshare drops to 5–10 percent. This difference ismost plausibly explained by the fact that invest-ment in drainage is not warranted when theproductivity of the land is low. Farmers adapt to

poor drainage by selecting tolerant but low-yielding or low-value crops and by applyingminimal inputs. Many developing countrieshave, however, reached the stage in which lackof drainage is keeping ambitious farmers fromachieving higher and more secure yields andfrom diversifying their crops. Where a lack ofdrainage is a constraint, agricultural develop-ment risks stagnation and lack of competitive-ness. (See also IP 9.1.)

INVESTMENT AREA

Current drainage investment in the developingcountries is restricted mostly to the control ofwaterlogging and salinization of irrigated land.The backlog in unmet drainage needs here isconservatively estimated at 20 million to 30 mil-lion hectares and is growing by an estimated0.25 million to 0.50 million hectares a year. Thecurrent rate of subsurface drainage develop-ment is estimated at only 0.1 million to 0.2 mil-lion hectares a year.

Developing countries make hardly any invest-ments in improving the drainage of rainfed land.Whatever drainage they have or construct ismostly main drainage. Viable investment oppor-tunities for drainage of rainfed land are esti-mated at 25 million to 50 million hectares, mostof it in the advanced countries of Southeast Asiaand Central and South America (box 5.2).

Many countries in Eastern Europe and in the for-mer Soviet Union are in great need of drainagesystem rehabilitation and modernization.

POTENTIAL BENEFITS

The traditional purpose of drainage is to removeexcess water from waterlogged land to improveaeration of the root zone and the growth ofcrops. Improved drainage therefore enhancesthe impact of fertilizers and other inputs, pro-vides better planting and harvesting conditions,and allows farmers to grow more rewardingcrops. It also improves the workability of farmmachinery and the efficiency of farm operations.Drainage is no longer the food machine it was


Drainage systems are composed of on-farm systems and mainsystems. The on-farm systems collect excess water from thefarmers’ fields and release it into the main systems.The mainsystems transport the drainage water to the outlet where itflows into a major element of the regional hydrological system(sea, river, or lake). On-farm systems can be either of the sur-face drainage type (collecting excess water from the surface ofthe land) or the subsurface drainage type (collecting excesswater deeper in the soil by controlling the depth of the watertable).Water tables may be controlled by parallel lines of deepditches or buried pipe (horizontal drainage). In drainage forwaterlogging and salinity control of irrigated land, pumpedwells (vertical drainage) are also widely used, particularly infresh groundwater areas where they serve both the irrigationand drainage functions.

Source: Smedema,Abdel-Dayem, and Ochs 2000.

Box 5.1 Drainage Technology

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during the nineteenth and early twentieth cen-turies, when governments reclaimed large areasof waterlogged land for agricultural use. But itscontribution to food security is still quite signifi-cant and carries a relatively low cost (box 5.3).

Irrigated land in the arid and semi-arid zonesthat is not adequately drained is at risk ofbecoming waterlogged and salinized becausewater tables rise and salts accumulate in theroot zone. Toxic salts inhibit crop growth, evenat low concentrations, while sodium salts mayseverely deteriorate soil structure and indirectlyaffect crop growth. Good drainage also con-tributes to rural development in areas unrelatedto agriculture, reducing damage caused by thehigh water table to buildings and risk of water-borne diseases (box 5.4).


Drainage development and management inalmost all developing countries relies on gov-ernment initiative and support, but stronginvolvement and commitment of the users isessential for sustainability and maintenance.The drainage development and managementmodel that is generally most appropriate placesthe responsibility for the main system with thegovernment or another public body and theresponsibility for the on-farm system with thefarmers. The role of the government in on-farminvestment is restricted mostly to creating theenabling conditions in terms of policy and legalframework, incentives, research, and technicalassistance (box 5.5). So far, no institutionalmodels for participatory drainage developmentand public-private partnerships have beentested. Recent sector work advocates a newapproach for participatory planning of multi-purpose drainage interventions under theacronym DRAINFRAME (see IP 5.1). It broadlyaddresses all costs and benefits of a drainagesystem through functions-values analyses andoptimizes the economic and social outcomeswhile safeguarding ecological functions.

Drainage interconnects with the water controlsystem and may harm the environment (FAO


Drainage development could help the rice-growing countriesin Southeast Asia and similar regions to intensify and diversifytheir agricultural sectors. It would allow farmers to growhigher-yielding rice varieties and apply more advanced farmpractices such as direct seeding and simple farm mechaniza-tion. It would also allow them to grow a wider range of uplandcrops. Full control of the widespread monsoonal flooding andwaterlogging would require large-scale works and high invest-ments. Substantial progress can, however, be made with limitedmeans at the local level.

Source: Nedeco 1991.

Box 5.2 Drainage in the Humid Tropics

The costs of drainage are low compared to irrigation. Simpletypes of on-farm surface drainage systems that do not requireextensive earth movement can be installed for US$100 to$200 per hectare. Cost could be further reduced when farm-ers participate in the work. On-farm subsurface drainage sys-tems are more costly with investments ranging from US$500per hectare in the temperate zones to US$1,000 per hectarefor salinity control of irrigated land in arid zones.The cost forthe main systems would be US$250 to $500 per hectare.Operation and maintenance (O&M) costs may be estimated at2–3 percent of the capital costs. Costs tend to drop as adrainage industry gains experience.

Source: Author.

Box 5.3 Cost

Drainage can improve public health and sanitary conditions invillages, lower maintenance costs of rural roads, enhance thedurability of foundations and mud-based houses, and reduceflooding-related infrastructural damage and disruption.Drainage investment can also target pockets of rural povertywhere caused by waterlogging, as has been established in Pak-istan. The total mix of benefits makes drainage a suitableinstrument for broad-based rural development, which is whyEurope’s rural development programs of the 1960s and 1970salmost always included a large drainage component.


Box 5.4 Drainage as an Instrument for Rural Development

178

1995; Abdel-Dayem et al. 2004). The most seri-ous threat is the degradation of water quality indownstream water bodies owing to the disposalof saline or polluted drainage water. Wherefarmers use many agrochemicals, aquatic lifemay suffer from the disposal of nutrient-richdrainage water in lakes and estuaries that haveinsufficient assimilation capacity or through-flow. Irrigation-induced river salinization isbecoming a serious problem in an increasingnumber of basins in the arid zone (FAO 1997).(See also IN 5.3 and IN 8.2.) Therefore, environ-mental impact assessment procedures should befollowed during project preparation. A func-tions-values analysis would add the socialdimension and prove useful in preparing anenvironmental management plan for the project.

Many governments give too little attention tofinancing. Even in places with well-developeddrainage infrastructure, O&M often receives lowbudget priority. Inadequate O&M financing isthe single biggest threat to drainage system sus-tainability. Reversing this situation requiresexploring new ways to improve cost recoveryand new sources of financing. Governmentsshould share in the costs of drainage infrastruc-ture and management because they producepublic goods such as human and environmentalhealth and biodiversity. All users and beneficiar-ies who enjoy direct benefits should share in theinvestment costs and pay the full O&M costs ofthe tertiary and field systems. Nonagriculturalbeneficiaries should also share in the costs, andthe “polluter pays” principle should beenforced, particularly on those releasinguntreated wastewater into the drainage systems.Policies and measures to control and regulatethe use of agricultural chemicals should beadopted. The potential for private sector partici-pation in drainage investment and provision ofO&M services should also be explored.Drainage development is theoretically governedby economic opportunities, but investments willgenerally be made only in a suitable environ-ment. A most important component of such anenvironment is a long-term, committed govern-ment policy (box 5.6).

LESSONS LEARNED

Of the drainage projects that did not meetexpectations, many suffered from a faulty diag-nosis of the drainage problem and exaggeratedexpectations of the impact of the proposeddrainage system. Drainage is a proven—butdemanding—discipline and technology. Thebest solutions are case and site specific, andthe appropriateness and cost effectiveness oftechnical and institutional proposals depend onthe experience, diagnostic perception, andmultidisciplinary skills of the investment prepa-ration team.

Long-term partnerships between emergingdrainage countries and established drainagecountries have contributed to the expansionof drainage in some developing countries.


Much of the main and on-farm drainage infrastructure inEurope and in North America was developed in the course ofthe nineteenth and twentieth centuries, almost always withstrong government involvement and support. Main systemswere fully financed from public funds, while on-farm develop-ment was substantially subsidized. Between 1950 and 1970,Europe’s direct subsidies for on-farm drainage developmentranged from 20 percent to 50 percent.


Box 5.5 Drainage Development in Europe andNorth America

Egypt has invested about US$3 billion (in fiscal 2001 dollars)since the 1970s to provide drainage for 2 million hectares.Drainage has mitigated the effect of irrigation-induced water-logging and salinity despite year-round irrigation since the con-struction of Aswan High Dam. The government and farmershave shown strong commitment to the program, adoptingappropriate technologies, improving irrigation systems, trans-ferring management to water user associations, and adopting awell-functioning system of cost recovery.The country has anintensive and diversified cropping system, and its wheat, rice,and cotton yields are among the highest in the world.Improved drainage accounts for 15–25 percent of recent crop-yield increases. Reuse of drainage water in irrigation con-tributes to making overall water use efficiency in the lowerNile River Basin one of the world’s highest.

Source: Adapted from World Bank 2003.

Box 5.6 Egypt’s Drainage

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Outstanding examples are the partnershipsbetween Canada and the Netherlands on theone hand and Egypt and Pakistan on theother. Similar successful experience comesthrough the activities of the International Pro-gramme for Technology and Research in Irri-gation and Drainage (IPTRID) and itsnetworks for knowledge sharing and capacitybuilding in several developing countries.

Drainage systems are the sinks of the land-scape, collecting agricultural wastewater as wellas residential and industrial wastewater, the lat-ter usually unplanned. Until regulatory meas-ures are enforced, the unplanned pollution ofagricultural drainage systems will continue. Par-ticipatory approaches to planning and manag-ing drainage systems, in which all stakeholdersare involved and share the benefits and costs,could significantly help control misuse andraise cost recovery. Egypt’s new water boardsshowed great interest and took important initia-tives to control pollution in the irrigation anddrainage canals.

Drainage systems operate mostly by uncon-trolled gravity. This sometimes leads to exces-sive drainage when water tables fall undesirablydeep and deprive crops and natural vegetationof water to survive dry periods. Where a sensi-tive balance between water removal and waterconservation needs to be maintained, drainageshould be controlled. This endorses a newunderstanding of drainage as a managementtool to remove or retain water as desired(Abdel-Dayem et al. 2004). Controlled drainagecan also help reduce undesirable mobilizationof solutes and protect downstream water quali-ties (see IP 5.2).


• Drainage investment should be made whennatural drainage has become a critical con-straint to further agricultural development.

• Absolute assurance should be established—based on careful analysis of the technicaland financial requirements, governance andinstitutional capacities, and farmers and

other beneficiaries’ commitments—that theinstalled drainage systems will be properlymaintained. If there are no such assurances,the planned drainage investments shouldbe postponed. Instead, the focus should beon advocacy and institutional and technicalcapacity building.

• Drainage issues should be assessed throughremote sensing, combined with geographicinformation system (GIS) and modelingtechnologies that facilitate applying inte-grated approaches in drainage system plan-ning and management. These technologiesare useful when assessing how drainageinterventions will change the natural (agro)hydrological conditions in the resource sys-tems, how the social and environmental val-ues may change, and which benefits andlosses may materialize.

• Research and studies should be encouragedinto quantifying in monetary terms theintangible drainage benefits (such asimproving health, protecting buildings andrural infrastructure, enhancing biodiversity);developing models for cost sharing and costrecovery of nonagricultural drainage serv-ices (such as disposal of domestic andindustrial wastewater); and the impact of“with” and “without” drainage on ruralpoverty and livelihoods.

• Expert review of drainage plans almostalways pays.


Between 20 million and 30 million hectares ofirrigated land in developing countries urgentlyawait improved drainage. There is also a con-siderable viable need for drainage rehabilitationin Eastern Europe and the former Soviet Union.Time is also ripe for drainage development insome countries in the humid tropical zone ofSoutheast Asia and Central and South America.Investments should generally not be restrictedto the construction or rehabilitation of drainagesystems and related physical infrastructure; theyshould also strengthen research, capacity build-ing, and institutional developments.


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REFERENCES CITED

Abdel-Dayem, S., H. Hoevenaars, P. Mollinga,W. Scheuman, R. Slootweg, and F. vanSteenbergen. 2004. “Reclaiming Drainage:Toward an Integrated Approach.” Agricul-tural and Rural Development Report 1.World Bank, Agricultural and Rural Devel-opment Department, Washington, DC.

FAO (Food and Agriculture Organization). 1995.Environmental and Impact Assessment ofDrainage Projects.” Irrigation and DrainagePaper No 53. FAO, Rome.

———. 1997. “Management of AgriculturalDrainage Water.” Water Report No 13. FAO,Rome.

Nedeco (Netherlands Engineering Consultants).1991. “Mekong Delta Master Plan.” WorkingPaper No 3. United Nations Development

Programme Project VIE/87/031. Hanoi,UNDP.

Smedema, Lambert K., Safwat Abdel-Dayem,and Walter J. Ochs. 2000. “Drainage andAgricultural Development.” Irrigation andDrainage Systems 14: 223–35.

World Bank. 2003. Agricultural InvestmentSourcebook. Washington, DC: World Bank.

SELECTED READING

Smedema, L. K., W. F. Vlotman, and D. W.Rycroft. 2004. Modern Land Drainage: Plan-ning, Design and Management of Agricul-tural Drainage Systems. Rotterdam: Balkema.

This Note was prepared by Bert Smedema and reviewed byBart Snellen of the International Institute for Land Reclama-tion and Improvement (ILRI).


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INVESTMENT NOTE 5.2

INVESTING IN THE REUSE OFAGRICULTURAL DRAINAGEWATER

Mounting water scarcity has forced countries toinclude reuse of agricultural drainage water intheir national water programs. Drainage water isoften available in large volumes, and thereforecould cover a significant part of total irrigationdemand, if adequately managed. Investment forreuse is usually a small add-on component of irri-gation projects.

With growing demands on freshwater resourcesin water-scarce countries, pressure is mountingon the agricultural sector to give up part of itsallocation to prime use sectors such as house-holds and industries. Meanwhile, agriculture hasto continue producing food and fiber to satisfycurrent and future demand for food security.Under such conditions, reuse of agriculturalwater in irrigation could become important tonot only fill in a gap in supply, but also maxi-mize water use efficiency. Reuse of agriculturalwater also offers a solution in situations wheredisposal of drainage water is a problem.

INVESTMENT AREA

Agricultural drainage systems collect, evacuate,and dispose of excess surface and subsurfacewater from cropped fields. Farmers in water-scarce countries may reuse this drainage waterfor irrigation, if it is of sufficiently good quality,either as a sole source or as drainage watermixed with fresh canal water or with rainwater,each applied separately. The choice of thereuse option depends on the volume and qual-ity of drainage water, soil type, crop toleranceto salinity, agroclimatic conditions, and avail-ability of freshwater resources.

Reuse of drainage water for irrigation requires atransformation in the drainage from a disposal-based linear system to a recovery-based loopsystem conserving water and nutrient resources.

Drainage water reuse requires low investments,and such investments are add-ons to alreadyexisting schemes. Typical add-ons are the con-struction, operation, and maintenance of pump-ing facilities to lift water from drains to canalsand, in some cases, civil works such as linkcanals, culverts, and mixing basins. The typeand size of the work needed is site specific anddepends largely on the volume of drainagewater available and the layout of the irrigationand drainage systems. It may be a small pumpoperated by individuals or a group of farmers,or a large project implemented and operated bythe government (box 5.7).

Investments in reuse also require building sys-tems to monitor the volume and quality ofdrainage water and to build and manageinformation systems for decision making.Investment in research is needed to developevaluation criteria and guidelines for theimpact of reuse on the soil, crops, and theenvironment. Farmer awareness and trainingfor using and managing relatively saline wateron different crops is another important invest-ment area. Examples of sensible ways toinvest World Bank capital are given in thesubsection on Investment Opportunities.


• Technical assistance to develop manage-ment tools such as monitoring programsand guidelines for safe drainage water reuse

• Research studies on different reuse optionsand their implications, and for developingmore salt-tolerant crop species

• Capacity-building and training programs

• Reform policy and regulations to governdrainage water development and manage-ment

• Strengthening of water user organizations todevelop local solutions that promote sus-tainable management

• Hardware purchases and contracting of civilworks


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POTENTIAL BENEFITS

Reuse of drainage water holds great potentialfor saving valuable freshwater resources forcompeting prime uses that require more strin-gent water quality standards. It can provide areliable supply of irrigation water and richnutrients to cropped fields. Furthermore, reusemay alleviate drainage disposal problems inrivers and streams by reducing the volume ofdrainage water as well as helping in the restora-tion of natural wetlands.

Agricultural drainage water has the advantage ofcoming in large volumes, uncontaminated bypathogens, and of often being located close to oreven inside the reuse areas. Reuse of drainagewater for irrigation reinforces the potential forimplementing sustainable integrated waterresources management and reducing the num-ber of people deprived of potable water.


Drainage water is a large component of thehydrological cycle. It involves primarily dis-posal issues that allow society to exploit theresources base for maximum economic, social,

and environmental benefits. However, in manywater-short areas, drainage water turns out tobe an important resource with economic value.Policies for integrated water resources manage-ment, therefore, give drainage water adequateattention, and many countries now includedrainage water management and reuse in theirnational plans.

The main quality concern regarding reuse ofdrainage water for irrigation is its salt contentand potential adverse impact on crop produc-tivity. Agricultural chemical residues (nutrientsand pesticides) become a concern whendrainage water is mixed with canal water that isused for drinking purposes. Moreover, as soonas agricultural water gets into main drainagecanals it may mix with wastewater from domes-tic and industrial sources, which adds anotherquality concern about human health. Thesepossible impacts call for careful planning andmanagement. Failure to properly evaluate therisks of reuse and to put tools in place for safepractices may jeopardize crop production,human health, and the environment.

Over the last 20 years, drainage water qualityhas been equated with salinity, but sustainablereuse requires attention beyond salinity. It isnow recognized that planning and managementof drainage reuse requires other disciplines inaddition to engineering. Nowadays, reuse prac-tices are guided by Food and Agriculture Orga-nization (FAO) guidelines on crop tolerance forvarious salinity levels and the impact on cropsof various chemicals in drainage water (FAO1985, 1992, 1997); World Health Organization(WHO) guidelines on chemical and biologicalcontents for human health; and local criteriaand guidelines based on experimentation andpilots (WHO 1989, 1995).

Where drainage systems are used for disposing ofdomestic and industrial effluent, the quality ofdrainage water is threatened unless adequatestandards and regulations are enforced. Laws andregulations on water quality and pollution controlprovide a framework for drainage water manage-ment. Regulations vary in scope, depending onthe context of a specific locality, ecology, andcountry. In many countries, laws, regulations,


Egypt’s freshwater supply is constant at 55.5 billion m3 a year,but the country faces a double challenge. It has to supplywater to newly reclaimed areas,which means it has to increasecrop production on all new and existing irrigated areas usingthe same total water supply. In response, reuse of agriculturaldrainage water became national policy during the 1980s. Cur-rently, 5 billion m3 of drainage water, with an average salinity of1.8 dS/m, is reused each year.Another 3 billion m3 of drainagewater is committed for reuse in the new reclamation areas inthe near future.

This reuse strategy has not deteriorated the salt balance in theNile Delta.This favorable result was achieved with the help ofa World Bank–funded drainage program that implementsdrainage systems on 90 percent of the irrigated lands. Result-ing drainage water is reused after mixing with freshwater thathas a low salinity content.Tools including functional water vol-ume and quality monitoring systems have been developed forplanning and management.The impact of drainage water reuseon soil, crops, and environment has been a main subject on theagenda of Egypt’s Drainage Research Institute.

Source: Author.

Box 5.7 Egypt: Reuse of Drainage Water

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and institutions require reform to meet waterquality and environmental needs. Standardsshould be only as stringent as necessary to pre-vent pollution.

Reuse of drainage water at the lower (second-ary or tertiary) level reduces the risk of pollu-tion from domestic and industrial sources. Thisscale of reuse is important and offers potentialfor user-managed reuse projects.

LESSONS LEARNED

Reuse of drainage water has met the increasedwater demand for irrigated agriculture in somecountries, but many drainage water reuse planshave been implemented without due regard forlikely impacts or secondary effects. This hasgenerated new problems as well as tensionbetween water supply agencies and irrigatorsand between environmentalists and irrigators.

The quality of surface water, including drainagewater, is threatened in many countries by theuncontrolled disposal of polluted effluents(domestic, industrial) and the improper dis-posal of solid and toxic wastes from agriculturaland human activities. Experience from Egyptshows that 6 of the 22 reuse-mixing stations inthe Nile Delta have been entirely or periodicallyclosed owing to the increasing degradation ofwater quality. The capital cost of a typical reusestation with five units, each processing 12.5cubic meters of water a second, could reachUS$10 million.

Decisions to increase reuse of drainage waterthat reduce return flows to rivers could back-fire. The case from Australia in box 5.8 showsthe adverse effect of a single-objective policyon the return flow to the Murray Darling River.

World Bank participation in ongoing drainageprograms in developing countries has helpedthese countries attract resources from otherbilateral and multilateral donors to build localcapacity in water management. Long-term part-nerships between well-developed and less-developed drainage countries have greatlycontributed to building local capacities. Anexcellent example of this is the partnership

between the Netherlands and Egypt, whichincludes a joint Advisory Panel.

Water user associations established under Bank-financed projects in Egypt and India have suc-cessfully contributed to the development oflocal solutions, thus promoting sustainablemanagement of drainage water. Egypt’s newlyestablished water boards are taking impressivewater quality management initiatives that werevery difficult to implement by the governmentat the grassroots level in the past.


• Ensure that investment in drainage is notrestricted to construction/improvement/rehabilitation of drainage systems andrelated infrastructure; it should also beextended to promote drainage water man-agement, including reuse programs.

• Ensure that the reuse project or programincludes a feasibility study and an environ-mental impact assessment, before lending.Understanding the tradeoffs in reusingdrainage water and its impacts on the envi-ronment will ensure that reuse projects canbe designed and maintained in a way thatsatisfies health and environmental require-ments within existing institutional constraints.


The dual pressure of increasing competition for water anddeclining water quality in the Murray Darling Basin haveresulted in many policy initiatives, among which are reducingdrainage volumes from irrigated areas and recycling and reuseof drainage water. These policies have resulted in reducedsalinity in the river and more crops grown with less waterwastage. However, the argument is that all these efforts andthe increased irrigated areas have reduced return flow to theriver to environmentally damaging levels that cannot sustainthe natural ecosystems.This raises the question, “Were thesethe right policies?” Could the current situation have been pre-dicted and avoided had a more comprehensive planningapproach been considered?

Source: Christen and Hornbuckle 2003.

Box 5.8 Australia: Drainage Interventions in the Murray Darling Basin

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• Support investments in small but full-sized,reuse pilots in countries with little previousexperience that, if successful, could lead tomainstreaming the learning from initialresults into larger projects.

• Invest in research to explore reuse opportu-nities and options and understand theirimplications on water quality, public health,and the environment.

• Support full use and development of well-designed monitoring programs, reuseguidelines, and modeling techniques toassess how the proposed reuse programwill change the natural agrohydrologicalconditions, how environmental values maybe affected, and which benefits may be rea-sonably expected.

• Promote well-established design criteria forreuse schemes, based on successful projectsfinanced by the Bank or other investors.

• Invest in the development of the institu-tional capacity to plan, implement, monitor,and regulate the reuse program. Thisinvolves strengthening the organizationsthat will carry out the program.

• Support environmental training to promoteenvironmental awareness, monitoringaspects, environmental and health concernsassociated with drainage reuse, legislation,and policy development.

• Create awareness through the proper man-agement and dissemination of environmen-tal data and information. Dissemination tofarmers should also be supported throughthe participation of public agencies, non-governmental organizations (NGOs), anduser organizations.

REFERENCES CITED

Christen, E., and J. Hornbuckle. 2003. The Mur-ray Darling Basin—A Case Study of DrainageImpacts in a Multifunctional Resource Sys-tem. Griffith, New South Wales, Australia:CSIRO Land and Water.

Food and Agriculture Organization (FAO). 1985.“Water Quality for Agriculture,” by R. S.Ayers and D. W. Westcot. Irrigation andDrainage Paper No. 29 (Rev. 1). FAO, Rome.

———. 1992. “The Use of Saline Waters forCrop Production,” by J. D. Rhoades, A. Kan-diah, and A. M. Mashali. FAO Irrigation andDrainage Paper No. 48. FAO, Rome.

———. 1997. “Management of AgriculturalDrainage Water Quality,” by C. A. Madra-mootoo, W. R. Johnston, and L. S. Willard-son, eds. FAO Water Report No. 13. FAO,Rome.

World Health Organization (WHO). 1989.“Guidelines for the Safe Use of Wastewaterand Excreta in Agriculture and Aquaculture.”Available online at http://www.who.int/water_sanitation_health/wastewater/wasteuse/en/.

———. 1995. “Developing Human Health-Related Chemical Guidelines for ReclaimedWastewater and Sewage Sludge Applicationsin Agriculture,” by Andrew C. Chang, Genx-ing Pan, Albert L. Page, and Takashi Asano.Available online at http://envisci.ucr.edu/downloads/chang/WHO_report.pdf.

SELECTED READINGS

DRI (Drainage Research Institute). 1997.Drainage Water Irrigation Project: FinalReport. Cairo: DRI, Louis Berger Interna-tional, Inc., and Pacer Consultants.

Tangy, K. K., and N. C. Killen. 2002. “Agricul-tural Drainage Water Management in Aridand Semi-Arid Areas.” FAO Irrigation andDrainage Paper 61. FAO, Rome.


Egypt. “Second National Drainage Project.”Active. Project ID: P045499 Approved: 2000.

This Note was prepared by Shade Abdel-Gnawed of theNational Water Research Center in Egypt. It was reviewed byBart Smelled of ILRI.


185

INVESTMENT NOTE 5.3

INVESTING IN THE REUSE OFTREATED WASTEWATER

Reuse of treated wastewater often disproportion-ately benefits the poor. It must be combined withstrategies to prevent or mitigate health risks frompathogens, heavy metals, pesticides, and endocrinedisrupters and environmental damage from heavymetals and salinity. Long-term institutional coordina-tion among urban, agricultural, and environmentalauthorities and end users is a requirement for waterreuse investments to pay off. This Investment Noteoutlines technological and management interven-tions suitable for World Bank lending.

Of the projected 1 billion growth in globalpopulation by 2015, 88 percent will take placein cities, nearly all of it in developing countries(UNDP 1998). Investments in urban water sup-ply and sewerage coverage are rising, asshown in figure 5.1. However, as shown intable 5.1, adequate treatment for agriculturalreuse with acceptable risk mitigation forhuman health and the environment will requirefurther investment (World Bank and SwissDevelopment Corporation 2001). While thisInvestment Note addresses reuse after treat-ment, it is critical to ensure that investments in

treatment appropriate for reuse schemes willbe made. Urban wastewater is well suited toagricultural reuse and landscaping because ofthe reliability of supply, proximity to urbanmarkets, and its nutrient content (dependingon the treatment technology). To have animpact on scarcity, reuse of wastewater mustsubstitute for, not add to, existing uses ofhigher-quality water.

INVESTMENT AREA

Water reuse has become part of integratedwater resources management policy in severaleconomies facing acute physical water scarcity,including Tunisia, Jordan, the West Bank andGaza, and Israel (box 5.9). In other countriessuch as Australia and the United States, benefi-cial reuse has been practiced for decades. In sit-uations where the investment costs to developnew freshwater resources are high, water reuseshould be given priority consideration. Owingto water quality and associated risk considera-tions, agricultural reuse of treated wastewater ismore feasible than potable reuse (althoughdirect potable reuse is now practiced in Singa-pore). Reuse through surface irrigation, particu-larly drip but also controlled furrow irrigation,appears to present less risk of contaminanttransmission than does groundwater rechargeand recovery, although Israel, the United States,and Australia are gaining experience with safe


FIGURE 5.1 URBAN WATER SUPPLY GROWTH, 1980–2015

Urb

an w

ater

sup

ply

cove

rage

,m

illion

s of

peo

ple

1980 1990 2000 2010

3,000AsiaAfricaLACEuropeN. AmericaOceania

2,500

2,000

1,500

1,000

0

2020 2030

500

Source: UNDP 1998.

186

injection and recovery, soil-aquifer treatment,and related groundwater-based technologies.Landscaping uses with suitable controls overcontaminant transmission to the public repre-sent an important investment opportunity butbenefits and cost recovery may be limited tospecific high-value uses such as golf courses.

POTENTIAL BENEFITS

If reuse substitutes for an existing use, freshwateris saved. Finding new uses for treated waste-water may generate additional economic bene-fits but does not translate into water savings.Because of water competition in water-scarce sit-uations, farmers’ livelihoods are often threat-ened, as cuts in allocation come at the expenseof the agricultural uses. Water reuse with sometenure security for farmers can result in signifi-cant economic benefits. Environmental quality isoften an important benefit of reuse programsbecause poor-quality water is used in agricultureinstead of being discharged into cleaner surfacewater bodies or groundwater. Finally, waterreuse may reduce the investment costs of devel-oping new resources for agriculture or otheruses for which it is substituted (swapped).

Based on international experience, it is increas-ingly apparent that economic win-win solutionsare not easy. Instead, potential Bank invest-ments in the water sector need to address alter-natives and consider the economic tradeoffs,for example:

• Should a sea outfall be built to dischargewastewater from a coastal city, if permittedby national and regional regulations andtreaties, or should wastewater be reused,possibly incurring much higher costs for thetreatment, storage, and especially the trans-fer of reclaimed water?

• Should a reservoir for reclaimed water bebuilt to increase its availability during theirrigation season or should treated water bedischarged during the wet season?

• Are more expensive treatment and unre-stricted irrigation preferable to simpler treat-ment and crop restrictions?


Planned reuse is not just about treatment; itrequires an integrated approach. Where theBank lends for wastewater treatment, theplanned reuse of effluent should be integratedinto the decision to invest in intensive (forexample, activated sludge) or extensive (for


Percentage Percentage ofof sewered sewered wastewaterpopulation that is treated

Region in large cities to secondary level

Africa 18 0

Asia 45 35

Latin America and the Caribbean 35 14

Oceania 15 Not reported

North America 96 90

Europe 92 66

Source: WHO and UNICEF 2000.

Table 5.1 Water Treatment Gaps

Tunisia, with per capita freshwater availability of about 450cubic meters a year, is recognized as a leader in the area oftreated wastewater reuse. From 1996 to 2030, the share oftreated wastewater as a percentage of total available waterresources is projected to more than double from 4.4 percentto 10.9 percent. Despite strong institutional support, includingthe 2002 consolidation of the Ministry of Agriculture, Environ-ment, and Water Resources to oversee integrated water man-agement and water reuse, only 18 percent of reclaimed wateris currently used. Treated wastewater use has faced severalconstraints—social acceptance, salinity levels too high forsome crops, restrictive regulations, and volumetric pricing inthe range of US$0.02 to $0.05 per cubic meter (between 50percent and 95 percent of the cost of freshwater for irriga-tion)—and these have limited its full potential for develop-ment. Through its carefully phased approach to treatedwastewater use and the concomitant development of a regula-tory framework prohibiting untreated wastewater use,Tunisiahas significantly mitigated environmental and public healthrisks associated with the practice elsewhere in the world.

Source: Author.

Box 5.9 Tunisia:Water Reuse

187

example, stabilization ponds) technologies, orcentralized versus decentralized systems.

Because collection and treatment of waste-water are usually under the jurisdiction of adifferent sector (such as urban water supplyand sanitation) from the reuse sectors (such asagriculture and municipalities), intersectoralcoordination in planning and management isextremely important. The Country Water Assis-tance Strategies offer an opportunity to ensuresuch coordination (see IP 1.1). On the demandside, users should be involved in planning andmonitoring the quality of the supplied effluent.Effective advisory/extension services are alsoextremely important.

Key to the success of planned strategic reuseprograms are a coherent legal and institutionalframework with formal mechanisms to coordi-nate the actions of multiple government author-ities; policies to reduce waste loads throughapplication of the “polluter pays” principle;appropriate practices for wastewater usethrough crop choice, landscaping, and the like;public awareness campaigns to establish socialacceptability for reuse; and consistent govern-ment commitment over the long term.

The private sector can play an important role inpromoting treated wastewater reuse. It wouldbe even more attractive for the private sector toinvest in wastewater treatment when marketsfor the treated effluent exist (box 5.10). Thisarrangement requires policies and regulationsthat allow the private sector to function andprovide reliable services.

LESSONS LEARNED

Based on international best practices, the fol-lowing should be borne in mind when devel-oping wastewater investment plans.

• Wastewater treatment must result in waterquality that is suitable for the particularreuse application—for example, nutrientremoval may be counterproductive unlessenrichment or eutrophication of surface orcoastal waters is a risk.

• Guidelines linked to reuse must adequatelyprotect human health. The internationalstandard WHO guidelines (WHO 1989) arebeing revised, based on the StockholmFramework encouraging flexible, stepwiseimplementation of guidelines that considerother sources of risk.

• Source control of contaminants is a must,particularly for industrial wastewater; other-wise reuse programs will be unsustainable.

• Cultural values play an important part in theacceptability of water reuse, particularlywhere religious views on ritual purity arehighly articulated, for example in Islam andHinduism.

• Sustained, long-term public awareness cam-paigns among the reuse target group (suchas farmers or urban landscaping authorities)are needed for acceptance of water reuse.

• Irrigation methods must be suitable for thetype of reclaimed water (high suspended,dissolved solids). Where possible, high-water-productivity drip irrigation should beencouraged. Sprinklers can lead to air-borne transmission of viruses and othercontaminants. It should be stressed that tosave water, reuse must substitute for anexisting use.


An example of private participation in wastewater treatmentand reuse comes from Australia. The city of Adelaide in thesouth was operating a wastewater treatment plant where dis-posal of the treated effluent caused environmental concerns.Meanwhile, orchards 120 kilometers away from the city weresuffering from water scarcity after exhaustion of the ground-water aquifer on which they relied for irrigation.The privatesector, under a contract to the city government, constructed atreatment plant and pipeline (the “Virginia pipeline scheme”)to transport the treated effluent to these farms for irrigationat an agreed tariff. This commercial solution was successful,and the private investor considered further investment toexpand the treatment plant to serve other irrigated areas.

Source: Croke, Kracman, and Wright 1999.

Box 5.10 Private Participation in Wastewater Treatment and Management

188

• Crop restrictions applied sensibly may beessential, particularly in view of increasedphytosanitary controls required in exportagriculture.

• Institutional coordination is essential amongvarious government authorities, civil society,and farmer associations of water user groups.


Examples of sound investments in treatedwastewater use include the following:

• Water swaps as a substitute for existing usesof (raw or potable) water for reclaimed water

• Rehabilitation of wastewater treatment plants

• Construction of new wastewater treatmentplants using appropriate technologies

• Sewer systems that separate municipal fromindustrial wastewater

• Surface storage reservoirs for reclaimed water

• Pilot projects on separate reuse of urine andfeces through decentralized systems (eco-logical sanitation) in small towns and peri-urban areas.


Recommendations for countries experienced inreuse are different from those for countries justembarking on reuse. Comprehensive recom-mendations include the following:

• Support for master plans that integratereuse in the planning and design of sanita-tion projects and that build it into agricul-tural programs

• National reviews of reuse policies, includ-ing multistakeholder workshops

• Creation of interdepartmental workinggroups at the national and/or local levels

• Awareness building on health and environ-mental risks for farmers using untreatedwastewater or reclaimed water

• Development of economic and environ-mental models to support decision makingabout reuse investments and policies,including policies on subsidies

• Promotion of regional exchange of experi-ences through professional networks

• Support for research on reuse technologyand biophysical sustainability, on institu-tional arrangements for reuse as part ofmaster planning, on factors that enhance orinhibit social acceptability, and on farmers’and users’ innovations with water reuse.

For countries embarking on reuse, the follow-ing apply:

• Introduction of appropriate national reusestandards

• Introduction of appropriate crop restrictions.

And for countries that have made progress inreuse, the following apply:

• Formal arrangements between farmers andutilities specifying mutual rights and respon-sibilities

• Design of tariffs for reclaimed water.

REFERENCES CITED

Croke G., B. Kracman, and C. Wright. 1999.“The Virginia Pipeline Scheme, AdelaideSouth Australia—Commercial Solutions toEnvironmental Problems.” Paper presentedat the 17th Congress on Irrigation andDrainage. Granada, Spain, September11–19. Special Session R7.

UNDP (United Nations Development Pro-gramme). 1998. Global Human Develop-ment Report 1998. New York: OxfordUniversity Press.

WHO (World Health Organization). 1989.Health Guidelines for the Use of Wastewaterin Agriculture and Aquaculture. Report ofa Scientific Group. Technical Report Series778. Geneva: World Health Organization.


189

WHO and UN Children’s Fund (UNICEF).2000. Global Water Supply and SanitationAssessment 2000 Report. New York: WHO/UNICEF Joint Monitoring Programme forWater Supply and Sanitation.

World Bank and Swiss Development Coopera-tion. 2001. “Water for Sustainable Growth.”Regional Workshop on Water Reuse, July 2–5,Cairo. Sponsored by the World Bank, MiddleEast and North Africa Region, in cooperationwith National Water Research Center, Ministryof Water and Irrigation, Egypt.

SELECTED READINGS

Drechsel, P., U. J. Blumenthal, and B. Keraita.2002. “Balancing Health and Livelihoods:Adjusting Wastewater Irrigation Guidelinesfor Resource-Poor Countries.” Urban Agri-culture Magazine 8: 7–9.

Scott, C., F. Naser, and R. S. Liqa, eds. 2004.Wastewater Use in Irrigated Agriculture:Confronting the Livelihood and Environ-mental Realities. Oxfordshire, U.K.: CABInternational.

This Note was prepared by Chris Scott of InternationalWater Management Institute (IWMI) with input by ManuelSchiffler. It was reviewed by Bart Snellen of ILRI.


190


DRAINAGE INVESTMENTS IN THE CONTEXT OFINTEGRATED WATERRESOURCES MANAGEMENT

What is new? The nonagricultural impacts of landdrainage are real but rarely noted, among thempoverty reduction and public health. This profileoffers a new investment approach that considers allfunctions of the resources system that are affectedby drainage intervention and integrates them intoan infrastructural and institutional design by engag-ing all stakeholders.

Because drainage is indispensable to bothwater resources management and crop produc-tion, the World Bank lends for drainage andflood control projects. Over the last 30 years, 60countries have signed loans for a total US$7.2billion. Economic rates of return have beenfully acceptable (box 5.11), yet lendingdropped from US$1 billion a year during the1980s to an average of less than US$200 milliona year in the last decade.

One reason for the decline lies in the exclusivefocus on agriculture in project design, whichhas excluded drainage from the discourse on

integrated water resources management.Drainage has many effects and multipleimpacts, positive and negative, on other func-tions1 of the resources system, including floods,fisheries, sanitation, built-up property, infra-structure, health, transportation, and the envi-ronment. Many of these currently go unnoticedand therefore do not attract investment. A sec-ond reason is that drainage has been seen onlyas a remedy for irrigation-induced problems inarid zones, although it is equally important inhumid regions.


Drainage affects the multiple functions of theresources system in different ways. It is there-fore necessary to optimize its economic andsocial development outcomes, while safeguard-ing ecological functions.

Optimization requires the following:

• Understanding and managing the diversityof drainage situations

• Participation of all stakeholders in the deci-sion-making process

• Inclusive modes of governance, decisionmaking, and stakeholder representation

• Improving sustainability through researchand wise management

Each drainage situation is unique and warrantsconsideration on its own merits. The planningand design of drainage in a multifunctionalresources system requires a stepwise analysisof the system’s functions and values.2 Theanalysis identifies the first- and higher-orderchanges in the resources system due to adrainage intervention, the geographical andtime range of changes, the functions affectedand their stakeholders, and assesses the eco-nomic, social, and environmental impacts (box5.12). The process allows stakeholders to nego-tiate and discuss tradeoffs, examine alterna-tives, and design mitigation measures. Theanalysis considers landscapes within hydrolog-ical units or even river basins.


Economic rates of return (ERRs) of the drainage subprojectsof Mexico’s Rural Development Program for the Tropical Areas(PRODERITH) have ranged from 14.7 percent to 21.5 percent.In Bangladesh, 9 out of 17 inland flood control cum drainageprojects were economically viable, with ERRs between 22 per-cent and 96 percent (median 54 percent). In Egypt, the ERR ofthe National Drainage Project was estimated at 31 percentupon completion. Annual farm income in the Nile Deltaincreased by US$200–US$350 per hectare. In Pakistan, yieldincreased by 27–150 percent.

Source: World Bank 2004; Project Implementation CompletionReports.

Box 5.11 The Impact of Drainage on Agricultural Production

191

OUTPUT AND IMPACTS

A tool for integrated and participatory planningof drainage intervention, known as DRAIN-FRAME, allows function-values analysis andcommunication and negotiation of tradeoffsbetween stakeholders engaged in a participatoryplanning process. The expected result is opti-mization and sharing of all costs and benefits. Itscapacity to integrate functions improves thepotential for cost recovery and may help securenew financing sources by charging beneficiariesfor nonagricultural functions and increased landvalue. It may also attract private investment.

Use of the tool has institutional as well as tech-nological implications. A polycentric gover-nance structure generally offers great promisefor drainage development and management.Reform in the direction of integration is neededand would strengthen the role of local govern-ments, the private sector, and user organiza-tions in natural resources management at theexpense of drainage line agencies. Govern-ments and other public and user organizationsmay get involved at different levels of servicesprovision.

A multipurpose drainage system requires newdesign approaches and operating practices.This requires infrastructure and managementrules with capacity to manage water levels forremoval or retention of excess water, improve-ments in water quality, reuse of drainage water,and the management of disease vectors. Forexample, controlled drainage is a promisingoption to achieve different management objec-tives (see IP 5.2).


An integrated approach to drainage requires thefollowing:

• Formulating policies that facilitate inte-grated planning and management

• Creating an enabling environment by reform-ing drainage governance and institutions

• Planning, involving all stakeholders in deci-sion making

• Raising awareness about the value addedby integrated drainage management

• Building technical capacity to design andmanage drainage for multifunctional objec-tives

• Encouraging research on social, economic,and technological aspects of integration indrainage planning and management

The World Bank has started to use the inte-grated approach in its drainage projects, forexample, the pipeline “Integrated IrrigationImprovement Management Project” in Egyptand the “Drainage Master Plan” and the“National Drainage Project” in Pakistan. Theseprojects are expected to provide useful lessonsfor wider application, which could improve theplanning and design of interventions and safe-guard ecological values (box 5.13).


Egypt

Land drainage investment improved soil fertility and increasedagricultural production (function). It raised incomes for pro-ducers (value) and had farmers as direct stakeholders andurban food consumers as indirect ones.The investments low-ered the groundwater table in neighboring settlement areas,which improved living conditions and reduced transmission ofdiseases (functions), improving livelihoods (social value),reduced damage to property (economic value), and improvedpublic health (social and economic value).The main stakehold-ers were rural inhabitants in general and particular groupsamong them, depending on how effects were distributed spa-tially and socially.The quality of the drainage water conveyedto coastal lagoons affected fisheries and ecological functions.

Bangladesh

Reduction of local floods raised productivity (function) andfarmer income (value) but lowered fisheries potential (func-tion) and fisherfolks’ income (value). Farmers and fisherfolkare the main stakeholders, but their interests clash. Down-stream, this stakeholder antagonism reverses.There, increasedfloods cause agricultural damage and reduce farmer incomebut increase fisherfolks’ income.

Source: Abdel-Dayem et al. 2004.

Box 5.12 Egypt and Bangladesh:A Functions and Values Analysis

192

REFERENCES CITED

Abdel-Dayem, S., H. Hoevenaars, P. Mollinga,W. Scheuman, R. Slootweg, and F. vanSteenbergen. 2004. “Reclaiming Drainage:Toward an Integrated Approach.” Agricul-tural and Rural Development Report 1.World Bank, Agricultural and Rural Devel-opment Department, Washington, DC.

World Bank. 2004. Country Case Studies onDrainage in Bangladesh, Egypt, Indonesia,Mexico, Pakistan, and the Netherlands.Toward Multidisciplinary and IntegratedAgricultural Drainage. Washington, DC:World Bank, Agriculture and Rural Develop-ment Department. Online at http://www.worldbank.org/irrigation-drainage.


Egypt. “Integrated Irrigation Improvement andManagement Project.” Proposed. Project ID:P073977. Approval expected by March

2005. Within World Bank, available athttp://projportal.worldbank.org.

Pakistan. “Sindh Water Sector ImprovementProject.” Proposed. Project ID: P084302.Approval expected by July 2005. WithinWorld Bank, available at http://projportal.worldbank.org.

ENDNOTES

1. The concept of functions summarizes whichgoods and services the natural resourcessystem provides or performs. These func-tions include production, processing, regu-lation, and transportation.

2. “Values” is the concept through which soci-etal preferences, perceptions, and interestswith regard to functions provided by natu-ral resources are summarized.

This Profile was prepared by Safwat Abdel-Dayem withinputs by Peter Koenig. It was reviewed by Keizrul Abdullah ofthe International Commission on Irrigation and Drainage.


Egypt

A DRAINFRAME-based study in the Mahmoudiya Command Area, during the prefeasibility of the “Integrated IrrigationImprovement 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 becaptured and problems to be solved for consideration during the project planning process. Project impacts on fish farms, theimpact 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 BankOutfall 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 andparticipatory approach. A local planning team at the provincial level was established to carry out full analyses and planningbased on the DRAINFRAME methodology.

Source: Author.

Box 5.13 DRAINFRAME Applications

193


INVESTING IN CONTROLLEDDRAINAGE

What is new? Adoption of proven technologyand management practices for drainage practicesin developing countries may save time, water, andfertilizer, as well as raise yields and reduce pollu-tion. Controlled drainage is a technique for regu-lating the water table level. It allows harvesting“more crop per drop” in both the scheme and thebasin. The technique can be part of new drainagesystems and retrofitted in existing ones. It is par-ticularly suitable in irrigated regions threatened bywater scarcity.

Conventional land drainage acts coarsely andmoves too much water through the soil profileand away through the drain. Farmers respondfrequently by overirrigating to compensate forthe rapid removal of water. Such practicesincrease the drainage water volume and the saltand nutrient loads and make irrigation opera-tions less efficient. North America and NorthernEurope have invested millions of dollars inresearch and development on controlleddrainage to combat nonpoint source pollutionby nitrates. The field scale results were quiterewarding through reduced drainage flows andpollutant loads, and increased crop yield (box5.14). Unfortunately, other countries have madeno significant investment in adapting the tech-nique to their conditions. Egypt and China havecarried out research and development pro-grams, but even they lacked either a strategy orinvestment support to launch controlleddrainage countrywide.


The objective of controlled drainage is to man-age water tables in farmland by retaining orremoving water from the soil profile, to achieveoptimum benefits from the available water whileimproving the quality of the drainage effluent.

Maintained at predetermined depths during thegrowing season, the water table can supply

moisture to the root zone through capillaryrise. Controlled drainage requires low-coststructural provisions appropriate to the type ofdrainage system.

For pipe drains, controlled drainage involvesinstalling an L-shaped pipe to the drain outlet,so that water flows only when the water tablerises above the height of the top section. Theheight can be adjusted by rotating the pipe.And for open drainage ditches, controlleddrainage involves installing a weir with a mov-able sill at the drain ditch outlet.

BENEFITS AND IMPACTS

Controlled drainage can bring major improve-ments to a situation where crop yields are lowbecause of unreliable water supply or short-ages. The main benefits of controlled drainageare as follows (Brabben and Abbott 2002):

• Water savings—more efficient irrigation anddrainage management

• Energy and labor savings—reduced pump-ing for both irrigation delivery and drainagewater evacuation

• Water quality improvement—less leachingof agrofertilizers and less potential foreutrophication in downstream water bodies

• Yield increases—better water availability forcrops after irrigation events

The benefits are shared by farmers and the state.Farmers gain directly by saving time and money


Controlled drainage in the Conetoe Creek project in NorthCarolina, United States, increased corn yields by 25 percent innonirrigated fields and by 15 percent in irrigated fields. Mean-while, data from 125 site-years with controlled drainage inNorth Carolina showed an average decrease of 30 percent indrainage outflows compared to uncontrolled drainage sys-tems.Average reduction of nitrogen to surface water were 55percent and of phosphate 35 percent.

Source: Skaggs 1999.

Box 5.14 Controlled Drainage in North America

194

in on-farm water management and by increasedcrop yields (box 5.15). The state gains throughsavings of valuable water resources and reduc-tion in environmental damage.

Managing drainage under controlled conditionsalso reduces conflicts between farmers who havedifferent management preferences. This is partic-ularly true in the case of mixed crop pattern agri-culture (for example rice, cotton, and corn) onsmall holdings that share a drainage system.


Controlled drainage has great potential forwider applicability. It is regarded as a promisingtechnological option for managing drainagefrom an integrated perspective (see IP 5.1).However, several issues should be considered.

Controlled drainage, to be successful, requirescertain management and organizationalarrangements. The main institutional require-ment is that farmers make group decisions oncrop selection, operational guidelines, and costand benefit distribution (Abbott et al. 2002a).Farmers must coordinate their cropping pat-terns with each other. Planting similar cropsalong the drain lines will minimize subsurfaceinteraction beneath the fields. Farmer groupssuch as water user associations are suitablecoordination mechanisms for controlleddrainage management. Controlled drainage ismore likely to be successful if the farmers havean entrepreneurial attitude and are willing to

grow more or more valuable crops. The uptakeof controlled drainage can be promotedthrough a training and awareness-building cam-paign (Abbott et al. 2002b). Farmers can best betrained through an existing extension service.

As controlled drainage maintains high watertables for a fairly long time and reduces waterflow through drains during the growing season,there is a risk of salt accumulation, particularlywith saline groundwater. The operating regimeof a controlled drainage system and associatedirrigation scheduling should allow a constantsalt balance in the root zone. If the soils aremedium textured and the irrigation water hasonly a low to moderate salinity, the chance ofsuccess in controlling salinity control increases.

Controlled drainage is most applicable whenwater supply varies between wet and dry spellsand is insufficient or unreliable. It is also effec-tive for the protection of sensitive aquatic bod-ies receiving drainage effluent because themethod reduces nutrient loads.

Areas where irrigation and drainage are alreadywidespread are the most likely candidates forcontrolled drainage. These include:

• North Africa: Algeria, Egypt

• Middle East: Israel, the Syrian Arab Repub-lic, Iraq, Bahrain

• Central and South Asia: India (Punjab,Haryana, Rajasthan), Pakistan, NorthernChina, Uzbekistan, Tajikistan, Turkmenistan

All of these countries are strongly threatened bywater scarcity over next 25 years (Abbott 2002b).

REFERENCES CITED

Abbott, C., A. Lo Cascio, S. Abdel-Gawad, J.Morris, and T. Hess. 2002a. “Guidelines forControlled Drainage.” HR Report OD147.HR Wallingford, Wallingford, U.K.

Abbott, C., P. Lawrence, G. Pearce, and S.Abdel-Gawad. 2002b. “Review of the Poten-tial of Controlled Drainage around the


In response to rising water tables in the Nile Delta, a free-flowing subsurface drainage system has been installed acrossmost of the agricultural sector of the Nile Delta. Recent con-trolled drainage pilots in rice growing areas showed water sav-ings of up to 40 percent. Research work was done in smallfield plots planted to corn and wheat. Farmers can recoup thecosts of controlled drainage in two or three seasons, owing toincreased crop yield. In circumstances where high water sav-ings can be achieved, the internal rate of return is 100 percent,meaning that the investment is recouped within one year.

Sources: DRI 1998;Abbott et al. 2001;Abdel-Gawad 2002.

Box 5.15 Benefits of Controlled Drainage in Egypt

195

World.” HR Report OD146. HR Wallingford,Wallingford, U.K.

Abbott, C., S. Abdel-Gawad, M. S. Wahba, and A.Lo Cascio. 2001. “Field Testing of ControlledDrainage and Verification of CDWaSim Simu-lation Tool.” HR Report OD/TN102. HRWallingford, Wallingford, U.K.

Abdel-Gawad, S. 2002. Egyptian-Dutch Co-Operation in Land Drainage and Technol-ogy Transfer.” GRID Newsletter 19, 10–11.IPTRID/FAO, Rome.

Brabben, T., and C. Abbott. 2002. “ControlledDrainage—A Path for Uptake and Dissemi-nation.” HR Report OD148. HR Wallingford,Wallingford, U.K.

DRI (Drainage Research Institute). 1998. “Con-trolled Drainage through Water Users Asso-ciations.” DRI Technical Report 102.Ministry of Water Resources and Irrigation(MWRI) Drainage Research Institute, Cairo.

Skaggs, R. W. 1999. “Water Table Management:Subirrigation and Controlled Drainage.”Number 38 in the series Agronomy. In R. W.Skaggs, ed. Agricultural Drainage. Madi-son, Wis.: American Society of Agronomy.

This Profile was prepared by Geoff Pearce and was reviewedby Bart Snellen of ILRI.


196


INVESTING IN EVAPORATIONPONDS

What is new? Until recently, releasing salinedrainage water from irrigated land into an evapora-tion pond was acceptable only if the practice wastemporary. But experience since the 1960shasbeen mostly positive. Environmental problems havebeen incidental and in retrospect could have beeneasily mitigated or prevented by careful design andmanagement. In the arid zone, evaporation pondsare now widely accepted as a credible medium-and long-term solution.

The natural and time-honored disposal of salinedrainage is by way of a river to the sea or otherterminal site. Where river disposal would renderthe river water unsuitable for downstream use,other disposal solutions have to be explored. Insome irrigated basins, outfall drains have beenconstructed to transport the saline drainagewater directly to a terminal site. The best-knownones are the drainage network of the Nile Deltain Egypt and LBOD in Pakistan. Another optionis disposal in evaporation ponds, shallowdepressions into which the drainage water canreadily be discharged and left to evaporate.


Evaporation ponds are best suited for the dis-posal of the irrigation effluent of subsurfacedrainage systems in the arid zone. These sys-tems have an annual discharge of less than 100

millimeters, while annual evaporation losses are1,500–2,000 millimeters (box 5.16). Seepagelosses from the pond are often about the sameas evaporation. As result, 1 hectare of pond suf-fices for every 40 to 70 hectares of irrigated land.

Storm drainage water should generally bediverted from the ponds. Pond water can rarelybe reused while stormwater would also signifi-cantly increase the required pond area. TheWorld Bank–supported National Drainage Pro-gram in Pakistan builds on this principle.

Natural depressions in desert land outside theirrigation perimeter are suitable sites, but evap-oration ponds may also be constructed on low-lying wasteland inside irrigation commands.Pond sizes vary from 1–5 hectares when locatedon-farm or near villages to 1,000–25,000hectares in desert depressions serving large irri-gation systems. In large ponds, drainage wateris usually routed through increasingly salinecompartments, designed and operated so thatthe salt is deposited in the end compartment.

OUTPUTS AND IMPACTS

Ponds will generally form new water bodies intheir rather dry environments and attract pio-neer flora and fauna that are adapted to thehydrologic and water quality regime, as hap-pened in the Wadi El-Rayan in Egypt. Over time,the pond usually becomes half to several timesmore saline than seawater. Fishery developmenthas met with mixed results and is subject to fur-ther research. Design and management shouldbe based on careful environmental assessmentand monitoring (box 5.17).

Evaporation ponds require some infrastructure,but costs are low compared to other irrigationworks built on marginal land. Initially, highseepage losses will usually decline because ofsealing, but ponds underlain by permeable soilsand strata will maintain high rates throughouttheir lifetime (box 5.18).

EXPERIENCES AND APPLICABILITY

Natural salt lakes have been used to dispose ofdrainage water from irrigated land, but this


Saline water surfaces evaporate less than freshwater surfaces.Under average operational conditions, pond evaporationlosses are typically 20–30 percent less than the Penman openwater evaporation. Evaporation becomes minimal when saltconcentration approaches the saturation point, and salt startsto crystallize. But usually this crust covers only a small part ofthe pond surface.

Source: FAO 1997.

Box 5.16 Evaporation Rates

197

practice was little noted until the 1970s and1980s, when irrigation expansion, the greenrevolution, and population growth madedrainage disposal a concern. Some naturalevaporation ponds such as Lake Karoon inEgypt have been in existence for centuries.Only recently signs of aging and pollution haveforced integrated approaches to regulate thevolume and quality of the inflow.

Little is known about the lifetime of artificialevaporation ponds. Known histories cover onlythe last 40 years and do not include pondsreaching their nonfunctional state. Rates of saltdeposition depend on evaporation, seepagelosses, and inflow of drainage water, but wherethe latter two are minimal, ponds may beexpected to fill up with solid salts. Present viewsare that ponds may function for at least a halfcentury before needing rehabilitation. Initially,most evaporation ponds were planned to holddrainage water only temporarily, until it couldbe released into a nearby river during high flowor until a final disposal solution was in place.But most have now become permanent or semi-permanent. Long-term operational experience islimited, and no authoritative technical perform-ance assessments have yet been made.

Evaporation ponds for the disposal of salinedrainage water are used most extensively in theAral Sea Basin, particularly the basins of theAmu Darya and Syr Darya rivers. In bothbasins, evaporation ponds receive about 80percent of the drainage water and only 20 per-cent is released into the rivers. Most ponds arelarge and located outside irrigation perimeters.They have been functioning satisfactorily sincethey were established in the 1960s and 1970sbut have now reached their maximum capacity.

In Pakistan, some 25,000 hectares of intercon-nected evaporation ponds are under construc-tion in the eastern deserts to receive dischargesfrom tubewell and pipe drainage schemes inSouthern Punjab. It is still being debated whetherthese ponds will be operated as final disposal

sites or eventually be linked to the LBOD outfallsystem that empties into the Arabian Sea.

REFERENCES CITED

FAO (Food and Agriculture Organization). 1997.“Management of Agricultural Drainage WaterQuality.” Water Report 13. FAO, Rome.

California Department of Water Resources.1999. “Evaporation Ponds.” San Joaquin Val-ley Drainage Implementation Project, Sacra-mento, Calif.

IWASRI (International Water and SalinityResearch Institute). 1991. EvaporationPonds for the Disposal of Saline DrainageEffluent in Pakistan. Lahore, Pakistan:IWASRI. Online at http://www.iwasri.pk.

This Profile was prepared by Bert Smedema and reviewedby Bart Snellen of ILRI.


This Kesterson Reservoir was originally planned as a regulat-ing body in a drainage system serving the northern part of theSan Joaquin Valley in the U.S. state of California, but it turnedinto an evaporation pond when the system was not com-pleted. Evapoconcentration and bioaccumulation raised theconcentration of selenium, a trace element that the drainagewater picked up from natural geologic formations. The sele-nium buildup affected the aquatic food chain, reducing repro-duction, causing birth defects, and killing waterbirds.These andsimilar isolated incidents are reminders of the need fordetailed chemical analysis of incoming drainage water.

Source: California Department of Water Resources 1999.

Box 5.17 The Kesterson Reservoir

Seepage losses from ponds have caused waterlogging in nearbyirrigated land in the sixth Salinity Control and Reclamationproject area in Pakistan and in the Murray Darling Basin inAustralia.Where such impacts are likely, geohydrological inves-tigation and groundwater modeling should be done to assesshazards and plan remedial measures.

Source: IWASRI 1991.

Box 5.18 Seepage Problems

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INVESTING IN BIODRAINAGE

What is new? Biodrainage controls excess waterby using the water uptake capacity of vegetation,especially trees. Its potential is greatest in arid cli-mates. India, Australia, and other countries havedemonstrated that tree plantations can help con-trol shallow water tables and reclaim waterloggedareas. But biodrainage removes more water than itdoes salts. Salts accumulate when water is mineral-ized unless salt balances are maintained by naturalor artificial drainage. Biodrainage can assist butgenerally not replace conventional subsurfacedrainage for salinity control of irrigated land.

Unlike conventional drainage, biodrainagedoes not need ditches, canals, pumps, or otherphysical means to collect and transport excesswater. Nor does disposal of drainage effluentpresent a problem. Capital and O&M costs arerestricted to the costs of establishing and main-taining the plantations. Biodrainage is not yetpracticed on a sufficiently large operationalscale to permit cost comparisons with conven-tional drainage.

Interest in biodrainage is strong in Australia,where it is considered an environmentallyattractive option to restore water balances dis-turbed by past changes in land use, and inChina, India, and some arid developing coun-

tries that see biodrainage as a low-cost optionfor combating waterlogging and salinization ofirrigated land.


Biodrainage is best achieved by planting treespecies that are heavy consumers of water andalso tolerant of waterlogged and saline condi-tions (box 5.19). Planting in belts and blocks ismost common and also most effective. Treeshave also been planted in narrow strips of threeor more rows, resembling pipe- or ditch-typefield drainage systems. These strips also act aswindbreaks. Biodrainage is best suited to com-bat waterlogging that is localized, as alongcanals, not areawide.

Biodrainage design requires a good under-standing of local hydrology and the causes andnature of the waterlogging problem. Waterlog-ging in depressions and valley bottoms may beaddressed by planting in the affected areas, inthe upslope source areas, or wherever the plan-tations intercept seepage flows.

Establishment costs are considerable in siteswith poor soil conditions that require ameliora-tive and protective measures to achieve reason-able seedling survival rates. Examples of suchmeasures are ripping of impeding layers, lim-ing, fertilizing, and fencing. Products such aslow-quality wood and fodder generally do notrecover the plantation costs, and the justifica-tion must almost always derive from thedrainage benefits. Environmental benefits suchas water quality protection and enhanced biodi-versity may also be significant. Biodrainage canbe undertaken on different scales, by individualfarmers or by communities through participa-tory programs.

OUTPUTS AND IMPACTS

Plantations have in several cases been effectiveat intercepting seepage flow, controlling shallowwater tables, and positively amending water bal-ances. Biodrainage has most potential wheredrainable surpluses are small compared to thewater uptake of the plantations and where the


Trees generally have extensive and deeply penetrating rootsystems and high aerodynamic roughness.These features makethem better biodrainage performers than bushes, but bushesoutperform crops.A tree plantation normally evapotranspires25 to 50 percent more water than a cropped area. Eucalypticspecies are widely used, but good experiences have also beenrecorded with Acacia, Prosopsis, and Tamarix spp. Poplar andwillow spp are used in north China. Plantations may have oneor more species, sometimes with an undergrowth of resistantbushes or crops.

Source: IPTRID 2002.

Box 5.19 Suitable Species

199

focus is on maintaining seasonal or annual bal-ances. This makes biodrainage generally bettersuited for arid than for temperate climates andfor subsurface rather than surface drainageneeds (box 5.20).

Biodrainage plantations will also take up andremove salts with the harvested products, butusually too little salt is removed to maintain saltbalances. Biodrainage in the arid zone is there-fore generally sustainable only when salt accu-mulation in the root zone is minimal as a resultof efficient irrigation with high-quality water orwhen natural or supplemental artificial drainageremoves a sufficient amount of salt from theroot zone. On the downside, where water isscarce biodrainage may evaporate water thatcould be used more beneficially.

APPLICABILITY

In the Indira Gandhi Nahar project in India,eucalyptus and acacia plantations reclaimedseepage zones along leaking irrigation canalsand waterlogged depressions. The bestapproach was to start planting trees away fromthe most affected areas and move toward theseareas by the time the first areas had somewhatdried out. Reclamation took only a few years.The plantation water tables reached depths of15 meters in six to seven years, and the rootsystems were 10 meters deep.

Biodrainage has worked well in a variety ofother situations. In Croatia, spring land prepara-tion on poorly drained, heavy clay soils wasable to start earlier when the land had a lightcover left from the previous grain crop. In theNetherlands, reed was planted to accelerate thereclamation of polders; the seed was broadcastfrom the air when land emerged from thewater. In Tanzania, actively growing full canopysugarcane suffered fewer drainage problemsduring the rainy season than the less transpir-ing, newly planted, or ratooned crops.

In Australia, biodrainage is favored where thenatural water table regimes are disturbed afterthe conversion of forests into rangeland or rain-

fed cropland. Because rainfed crops allow lessevapotranspiration than does deep-rooted treecover, and deeper percolation of rainwater,saline groundwater rises, causing widespreadwaterlogging and salinization—known as dry-land salinity, to distinguish it from irrigation-induced salinity. Considerable success incontrolling water tables has been achieved bythe establishment of eucalyptus plantations. Inwaterlogged areas, the trees lower the watertable by on-site uptake of water, and upslopefrom these areas they lower the water tables byintercepting the recharge flow to waterloggedareas. Biodrainage plantations are also valuedfor their contribution to environmental diversityand the landscape.

REFERENCES CITED

IPTRID (International Programme for Technol-ogy and Research in Irrigation andDrainage). 2002. “BIODRAINAGE: Princi-ples, Experiences and Applications.”Knowledge Synthesis Report No. 6.FAO/IPTRID, Rome.

USBR (United States Bureau of Reclamation).1999. “Integrated System for AgriculturalDrainage Management on Irrigation Land.”Final Report Grant 4-FG-20-11920. WestsideResources Conservation District, FivePoints, Calif.


Plants may be used to concentrate saline drainage water tofacilitate its disposal. If small in scale, this solution is feasiblewhere evaporation ponds or other regular means of disposalcannot be used. Biological concentration has been piloted inthe San Joaquin Valley, California.The subsurface drainage efflu-ent from land planted with regular crops and halophytes (salt-tolerant crops, trees, and bushes) is sequentially reused andfinally released into a small evaporation pond. Each next reusearea is only a fraction of the source area. In the process, thedrainage water is reduced in volume, but its salt concentrationincreases to end up in solid form in the evaporator.

Source: USBR 1999.

Box 5.20 Sequential Biological Concentration

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ADDITIONAL INFORMATION

Institute for Sustainable Irrigation Agriculture,Victoria State Department of NaturalResources, Environment and Agriculture,Tatura, Victoria, Australia. Online athttp://www.dpi.vic.gov.au/dpi/nrentat.nsf/Home+Page/Tatura~Home+Page?open.

This Profile was prepared by Bert Smedema and reviewedby Bart Snellen of ILRI.


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INVESTING IN USEROPERATION ANDMAINTENANCE OF DRAINAGE

What is new? Drainage management has been atop-down agency activity with little user respon-siveness, but this needs to change. For one, thegovernment needs user fees to fund O&M. Sec-ond, farmers need finely tuned water table levelsthat allow them to raise yields and diversify theircrops to meet market demand. Egypt’s Ministry ofWater Resources and Irrigation, took a successfulprocess approach in which it gradually built sup-port for reform.

Egypt’s Public Authority for Drainage Projects(EPADP) brought massive and rapid drainagedevelopment soon after its establishment, butthe way it operates is outdated by today’s rap-idly changing environment and the mountingcosts of operation, maintenance, and replace-ment. The agency needs to shift from construc-tion to maintenance, tailor designs to users aswell as to sites, decentralize water manage-ment, and privatize service delivery.

In an effort to adapt to this changed environ-ment, the MWRI invited two donor-funded pro-grams to join forces and develop practicalmethodology for user participation in drainagedesign, implementation, and maintenance.


EPADP itself identified the need for greater userparticipation and chose water boards as its mainvehicle. Water boards are water managementorganizations set up and run by irrigation anddrainage users at the branch canal commandlevel. Long-term policy foresees that theyassume responsibility for O&M of the drainagesystem to the field level in subsurface pipe-drained areas.

The two MWRI programs opted for a changeprocess, as opposed to a project, because amultitude of new behaviors was needed. They

formed a working group of high-level EPADPofficials and program staff that formulated fourobjectives:

• Test a process that is acceptable to users,EPADP management, and its design andfield staff

• Develop training modules for both staff andusers

• Draft all new legal documents such as con-tracts, memoranda of understanding, andtransfer deeds

• Transfer responsibility for O&M to userorganizations.

Building on institutional reform efforts inEPADP, the working group identified therequired changes. Following the principles ofthe process approach, it aligned the new activi-ties with existing EPADP procedures instead ofdesigning a totally new, project-type approach.As a result, it recommended training waterboard and EPADP staff, developing proceduresfor participatory field investigation and design,and formalizing the partnership among agency,users, and contractors.

The working group debated the recommenda-tions in the agency and incorporated outputinto a draft approach that it piloted with the ElFadly Water Board in Kafr el Sheikh, establishedin 2001. The desired outcomes of the pilot wereas follows:

• High quality of implemented infrastructure

• Responsibility for O&M assigned to thewater board

• Water board trained, motivated, and organ-ized to handle maintenance

• Changed working relationship betweenfarmers and EPADP

The new process features the usual EPADP activ-ities. The changes lie mostly in activities built into ensure participation and strengthen bothEPADP and water board organization (figure 5.2).


202

OUTPUT AND IMPACTS

INCORPORATION OF FARMER TRAINING INTO THE

PROCESS. A two-day practical training coursewas given to prepare the water board for itsnew tasks in design and quality control. A visitto a pipe factory and the use of large drawingsand maps proved successful teaching tools. Thetrainers paid special attention to the option ofcontrolled drainage and crop consolidation, amajor issue in the area (see IP 5.2). Cotton andrice growers need different water levels, andtheir conflicting interests sometimes lead toopen confrontation. With controlled drainage,farmers can reduce pumping costs for rice pro-duction and avoid waterlogging in cotton culti-vation, if the individual farmers agree toconsolidate their cropping patterns arounddrainage (sub-)collectors.

TAILORING THE DESIGN TO THE SITE AND USERS.The participatory design process consisted ofthree main steps:

• Joint field investigations to make maximumuse of local knowledge of trained waterboard members.

• A structured design meeting where engi-neers presented the design, explainedoptions, and reached a consensus with theexecutive committee on the optimal design.The water board executive committee con-sidered that controlled drainage was feasi-ble for its area, although it expecteddifficulties organizing farmers for this pur-pose. It decided that the additional invest-ment of some 20 percent was worthwhileand took this expensive option to theassembly for approval.

• The water board held a large assemblymeeting and a series of smaller public infor-mation meetings throughout the commandarea to present the preferred design optionand justify its higher costs. It also discussedsubjects such as compensation for cropdamage during construction and stressed theimportance of smooth implementation byallowing equipment free access to the area.

Despite more intensive consultation, EPADPdesign staff halved its time input in El Fadly as aresult of water board assistance during field


FIGURE 5.2 PARTICIPATORY DRAINAGE PROCESS STEPS

Project agreementIntroduction and training of water boardPreliminary site visit EPADP–El Fadly Water BoardWater Board Assembly meeting and approvalMemorandum of understandingDetailed field investigationsPreliminary design and meeting EPADP–water boardTender and contractor selectionSigning contract EPADP–contractor (with joint supervision)Introduction meeting contractor–World BankCommunication to Water Board AssemblyImplementation arrangement water board–EPADPMobilization and preparationImplementationJoint Supervision EPADP–water boardTemporary transfer deed or handing over documentAnnual Inventory and Maintenance Plan, approvedby Water Board AssemblyProtocol EPADP–water boardComplaint management and performance monitoringFinancial audit

1.2.3.4.5.6.7.8.9.

10.11.12.13.14.15.16. 17.18.19.

Design

Implementationand supervision

Operation andmaintenance

Memorandum ofunderstanding

Stages Activities Milestones

Implementation agreementand contract

Handing over document

Annual maintenanceprotocol

Source: Author.EPADP. Egypt’s Public Authority for Drainage Projects.

203

investigations. More important, both the waterboard and EPADP field engineers judged thatdesign quality had been greatly enhanced andbetter adapted to the agronomic and organiza-tional conditions of the area. The training, design,and consultation process took six months.

FORMALIZING THE PARTNERSHIP BETWEEN WATER

BOARD, AGENCY, AND CONTRACTORS. In 2003, thewater board and EPADP signed their first mem-orandum of understanding. It defined the rightsand obligations of both parties. EPADP thenincluded provisions in its implementation con-tract with the contractor that defined the roleand responsibilities of the water board in super-vision and quality control. Supervision of con-tractors by a well-trained water board, insteadof an overstretched EPADP field engineer, isexpected to improve quality, ownership, andmaintenance. In addition, the water board andEPADP agreed to sign a handover protocol thatspecified the role and obligations of the waterboard in maintenance, until now an exclusiveEPADP task.

MAINSTREAMING THE PILOT IN EPADP PROCE-DURES. When EPADP engineers saw the reduc-tion in design time and the user preference forcontrolled drainage, their feedback convincedtop management that the approach should bedisseminated among middle-level managersand engineers. A workshop decided to repli-cate the process in other areas with waterboards; develop a similar approach fornon–water board areas, emphasizing publicconsultation and temporary implementation

committees; and incorporate the water boardtraining module into the curriculum of theDrainage Training Center and hold suchcourses for all user organizations dealing withdrainage development.


The institutional reform process within theauthority had already raised staff awarenessabout the need for change. Sometimes abstractdiscussions were shown to lead to a practicalapproach that would improve drainage designand implementation.

High-level management supported the process.It allocated budgets for training, approvedamending the contracts with contractors, andsigned the memorandum of understanding withthe water boards that transferred O&M respon-sibilities. Earlier in the process, the chair andvice chair made their support and commitmentvisible by attending meetings organized for themanagers reporting to them.

The positive and trusting attitude of the waterboard convinced skeptical managers and engi-neers of the value of accepting users’ opinionsand decisions. Board members trusted andengaged the EPADP engineers and were eagerto learn both practical and technical details ofdrainage design and implementation.

This Profile was prepared by William Oliemans of RoyalHaskoning with input by Adel Bichara. It was reviewed byBart Snellen of ILRI.


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66INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE

OVERVIEW

Investments to improve incomes and reduce vulnerability in rainfed farming systems are covered in thischapter.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 managementapproach. 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 aredescribed 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 andwater sources but also risks from unstable land tenure and from poorly functioning product andcredit markets. Some approaches described in the chapter and elsewhere in the Sourcebook were

• 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

206

successful in overcoming these risks. For exam-ple, investments in supplemental irrigation, inholistic and integrated watershed management,and in drought management can reduce the riskof uncertain rainfall. (See IN 6.1 on supplemen-tal irrigation and IN 6.2 on watershed manage-ment. For the problem of drought and for waysto handle it, see chapter 8, especially IN 8.1.)

SOME TECHNOLOGIES FOR RAINFED AREAS CAN HAVE

HIGH RETURNS. Investing in supplemental irriga-tion—a “just-in-time” dose of water—can have asignificant impact on rainfed systems. Returns onwater in supplementary irrigation are higher thanin conventional irrigation, and are highest atlower-than-recommended applications—a pow-erful message in water-scarce localities. Farmersreadily adopt supplementary irrigation once theyare convinced it is profitable and reduces risk.Maximum benefits require an integrated invest-ment package of water-harnessing and irrigationtechnology, irrigation scheduling, training, andcropping and fertilizing guidance. Combined soiland water management investments can alsohave a high return. The Loess Plateau watershedrehabilitation project in the Yellow River Basin ofChina demonstrated on an area of 1.5 millionhectares that profitable farming could be com-patible with soil and water conservation. (See IN6.1 on supplementary irrigation, IN 6.3 on com-bining water with soil fertility management, andIP 6.2 on the Loess Plateau project. See also“Integrated Nutrient Management for SustainingSoil Fertility,” in Agriculture Investment Source-book (AIS), Module 4.)

INVESTMENT IN SOIL FERTILITY MUST DEAL WITH

COST AND RISK FACTORS. Farmers see improvingfertility as a costly and risky business. Researchand development programs can promote adop-tion, and in some countries innovation grants tofarmers have worked well. Where packageshave been developed on a large scale, theyhave been successful in reducing poverty. Onecase study on Madagascar shows the broadimpact of a nongovernmental organization(NGO) program for transferring soil conserva-tion technology. (See IN 6.3. See also IP 6.1 forthe Madagascar program and IP 6.2 for theLoess Plateau project.)

Watershed management investment should focuson poverty reduction. Empirical evidence showsthat the most sustainable watershed manage-ment projects focus on poverty reductionthrough improvements to roads, education,diversification, and livelihood improvement.Thus, sustainability starts with the farm familyand its livelihood as the unit of development andrecognizes the role of watershed communities as“conservation managers.” A typical approach is aparticipatory project with a poverty focus aimedat changing land use and boosting incomesthrough higher-value crops and more sustainablepractices, combined with conservation invest-ments. Secure land tenure, a cash crop orienta-tion, and investment profitability are crucial.Investments such as planting fruit trees or adopt-ing micro-irrigation have demonstrated successin both income improvement and soil conserva-tion. Early returns are needed to maintain farmerinterest. (See IN 6.2. For monitoring and evalua-tion of watershed projects, see IN 9.1. See also“Community-Based Natural Resource Manage-ment,” and “Watershed Management for Agricul-tural Development,” in AIS, Module 5.)

WOMEN’S ROLE NEEDS TO BE CONSIDERED IN

RESOURCE MANAGEMENT INVESTMENTS. Women canplay a crucial role as “front-line resource man-agers” and as the educators of the next genera-tion. Therefore, it is important to invest inlightening women’s workload and diversifyingtheir livelihood source. (See IN 6.2.)

NEW INSTRUMENTS ARE BEING DEVELOPED TO PAY

POPULATIONS UPSTREAM IN WATERSHEDS FOR GOOD

RESOURCE MANAGEMENT. Watershed managementhas to give upstream populations incentives tomanage the watershed for the benefit of all,including the population downstream. Variousmarket-based methods are being tried forrewarding good natural resource managementby paying for the resulting environmental serv-ices. There is a need for a clear database anddecision-making framework accessible by allstakeholders, such as the Drainage IntegratedAnalytical Framework (DRAINFRAME) (see IP5.1). The Carbon Fund under the Kyoto Protocolis an example of a payment mechanism forenvironmental services. (See IP 6.3.)


207


Technical assistance investments may includethe following:

• Capacity building of farmers and extensionworkers

• Integrated studies of watersheds and theirstakeholders

• Studies to develop market-based mecha-nisms for paying for environmental services


• Water resources development for supple-mentary irrigation

• Low-energy pressurized systems

• Integrated pro-poor watershed managementprojects

Policy-based investments may include the devel-opment and support of national drought policyand preparedness plan. And finally, related invest-ments may include postconflict rehabilitation oremergency projects that aim to restore assets andproduction and promote supplemental irrigation.

INVESTING IN WATER MANAGEMENT IN RAINFED AGRICULTURE

208

INVESTMENT NOTE 6.1

INVESTING IN SUPPLEMENTALIRRIGATION

Supplemental irrigation helps stabilize rainfed agri-culture. For the greatest benefit, it must be part ofan integrated package of farm cultural practices.Overexploitation of groundwater threatens thesustainability of groundwater-based supplementalirrigation in many areas. Supplemental irrigationthat is optimized through on-farm water manage-ment policies and timely socioeconomic interven-tions is essential for the sustainable use of limitedwater resources.

Production is low and unstable in dry farming,dependent on variable rainfall and subject todroughts and land degradation. One option forboosting and stabilizing crop productivity issupplemental irrigation, whose returns to farm-ers can be overwhelming. Supplemental irriga-tion (SI) is defined as the application ofadditional water to otherwise rainfed crops,when rainfall fails to provide essential moisturefor normal plant growth, to improve and stabi-lize productivity. Unlike full irrigation, the tim-ing and amount of SI cannot be determined inadvance owing to rainfall stochasticity.

Key questions and issues for successful SI are asfollows:

• Determining the most appropriate schedul-ing for farm conditions

• Selecting crops and cropping patterns formaximum returns

• Determining the socioeconomic feasibility ofoccasionally supplying extra water to rainfedcrops

• Promoting water user associations (WUAs)that manage water use in a sustainablemanner

• Setting fixed and efficient water deliveryschedules

• Providing incentives for local communities touse water efficiently to improve livelihoods

• Managing the economic and environmentalconsequences of using water in supplementalirrigation

• Developing policies that foster an enablingenvironment for the adoption of water-effi-cient technologies to manage rainfed sys-tems in a sustainable manner

INVESTMENT AREA

Alleviating soil moisture stress during the criti-cal crop growth stages is key to improved pro-duction. Supplemental irrigation is a highlyefficient option to achieve this strategic goalbecause it provides the crop with a limitedamount of water at the critical time (box 6.1).

Water resources management strategies havebecome more integrated, and current policieslook at the whole set of technical, institutional,managerial, legal, social, and operational aspectsneeded for development on every scale. Sustain-ability is a major objective of national policies.Optimizing SI in rainfed areas is based on threebasic aspects:

• Water is applied to a rainfed crop thatwould normally produce some yield with-out irrigation.

• Since rainfall is the principal source ofwater for rainfed crops, SI is applied onlywhen rainfall fails to provide enough mois-ture to improve and stabilize production.

• The amount and timing of SI are schedulednot to provide stress-free moisture condi-tions throughout the growing season, but toensure a minimum amount of water duringthe critical stages of crop growth so as topermit optimal instead of maximum yield(box 6.2).

A suitable and sustainable water supply is deci-sive. If groundwater is used, and it usually iswhen there is no surface water source, ground-water sustainability can be jeopardized by SI


209

development because of the tendency for over-exploitation. Groundwater levels are indeeddropping rapidly in many areas. As an alterna-tive to groundwater, water harvesting for SI is asustainable practice and is common in theabsence of other sources, as in Sub-SaharanAfrica (box 6.3).

POTENTIAL BENEFITS

Benefits associated with SI include increasedyield productivity and reduced risk of failedharvests caused by below-average rainfall.

Social benefits are thus derived from increasedincome reliability. Because economic benefitscan be partly offset by higher annual produc-tion costs, sound economic analysis of suchinvestments is extremely important, but anincrease in annual net profit per hectare islikely (box 6.1, section on the extent and econ-omy of implementation).

In northern Iraq, where most of the country’s rain-fed grains grow, huge public investments weremade in SI schemes. Substantial improvement inyield was achieved by using SI in conjunction


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 andtimely application of only 100 millimeters to 200 millimeters of irrigation water.Therefore little water would not supporta 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 lessthan 1 kilogram per cubic meter but up to 2 kilograms per cubic meter under SI.Thus, SI also improves the productivityof 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) hasincreased 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 rainfedequals US$150 per hectare. Estimated mean increase in net profit between rainfed and SI for wheat equals US$300 perhectare. 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 6.1 Supplemental Irrigation in Northern and Western Syrian Arab Republic

SI led rainwater productivity in northwest Syria to increase from 0.84 kilograms of grain per cubic meter to 1.53 (at one-thirdSI), 2.14 kilograms per cubic meter (at two-thirds SI), and 1.06 kilograms per cubic meter (at full SI). Similarly, for biomasswater 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 SIapplication 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 aimsat efficient use of water resources in water-scarce areas. Raising yields by increasing water productivity is economical onlywhen crop yield gains are not offset by increased costs of other inputs.The curvilinear water productivity-yield relationshipmakes clear the importance of attaining relatively high yields for efficient use of water. Policies for maximizing yield should beexamined from every angle before they are applied under water-scarce conditions. Guidelines for recommending irrigationschedules under normal water availability conditions need to be revised when applied in water-scarce areas.

Source: Oweis and Hachum 2003.

Box 6.2 Optimizing Supplemental Irrigation

210

with appropriate production inputs and systemmanagement. In the growing season of 1997–8,rainfed wheat yield increased from 2.16 tons perhectare to 4.61 tons per hectare with the applica-tion of only 68 millimeters of irrigation water atcritical times. Every week of delay in sowingresulted in wheat yield losses of up to 0.5 tons perhectare. Yield significantly increased withincreases in nitrogen fertilizer applications. (Seealso IN 6.3.)

In the highlands of Turkey, the Islamic Republicof Iran, and Central Asia, frost conditions inwinter put field crops into dormancy. Mostyears, sufficient rainfall to germinate seedscomes late, resulting in weak crop stand duringthe frost period, slow growth in the spring, andyields that are much lower than potential.Ensuring good stand before winter wasachieved by early sowing and applying a smallamount of SI. In Turkey’s central Anatoliaplateau, applying only 50 millimeters of SI towheat sown early increased rainfed grain yieldby more than 60 percent, adding more than 2tons per hectare to the average rainfed yield of3.2 tons per hectare.

In northern Syria, water-short farmers applyhalf the amount of full SI water requirementsto their wheat fields. By so doing, the areaunder SI is doubled using the same amount of

water, and total yields increase by about 25percent; total farm production increases by 38percent (box 6.4).

The ecology of the rainfed dry areas is fragile.Resources for the poor are generally limited.Under pressure to eke out a living, farmersoften overexploit water resources, jeopardizingthe sustainability of their livelihood. Nationallyintegrated policies to control the use of waterresources create an enabling environment forsound technologies. Human capacity building isalso crucial for improving the livelihood of thepoor in the rainfed dry areas. The challenge inthe rainfed areas is to enhance and stabilizeproductivity of water by promoting strategicand sustainable use of water from conventionaland unconventional sources to augment rainduring the dry season.


Integrated and participatory research anddevelopment (R&D) programs offer the bestway of bringing SI technologies and practicesto their full potential. Any development orapplied research program that underestimatesthe role of farmers is doomed to failure. Accep-tance of SI by male and female farmers is acondition for its success. For pilot tests, staffand farmers may select a water basin usingagreed criteria. An integrated R&D programwill be designed and implemented in a waythat involves local communities, institutions,and decision makers. The following issuesmust be taken into consideration:

• The introduction of SI techniques builds onany existing water conservation measures.

• Farmers should see the benefits of a projectas early as possible. Motivating and promot-ing awareness among farmers with regardto the project objectives and the ways toachieve them are essential. Implementationrequires commitment and cooperation ofneighboring farmers (or communities) inthe coordination and management of theirlimited water resources. Today, local com-munities seldom initiate group action anddepend on assistance from external agents


In Sub-Saharan Africa and other tropical semi-arid areas, rain-water harvesting, which collects surface runoff, is used to pro-vide water for SI. Although seasonal rainfall in theseenvironments is higher than around the Mediterranean, itseffectiveness is low because of higher evaporation losses andlower soil-water holding capacity at the root zone. Research inBurkina Faso and Kenya has shown that SI of 60 to 80 millime-ters can double and even triple grain yields from the tradi-tional 0.5–1 ton per hectare (sorghum and maize) to 1.5–2.5tons per hectare. However, most beneficial effects of SI wereobtained only in combination with soil-fertility management.The major constraint to SI development in Africa is farmers’capacity, both technical and financial, to develop storage sys-tems for runoff water.

Source: Rockstrom, Barron, and Fox 2003.

Box 6.3 Supplemental Irrigation in Sub-Saharan Africa

211

such as NGOs. The lack of developed localinstitutions critically constrains exploitationof the potential for improved water man-agement technologies such as SI.

• The specific needs of a local community or agroup of beneficiaries must be understoodand designed into an appropriate system,bearing in mind the major role often playedby women in agricultural works. Farmers’acceptance of a new technology depends ontheir attitudes toward production risk. It isimportant to find out whether differences infarmers’ adoption behavior are caused bydifferences in their perceptions about therisks involved in a new technique or by dif-ferences in their access to credit and otherinputs. Risk-averse farmers will accept a newtechnology if they perceive that increasedreturns more than compensate them for anyincrease in risk.

• To prevent inequality at the village levelfrom widening as a result of the introduc-tion of SI, special care should be taken tomake sure that poor and women farmershave equal access to the technique.

• Most dry area ecosystems are fragile and donot adjust easily to change. If the introduc-tion of SI changes suddenly the use of, forinstance, natural resources, especially landand water, the environmental consequencescan be far greater than foreseen.

• The necessary conditions for adoption ofnew technologies are often location specificbecause they are influenced by cultural dif-ferences, education, and awareness of aneed for change. Users of land and waterresources are usually aware of land degra-dation, but they may not be able to do any-thing about it if their primary concern issurvival. They are unlikely to take up a newpractice unless they are convinced it isfinancially advantageous, does not conflictwith other activities they consider impor-tant, and does not demand too much oftheir time for maintenance.

• Institutional capacity building, water resourcesmanagement policies, and management andmaintenance programs are key to success.The institutions could be at the village,regional, or national level, depending on the


Applying only 50 percent of full SI requirements for wheat causes a yield reduction of only 10–15 percent. Many farmersoverirrigate their wheat fields.When there is not enough water to provide full irrigation to the whole farm, the farmer hastwo options: to irrigate part of the farm with full irrigation, leaving the other part rainfed, or to apply deficit SI to the wholefarm. In areas where water is more limiting than land, applying deficit irrigation increased the benefit by more than 50 percentcompared 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 50Irrigation 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.

Box 6.4 Water Productivity in Farmers’ Fields

212

size of the SI projects and the extent of acountry’s decentralization. Multiple plantingsto increase rainfall utilization should becomestandard practice under SI. Therefore, farm-ers need to be knowledgeable about water-stress-sensitive growth stages and correcttiming of water applications.

LESSONS LEARNED

Alleviation of the following constraints will helpSI achieve its potential:

• The on-demand water delivery system isbest suited to SI. This is what small farmsuse, drawing water from wells or nearbysurface water.

• SI must be properly integrated with otherproduction inputs, including crop and soilmanagement options, improved germplasm,and fertilizers to achieve the desired output.

• Many poor farmers in rainfed dry areas can-not afford to buy inputs. To assist them,socioeconomic intervention should be care-fully planned.

• Farmers need to understand the technologyand how to use it. Extension and humancapacity building should play a major rolein this respect. Long-term training and advi-sory programs should be designed andimplemented.

• Natural resources, particularly land andwater, are more efficiently utilized collec-tively than individually. WUAs are a goodexample of an efficient approach to collec-tive management and use. Any institutionalconstraints hindering the establishment andtransparency of these associations shouldbe studied.


• Use incentives for farmer participation,technology transfer, and water cost recoveryto prompt adoption of improved manage-ment options.

• In rainfed dry areas, maximize yield perunit of water, not yield per unit of land.

• To maximize the benefits of SI, make surethat other inputs and cultural practices arealso optimized.


• Reform policies and regulations to governgroundwater development and operation.

• Strengthen or create WUAs to manage waterat the scheme level.

• Develop systems for monitoring groundwa-ter quality through overexploitation.

• Finance water resources development for SIthrough the source, the conveyance system,and the field irrigation systems.

• Develop low-cost, low-energy irrigation sys-tems such as drip or sprinkler, including apumping set.

• Build capacity building of extension work-ers and farmers to install, operate, andmaintain their systems.

• Support development of simple and practi-cal tools for SI scheduling. Scheduling is thekey to improving water use efficiency.

• Rehabilitate SI systems damaged in conflicts(examples include Iraq and Afghanistan).

REFERENCES CITED

Oweis, T., and A. Hachum. 2003. “ImprovingWater Productivity in the Dry Areas of WestAsia and North Africa.” In W. J Kijne, R.Barker, and D. Molden, eds. Water Produc-tivity in Agriculture: Limits and Opportunitiesfor Improvement, 179–97. Wallingford, U.K.:CABI Publishing.

Rockstrom, J., J. Barron, and P. Fox. 2003. “WaterProductivity in Rain-Fed Agriculture: Chal-lenges and Opportunities for SmallholderFarmers in Drought-Prone Tropical Agro-ecosystems.” In W. J Kijne, R. Barker, and D.


213

Molden, eds. Water Productivity in Agricul-ture: Limits and Opportunities for Improve-ment, 145–62. Wallingford, U.K.: CABIPublishing.

SELECTED READINGS

ICARDA (International Center for AgriculturalResearch in the Dry Areas). 2003. ICARDAAnnual Report 2002. Aleppo, Syria: ICARDA.

Oweis, T. 1997. Supplemental Irrigation: HighlyEfficient Water-Use Practice. Aleppo, Syria:ICARDA.

Oweis, T., and A. Hachum. 2001. “ReducingPeak Supplemental Irrigation Demand by

Extending Sowing Dates.” AgriculturalWater Management 50: 109–23.

Oweis, T., A. Hachum, and J. Kijne. 1999.“Water Harvesting and Supplemental Irriga-tion for Improved Water Use Efficiency inDry Areas.” SWIM Paper No. 7. System-Wide Initiative on Water Management.International Water Management Institute,Colombo, Sri Lanka.

This Note was prepared by Theib Oweis and AhmedHachum of ICARDA, and reviewed by Jean-Marc Faurès ofthe Food and Agriculture Organization (FAO).


214

INVESTMENT NOTE 6.2

INVESTING IN WATERSHEDMANAGEMENT

In many watersheds, erosion and siltation resultfrom goal-rational human action. Projects seekingto stem these physical phenomena should first tryto help individual families reach their food, shelter,and cash goals in new ways. Once that is accom-plished, conservation can be made a communitygoal. Point sources may be combated by payingupstream watershed users for changed behavior,but the link between upstream action and down-stream output cannot always be established, letalone measured.Where nonpoint sources of pollu-tion or erosion and upland poverty are a problem,their reduction through participatory projects fornatural resource management by the community isstill a valid option.

Sustainability of World Bank watershed man-agement projects suffers from poor enablingenvironments and inadequate technical sup-port, including overoptimistic assumptionsabout the long-term net benefits of new tech-nologies. It also suffers from a focus on off-site benefits such as lower siltation rates andimproved security and quality of water sup-ply. In addition, the assumption that publicand private goods are interchangeable doesnot always hold. Together, these assumptionsresult in large investments in conservationwith add-on incentives for farmers rather thanin projects that are, by themselves, sustainablebecause they focus on poverty reduction byimproving access, education, diversification,and incomes.

For project sustainability, designers must concen-trate first on the farm family and all its sources ofincome as the unit of development. Recognizingthat environmental conservation is almost alwaysa community priority—but only after food, shel-ter, and cash needs are met—will enable taskmanagers to address sustainability issues withindividual farmers and their communities. Suchan approach recognizes the pivotal role of water-shed communities as future conservation man-

agers, and therefore addresses their priorityneeds first.

INVESTMENT AREA

Past projects emphasizing general rural develop-ment have often involved large investments in acomprehensive approach (box 6.5). They can beeffective if approaches are adapted to local pref-erences and are not prescriptive or dogmatic.

About one in four Bank watershed manage-ment projects seeks to reduce siltation rates of amajor body of water such as a river or reservoir,sometimes to protect irrigation schemes fromsedimentation by upstream soil erosion. Target-ing riparian communities that have problemssuch as soil erosion or water pollution frompoint sources can be more cost effective.

A possible approach is the use of payments toeffect change. Payments for environmentalservices are appropriate where long-termsecure funding to change behavior is avail-able. They are therefore often linked to pay-ments by consumers for potable water or otherservices. Turning responsibility for catchmentsfor potable water over to municipal govern-ments and consumers has been a growingtrend in Honduras. In Costa Rica (Chomitz1998), payments for environmental servicesfrom users to landholders under the 1997Forestry Law were first organized by govern-ment from hydropower operators. Now thetrend has spread to tour operators and hotels,which strive to maintain scenic and waterquality assets. The total of incentive payments(US$20–US$30 a hectare per year) is about thesame as the rental price of pasturage.

The balance of policy and technology in improv-ing soil and water conservation and reducing soiland water pollution has to vary with the scale ofthe problem and the likely cost. Where nonpointsources of pollution or erosion at a watershed orpartial watershed are the problem, a participa-tory project may still be appropriate with apoverty focus on changing land use and boost-ing incomes through higher-value crops andmore sustainable practices (box 6.5).


215

Where a point source can be identified—forexample, in siltation of reservoirs or industrialand salinity pollution of waterways—“cap andtrade” schemes, based on payments for andtrading in pollution, are possible. However,they require accurate measurement technologyand a more organized society and rule of lawthan are usually prevalent. Similarly, a regula-tory approach requiring farmers to erect vegeta-tive barriers to streams or buy pollution creditsmay be tried, as in the catchment of the Wiven-hoe Dam, the source of water supply for thecity of Brisbane, Australia. The trend is towardpollution credit prices equal to the cost ofinstalling vegetative barriers and income for-gone from land lost.

Vetiver grass hedges have proven effective as soilloss barriers but suffer low adoption rates evenwhere climatic conditions favor them, as in Indiaand China, because of planting material require-ments and farmers’ preferences for a mix of con-servation and fodder supply/cash crop species.In northern Thailand, contour grass strips, 2 to 3meters wide, for livestock proved as effective asbench terracing in reducing soil loss (from 50tons per hectare to 2 tons per hectare). Planting

coffee on medium slopes (36–55 percent)released land for reforestation because coffeeearns farmers more money per hectare than dolower-value crops. Elsewhere, the adoption ofsimple pipe and microsprinkler irrigation systemsfed by local streams has allowed both incomeimprovement and soil conservation through inten-sive cultivation of vegetables and fruits.

POTENTIAL BENEFITS

For Costa Rica, Chomitz (1998) summarizes theper hectare benefits of environmental servicesof forests as shown in table 6.1.

Less quantifiable but important benefits fromwatershed management interventions includeimproved food security from a diversified crop-ping base, better health and sanitation, betteraccess, and an improved ability of resident pop-ulations to work with government and seekoutside opportunities.


• Promote locally relevant technologies sup-ported by research and extension.


The Red Soils II Area Development Project in China (1994–2000) addressed soil loss and degradation over some 11 millionhectares of acid infertile ultisol and inceptisol soils during the summer drought in the Yangtze and Pearl River catchments. Halfof the participants in the project, an improvement program in 266 small demonstration watersheds or partial watersheds infive 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-valuehorticultural 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 16–17 percent depending on the province andan economic rate of return of 19 percent. Sustainability was considered highly likely.

Source: “Second China Red Soils Area Development Project,” Implementation Completion Report.

Box 6.5 China: Soil Stabilization and Poverty Reduction Using a Farm Systems Approach

216

• Support policies encouraging appropriateresource use, in particular the reform offorestry pricing. In addition, any distortingsubsidies, particularly on outputs, should beremoved.

• Strengthen land tenure. Land tenure andinvestment in conservation are correlated,particularly in areas with land surplus ratherthan communal lands (box 6.6).

• Apply integrated planning to the entirewatershed. In the Loess Plateau I and RedSoils II Area Development projects in China,both rated as having a high likelihood of sus-tainability, key elements in gaining under-standing of what could be achieved andwhether it would be attractive to farmerswere initial training, consultation, land usemapping, and improved farm models.

• Use cash contributions from beneficiaries toensure commitment and realism in the scopeand quality of interventions. Most Bank proj-ects require labor contributions from benefi-ciaries, and a few require a small cash outlay.Both are required in the village self-helplearning initiative program (2000–4) underInternational Development Association andJapanese cofinancing in Sri Lanka; communi-ties must commit all the necessary labor andcontribute 10 percent of the total cost in cash.

LESSONS LEARNED

Land tenure availability, a cash crop orientation,and system profitability are crucial as is reliabletechnical assistance. There is a strong prefer-ence for market-driven solutions that offer, first,a financially attractive return to the land owneror user and, second, the desired conservationoutcome. Early returns are needed to maintainowner-user interest—promises of future incomewill not do it.

In addition to these factors, the basic needs ofcommunities, and particularly the needs ofwomen and youth, must be addressed. In the LaoPeople’s Democratic Republic, women are oftenthe major source of labor for crop harvest andprocessing, livestock husbandry, vegetable grow-ing, weaving, and water supply: they performmost of the value-adding and entrepreneurialactivities. Unless project design incorporatesmeans of releasing some women’s labor throughmechanization of crop processing or piped vil-lage water supply, livelihoods will not diversifyand improve enough to allow families to makeresource conservation a priority.

In most projects, implementation and sustain-ability are best achieved by units embedded in


Environmental Annual valueservice (in 1993 U.S. dollars)

Carbon sequestration 120(20/ton)

Ecotourism 12–25

Hydropower protection 10–20

Hydrological benefits 7–17

Existence and option values 13–32

Pharmaceuticals 0.15

Total 162.15–214.15

Source: Chomitz 1998.

Table 6.1 Forests’ Benefits

The first two land titling projects assisted by the World Bankin Thailand (1985–93) demonstrated that the major benefit oftitle security in lowlands was the access it gave to secure insti-tutional credit, based on a percentage of collateral value with-out a predetermined ceiling on loans.Title also increased landvalues. Private titling of the lowlands led to better practices inthe uplands because farmers who had taken over old forestlands could afford to plant and wait for income from treecrops as a result of the newly available capital. Effects on landvalues were dramatic. Land values increased by 308 percentfor lowlands and 425 percent for uplands in project areas(after correction for increase in nonproject areas) in thenorth. In the northeast, the corresponding figures were only135 for lowland and 7 percent for upland. Regression showedthat private title and presence of wells (for tree planting)explained most of the variation in land value. Most commercialbanks now accept provisional title as collateral.

Source: Author.

Box 6.6 Thailand: Unexpected Benefits of Land Titling

217

line agencies, not in specialized watershedmanagement units with elite staff. Communityparticipation in design, implementation, andfunding of works is essential.


• The first unit for consideration must be thefamily and its ability to earn cash incomefor basic needs.

• Invest in problem analysis and rapidappraisals to determine poverty status andactual community priorities as well as thestatus of resource degradation.

• Base design on sound land use capabilityplanning and resource analysis.

• Use low-cost solutions wherever possibleand minimal imports of goods.

• The community is the unit that will do thework. The community must therefore becommitted to the work without major sub-sidy and in recognition of the financial andother benefits likely to accrue.


• Economic benefit study to ensure that awatershed management approach is a prior-ity for the nation and the watershed con-cerned and to establish the cost that can bejustified (helps choose a suitable approach)

• Investment in reskilling of stakeholders, datasystems, and consultancy for water manage-ment and measurement under a basin-levelmanagement authority

• Participatory rural appraisal of problemsand opportunities

• Land use plan and soil survey

• Market studies for cash crop alternatives

• Identification of water sources (quality, vol-ume) in relation to users

• Initiatives for improving livelihoods of allfamily members

• Irrigation development and water supply tovillages combined with appropriate soil andwater conservation technology

REFERENCE CITED

Chomitz, K. M. 1998. “Financing EnvironmentalServices: The Costa Rican Experience andIts Implications.” Paper prepared for theEnvironmentally and Socially SustainableDevelopment Group. World Bank, LatinAmerica and the Caribbean Department,Washington, DC.


China. “Second Red Soils Area Development Pro-ject.” Closed. Project ID: P003595. Approved:February 1994.

SELECTED READINGS

Aylward, B., and J. Barbier. 1992. “Valuing Envi-ronmental Functions in Developing Coun-tries.” Paper presented at the InternationalWorkshop on Ecology and Economics, Turi-alba, Costa Rica, January 29–30, 1991.

Blair,G. J., and R. Lefroy, eds. 1990. “Technolo-gies for Sustainable Agriculture on MarginalUplands of Southeast Asia.” ACIAR Proceed-ings. Series No. 33. Canberra, Australia:Australian Centre for International Agricul-tural Research.

Boerma, P. 2000. “Watershed Management :AReview of the World Bank Portfolio,1990–99.” World Bank, Rural DevelopmentDepartment, Washington, DC.

Doolette, J. B., and W. B. Magrath, eds. 1990.“Watershed Development in Asia: Strategiesand Technologies.” World Bank TechnicalPaper No. 127. World Bank, Washington, DC.

Edwards, G. 1990. “Balancing Cost BenefitAnalysis and Ecological Considerations inDeveloping Priorities in R&D in UplandAgriculture.” In ACIAR Proceedings. SeriesNo. 33. Canberra, Australia: Australian Cen-tre for International Agricultural Research.


218

Hirsch, P. 1987. “Political Economy of Environ-ment in Thailand.” Journal of Contempo-rary Asia Publishers (Manila, Philippinesand Woolonngong, Australia).

Rady, G. 1990. “Technologies for SustainableAgriculture on Marginal Uplands in South-east Asia: An AIDAB Perspective.” In ACIARProceedings. Series No. 33. Canberra, Aus-tralia: Australian Centre for InternationalAgricultural Research.

Rerkasem, K. 1998. “Shifting Cultivation in Thai-land: Land Use Changes in the Context ofNational Development.” ACIAR Proceed-ings. Series No. 87. Canberra, Australia: Aus-tralian Centre for International AgriculturalResearch.

This Note was prepared by Richard Chisholm with inputsfrom Jim Smyle. It was reviewed by Benjamin Kiersch of FAO.


219

INVESTMENT NOTE 6.3

INVESTING IN WATER ANDSOIL FERTILITY MANAGEMENT

Water and soil fertility are both indispensable forcrop growth. Supporting their combined manage-ment provides more than the sum of the parts.Investments in joint water and soil policies, in irriga-tion, runoff control, fertilizer supply, and cropimprovement at the country level need to gotogether with investments in curriculum develop-ment and capacity building. Market information sys-tems, credit systems, and innovation grants shouldalso be in place. Examples from Burkina Faso,Kenya,and South Asia show how projects narrowed thegaps between potential and actual yields in poorlyendowed agro-environments.

Where scope to expand agriculture is limited,additional production needs to come fromincreased yields and expansion of the harvestedarea. Both possibilities depend on adequatewater and fertilizer inputs (FAO 2002).

Water and soil fertility are key drivers of plantgrowth. When their availability and quality arebelow the level that allows plants to reachtheir full growth and production potential,their role is “growth limiting.” The two arealso intertwined: water is a major driver of soilnutrient availability to plants, the nutrientuptake process, and nutrient losses. Soilorganic carbon, the single most importantindicator of soil fertility, not only provides fer-tility to plants but also holds moisture andprovides a favorable environment for biologi-cal soil life, also enhancing biological nitro-gen-fixing potential.

Yet projects and governments rarely addresswater and soil fertility management simultane-ously. This note demonstrates that investmentsand policies for joint improvement of the twoproduction factors offer more than the sum oftheir parts and discusses projects that followedthis approach.

INVESTMENT AREA

(SUB)NATIONAL LEVEL. Country-level investmentshould aim to improve irrigation water and fer-tilizer supply systems and to increase produc-tion per unit of water and per unit of nutrient.Water productivity can be raised, for example,by clever routing and timing of water and fertil-izer nutrients to the plant and by developingcrop varieties that use water and nutrients moreefficiently than standard varieties.

COMMUNITY AND FARMER LEVEL. Local investmentsin rainfed agriculture should help farmers con-serve soil moisture by extending the time waterremains inside the productive system and main-taining or improving soil organic matter content(examples include erosion and runoff control,manuring, mulching, recycling city and house-hold waste, agroforestry, and restricted tillage).Box 6.7 shows how yields in rainfed agriculturein Burkina Faso increased through a combina-tion of water and soil fertility improvementmeasures. Box 6.8 demonstrates how reliablewater supplies favored adoption of soilfertility–improving technologies in semi-aridEastern Kenya.

Investments in irrigated agriculture may createincentives for various soil- and water-relatedmanagement activities. These activities includepreparation (puddling, leveling) and synchro-nization of water delivery to the field with fertil-izer application and control of salinity,alkalinity, and toxicity. Because water is largelyremoved as a growth-limiting factor in irrigatedsystems, sound and clever fertilizer and manureapplication can lead to quantum-leap yieldincreases, as shown for the South-Asian Rice-Wheat Consortium (Ladha et al. 2003).

Macro- and micro-level investments are sum-marized in the subsection on InvestmentOpportunities.

POTENTIAL BENEFITS

Investments in integrated water and soil fertilitymanagement (IWSFM) raise yields and enhancethe use efficiency of scarce water and nutrients.


220

In Burkina Faso (box 6.7), the yields of stapledryland crop increased, as did the yields fromvegetable irrigation along the borders of reser-voirs. Demand for these vegetables is high andtheir nutritive value important. In semi-arideastern Kenya, farmers with access to water,

and those living in the nicely terraced environ-ment around Machakos (Tiffen, Mortimore, andGichuki 1994), have market access and moneyin their pockets. Such farming systems areviable and stable and invite farmers to investand take risks.

Examples from the Rice-Wheat Consortium in theIndo-Gangetic plains (see http://www.rwc-prism.cgiar.org), and, singled out, those forsouthern Nepal show that irrigated multiple crop-ping with high fertilizer and manure applicationprovide much higher yields than those obtainedunder no-fertilizer conditions. In the Terai, south-ern Nepal, long-term research trials gave irrigatedrice-wheat yields of 2,750 kilograms per hectare


Recorded sorghum and millet productivity in Sanmatengaprovince (north of Ouagadougou) has improved between1984 and 2002 (see figure).This is due to both better rainfallduring the 1990s and adoption of IWSFM such as stone rows,planting pits (zaï), and compost pits (fosses fumiers), enrichedby local rock phosphates.

Zougmoré et al. (2003) recorded sorghum yields under runoffcontrol of 800–1,200 kg/ha at a water use efficiency of 4–6kg/mm. Combining stone rows and compost, however, gave2,300–2,800 kg/ha and 8–12 kg/mm, respectively. Farmerexperimentation in Yatenga (central Burkina) gave 200 kg/hasorghum with planting pits (zaï) alone, 700 kg/ha in pitsenriched by dry dung, 1,400 kg/ha in pits enriched with mineralfertilizers, and 1,700 kg/ha in pits enriched with both dung andfertilizers. Innovative farmers realized between 900 and 1,600kg/ha of sorghum in good and average years, and still 500 to900 kg/ha in bad years. Every year these farmers were foodsecure (Reij and Thiombiano 2003). Farmers that followedIWSFM used more compost and manure than those who didnot, saw kilogram production per millimeter of rainfall in therainy season go up from 3.8 to 6.6 kg for sorghum and from 3.8to 5.8 kg for millet.Villages with IWSFM harvested (in 2001)800 kg of grain/ha against 600 kg/ha in villages without IWSFM.

Sources: Burkina Faso 2002; Reij and Thiombiano 2003; Zougmoré etal. 2003.

1

600

SorghoMil

500400300200

0

700800900

100

2 3 4 5 6 7 8 9

1984–9 and 1993–2002

Water Use Efficiency (kg/mm)

Yie

ld (

kg/h

a)

10 11 12 13 14 15 16

Linear (Sorgho)Linear (mil)

Box 6.7 Joint Water and Soil Fertility Managementon the Mossi Plateau, Burkina Faso

Rapid increase in Kenya’s population has resulted inrural-urban migration and out-migration from thehigh-potential to eastern semi-arid and arid areas insearch of new farmlands (Makueni and Mwingi Dis-tricts). Soils in these ASALs are low in fertility andreceive little and unreliable rainfall.During 1998–2003,activities were set up to design, test, implement,demonstrate, and disseminate improved, integratedsoil fertility management techniques for various landuse zones, soil types, farming systems, and farm typesin ASAL through participatory efforts of scientistswith all relevant stakeholders.

The experimental results showed that, in rainfedfarming systems, low yields and negative nutrient bal-ances can be remedied by applying higher doses ofmanure and/or fertilizers.Their application in seasonswith erratic rainfall, however, barely attained value-cost ratios above 1. Therefore, farmers in rainfedlands consider water harvesting extremely important,and only when that is ensured are they really moti-vated to invest in soil fertility management.

In the case of (small-scale) irrigated vegetable pro-duction in other parts of the area, farmers’ manage-ment practices were characterized by higherapplication of mineral and organic fertilizers, higherand more stable yields, and higher financial returns. Itshows that as soon as water constraints are allevi-ated, farmers tend to value soil fertility improvinginputs differently.

Source: De Jager, Onduru, and Walaga 2004.

Box 6.8 Integrated Water and Soil FertilityManagement in Semi-Arid EasternProvince, Kenya

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without fertilizer, against 3,790 kilograms perhectare with manure, and 5,310 kilograms perhectare with nitrate, phosphorous, and potassium(NPK) fertilizer. Elsewhere, rice-rice-wheat triplecropping gave 2,000 kilograms per hectare with-out fertilizer, against 8,140 kilograms per hectarewith manure or NPK fertilizer. These results showconsiderable and promising yield gaps.

Impacts include the following:

• Increased food and income security forfarmers

• Healthier and more varied diets for produc-ers and consumers

• Reduced time spent fetching water andfuelwood by replenishment of subsurfacewater supplies and revegetation of less pro-ductive land

• A stop to land degradation and soil fertilitydepletion and their negative off-site effectssuch as siltation, flooding, and encroach-ment of still-less-productive areas


KEY POLICY DECISIONS REQUIRED FOR THE INVEST-MENT. A joint national policy on both water andsoil fertility is required. Limited initial price sup-port may be needed, as well as support to sup-plying and buying sectors (chain approach).National rural programs such as the WorldBank–supported Programme National de Gestiondes Terroirs in Burkina Faso are important tobuild local capacity and decentralize public tasks.

INSTITUTIONAL ISSUES. Key components are com-bining market infrastructure and informationsupport, credit systems, and joint learning andtechnology development on IWSFM (bringingtogether farmers, NGOs, and district agriculturalstaff). The latter requires both strong, client-driven applied research and demand-drivendelivery of outcomes to replace earlier ineffec-tive supply-driven delivery.

TRADEOFFS. Full market liberalization and struc-tural adjustment may depress input-output priceratios for farmers with no or limited access to

new markets. These impacts may need to be bal-anced by investment in market development.

Investment is appropriate where the growth rateof largely rainfed agriculture falls below the rateof population growth. It may also be appropri-ate in countries dominated by irrigated agricul-ture facing stagnating and declining yields.

PUBLIC-PRIVATE DIVISIONS OF RESPONSIBILITY. Inthe field of genetic improvement, the privatesector, national agricultural research centers,and centers under the Consultative Group onInternational Agricultural Research (CGIAR)should distribute tasks. Natural resources man-agement typically is a public duty, but whensupplies of water and nutrients are the directresult of a “service” by a supplying agency, theyhave a price. For a jump start, farmers have tobe given innovation grants, which have workedwell in zaï [planting pits] and compost pit devel-opment in West Africa and in a series of farmerand community-level programs in East andSouthern Africa supported by the RockefellerFoundation (J. Lynam, pers. comm.).

SOCIAL AND ENVIRONMENTAL IMPLICATIONS. Theinvestments will encourage farmers and otherstakeholders to improve their water and soilfertility management. They will also increasetheir food and income, and physical and cog-nitive strength.

Land under IWSFM will remain productive yetsustainable. The program may protect less-endowed lands because they will no longer beneeded for cultivation and may be revegetated.Subsurface water supplies will be replenished,reducing women’s workload in fetching waterand fuelwood.

LESSONS LEARNED

On Burkina Faso’s Mossi Plateau (box 6.7),stone rows reduced runoff and erosion, buttheir establishment needs a “food forwork”–type investment because collection,transport, and placement of the stones isbeyond the physical and financial scope of afarm family. Similarly, rock phosphates arebadly needed in phosphate-deficient lands and


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are applied via compost pits, but grinding rockcontaining phosphorus, transport, distribution,and pricing need some lending to improve landproductivity and reduce expansion of agricul-ture into marginal lands.

In semi-arid Kenya (box 6.8), farmers did notventure into soil fertility improvement as long aswater remained unreliable and scarce. Onlyfarmers with access to water control and com-modity markets invested labor and cash in soilfertility management. Similarly, where soil fertil-ity is still a free good to farmers who can regu-larly occupy new land, farmers will refrain fromimproving and maintaining their fields. IWSFMwill therefore work only where farmers nolonger have this exit option and have positiveincentives to invest their labor and cash andwhere the two resources can be made available,as in the once heavily eroded Machakos land-scape (Tiffen, Mortimore, and Gichuki 1994).

In Nepal, investments in irrigation and soil fertil-ity management have a prominent place on thenational agenda (APP 1997). The ambitious planis to increase fertilizer use from 22 to 150 kilo-grams per hectare by 2015, but privatization ofthe sector has not led to net increases in fertil-izer use since 1995. Supply systems are poor,fertilizer types limited (largely nitrogen andphosphorus-based), fertilizer quality low, watersupply in some places unreliable, and a compar-ison with neighboring states in India on agroe-conomic indicators unfavorable. Therefore, anirrigation and a fertilizer strategy have to gotogether, in a conducive national and districtpolicy environment, and against the backgroundof attractive factor and commodity prices.

Water conflicts at the scheme level and, as a con-sequence, unreliable supplies, can make farmerslose interest and yields plummet to very low lev-els. For the Vallée du Kou, Burkina Faso, Wop-ereis, Donovan, and Nebié (1999) showed thatgood crop husbandry (with nitrate fertilizer) cangive wet season rice yields of 5 tons per hectare,and dry season yields of 4 tons per hectare. Intimes of proper scheme management, yieldsabove 4 tons per hectare have been realized, asshown by the Department of Agricultural Statis-

tics. At the time of the Wopereis, Donovan, andNebié studies (which were conducted during1995–6), water scarcity during the dry seasonwas a major obstacle, and rice yields were below2 tons per hectare per year. This was also due tolack of knowledge on optimal timing, dosage,and mode of fertilizer application; optimal sow-ing and transplanting dates; and the importanceof nitrogen as the major limiting factor to yield.At present, upstream water withdrawal by non-tax-paying vegetable farmers still frustrates theprofitable running of the scheme. The situationcontrasts strongly with the Office du Niger areain neighboring Mali, where a public-private part-nership in running the rice-growing area has ledto a relatively thriving sector.


• Push for an integrated water and soil fertil-ity management policy at the national level.

• Push for prioritization of national-levelinvestments in crop water control, a fertil-izer market (emphasizing the nutrient thatlimits yields most), crop improvementresearch, capacity building, and curriculumdevelopment for IWSFM.

• Push for the prioritization of local-levelinvestments in IWSFM technologies thatbest match farmer ambitions and agro-eco-logical conditions, lighten the workload forwomen, offer off-season options throughsmall-scale water control, recycling oforganic materials from farm and nearbyurban areas, and so on.

• Strongly stimulate government facilitation ofaccess to and information on factor andcommodity markets and prices. This willhelp retailers set up businesses and allowfarmers to make informed decisions. Forfarmers, credit systems have to be in place,and cooperative structures should be stimu-lated to spread risk and forestall excessiveprofit making by middlemen.

• If opportunities to increase supplies ofwater and nutrients are limited, start lookingfor ways to direct the water and nutrients


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that are available in a clever way, so as toraise their use efficiency.

• Organize farmers and other stakeholdersinto groups whose voices are heard at the(sub)national level.


(Sub)national level investments may target thefollowing:

• Delivery of water control infrastructure tai-lored to the physical and economic condi-tions in a region (provision of footpumpsto access shallow groundwater, govern-ment co-investment in small check dams,demand-driven delivery of water conserva-tion technologies)

• Support for a well-functioning fertilizer mar-ket with safeguards for quality

• Genetic improvement of food crops wherenot undertaken by private or public research.

Commodity- and farmer-level investments maytarget the following:

• Capacity building and curriculum develop-ment for farmer groups, NGOs, and district-level agricultural officers on IWSFM. Choicefrom a basket of options should give farm-ers satisfactory and sustainable yields athigh water and nutrient use efficiency.

• Market information and credit systems: water,fertilizer and commodity prices should bewell known to farmers, and credit systemsmust be in place. Support to and training inscheme-managed water supply is essential.

• Innovation grants for modern farmers whoplay a lead and exemplary role withintheir society. The development of plantingpits (zaï) in West Africa is a case in point(box 6.7).

Lending for irrigation technologies, fertilizersupply systems, yield response monitoring, andgenetic improvement may fall under specific orsector investment loans. Loans for improvement

of markets and information systems, training,capacity building, and joint IWSFM curriculumand technology development may fall underTechnical Assistance Loans. Support to innova-tion can typically come through Learning andInnovation Loans.

REFERENCES CITED

APP (Agricultural Perspective Plan). 1997.NEPAL Agriculture Perspective Plan (FinalReport). Kathmandu and Washington, DC:Agricultural Projects Services Centre andJohn Mellor Associates.

Burkina Faso. 2002. Annual Statistics onPlanted Areas, Production and Yields (byProvince, and by Crop). Ouagadougou:Department of Agricultural Statistics, Min-istry of Agriculture and Water Management.

De Jager, A., D. D. Onduru, and C. Walaga.2004. “Facilitated Learning in Soil FertilityManagement: Assessing Potentials of Low-External-Input Technologies.” AgriculturalSystems 79 (2): 205–23.

FAO (Food and Agriculture Organization). 2002.“Water and Fertilizer Use in Selected Coun-tries.” Discussion Paper. FAO, Rome.

Ladha, J. K., D. Dawe, H. Pathak, A. T. Padre, R.L. Yadav, B. Singh, Y. Singh, P. Singh, and A.L. Kundu. 2003. “How Extensive Are YieldDeclines in Long-Term Rice-Wheat Experi-ments in Asia?” Field Crops Res. 81: 159–80.

Reij, C., and T. Thiombiano, eds. 2003.Développement rural et environnement auBurkina Faso: la réhabilitation de la capacitéproductive des terroirs sur la partie nord duPlateau Central entre 1980 et 2001. Rapportde synthèse. Ouagadougou: DGIS/Nether-lands Embassy.

Tiffen, M., M. Mortimore, and F. Gichuki. 1994.More People, Less Erosion: EnvironmentalRecovery in Kenya. London: Wiley.

Wopereis, M. C. S., C. Donovan, and B. Nebié.1999. “Soil Fertility Management in Irrigated


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Rice Systems in the Sahel and SavannaRegions of West Africa.” Part I. AgronomicAnalysis. Field Crops Research 61: 125–45.

Zougmoré, R., A. Mando, J. Ringersma, and L.Stroosnijder. 2003. “Effect of CombinedWater and Nutrient Management on Runoffand Sorghum Yield in Semi-Arid BurkinaFaso.” Soil Use & Management 19: 257–64.

SELECTED READINGS

FAO (Food and Agriculture Organization). 2004.“Scaling Soil Nutrient Balances.” FAO Fertilizerand Plant Nutrition Bulletin #15. FAO, Rome.

Gami, S. K., J. K. Ladha, H. Padhak, M. P. Shah, E.Pasuquin, S. P. Pandey, P. R. Hobbs, D. Joshy,and R. Mishra 2001. “Long-Term Changes inYield and Soil Fertility in a Twenty-Year Rice-Wheat Experiment in Nepal.” Biology andFertility of Soils 34: 73–78.

NEDECO, DHV Consultants BV, Silt Consultants(P) Ltd., Consolidated Management ServicesNepal (P) Ltd., Masina Consulting Engineers(P) Ltd. 2003. Consultancy Services for Sun-sari-Morang Irrigation Project, Stage III,Phase I. Annual Report 4. Kathmandu: Min-istry of Water Resources.

Regmi, A. P., J. K. Ladha, H. Pathak, E. Pasuquin,C. Bueno, W. Dawe, P. R. Hobbs, D. Joshy,

S. L. Maskey, and S. P. Pandey. 2002. “Yieldand Soil Fertility Trends in a 20-Year Rice-Rice-Wheat Experiment in Nepal.” Soil Sci-ence Society of America Journal 66: 857–67.

Sanchez, P. A. 2002. “Soil Fertility and Hunger inAfrica.” Science 295: 2019–20.

Smaling, E. M. A., and C. Toulmin. 2000. “TheItinerary of Soil Nutrients in Africa: Destina-tion Anywhere? Outlook on Agriculture 29:193–200.

Vlaming, J., H. van den Bosch, M. S. van Wijk,A. de Jager, A. Bannink, and H. van Keulen.2001. “Monitoring Nutrient Flows and Eco-nomic Performance in Tropical FarmingSystems (NUTMON).” Part 1: Manual forthe NUTMON-Toolbox. Wageningen, TheNetherlands: Alterra/LEI.

Woomer, P. L., E. J. Mukhwana, and J. K. Lynam.2002. “On-Farm Research and OperationStrategies in Soil Fertility Management.” In B.Vanlauwe, J. Dells, N. Sanginga, and R. Mer-ckx, eds., Integrated Plant Nutrient Manage-ment in Sub-Saharan Africa from Concept toPractice. London: CABI.

This Note was prepared by Eric Smaling with inputs by ErickFernandes, and was reviewed by Tanja Van den Bergen of FAO.Part of the material in this Note is based on work performedunder FAO Personal Services Agreement 0477927-2 (2003).


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INVESTING IN COMMUNITY-BASED SOIL CONSERVATIONAND WATERSHEDMANAGEMENT PROJECTS

What is new? In the absence of an efficient tech-nology transfer system or extension service, theMadagascar Environment Program gave the pri-vate sector incentives to bring moisture-savingagricultural production technologies to farmers.These techniques allowed them to improve theirproduction and revenues while protecting soil andwater resources.

Farming communities in Madagascar overex-ploited agricultural and marginal land andencroached on forests and protected areas. Withinsecure land tenure and few opportunities forcash crop agriculture, farmers expanded theircultivated area using slash-and-burn practices.

In response, the implementing agency for theWorld Bank Environmental Program Project,approved in 1997, financed community-basedsoil conservation and watershed managementmini-projects, helped formulate communitydevelopment plans, and set up land-titling oper-ations near protected areas and forests. The goalwas to enable farmers to keep land in cultivationlonger and increase production and revenues,while reducing biodiversity loss from incursionsinto forests and protected areas. In the absenceof effective government extension services, theagency contracted local NGOs and private con-sultants (operators) located in small cities andrural towns to guide farmers in moisture-saving,zero-tillage techniques and other practices.


The project created an implementation agencyknown as ANAE, the French-language acronymmeaning National Association for EnvironmentalAction. Its purpose was to channel funds tofarmers to finance productive and infrastructuremini-projects, transfer technologies, help farmers

devise community development plans, supervisethese activities, and facilitate land-titling opera-tions (box 6.9).

Individual mini-projects typically consisted of arange of measures combining shorter-term pro-ductivity gains such as rehabilitation of small-scale irrigation infrastructure or the introductionof vegetable cash crops, with soil conservationtechniques that yield longer-term productivitygains such as alley-cropping or planting ofeucalyptus trees on hill slopes. In the longerterm, the gradual spread of mini-projects in aregion, combined with some spontaneousadoption of techniques by other farmers, isexpected to reduce the extent and frequency ofenvironmental problems including uncontrolledbrush fires, degradation of soil structure andfertility, and sedimentation of irrigation reser-voirs and canals. Many mini-projects includeassociated assistance at marginal cost for ruraldevelopment such as literacy or health trainingand provision of potable drinking water.

Soil conservation is relevant for water investmentsbecause soil erosion generates considerable


The ANAE in Madagascar intervened in highly populated agro-ecological areas with soil degradation (erosion) but agriculturalproduction potential. Its mini-projects covered four broad cate-gories: (1) management of soil and water resources (croppingon slopes, reforestation, gully stabilization, fruit tree planting); (2)farm production (intensive rice systems, horticulture, out-of-season cropping, small livestock raising, forage production, fishfarming and combined rice and fish farming, apiculture, stables,village granaries, composting/green manuring); (3) infrastructurefor farm production (small irrigation networks, riverbank pro-tection, bridges, dams, rural roads); and (4) social programs(potable water, protection of springs, construction/rehabilitationof wells and markets, improved ovens, biogas, schools, rurallibraries, and literacy programs).To conserve soil moisture andreduce labor requirements, ANAE disseminated through itscontracted agents innovative technologies such as direct seed-ing, which calls for minimum tillage and covering the soils withmulch or a seasonal/perennial green crop.

Source: Bienvenu Rajaonson, personal communication.

Box 6.9 National Association for EnvironmentalAction ANAE:A Wide Range of Rural Investments

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management costs to the farming communitythat depends on the water resources of thereservoirs. Erosion-induced sedimentation ofirrigation systems increases investment andmaintenance costs, reduces agricultural pro-ductivity because of poor water control, andreduces total irrigable area. Maintaining anadequate water supply to the reservoirs forfarming entails expensive de-silting operationson irrigation canals and dredging thousands ofcubic meters of sediment from the irrigationdrainage system. The total erosion mitigationcost can run into several million dollars. Soilconservation can greatly reduce siltation, thusraising the cost-effectiveness of agriculturalwater investments (box 6.10).

ANAE mini-projects provided farmers with tech-nical assistance, training, and inputs (such asseed, fertilizers, small equipment, tree plantlets,

infrastructure, books, and improved ovens)through the agency’s regional offices on a cost-sharing basis. ANAE advertised to attract localNGOs and private consultants and also con-tracted government extension agents but on acompetitive basis.

The providers sought to interest communities inthe program. They helped them select, formu-late, and submit applications and helped somecommunities develop community developmentplans. The operators established a visit schedulefor technology transfer and supervision. ANAEbuilt a partial cost-recovery system to strengthenownership and sustainability of project benefitsand to cover partial operating costs. Costs to berecovered were for inputs and small equipmentused in income-generating activities. Cost shar-ing between ANAE and beneficiaries fluctuatedbetween 22 percent and 97 percent. Beneficia-ries paid with labor and local materials. ANAEalso piloted land-titling operations and paid forthe issuance of land titles in selected areas.

OUTPUTS AND IMPACTS

Beneficiary response exceeded expectations.ANAE had hoped to implement 4,000 mini-proj-ects with 100,000 families on a surface of 32,000hectares. By the end of the project, it hadfinanced 4,791 mini-projects, benefiting 372,014families on 75,839 hectares. It had providedcapacity-building services to 34 producerorganizations and helped them becomerespected interlocutors with government anddevelopment agencies. Its titling operations,involving some 15,000 hectares, had touched20,000 families. Its operators had assisted farm-ers in the elaboration of some 70 communitydevelopment plans, some of which attractedANAE funding for the ensuing activities.Twenty-six percent of the nearby farmers whodid not participate in ANAE activities took upthe promoted technologies on their own.

PRODUCTIVITY INCREASES AND SOIL EROSION. Themost popular technology was a zero-tillagetechnique with moisture-retaining mulches. Itimproved soil quality and productivity and,from the first year, increased yields: rainfed rice


An outcome of the economic analysis of the Madagascar Envi-ronmental Program Project indicates that, to maintain an ade-quate water supply to the reservoirs for farming, expensivede-silting operations had to be undertaken on 25 kilometersof irrigation canals, with 25,000 cubic meters of sedimentdredged from the irrigation drainage system.The rehabilitationcosts to raise the dam on the Amboromalandy reservoiramounted to US$3.3 million. In addition, rehabilitation of thecanal system required additional investments of US$1.2 mil-lion. These costs, combined with the project costs ofUS$300,000 for rehabilitation of the Ambilivily and Ambon-dromifehy watersheds, amounted to a total erosion mitigationcost of US$4.8 million.

Failure to undertake these corrective actions or to otherwiserehabilitate the degraded watersheds resulted in the sedimen-tation of 150 hectares of irrigated area every year.The annualloss in production was estimated at US$13.8 million. Whileshort-term mitigation costs were much lower than the valueof lost rice output, such corrective investments were likely tobecome prohibitively expensive as long as erosion continuedunabated.A more sustainable response, and a less costly one inthe long term, was to invest in rehabilitating the watershed,which was expected to improve overall regional productivity.

Source: Madagascar “Environmental Program Support Project.” StaffAppraisal Report 1997.

Box 6.10 Economics of Erosion Mitigation and Implications for Agricultural Water Projects

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by 188 percent, maize by 201 percent, soybeansby 170 percent, and green beans by 99 percent.(Comparisons are with traditional cropping.)Direct seeding also reduced labor time in thefield by 40 percent from the second year on, anaverage labor saving of US$112 per hectare.Also, over a five-year period, farmers plantingtrees and direct seeding on slopes of 12 percentdecreased soil erosion by 80 percent, from 8tons to 1.6 tons per hectare.

INCREASED FARMER REVENUES. Revenues increasedsignificantly. The internal rate of return was 12–18percent for reforestation, 26–82 percent for anti-erosion technology, 26–106 percent for smalldams, and 19–202 percent for production intensi-fication and diversification. Using improved ovenssaved 1.6 tons per year per household in fire-wood, equivalent to US$23 per year per house-hold. The corresponding saving in timepreviously used to fetch firewood was about 144person-days a year, equivalent to US$115 per yearper household. Thus, one household could saveUS$138 per year, not a small sum for the averagehousehold in Madagascar. The impact on theenvironment is translated into the preservation of0.11 hectares of forest per year per household.

ENCROACHING ON FORESTS AND PROTECTED AREAS.The annual rate of deforestation, deduced fromsatellite imagery, decreased to 0.7 percent forthe protected areas, and 1.0 percent for thegazetted forests. This can be compared with a 2percent annual forest loss (FAO statistics) in theabsence of any intervention. Analysis con-ducted on biodiversity loss showed a slow-down, from a 1.66 percent index to 0.62percent over five years. In addition, theendemism rate index was reported to haveincreased from 0.6 percent in 1993 to 0.74 per-cent in 2000, a 23 percent increase.


Investments should incorporate the lessonselaborated below to significantly increase thepotential of replicating this experience.

LAND TENURE SECURITY. Adoption of technologiesthat pay back in the medium to long term requires

capital investments and time and effort on the partof the farmers. Few farmers will seriously invest intheir land without an assurance that they canhang on to the soils in which they invest andshare equitable benefits over a joint capital invest-ment, particularly when technologies extend overthe tenure of several land owners. Hence,improved land security is a means to improve soil,water, and biodiversity conservation.

AGRICULTURAL SERVICES. The training and exten-sion services offered by the private operatorswere reported as less than adequate in terms ofvolume and quality in many areas. Some opera-tors were selected because they were the onlyones in the area or because the selectionprocess was not rigorous enough. More impor-tant, operators were not given an incentive tofollow up on farmers after completion of themini-project.

ADAPTING TECHNOLOGIES. Fitting technologies tothe level of farmers’ willingness to change theirhabitual way of farming could have helpedimprove adoption. Some farmers complainedthat they had dropped some technologiesbecause the projects were difficult and time-consuming to apply.

ACCESS TO AGRICULTURAL CREDIT. Credit is impor-tant for farmers in a country such as Madagas-car, where they are among the poorestmembers of society. This is especially true forwomen, who generally lack clear title to land orother assets that lenders accept as collateral.

HOLISTIC APPROACH TO TECHNOLOGY GENERATION

AND TRANSFER. The example of livestock andforage production is cited. Because farmers usecrop residues and biomass as a source of feed,they were reluctant to use them for mulching indirect seeding. Late in the process, researchtried to correct this oversight and started to takea farming system approach to resolve the com-petition for biomass between livestock andcrop production.

INFORMATION, EDUCATION, AND COMMUNICATION.To increase the adoption of technologies, infor-mation, education, and communication are


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essential. Community leaders and governmentrepresentatives should be brought into the loopand asked to actively encourage farming com-munities to adopt new technologies to improvetheir production and revenues while protectingthe environment.

DECENTRALIZATION. ANAE operated on a highlycentralized basis with few qualified staff in thefield. Contracting out to local operators, whilehaving too few ANAE staff in the field to super-vise all work contracted out, was not conduciveto accountability and best implementation, andexacerbated farmers’ risk-aversion behavior.

MARKETS. Market connections and developmentare often forgotten in the design of income-gen-erating activities. Accessible market opportunities

would give farmers a significant incentive toadopt better farm production technologies.

COST RECOVERY. Cost recovery worked as a dis-incentive for technology adoption and did notsucceed. Farmers might have accepted it, hadtheir payments gone into a joint savingsaccount that they could later use to access thecredit system, rather than to ANAE.


Madagascar. “Environmental Program SupportProject.” Closed. Project ID: P001537.Approved: 1997.

This Profile was prepared by Jumana Farah and reviewed byInès Beernaerts and José Benites of FAO.


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INVESTING IN WATERSHEDMANAGEMENT IN CHINA’SLOESS PLATEAU

What is new? The project, located in the YellowRiver Basin, built moisture-retaining terraces onwhich poor farmers developed sustainable andproductive farms that reduced soil erosion. On 1.5million hectares, unsustainable crop cultivation oneroding steep slopes was replaced with moisture-retaining broad flat terraces, and trees and shrubswere planted on steep erodible wastelands.

The Loess Plateau region, an area of some640,000 square kilometers in the Yellow Riverdrainage basin, is subject to severe geological soilerosion (about 85 percent) and human-inducederosion (about 15 percent), which wreak havocin downstream river management. About 45 per-cent of the land is farmed, mostly on erodibleslopelands, and the rest is steep, uncultivatedwasteland with a sparse vegetative cover. Theregion is one of the poorest in China.

The Loess Plateau was subjected to severalcampaigns in the 1950s and the 1970s to buildterraces and plant trees. These campaigns toreduce soil erosion met with some success, butthere was little impact on farm incomes for sev-eral reasons. In those days, the governmentstressed grain production and discouraged indi-vidual initiative in the production and market-ing of high-value crops. The terraces werenarrow and uneven, and lacked the simplest ofaccess roads. Tree plantations were under com-munal control, which meant that no one feltresponsible for tending and protecting them.Above all, there was no control over free-graz-ing of goats and sheep.

By the early 1990s, recognition was growing inChina that profitable and sustainable farmingcould be made compatible with water conserva-tion. Thus, the stage was set for the LoessPlateau Watershed Rehabilitation project. Theproject adopted an integrated watershed rehabil-itation strategy that converts cultivated farmland

to moisture-retaining terraces, and plants treesand shrubs on the wasteland. Farm householdsown all the farmland and the plantations underleases of 30 to 50 years. The households alsoundertake to repay the portion of the cost ofeach component (between 40 percent and 60percent) represented by the credit from theInternational Development Association (IDA).The project has demonstrated on an area of 1.5million hectares that the conservation of landand moisture allows the development of pro-poor, small-scale agriculture.

Elements of success include close cooperationwith the farmers in preparation of detailedplans for changes in land use (based on geo-graphic information system [GIS] data), a focuson income generation, close links betweenphysical investments and policy change (graz-ing bans and long-term land tenure security),and a strict physical and financial monitoringsystem at all levels.


The objectives of the project were to alleviatepoverty in the Loess Plateau by increasing agri-cultural production and incomes and toimprove ecological conditions in tributarywatersheds of the Yellow River by introducingmore efficient and sustainable uses of land andwater resources and by reducing erosion andsediment flow into the Yellow River. The proj-ect area of 1,560,000 hectares in four provincescontains about 1,000 small watersheds rangingfrom 1,000 to 3,000 hectares. Typically, a water-shed includes several villages.

OUTPUT AND IMPACTS

The main achievements of the project were ter-races and farm roads (90,500 hectares),afforestation (290,000 hectares), orchards(57,000 hectares), grasslands (155,000 hectares),sediment control dams (149 key dams, 1,140warping dams, and 1,956 check dams), andinstitutional support (training centers, vehiclesand equipment, computers and software forGIS and information systems). The project,begun in 1993, was completed in 2002. The


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total project cost was US$252 million. An IDAcredit of US$150-equivalent financed 60 percentof the project cost.

The increase in agricultural production andincomes through more efficient and sustainableuse of land and water resources exceeded expec-tations. More than a million farmers in the projectarea directly benefited from the project. Annualgrain output rose from 427,000 to 700,000 tons,fruit production from 80,000 to 345,000 tons,(unfortunately, because of limited species diver-sity, a lot of waste occurred with apples all readyfor harvest at the same time; with limited avail-able infrastructure, prices collapsed). Per capitaincome in farm households increased from yuan360 to yuan 1,263 (US$44 to US$154).

Within the watershed, crop cultivation on steepslopes was eliminated and replaced by smallerareas of newly constructed terraces with accessroads. Terraced land retains water and resistssoil erosion. The improved soil and waterregime and better access for inputs and outputsgive farmers the opportunity to plant a widerrange of crops with much higher yields than onslopeland. In a year of average rainfall (lessthan 600 millimeters), grain yields on terracescan reach two to three times those onslopelands. The slopelands and uncultivatedwastelands were planted to trees and shrubsthat were contracted to farmers under longleases. Pasture was planted on large areas ofunused land. Sediment control dams were builtin the gullies to intercept sediment and createnew land for crops.

The project took the approach of working withand developing the existing institutions inChina’s public administration. Project manage-ment offices were established at each level—the province, prefecture, county, and township.These offices brought together specialists in soiland water management, agriculture, horticul-ture, and forestry. Management at the villagelevel was through a village committee. At eachlevel, there was a group of leaders, composedof senior officials and specialists.

The cultivated land was already held under long-term contracts, but the wasteland was simply

government-owned land. The land planted totrees and shrubs was auctioned, with preferencefor local villagers, and the buyers were given a50-year land lease.

Farmers are responsible for repaying about 60percent of the cost (the portion disbursed fromthe IDA credit); the balance consisted mainly offarmers’ own labor. The repayment responsibil-ity and land tenure security are strong incen-tives for farmers to preserve and manage theland developed by the project.

A Second Loess Plateau Rehabilitation project,requested by the government, began in 1999. Acritical element in the success of the two proj-ects was the ability of local government leadersto mobilize public participation by detailedplanning at the village level in close consulta-tion with the farmers. The government isactively preparing a third project.

LESSONS LEARNED

SOIL AND WATER CONSERVATION IN THE LOESS

PLATEAU IS COMPATIBLE WITH POVERTY ALLEVIATION

THROUGH SUSTAINABLE AND PRODUCTIVE AGRICUL-TURE. Early efforts to treat the Loess Plateauwere not integrated with efforts to raise agricul-tural productivity and farm incomes. The proj-ect has convinced planners and farmers thatland conservation is compatible with sustain-able and productive agriculture and that theyare mutually reinforcing.

INTEGRATED AND COMPREHENSIVE LAND USE PLANS

MUST BE PREPARED FOR ALL SMALL WATERSHEDS. Akey element of the above strategy is the imple-mentation of detailed land use plans that aredesigned to create high-quality terraces for fieldcrops and orchards to compensate for takingsteep slopeland out of crop production, to takeslopeland that is too steep out of crops andplant trees, to ban grazing by goats and sheep,to plant pasture for cut-and-carry feeding oflivestock, and to plant trees that can generateincomes in the long term.

FARMERS SHOULD ACQUIRE LONG-TERM LAND CON-TRACTS FOR NEWLY DEVELOPED LAND. Land con-tracts should be signed between farmers and


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the authorities for newly developed land. Aftertree planting, the wasteland should be auc-tioned to farmers (with competition limited tovillagers unless there is insufficient demand),and successful bidders should be given a long-term contract.

COSTS SHOULD BE RECOVERED FROM THE BENEFICI-ARIES. In the IDA project, about 60 percent ofthe project cost was recovered from the benefi-ciaries. This provides incentives to maintain anddevelop the land and to reduce the burden onpublic funds.

QUALITY AND FINANCIAL CONTROLS. A detailedphysical check of progress and quality of com-pleted work should be made, and spot checksshould be made periodically by the prefecturesand provinces. These should be based on

detailed maps of the land use plan for eachwatershed. Funds should be disbursed onlyafter work is inspected and approved.

Disbursement for most forms of land develop-ment and afforestation should be based on pre-viously agreed unit prices (costs per hectare).


China. “Loess Plateau Watershed RehabilitationProject.” Active. Project ID: P003540.Approved: 1994. Within World Bank, avail-able at http://projportal.worldbank.org.

This Profile was prepared by William Smith with inputs fromJuergen Voegele.The Profile was reviewed by Rod Gallacherof FAO.


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INTEGRATED WATER MANAGEMENT TO ENHANCEWATERSHED FUNCTIONS ANDTO CAPTURE PAYMENTS FORENVIRONMENTAL SERVICES

What is new? This Innovation Profile focuses onland management in the context of incentives andarrangements for reducing upstream-downstreamnegative impacts of water use by irrigators andother stakeholders in the watershed. Market-basedmechanisms—if adapted to local conditions—canhelp promote resources management changes thatenhance productivity and ecosystem service syner-gies, while minimizing undesired tradeoffs.

Natural resources (biodiversity, forests, land,water) use has upstream and downstreamimpacts not only on soil and water productivity,but also on ecosystem services such as biodi-versity niches, water flows and quality, erosioncontrol, and flooding and sedimentation (box6.11). Watersheds are generally managed to col-lect the water from the upper parts for use bypeople living lower down. The protection ofvegetation for soil cover in the upper parts ofthe watershed is fundamental for maintainingsoil properties conducive to good water infiltra-tion, ground water recharge, and moderatedsurface water flow—conditions that can pro-vide adequate volume and quality of water andavoid soil erosion and sediment flows to lower-lying dams, lakes, and ponds. Land and waterusers in the upper watershed do not necessarilyadopt resources management practices thatbenefit downstream populations. In manycases, practices that support the short-term sur-vival of upstream communities (including high-input, heavily mechanized agriculture, anddairy and hog farms) can be quite detrimentalto downstream settlements. Government regu-lations have generally been ineffective in pro-moting good natural resources (land, water,forest) stewardship.


This Innovation Profile highlights the variety ofmarket-based mechanisms and their criteria forrewarding good natural resources managementvia payments for the resulting environmentalservices. For trading purposes, the servicesneed to be tangible, scientifically quantified,and in accordance with local legislation. Box6.12 provides an example of a program that isevaluating environmental service paymentopportunities in Asia. The payment mecha-nisms include private deals, public payments,and open trading schemes among local com-munities, municipalities, companies, andnational governments.

The market-based incentive systems that giverewards, in the hope of promoting sustainableland and water stewardship in catchments andbasins, generally subscribe to the concept thatenhanced resources management in upper catch-ments result in both productivity and ecosystemservices that can benefit stakeholders in thelower catchments. In most incentive-based sys-tems, the beneficiaries are charged an appropri-ate amount that is then equitably shared amongthe land users in the upper catchment (box 6.13).

Emerging markets for payments for ecosystemservices in Costa Rica (Miranda, Porras, and LuzMoreno 2003), India, the United States, and Aus-tralia, have resulted in some positive behavioralchanges in resources management on the part ofupstream land users—with significant downstreambenefits (Pagiola, Landell-Mills, and Bishop 2002).Watershed services are highly dependent on thewatershed or subwatershed scale, however, whichlimits market scale and size.

OUTPUT AND IMPACTS

The following “best practices” can be envisagedfor the assessment of costs and benefits of suc-cessful watershed management for equitableupstream-downstream resources management:

(1) All parties in the watershed should have astake in the management program and


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Forests increase runoff? Catchment studies show that because of increased interception, transpiration, and deeper rootingdepth 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 reducedry 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 notshow 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, forestmanagement activities (roads, drains, soil compaction) may increase floods. Studies show flood prevention benefits for smallevents only in small catchments and little or negative benefit for large rainfall events. Studies in large catchments show nomeasurable 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 6.11 Are Forests and Reforestation Beneficial for Hydrology and Groundwater Recharge?

RUPES is a program for developing mechanisms forrewarding the upland poor in Asia for the environ-mental services they provide.The goal of RUPES is toenhance the livelihoods and reduce poverty amongthe upland poor while supporting environmentalconservation on biodiversity protection, watershedmanagement, carbon sequestration, and landscapebeauty at local and global levels.The primary impactof RUPES will be to create and study the experienceon the use of environmental reward transfers as atool for promoting effective and sustained environ-mental management while increasing benefit flows topoor upland communities.The main result will be adeeper and more practical understanding of how toformulate such arrangements, their viability, and thepotential for wider use.

Source: RUPES Program of the World Agroforestry Cen-tre, Southeast Asia. Online at http://www.worldagroforestrycentre.org/sea/Networks/RUPES.

Box 6.12 Rewarding the Upland Poor for Environmental Services:The RUPES Program

Two well-known examples of payments by lowland communitiesfor ecosystems services provided by upland communities can befound in New York City and in the Cauca Valley in Colombia. In1989, New York’s water, piped in from the Catskills Mountains,was found to contain rising levels of pollutants.The Environmen-tal Protection Agency (EPA) ordered the city to build a water fil-tration plant at an estimated cost of US$6 billion to $8 billion.Instead of building the expensive filtration plant, however, thecity opted to work with the residents of the Catskill watershed.They financed reforestation projects, created riparian wood-lands to protect the integrity of the streams, and signed conser-vation easements with local farmers to enhance filtration ofsediments and pollutants by the riparian vegetation.The qualityof the water improved dramatically, and the cost of this collabo-rative effort with the residents of the Catskills was less thanUS$2 billion—a big saving to New York City taxpayers. Similarly,in Colombia’s Cauca Valley, agricultural producers pay fees, viatheir WUAs, to pay upland communities for soil conservationon steep slopes, reforestation, and the maintenance of riparianvegetation buffers to improve water flows and reduce sedimen-tation in irrigation canals.

Source: Author.

Box 6.13 Incentive Programs to Avoid Costly Investments in Water Treatment andReduce Environmental Pollution and Sedimentation

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watershed development functioned as anequity-enhancing mechanism.

(2) Because irrigation water is often the mostvaluable resource of watershed manage-ment, it is essential to develop mechanismsthat allow an equitable sharing of the water.This resource sharing can substitute fordirect payments to some stakeholders.

(3) Where common property is involved,especially in the upper catchments, it isessential that local communities collec-tively protect the common land so that theirrigation water resource is not compro-mised by illegal deforestation or overgraz-ing. Collective action is easier wherecommunities are homogeneous.

(4) The benefits of good resources manage-ment and water harvesting for irrigation inwatersheds will vary with agroclimatic andbiophysical conditions. If the benefits arenot substantial enough to be meaningfullyshared, environmental service paymentsmay not be economically viable.

(5) Leverage for the landless and less powerfulstakeholders in the watershed is necessaryto enable them to participate effectively inthe program. In some cases, external insti-tutions may need to play a facilitating roleon behalf of the “weakest” stakeholders.

(6) If irrigation water is used to produce greatervegetation biomass on common lands, bio-mass-sharing agreements are needed, espe-cially for landless stakeholders.

If water harvesting results in improved rechargeof groundwater aquifers, designating ground-water a common property resource can provideall stakeholders with a powerful incentive toimprove natural resources management prac-tices and collective action.


To ensure that incentive-based systems remainsustainable and can successfully facilitate the

improved management of irrigation water andassociated natural resources, the following chal-lenges have to be overcome:

(1) Identifying and reliably quantifying the vol-ume and quality of water flows and associ-ated benefits (vegetation biomass and soilcover, reduced erosion, added food andfiber production) provided by good landand natural resources stewardship.

(2) Identifying the risks (such as climatechange) and opportunities for mitigatingthe risk to the irrigation water and naturalresources management operations (Nobelet al. 2005; Watson et al. 2005).

(3) Identifying and charging the beneficiaries ofthe improved volume and quality of waterflows to provide the financing mechanism.

(4) Ensuring that payments are equitably dis-tributed to all stakeholders and the amountnot only compensates for the costs ofchanges in resources management but alsoreflects the value of the services provided.Since supply price and ecosystem benefitsare based on location in the watershed orlandscape, Chomitz, Brenes, and Constan-tino (1998) suggest a framework based onspatial information to guide prioritizationand pricing.

(5) Creating an appropriate decision-makingframework and institutional supportstructure that can be accessed by allstakeholders. The World Bank’s DRAIN-FRAME, a multistakeholder, landscape-scale tool, can facilitate a transparent andconsensus-building approach to prioritysetting and decisions on access and allo-cations (Abdel-Dayem et al. 2004; seealso IP 5.1). Watershed modeling toolsare also very useful in engaging commu-nity, research, and policy stakeholders(Calder 1999).

To leverage existing public investment inenhanced watershed management for environ-mental services, the following opportunities exist:


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(1) The use of irrigation to enhance the pro-ductivity of staple food crops per unit areaoffers significant opportunities for releasinglarge areas of poorly productive land forafforestation, reforestation, and agro-forestry. This can lead to a range of prod-ucts and ecosystem services such asbiodiversity conservation and beautifullandscapes for ecotourism. Afforestation-reforestation per se does not necessarilyimprove hydrological functions of water-sheds, however (box 6.13).

(2) The Kyoto Protocol is now operational fol-lowing the Russian Federation’s decision toratify it. Opportunities are emerging forcommunities to obtain payments for carbonsequestration via reforestation and agro-forestry systems adjacent to high-productiv-ity irrigation land (Bass et al. 2000). TheWorld Bank’s BioCarbon Fund is currentlyfinancing prototype operations of morethan US$410 million, managed in six funds(either approved or under operation).

(3) The Global Environmental Fund’s OP 15program has dedicated significant grantresources to the rehabilitation of degradedlands. These grants can be used to leverageprivate investor funds for enhanced watermanagement and environmental benefits.

REFERENCES CITED

Abdel-Dayem S., J. Hoevenaars, P. P. Mollinga,W. Scheumann, R. Slootweg, and F. vanSteenbergen. 2004. “Reclaiming Drainage:Toward an Integrated Approach.” The Agri-culture and Rural Development Report No.1. World Bank, Washington, DC.

Bass, S., O. Dubois, P. Moura Costa, M. Pinard,R. Tipper, and C. Wilson. 2000. “RuralLivelihoods and Carbon Management.”International Institute for Environment andDevelopment, Natural Resources Issuespaper No. 1. IIED, London.

Calder, I. R. 1998. “Water-Resource and Land-Use Issues. Systemwide Initiative on Water

Management (SWIM).” Paper No. 3.Colombo, Sri Lanka: International WaterManagement Institute.

———. 1999. The Blue Revolution: Land Useand Integrated Water Resource Manage-ment. London: Earthscan.

Chomitz, K. M., E. Brenes, and L. Constantino.1998. “Financing Environmental Services: TheCosta Rican Experience and Its Implications.”Paper prepared for Development EconomicsResearch Group (DECRG) and Environmen-tally and Socially Sustainable Development(ESSD). World Bank, Washington, DC.

Miranda, M., I. T. Porras, and M. Luz Moreno.2003. The Social Impacts of Payments for Envi-ronmental Services in Costa Rica. A Quantita-tive Field Survey and Analysis of the VirillaWatershed. London: International Institute forEnvironment and Development (IIED).

Watson, Robert, Ian Noble, Ajay Mathur, ToddJohnson, Eduardo Dopaza, and Frank Sper-ling. Forthcoming. “A Proposed Approachfor the World Bank to Climate Change.”Draft.

Nobel, Ian et al. Forthcoming Screening ToolConcept for Climate Change.

Pagiola, S., N. Landell-Mills, and J. Bishop.2002. Selling Forest Environmental Services:Market-Based Mechanisms for Conservationand Development. London: Earthscan.

USEFUL LINKS

BioCarbon Fund: http://carbonfinance.org/biocarbon/home.cfm

Conservation Finance Alliance: http://www.conservationfinance.org/CFPapers.htm#PES

Ecosystems Market Place: http://www.ecosys-temsmarketplace.com.

RUPES Program, The World Agroforestry Cen-tre, Southeast Asia Web site: http://www.


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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 inputsfrom Stefano Pagiola. It was reviewed by Kenneth Chomitz.


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77INVESTING IN AGRICULTURAL WATERMANAGEMENT IN MULTIPURPOSE OPERATIONS

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 andwatershed management, improving the quality of development. How CDD programs and relatedsocial fund financing mechanisms can be applied to multipurpose investments is discussed in thischapter. Bottom-up stakeholder involvement through CDD can improve the quality of naturalresource 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 onlytheir own interest. Cost sharing is important, because it binds the community and leads to better and

• 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

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more sustainable investment. It also reducescosts, because it gives the community a stake ineconomizing. The value of a community-drivenapproach to water management is confirmed bythe the Republic of Yemen case study discussedin chapter 4. Even in a situation resembling“water resources anarchy,” individuals, throughlocal interest groups and using a “partnership”approach, can be motivated to change theirwater resource management behavior in a wayconsistent with the public interest. (See IN 7.1on the benefits from CDD approaches and IP4.1 on the illustration provided by the Republicof Yemen. On demand drive and communityorganization generally, see also chapters 2 and6. On the virtues of cost sharing, see IN 1.4 andIN 1.5, and, for cost sharing in watershed man-agement, IN 6.2. See also “Community-DrivenDevelopment for Increased AgriculturalIncomes,” in Agriculture Investment Sourcebook(AIS), Module 11.)

Aquaculture is the fastest-growing animalfood–producing sector. A very different type ofmultipurpose investment is in aquaculture.Aquaculture has grown by an average 9 percentannually since the 1970s and is expected toprovide more than 40 percent of fish consumedby 2020. Aquaculture investment can improvefood security and nutrition, and create jobs andlivelihoods for the poor. It can bring unproduc-tive land and “unwanted” water (that is,drainage and flood water) into use, and fish caneven be sown into canals and cropped fields.

However, intensive systems can harm habitatsand affect both water and soil quality througheutrophication and acidification. Extensive,low-input systems dependent on local materialsand wastes are good pro-poor investments.(See IN 7.2. See also “Aquaculture ProductionSystems” and “Income Generation throughAquaculture,” in AIS, Module 4.)

Considering investments together can createtechnical and economic synergies, as in thecase of irrigation and potable water supply.Water investments tend to be made on a sec-toral approach, although integrated approachesat the planning level are now more common. Atthe community level, there can be advantagesin considering investments together. For exam-ple, joint investment in potable water supplyand irrigation can improve both incomes andhealth. (See IP 7.1 for examples from Vietnamand Guatemala.)


Possible investments in this area include thefollowing:

• Social fund and CDD projects for small-scale irrigation and watershed management

• Integrated drainage investments

• Aquaculture investments

• Joint potable water and irrigation systems


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INVESTMENT NOTE 7.1

INVESTING IN AGRICULTURALWATER THROUGHCOMMUNITY-DRIVEN ANDSOCIAL FUND APPROACHES

CDD and social fund approaches have been devel-oped to improve the relevance, quality, and sus-tainability of pro-poor investments. They can beused for small-scale irrigation and watershed man-agement investments, where substantial social cap-ital already exists. They are not suited tolarge-scale irrigation, where participatory irriga-tion management is indicated. Both approachescan be efficient for small-scale agricultural waterinvestments, but care has to be taken over equityand environmental impacts.

Governments have promoted large-scale irriga-tion for millennia. Land and water managementwithin a catchment has similarly often been thedomain of the planner and the top-down devel-oper. Formal management institutions have beentop down, too. But community-based irrigationand watershed management also has a history,where groups of farmers develop schemes toimprove their agriculture, and local institutionsmanage runoff, forests, and rangeland.

Government-planned and -executed schemesoften lack the local information and the institu-tional control to ensure optimal resource alloca-tion, poverty targeting, and sustainability. Inresponse, CDD approaches have been designedto promote decentralized, participatory, andequitable development, with priority to poorrural communities. CDD takes many forms buthas, as a common organizing principle, delega-tion of powers and responsibilities to communi-ties to turn them into actors for their owndevelopment. Nevertheless, major risks andchallenges exist. Recent evidence (Mansuri andRao 2004) suggests that many CDD projectshave not been effective in targeting the poor.Moreover, CDD projects may still be dominatedby elites, and both poverty targeting and projectquality tend to be markedly worse in moreunequal communities.1

First-generation CDD projects focused on assetcreation and on building community capacity tooperate the new facilities. The current second-generation projects seek, in addition, to createmanagement skills for a broader developmentagenda. Social funds (SFs) typically adopt CDDapproaches, and in this book SF is considered thefinancing mechanism for CDD approaches. Thekey feature of SFs is that stakeholders determinethe investments through subproject proposals.SFs have decentralized and efficient operatingprocedures and aim at institutional developmentfor both communities and central and local gov-ernment. The investments are relevant to the pri-ority needs of the poor and are sustainable.

INVESTMENT AREA

CDD/SF approaches can also be employed foragricultural water management. They are wellsuited to small- and medium-scale irrigation,which usually has a long social and institutionalhistory of community involvement and wherethe scale is appropriate for local management.The community may consist of all familiesresiding in a village but more frequently con-sists of only people who, through inheritanceor labor investment, are co-owners of an irriga-tion system.

CDD/SF approaches for large-scale irrigation(LSI) are more problematic. Experience showsthat incorporating the views of stakeholders isvital, and LSI investments work best when basedon a practical “ownership” of the project byfarmers and on a practical participation to ashigh a level as possible. However, LSI can neverbe fully driven by community imperativesbecause it requires planning, study, investment,and management capacity way beyond commu-nity capability. For LSI, gradations of participa-tory irrigation management have been employedinstead of CDD approaches. Participatory irriga-tion management allows the essential top-downplanning and financing considerations to be rec-onciled with requirements expressed by users(see IN 2.1). As seen in box 7.1, CDD can, how-ever, be employed at the lowest level of LSI—forexample improvement of irrigation turnouts oron-farm efficiency improvements.

AGRICULTURAL WATER MANAGEMENT IN MULTIPURPOSE OPERATIONS

240

For watershed management, scale and technicalconsiderations are again often beyond the scopeof community capability, and at the basin level,top-down study and planning are clearly needed.However, experience has shown that top-downapproaches alone rarely work. Local communi-ties need to “own” the interventions to a degreethat planners can rarely induce. CDD/SFapproaches can be adapted for watershed man-agement activities (box 7.2). (See also IN 6.2.)

Experience has confirmed that CDD/SFapproaches can be used for small- andmedium-scale irrigation. Recent improvementprojects have been based on existing socialcapital and hydraulic layouts. CDD approacheshave proven particularly suitable, for example,in the Republic of Yemen and the Arab Repub-lic of Egypt, for community water basins foragriculture, livestock, and human use. In water-shed management, existing resources manage-ment institutions (for example, for runoff,forest, and rangeland management) haveformed the basis of CDD approaches. In situa-tions of public interest or third-party externali-ties such as forest conservation or soilprotection, where regulation has been used inthe past, comanagement approaches are beingtried with some success, but the evidence is notyet conclusive.

POTENTIAL BENEFITS

An evaluation of CDD/SF approaches (Carvalho2002) finds significant advantages in theapproach. The first benefit is information. Rely-ing on local demand overcomes the typicalinformation gap about the high-impact invest-ment needs and the correct design of projects.Local demand also has an inbuilt holistic visionof the management of land and waterresources. Second, CDD/SF builds on andstrengthens existing social capital, with particu-lar emphasis on helping communities adapt tochanged environments—for example, adaptingto managing groundwater rather than springs oradapting to dealing with a modern state and itsprojects and financing windows. Third, CDD/SFcan help reconcile public and private interests,as in the watershed management example inbox 7.1. Fourth, CDD/SF should improvepoverty targeting and inclusion. Fifth, demanddrive should help improve sustainabilitythrough ownership. Finally, SF procedures areusually simple and decentralized, so that com-munities can participate in design and contract-ing, and procurement and disbursement can berapid, which helps build trust and ownership.The more recent evaluation of Mansuri and Rao(2004) emphasizes that these benefits can beachieved only if the approach is applied with


The introduction of farmer organizations for decision making,resource mobilization, management, communication, and con-flict resolution turned the Gal Oya irrigation system, onceknown as the most deteriorated and disorganized irrigationsystem in Sri Lanka, into one of its most efficient. Productionof rice per unit of water increased by 300 percent, and at leasttwo-thirds of the increase was due to the creation of newroles and relationships and the activation of certain norms andattitudes among irrigators.

Source: Kahkonen 2003.

Box 7.1 The Power of Social Capital—An Example from Large-Scale Irrigation

In the early 1990s, Morocco prepared a national watershedmanagement plan and piloted it in the Oued Lakhdar water-shed. CDD approaches were used because previous attemptsat top-down watershed management had not produced last-ing results.

The project worked with community representatives to iden-tify a local agenda comprising production investments such asirrigation, social investments, and conservation measures.Thisapproach was designed to reflect interactions between com-munities and the environment and between upstream conser-vation and downstream production.To provide incentives forconservation measures, cost sharing for these was lower, pro-ductive investments such as fruit trees or fodder crops wereused wherever possible, and the downstream productioninvestments were undertaken first. Now at the end of theproject, communities have created their own permanentdevelopment associations and are working directly with thelocal social fund office on projects that include both produc-tion and conservation investments.

Source: Author.

Box 7.2 The Morocco Oued Lakhdar Watershed Management Project

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care. Lack of analysis of the necessary precon-ditions (such as the institutional environmentand the level of equity in the community) canreduce the envisaged beneficial effects.


The key policy decision is “to let go,” phrased byone practitioner as “losing control—and gainingownership.” Governments may be reluctant, andneed persuading, particularly in plannerdomains such as irrigation and watershed man-agement. Box 7.3 illustrates the problem.

Where irrigation is offered through CDD/SF, itmay crowd out other investments because farm-ing communities usually prefer irrigation tosocial or conservation investments. This maycreate a risk of appropriation by an elitebecause irrigation is ultimately a private benefit,and user rights over water or other naturalresources follow an ownership pattern that maybe inequitable. But it is usually impossible toprovide assistance to the many small plot own-ers on farmer-managed irrigation systems with-out also helping owners of larger plots. Areinforced offtake and weir, or an improvedmain canal, benefits all farmers downstream,small and large. “Losing control” may also leadto farmer choices that do not coincide with envi-ronmental concerns about, for example, water-shed management or groundwater mining.

One variant on the multisector CDD/SFapproach is a project that targets a single sectorusing a CDD approach (for instance, a projectwhere irrigation or watershed management isthe main investment). A CDD project targeting asingle main sector can also offer complemen-tary investments in social and communityassets, as in the Morocco Irrigation-Based Com-munity Development Project. This approach isappropriate when all or almost all householdsare irrigators (or herders or forest users).

CDD/SF is not universally applicable. For small-and medium-scale irrigation, there is a risk that“inclusion”—of women, the landless, theabsolute poor—may be difficult, unless it isspecifically engineered (see box 7.2 for an

example of “engineering”). CDD/SF favors localpublic goods and communal assets, and care isneeded if private or only partly public goodssuch as irrigation water or rangeland improve-ment are to be provided. For natural resourcesmanagement, there is need, too, for appropriatetechnical framework, and a tailored menu ofinvestments with incentives for conservationand other purposes (box 7.2).

LESSONS LEARNED

Empirical evidence is accumulating aboutwhere and how CDD/SF approaches are effec-tive. This section is largely based on recent andongoing World Bank evaluations of CDD/SF(especially Carvalho [2002]; World Bank [vari-ous years]; and Mansuri and Rao [2004]).

• CDD/SF projects have stronger ownershipand higher quality and sustainability.2

CDD/SF does help in empowering communi-ties and in building capacity, for instance toresolve conflicts in water management ormaintenance. For irrigation and naturalresources management, CDD/SF works bestwhere social capital and rules already exist.In fact, overall CDD/SF approaches havefunctioned as users rather than as producersof social capital. CDD/SF approaches couldbe indicated for small- and medium-scale irri-gation and natural resources management,


Since 1999, a project has been working with 657,000 peoplein the Nepal Terai to alleviate poverty through community-managed shallow tubewells. Working with communities,NGOs banks, the private sector, and government, the projecthas transformed an agency-led, supply-driven method favor-ing big farmers into a demand approach, driven by farmersbelow the poverty line, and by the private sector. Costs arelow, and, by 2003, more than 600 groups had installed wells.More than half the beneficiaries are women. Government hasbeen convinced by this project that social mobilizationthrough NGOs is a reliable and inexpensive way to reachsmall farmers

Source: CGISP 2003.

Box 7.3 Nepal: Farmers Leading the Way inGroundwater Development

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where extensive social capital usually exists.However, community size and power distri-bution are important. CDD works well withsmaller groups, based on kinship or resi-dence, and with more homogeneous com-munities.

• Farmer organizations may not include thepoor and marginalized as other communityorganizations do. CDD/SF approaches gen-erally focus on inclusive community organi-zations and communal assets for exactly thisreason. However, unlike community assets,irrigation systems co-owned by farmers docreate incomes. Tradeoffs may be necessaryto solve the poverty problem. (See De Jan-vry et al. 2001).

• If irrigation investment is done throughCDD, producer organizations are likely tobe the appropriate partner rather thanbroader community groups, and carefulattention will have to be taken to ensureequity. If a CDD project works with pro-ducer organizations, it is likely that theywill select irrigation investments.

• For irrigation and natural resources man-agement, assessing the resource constraintis important, because moderate scarcitypromotes cooperation, but abundance orabsolute scarcity have the opposite effect.

• CDD/SF approaches reduce costs, especiallywhere community contributions are highand where communities manage contracts.

• Without clear, but simple, environmentalassessment procedures, irrigation and natu-ral resources management projects can cre-ate environmental problems under CDD/SFapproaches (World Bank 1999).

• CDD/SF approaches are effective in deliver-ing small infrastructure, but the demandmechanism does not necessarily reach thepoorest in the community or the poorest com-munities. This is probably especially true forsmall- and medium-scale irrigation projects.

• CDD works best with active involvement oflocal government and line agencies. How-ever, where a social fund program is usedrather than integrating CDD into a line min-istry’s approaches, linkages to line min-istries and their programs may be weak.Typically, social funds do not work wellwith line ministries.


• Where poverty alleviation is the goal, con-sider CDD/SF approaches to small- andmedium-scale irrigation and watershedmanagement, but as part of a package withprovisions for the poor and marginalizedpeople with no or little land (box 7.4).

• Where CDD/SF approaches are used, startby evaluating existing social capital care-fully because it is key to success.

• Given the risks of “elite” capture where irri-gation or any investment for private benefitis concerned, consider participatory planningand research as a first step toward CDD. Thisprecursor stage, before the question offinancing arises, will make clear whether thecommunity has the necessary social capitaland mechanisms for ensuring equity.

• Look at levels of contribution to projects.For private benefit investments such as irri-gation, ensure that beneficiaries invest morethan they do for public interest investments.


CDD/SF approaches should be preferred where the followingapply:

• They are the most efficient, in terms of improving invest-ment quality, through better information and solid owner-ship, and in terms of lower cost, through mostappropriate design and implementation procedures.

• They are demonstrably more equitable and pro-poorbecause this is a specific objective of CDD/SF approaches.Where there is a risk, appropriate alternative measures toensure “inclusion” are required.

• They are environmentally sound in terms of “no harm” andmake a positive contribution to externalities and to com-mon resources management.

Source: Carvalho 2002.

Box 7.4 Bank Requirements for Using Community-Driven Development/SocialFund Approaches for Agricultural Water

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• Ensure that CDD/SF investments in agricul-tural water are linked to overall agriculturalprograms such as research and extension.

• Check that the CDD/SF process has ade-quate environmental safeguards built in.

• Take part in the Poverty Reduction StrategyPaper (PRSP)/Country Assistance Strategy(CAS) process and help assess the relevanceof CDD/SF to agricultural water needs.

REFERENCES CITED

Carvalho, Soniya. 2002. “Social Funds: Assess-ing Effectiveness.” World Bank, OperationsEvaluation Department,Washington, DC.

CGISP (Community Groundwater Irrigation Sec-tor Project). 2003. “Farmers Leading theWay in Groundwater Development.” CGISPNewsletter # 1 (Winter). Available online athttp://www.cgisp.org.np.

De Janvry A., Sadoulet E., Collion M. H., andRondot P. 2001. “Impact of Producer Orga-nization Capacity-Building Component inAgricultural Services Projects. The Case ofSénégal and Burkina Faso.” Joint researchproject between the University of Califor-nia at Berkeley and The World Bank. Asurvey is available online at http://wbln0018.worldbank.org/essd/nrwtrust.nsf/0/85256b1900666c8785256aff007eacf2/$FILE/ScialWindowProgressAttachment2ActivityReportsOct2001_1-47.pdf.

Kahkonen, S. 2003. “Does Social Capital Mat-ter?” Social Capital Initiative Working PaperNo. 9. World Bank, Washington, DC.

Mansuri, G. and Rao, V. 2004. “Community-Based and -Driven Development: A Criti-cal Review.” The World Bank ResearchObserver 19(1): 1–39. Available online athttp://www.cultureandpublicaction.org/bijupdf/mansurirao.pdf.

World Bank. Various years. “Social Capital Ini-tiative.” This research project is publishinga series of working papers including “Insti-tutional Reform and the Informal Sector,”obtainable at http://www.iris.umd.edu/socat/topics/cdd.htm.

World Bank. 1999. “Environmental Assessmentof Social Fund Projects.” EnvironmentalAssessment Sourcebook Update No. 24.World Bank, Environment Department,Washington, DC, January.

SELECTED READING

“OED Social Funds Evaluation.” Availableonline at http://wbln0018.worldbank.org/OED/SocialFunds/AR/SecDocLib.nsf/Table+Of+Contents+Web?OpenView.

ENDNOTES

1. Mansuri and Rao (2004) focus on the fol-lowing questions: does community partici-pation improve the targeting of privatebenefits? Are the public goods created bycommunity participation projects better tar-geted to the poor? Are they of higher qual-ity, or better managed than similar publicgoods provided by the government? Doesparticipation lead to the empowerment ofmarginalized groups? Do the characteristicsof external agents—donors, governments,nongovernmental organizations (NGOs),and project facilitators—affect the quality ofparticipation or project success or failure?Can community participation projects bescaled up in a sustainable manner?

2. Empirical evidence has not, however, estab-lished that the participatory elements areresponsible for these improved project out-comes (Mansuri and Rao 2004).

This Note was prepared by Christopher Ward with inputsfrom Daniel Sellen and Melissa Williams. It was reviewed byKeizrul Abdullah of International Commission on Irrigationand Drainage.


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INVESTMENT NOTE 7.2

INVESTING IN AQUACULTUREACTIVITIES

Farming fish, shellfish, and aquatic plants is thefastest growing subsector in agriculture. High-inputaquaculture helps supply global consumption andearns foreign exchange. Less intensive forms aresuitable for low-income small producers and play akey role in poverty reduction. Pro-poor interven-tions require definition of public and private sectorresponsibilities and equitable distribution of bene-fits in the longer term. All aquaculture investmentsshould be planned within national strategies forfisheries, water use, and the environment. Invest-ments in irrigation and drainage may incorporatean aquaculture component, taking advantage of thepossibility of using irrigation canals and drainagewater for this purpose. Investments to enhancemarket-oriented aquaculture will be aided by con-current development of national capacities in mon-itoring product safety and health.

The world’s capture fisheries have stabilized, at85 million to 90 million tons a year, but aqua-culture has been growing, at a compoundedrate of 9.2 percent a year since the 1970s. Itsglobal rate of growth is estimated at 7 percent.Aquaculture is thus critical to meeting futuredemand for food fish. By 2020, aquaculture willprovide an estimated 41 percent of all fish forhuman consumption—10 percent more than in1997 (Delgado et al. 2003). Most growth willoccur in developing countries, which willaccount for 79 percent of food fish productionin 2020. In China, already the largest single pro-ducer of fish, aquaculture has exceeded theproduction of capture fisheries.

This rapid expansion features diversification,intensification, and technological advances.More than two hundred aquatic organisms arenow grown in marine, brackish, and freshwatersystems. They include finfish, mollusks, crus-taceans (with shrimp the most valuable exportcommodity), sea cucumbers, and seaweeds.Aquaculture practices range from culture inponds, pens, cages, and raceways; to stocking

in tanks and reservoirs; and cultivation in ricefields, irrigation ditches, land depressions filledby drainage water, and seasonal water bodies infloodplains. The latter technique is practicedprimarily by poor households.

INVESTMENT AREA

Intensive systems for salmon, trout, tilapia, floun-der, turbot, shrimp, and other species have highinput for seed, formulated feeds, vaccines andchemicals for disease control, improved strainsselected for growth, high feed-conversion effi-ciency, and other production and market charac-teristics. Globally, operators therefore tend topartner with feed suppliers. Their high-value fishand seafood products are filleted, frozen,canned, or cured for urban and export markets.

Extensive low-input systems are more readilyadopted by poorer or subsistence farmers andcommunities. Such systems use local feeds andfertilizers but few other inputs. Farmers oftengrow juveniles of indigenous species trapped inthe wild together with higher-value species. Thefarmers’ objectives are household consumption,local barter, and trade. These systems have con-siderable potential to enhance local food secu-rity, alleviate poverty, and improve rurallivelihoods (Friend and Funge-Smith 2002). Chi-nese and Indian carp and tilapia dominate fresh-water production for local demand.

Between these extremes are many intermediatepractices, depending on experience, local sup-port infrastructure, and market access. Forexample, in Andhra Pradesh, India, the growthof aquaculture followed the availability of effi-cient road transportation to distant marketssuch as Calcutta. Tilapia and catfish can begrown in a range of less-demanding culture sys-tems and now have both local and internationalmarkets. The world supply of aquatic plants iscurrently 10.1 million tons, valued at US$5.6 bil-lion, most of them grown in simple systems,predominantly in China and the Philippines.

A successful experience in northern Cameroonand a recently approved project in Uzbekistanshow how investments in agricultural water,


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especially drainage, can successfully include anaquaculture component. In northern Cameroon,after the restoration of the hydrological dynam-ics of former floodplain depressions, in 1982 theBenue River was dammed for hydroelectricityand irrigated agriculture. Large parts of thedownstream floodplains could no longer beused. However, after a long rainy season, thedam had to release water. Former floodplaindepressions were reconnected with the riverand in several weeks were teeming with fish.The restoration of fisheries potential was soimpressive that experiments began with man-agement of floodplain depressions, now beingfilled with drainage water from the irrigationscheme. At the end of the dry season, fish weretaken out and the entire depression was drainedand left to dry until the next rains as an effectivemeans of vector control (schistosomiasis snails)(Abdel-Dayem et al. 2004). A recent project inUzbekistan plans to use drainage water torecharge wetlands and foster the production offish and reeds. Total economic benefits fromaquaculture are expected to exceed US$400,000(see Uzbekistan in “World Bank Projects Dis-cussed” below).

Asia, and China in particular, dominate aqua-culture, but important producers have devel-oped in Latin America, the Caribbean, Europe,Africa, and the Middle East. Markets for higher-value produce will follow rising urban incomesand perceptions of fish as a nutritious andhealthy food. Japan, the European Union, andthe United States are major importers of high-value produce.

POTENTIAL BENEFITS

Aquaculture can improve local and nationalfood security and earn important foreignexchange, including for low-income fooddeficit countries (box 7.5). Fitchett et al. (1997)report a successful example, dealing withshrimp aquaculture in Madagascar.

Aquaculture can generate jobs and livelihoodsfor many, including disadvantaged or dis-placed people. Women and children havestarted “own enterprise” initiatives close to the

farm household. Marginalized women andeven the landless have been organized in com-munity arrangements for water bodies. Peopledisplaced by dam building have engaged inreservoir fisheries, and persons displaced bycapture fisheries have developed new liveli-hoods in coastal aquaculture.

Aquaculture can bring unproductive land intouse. An example is the river beach develop-ment in the Shanxi Poverty Alleviation project(World Bank 1996) and similar development inother Bank- and World Food Program–assistedaquaculture development in China. China’s Sus-tainable Coastal Resources Development Pro-ject is an advanced coastal management projectthat includes integrated coastal zone manage-ment, marine aquaculture, and seafood pro-cessing; it follows international facility designand operation standards.

Aquaculture can help raise the productivity ofagricultural water when it uses irrigation canals,drainage water (box 7.6), and rice fields (box7.7). Also, in deltas such the Ganges andMekong, dry-season, brackish water shrimp andaquaculture complements wet-season rice farm-ing in the same paddies that are alternatelyinundated with brackish and freshwater.


• Introduction of aquaculture to new entrants as a compo-nent of integrated poverty reduction or coastal and waterbasin management schemes

• Integration of support services and infrastructure to helpcommunities of aquaculture farmers shift from subsis-tence farming to more market-oriented enterprises

• Provision of training and educational institutions forextension and development of aquaculture technologiesappropriate for practitioners and new entrants

• Support for research to advance, identify, test, and evalu-ate aquaculture applications in local conditions

• Provision of a national regulatory environment to guideaquaculture development and domestic and export mar-keting initiatives

Source: Author.

Box 7.5 Major Public Sector InvestmentApproaches for Aquaculture

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FORMULATION OF COMPREHENSIVE STRATEGIC

DEVELOPMENT FRAMEWORKS. Developing initia-tives for coastal and inland areas requires con-sultative and participatory decision-makingprocesses with all key interest groups. Inte-grated coastal zone development and manage-ment plans should identify the place ofaquaculture in relation to competing uses bycities and for energy, transport, tourism, andcritical natural habitats. The potential for usingdrainage water, which would otherwise bewasted by discharging it into the sea, to fillaquaculture ponds should also be examined.For inland areas, location of land and waterresources for aquaculture should complementinvestments in water management and inhydropower, reservoirs, and irrigation anddrainage schemes.

ENVIRONMENTAL REGULATION. The rapid andunregulated development of intensive practices,particularly for shrimp, has destroyed habitats—both when farmers cleared mangroves to buildponds and when they caused eutrophication ofwater bodies and acidification of pond soilsthrough excessive use of inputs. Their actionshave caused outbreaks of disease and failure ofenterprises. They also sparked legal responsesand triggered community controversy. Adversesocial impacts also resulted where belts ofshrimp pond development cut off fishermen’saccess to the sea, where flooding and waterlogging were improperly managed, and wheregroundwater reserves were depleted, causingsaltwater intrusion. Some firms have developedmanagement guidelines to address these prob-lems. The World Bank and others haveembarked on the development of generalguidelines, including codes of conduct forwater quality and sustainable shrimp farming.Formulating and enforcing environmental stan-dards is key to meeting the industry’s develop-ment goals.

ENABLING ENVIRONMENT. Aquaculture requiressteady supplies of good quality larval or juvenilefish. National strategies to manage hatcheries,brood stock, and strain quality are required toavoid inbreeding and loss of productivity. These


In the southern vicinity of Lake Edku in Egypt, fish farming withdrainage water started 20 years ago. Fish ponds now cover anarea of 8,000 acres. The government leases out the land forthe ponds at very low rents.A 1-acre pond leased for US$15 ayear can earn the renter about US$1,000. The average fishyield is 2 tons per acre per year, compared with 500 kilogramsper acre per year from the lake. Only drainage water is used infish ponds, and a fish pond produces more than five times thevalue of cropped land with the same amount of water.

Source: Scheumann 2004.

Box 7.6 Drainage Water for Fish Farming in Egypt

Rice-fish systems can bring benefits to many inhabitants offlood-prone areas. Seasonal floodwaters have been regardedas a constraint and been utilized only for occasional fishing.Fish can, however, be stocked concurrently with deepwaterrice or by alternating the stocking of fish during the flood sea-son, in an enclosed area such as a fish pen, with rice culture inthe dry season.

Alternating rice and fish culture was recently tested in deep,flooded areas of Bangladesh and Vietnam in a community-based management system. The institutional arrangementswere designed for sharing benefits in proportion to provisionof land, labor, guarding against poaching, and so on, so that allcontributors benefited. Loans taken out for fence constructionwere repayable at the first harvest.

Results indicate that community-based fish culture in rice fieldscan lead to fish production of 600 kilograms per hectare peryear in shallow flooded areas and up to 1.5 tons per hectareper year in deep flooded areas, without reducing rice yield andwild fish catch. Overall profitability, counting rice and fish, roseto US$690 per hectare a year in Bangladesh, an increase of20–160 percent.Annual per capita income of the landless labor-ers in the group increased by 60 percent, and their per capitafish consumption increased by 25–60 percent.These gains arelikely to improve through technical modifications.

This approach is applicable to several million hectares of Asianfloodplains if aquaculture practices are shaped to match localsociocultural and economic conditions. In Africa, the potentialfor community-based fish culture is greatest in seasonal flood-plains and in irrigation schemes. In West African floodplains,470,000 hectares used to grow deepwater rice could be usedconcurrently for fish culture.

Source: World Fish Center 2001.

Box 7.7 Community-Based Fish Culture in SeasonalFloodplains

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strategies should include provision of more localseed fish to regions where aquaculture is beingintroduced or expanded. Adoption and exten-sion of aquaculture will require pilot industrydevelopment, locally affordable credit, andcapacity building of extension services. Oppor-tunities for entry depend on farmers’ land andwater tenure. NGOs and community organiza-tions have played key roles in the extension ofaquaculture for poverty alleviation in countriessuch as Bangladesh. Their contributions arevaluable but need strengthening with technicalassistance.

MANAGEMENT OF OTHER INPUTS AND EFFLUENTS.Input management is mainly a private sectorconcern, but public policy may have to encom-pass feeds—to minimize use of wild fish, fish-meal, and fish oils—and water, with attention toquality and effluent management. Moreover,standards should minimize or prohibit use ofdrugs such as antibiotics and chemicals for pestcontrol or water quality management. Suchstandards protect both the environment andprofitability. In addition, effluent dischargeneeds to be managed effectively to forestalladverse effects on water quality and habitatsnearby and downstream. Solid waste shouldalso be appropriately reused or disposed of toprevent damage to the environment and unde-sirable social impacts.

MARKET ORIENTATION—GRADES AND STANDARDS. Inmany cases, aquaculture produce can joinpostharvest, cold, and marketing chains alreadyestablished for capture fisheries. Importingcountries increasingly impose health and sani-tary standards—such as sanitary-phytosanitarystandards (SPS) and hazard analysis and criticalcontrol point (HACCP) regulations on foodimports, in part because seafood is perishable.Some aquaculture industry associations areadopting environmental standards to maintainmarket acceptability. Governments of exportcountries can enhance competitiveness byestablishing product health and monitoring serv-ices that meet the importing countries’ certifica-tion needs. Such government services wouldalso help small producers join supply chains.Policies should promote biotechnologies that

improve strains in line with national law andacceptability in target importing countries.

BALANCE BETWEEN PRIVATE AND PUBLIC SECTOR

RESEARCH AND INVESTMENT. Export-focused aqua-culture is pursued by private sector firms andoccasionally by joint ventures. However, insome countries, the establishment of aquacul-ture has clearly been augmented, if not led, bygovernment research and planning support.Examples are Norway and China. Aquacultureindustries develop rapidly. Some farmers, oncetrained and established, quickly shift from low-value species that meet local demand to high-value species for external markets. Public policygoals for investment need careful definition toavoid duplicating private sector responsibilities.

LESSONS LEARNED

FEASIBILITY ASSESSMENT AND PLANNING. Importingtechnologies from other regions can work iflocal soil and water quality are taken intoaccount, and if use is made of indigenousspecies for which artificial propagation methodsand hatchery management techniques are wellunderstood, for which feeds can be identifiedlocally or imported. The strategy must also becost effective, and marketing channels anddemand must be ensured. The costs of seedand feed supply have been difficult to sustainwithout government assistance or differentia-tion of roles among adopters after completionof pilot projects. Market substitution betweenfish and seafood products can be quite high.Assessments of target species should thereforetake into account availability of local inputs,market competition, production efficiencies,and transport costs, for instance when dealingwith unprocessed products, shelled mollusks,and other perishables. Successful industries canultimately depress market prices and lowerprofits, as with Norwegian salmon. Labor needsfor starting aquaculture industries must be thor-oughly evaluated because they have sometimesbeen overestimated.

POVERTY ALLEVIATION AND ADOPTION. The price offish compared to starchy food staples makesfarmed fish a major component of livelihood


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schemes. Women have been quick to access thenutritional and income benefits of rural aquacul-ture, even in simple forms such as growing fin-gerlings. Adoption of aquaculture can be slow inrural communities with little experience in watermanagement. However, after adoption, practicesmay quickly evolve, incomes rise, and fish pricesstabilize in the local markets. Equitable access toland and water for the poor and durable institu-tions are the two most important conditions.

LONG-TERM SUPPORTING RESEARCH IS REQUIRED.Strains of fish improved for growth or other fea-tures by selective breeding can augment pro-ductivity but must be implemented with care topreclude adverse impacts to the genetics andfitness of wild populations. Public and privatesector goals should be defined for strainimprovement that meets the goals of subsectorsand national biodiversity. Import, propagation,and culture of exotic species must be carefullyconsidered with monitoring and control sys-tems in place before introduction. Analysis ofthe social mechanisms governing communityinvolvement in aquaculture is needed to sustainequity in the distribution of benefits so that adisproportionate share of the benefits does notgo to the better-off.

RISK. Marketing channels must be well under-stood and established. Increases in the incidenceof disease in fish has been a major consequenceof unregulated development and has causedsome initiatives to collapse. Contamination withantibiotic residues can prevent produce frommeeting importing-country health criteria. Exter-nal sources of pollution can cause morbidity andmortality of cultured organisms or make produceunsaleable. In addition, products such as farmedsalmon may contain dioxin and polychlorinatedbiphenyls (PCBs) that can reduce market interestand pose significant health risk, particularly tochildren and pregnant women. Similar concernshave been identified for fish caught in the wild,such as tuna, which are high in mercury.

ENVIRONMENT AND INDUSTRY ASSOCIATIONS. Theperformance and image of aquaculture havebeen tarnished by people who do not differenti-ate between ranges of intensification when raising

environmental concerns to address it. Industryassociations have responded strongly by adopt-ing and promulgating agreed practices amongtheir members; governments have adopted zon-ing and other laws to sustain water quality, andenvironmental certification and labeling thathelp maintain export-market share.


The World Bank Group’s involvement in aqua-culture development has included investmentsin the full range of technologies for productionexpansion, including infrastructure support(hatcheries, feed-processing plants, seafood-processing plants, improvement and new con-struction of wholesale markets, disease controlfacilities, coastal zone management centers,water quality monitoring laboratories, and train-ing and education facilities). Sector workincludes a coordinating role with the globalshrimp farming and environment study with theNetwork of Aquaculture Centers in Asia-Pacific,the World Wildlife Fund, and the Food andAgriculture Organization. The work involved 40case studies and thematic reviews and the pub-lication of a guide on the assessment of sourcewater quality for aquaculture.

Recommendations for practitioners investing inaquaculture can be summarized as follows:

• Plan for aquaculture within comprehensivedevelopment frameworks, including theintegrated use of water, and not as stand-alone enterprises.

• Take advantage of investment projects inirrigation and drainage and/or integratedwater resources management to foster thedevelopment of aquaculture.

• Include in feasibility studies an assessmentof potential interactions with fisheries (atthe level of feed and food uses, waterresources, markets, and community inter-ests) and other animal industries.

• Assess realistically the potential for absorp-tion of labor by aquaculture, if job creationis a development goal.


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• Tailor flexible packages, in new initiatives,for local conditions, longer-term technicalsupport (including for agricultural extensionworkers), and establishment or provision ofassociated services (seed, feed, health, andmarketing).

• Plan sufficiently long water or communitytenure over aquaculture sites to preventresource mining.

• Include environmental guidelines andassessments in every aquaculture initia-tive—and support for the development andimplementation of such guidelines wherethey are lacking.

• Enlist national capacities to monitor producthealth and safety from production throughthe postharvest chain to support export-ori-ented aquaculture development.

Overall, the Bank Group’s experience in aqua-culture development has been satisfactory, withmost investments yielding sustainable out-comes. Projects with doubtful medium- andlong-term benefits were often overambitiouswith regard to scale, complexity of technologiesemployed, and dependency on public sectormanagement for sustainability. These areimportant and useful lessons to guide futureoperations considered for investment.

REFERENCES CITED

Abdel-Dayem, S., H. Hoevenaars, P. Mollinga,W. Scheuman, R. Slootweg, and F. vanSteenbergen. 2004. “Reclaiming Drainage:Toward an Integrated Approach.” Agricul-tural and Rural Development Report 1.World Bank, Agriculture and Rural Develop-ment Department, Washington, DC.

Delagado, C. L., N. Wada, M. W. Rosegrant, S.Meijer, and M. Ahmed. 2003. Fish to 2020:Supply and Demand in Changing GlobalMarkets. Washington, DC: InternationalFood Policy Research Institute.

Fitchett, D., F. Jaspersen, G. Pfefferman, I. Kar-makolias, and J. Glen. 1997. “The Private

Sector and Development: Five Case Stud-ies.” World Bank Report 23470, Washington,DC. Available online at http://www-wds.worldbank.org.

Friend, R. F., and S. J. Funge-Smith. 2002. “Focus-ing Small-Scale Aquaculture and AquaticResource Management on Poverty Allevia-tion.” Report of an expert consultation, heldat the Food and Agriculture Organization ofthe United Nations, Bangkok, Thailand, Feb-ruary 12–14. FAO, Network of AquacultureCenters in Asia-Pacific (NACA), and Supportfor Regional Aquatic Resources Management(STREAM).

Scheumann, W. 2004. “Toward Integrated Plan-ning of Irrigation and Drainage in Egypt—Institutional Perspective.” Study in supportof the Integrated Irrigation Improvementand Management Project (IIIMP), Interna-tional Program for Technology and Researchin Irrigation and Drainage. FAO, Rome.

World Bank. 1996. “China—Shanxi PovertyAlleviation Project.” Staff Appraisal Report.World Bank, Washington, DC. Availableonline at http://www-wds.worldbank.org.

World Fish Center. 2001. “Community-BasedRice-Fish Culture on the Floodplains ofSouth and South East Asia.” In Stories fromthe CGIAR Annual Report 2001. Availableonline at http://www.worldfishcenter.org/reshigh01_cg.htm.


Uzbekistan. “Drainage, Irrigation and WetlandsImprovement Phase-I Project.” Active. Pro-ject ID: P009127. Approved: June 2003.Within World Bank, available at http://proj-portal.worldbank.org.

SELECTED READINGS

Ahmed, M., and M. H. Lorica. 2002. “ImprovingDeveloping Country Food Security throughAquaculture Development—Lessons fromAsia.” Food Policy 27: 125–41.


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Dey, M. M., and F. J. Paraguas. 2001. “Eco-nomics of Tilapia Farming in Asia.” In S.Subasinghe and Tarlochan Singh, eds,Tilapia: Production, Marketing andTechnological Developments. Proceed-ings of an International Technical andTrade Conference on Tilapia, May 28–30,Kuala Lumpur, Malaysia. Kuala Lumpur:INFOFISH.

Dey, M. M., and M. Prein. 2003. “Community-Based Fish Culture in Seasonally DeepFlooding Ecosystems.” Agriculture Tech-nologies for Rural Poverty Alleviation. IFADTechnical Knowledge Notes No. 1, Aquacul-ture Series. International Fund for Agricul-tural Development, Rome.

FAO (Food and Agriculture Organization). 1997.Review of the State of World Aquaculture. FAOFisheries Circular No.886, Rev 1. Rome: FAO.

———. 2002. The State of World Fisheries andAquaculture. Rome: FAO.

Gupta, M. V., J. D. Sollows, M. Abdul Mazid, A.Rahman, M. Golam Hussain, and M. M.Dey. 1998. Integrating Aquaculture withRice Farming in Bangladesh: Feasibilityand Economic Viability, Its Adoption andImpact. Manila, Philippines: InternationalCenter for Living Aquatic Resources Man-agement (ICLARM).

Zweig, Ron. 1998. “Sustainable Aquaculture—Seizing Opportunities to Meet GlobalDemand.” Agriculture Technology NotesNo. 22. World Bank, Agriculture RuralDevelopment Department, Washington, DC.

This Note was prepared by Peter Gardiner with inputs fromRonald Zweig. It was reviewed by Bart Snellen of the Interna-tional Institute for Land Reclamation and Improvement.


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RURAL WATER SUPPLY AND IRRIGATION

What is new? Simultaneous investment in drink-ing water supply and irrigation is rare, although it isoften cost effective in reducing rich-poor gaps inincome and health. Rural communities can operatesystems using the same source of water for bothsmall-plot irrigation and drinking water as income-generating businesses. The Mekong Delta WaterResources Project shows that a small investment inseparate rural water supply hardware, fundedthrough a subcomponent of a large water-resources or irrigation project, can also cost-effec-tively deliver benefits to the rural poor, especiallyto those living far from roads.

Combining investment in irrigation with devel-opment of water supply for humans has beenhard to do in spite of its many advantages: (1)the additional income from irrigation allowsusers to repay loans for their water supplyhardware within two or three years and after-ward pay for operation and maintenance(O&M); (2) combining human water supplywith crop water supply reduces per capitainvestment cost, especially in remote areas, and(3) poor health caused by contaminated drink-ing water often constrains input of labor on theirrigated farm.

Large irrigation projects can include water sup-ply components and take a cue from commu-nity-driven investment. The main constraint isinstitutional, both within the World Bank andin-country.


The Mekong Delta Water Resources project suc-cessfully combined large irrigation developmentwith small-scale water supply development. Thegovernment of Vietnam first proposed to theWorld Bank what was primarily an irrigation proj-ect. The line ministry initially opposed the ruralwater supply and sanitation (RWSS) componenton the grounds that RWSS had always been

funded through grants, that it was poorlyequipped to handle minor infrastructure, and thatRWSS was a matter for the provinces.

During project identification and preparation,the Bank team worked closely with the Viet-namese government and gradually obtainedbuy-in. It helped that RWSS coverage in thedelta was low compared to the rest of the coun-try, that the incidence of sanitation-related dis-ease was high owing to a lack of sanitationfacilities and sanitation awareness, and that theVietnamese government had set a goal of 100percent rural water supply coverage by 2005but that the national program was underfunded.

The project supported an integrated approach toimproving water resources infrastructure as wellas upgrading clean water provision and sanita-tion for the rural inhabitants. In line with theevolving national RWSS strategy, it tested demandresponsiveness and community participation inplanning, implementation, and financing. It tar-geted primarily remote rural households thatother programs cannot reach.

The RWSS strategy was carried out by the Min-istry for Agriculture and Rural Development. Itgave implementation responsibility to theprovinces, which delegated it to provincial ruralwater supply development centers that mobilizecommunes and conduct awareness campaigns,provide technical assistance, and design andsupervise construction through contractors. Thecenters outsourced the sanitation improvementcomponent to provincial women’s unions, whichwere certified by the provincial authority to oper-ate a sanitation revolving fund. Each women’sunion has branch units in villages and communesthat work with individual women farmers.

Hybrid systems in Guatemala (box 7.8),Nicaragua, Bangladesh, Zimbabwe, Nepal, andVietnam often do not need grants because userscan generate enough income from cash-pro-ducing irrigated plots and fees for domesticwater use. The increased revenue stream allowsthem to pay off both their individual loans forthe irrigation system and the community loanfor the installation of the water supply system.Rural villages, especially in arid regions, often


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already have the organizational infrastructure tooperate these systems (for example in Pakistan,Afghanistan, and Tunisia).

OUTPUTS AND IMPACTS

In the Mekong Delta Water Resources project,implementation of the rural water supply sub-component began in 2001 and was planned toend in 2005. Instead, it ended in 2003 becausemost activities had been completed. Outputincluded 244 schemes for piped clean water,2,290 wells, 1,060 filter systems, and 13,176water jars to supply clean water to local com-munities, benefiting some 314,330 rural poor. Atthe mid-term review, the Vietnamese govern-ment requested a US$9 million increase toexpand the component from 6 provinces to 10.

Evaluations of water supply developmentthrough hybrids in Nicaragua and Nepal indicatethat rural families quickly repay loans for systemconstruction and also move up the income lad-der, from absolute poverty to relative poverty.

ISSUES FOR WIDER APPLICATION

SMALL INVESTMENTS YIELD GREAT BENEFIT AND

ARE WORTH THE EXTRA EFFORT. In Vietnam, proj-ect investment in irrigation and drainage,flood control, saline intrusion control, and

waterway transport benefited the local inhabi-tants but did not satisfy their need for cleandrinking water. A small investment in RWSSdelivered immediate benefits to those living inremote communes, beyond the reach of largesystem supplies, a group often difficult toserve with a standalone project. The addedinvestment did increase project preparationand supervision costs.

INVOLVE GRASSROOTS ENTITIES. These grassrootsconnections can mobilize small communities,and in this case, experience with the women’sunions contributed to effective organization ofawareness campaigns that reached individualwomen farmers with small group-based creditsand training in hygiene.

FOSTER INTERACTION AMONG THE “WATER PLAY-ERS.” Although they inhabited the same min-istry, the “irrigation people” and the “RWSSpeople” interacted little. Project implementa-tion brought interaction through meetings,supervision, and monitoring. Trust grewbetween these professional groups andbetween the central and provincial agenciesdealing with water, which reinforced integratedwater resources management.

• Balance cost-recovery and poverty goals.The goals of greater cost recovery andpoverty alleviation had to be balancedbecause the target population lived inremote areas with little market access.

• Synergies with irrigation development maybe the key to the financial sustainability ofRWSS. Irrigation usually raises incomes withwhich to repay loans and pay O&M ofdomestic water supply.

• Strengthening communication and collabo-ration between the professional communi-ties. In water supply and sanitation, waterresources and irrigation, communicationamong all actors is key, both in-country andwithin the Bank. Funding mechanisms andbudget provisions should be set aside forjoint design and implementation. The RWSStoolkit for multisector projects provides use-ful support.


In Guatemala more than 100 small community-owned andoperated irrigation systems supply domestic water to commu-nities that do not have connections to water supply. Hillsidefarmers installed these systems, which rely on gravity pressure,primarily for irrigation.The average system size is 20 hectaresand average farm plot size 0.2 hectares. Each farm plot is servedby a tap in the center. Farmers connect a hose to a conven-tional sprinkler on a tripod and move it around the field to irri-gate.The communities repaid the government loans in less thanthree years with proceeds from their high-value crops mar-keted in Guatemala City. This experience was successful forthree main reasons: technical assistance and credit at reason-able interest rates were available; the participants formed small,tightly knit groups; and they were able to grow and markethigh-value crops such as fruits and vegetables.

Source: Polak et al. 2002.

Box 7.8 The Guatemalan Experience

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HYBRID SYSTEMS ARE SOMETIMES NOT FEASIBLE.They will not work in cases in which (1) waterneeds to be treated, and treatment would makethe water too expensive for irrigation; (2) theconstruction cost would be too high to pay offa loan from the proceeds of horticultural crops;(3) a village is too far from markets; and (3)clean, affordable drinking water is availablefrom other sources. Experience in Guatemalaalso shows that hybrids generate income forfarmers only if there are market opportunities.

REFERENCE CITED

Polak, P., D. Adhikari, B. Nanes, D. Salter, andS. Surywanshi. 2002. “Transforming RuralWater Access into Profitable Business

Opportunities.” International Develop-ment Enterprises (IDE). Available online athttp://www.ideorg.org/html/library/tech_pop_index.jsp?pdf=1056561357553_water%20opportunities.pdf.


Vietnam. “Mekong Delta Water Resources Pro-ject.” Active. Project ID: P004845. Approved:1999. Within World Bank, available athttp://projportal.worldbank.org.

This Profile was prepared by Carlos Linares and Mei Xie withinputs from Parameswaran Iyer. It was reviewed by SarahCline, Timothy Sulser, and Mark Rosegrant of the Interna-tional Food Policy Research Institute (IFPRI).


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88COPING WITH EXTREME CLIMATIC CONDITIONS

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 impacton the poor. Some of the available high-impact technologies and institutional responses to these climaticchallenges 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 climateis variable and that “drought is normal.” The common response has been reactive and ineffectualin mitigating impacts on the vulnerable. Recent best practices concentrated on lessening riskthrough policies to reduce vulnerability, and through investments in preparedness and drought-mitigation planning. Investment in drought management brings benefits by reducing the associatedeconomic, social, and environmental costs. Because the poor are especially vulnerable, drought

• 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

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preparedness is a critical part of poverty reduc-tion strategies. (See IN 8.1. See also “Kenya:Community-Based Drought Management,” inthe Agriculture Investment Sourcebook (AIS),Module 10.)

EVEN FLOODS CAN BE TURNED TO GOOD ACCOUNT.Floods can be harnessed beneficially as sourcesof irrigation water, groundwater recharge, andsoil fertility renewal. They can improve waterquality and sustain ecosystems and fisheries.Investment in integrated flood managementwithin basin plans improves beneficial use andminimizes losses. Measures include investmentsto improve water retention, investments to miti-gate flood impacts and reduce susceptibility todamage (including disaster preparedness), andflood protection measures such as dikes, lev-ees, and flood embankments. Because poorpeople are most vulnerable, investment inimproved flood management and preparednessis pro-poor. Stakeholder involvement andappropriate environmental policies are essentialto investment outcomes. (See IN 8.2. See alsoIN 4.4 on groundwater recharge in California.)

RESPONSES TO CLIMATE CHANGE ARE POSSIBLE, BUT

THEY NEED SITE-SPECIFIC FLEXIBILITY, BACKED UP BY

RESEARCH. The future incidence of climatechange can only be conjectured, but it is likelyto have particular impact on the poor in mar-ginal areas who have the least knowledge andresources to cope. Experience has shown thatprograms can be adapted to help, particularlythrough technological innovations such as min-imum tillage and improved water management.Future research and technology transfer willhave to focus increasingly on helping poorfarmers cope with climate change. (See IP 8.2.)

TECHNOLOGIES ARE AVAILABLE FOR EVEN THE MOST

UNPROMISING MARGINAL RAINFED SYSTEMS, BUT

THEIR ADAPTATION AND ADOPTION IS BEST DONE BY

PARTICIPATORY APPROACHES. The Green Revolu-tion depended largely on water availability, andoffered little to marginal rainfed areas wherethe challenge is low productivity caused byenvironmental and soil problems of drought,

salinity, temperature, and lack of nutrients.Recent pilot projects in India have successfullytested integrated soil, water, and agronomicinvestments in very marginal watersheds (cf.the Loess Plateau experience). Earlier attemptsto “introduce” new technical packages top-down—for example, vetiver grass—had failed.Instead, new investments were based on a “bot-tom-up” approach, testing, evaluating, and thenscaling up innovations. Cost sharing cementedownership. Uptake has been excellent. Familyincomes have increased considerably. The proj-ects have demonstrated a cost-effective invest-ment mechanism for making a large andsustainable impact on the lives of poor people.(See IP 8.3 and IP 6.2.)

INNOVATING INVESTMENTS CAN CONTRIBUTE SIGNIFI-CANTLY TO AGRICULTURAL WATER MANAGEMENT AND

POVERTY REDUCTION WHERE CLIMATIC CONDITIONS

ARE ADVERSE AND RESOURCES SCANT, PROVIDED

THAT THEY ARE “INTEGRATED” WITHIN A FAVORABLE

SOCIAL AND INCENTIVES FRAMEWORK. This chaptershows that even the most difficult technicalproblems—for example, drought, salinity, andreclamation of sodic soils—can be overcomebut that the approaches require both “technicalintegration” (of soil, water, agronomy, for exam-ple) and parallel “socioeconomic integration”(for example, input and output markets, whichcreate incentives and lead to income improve-ments). Success requires community involve-ment; a bottom-up approach; development andtesting of locally adapted technical packagesthat address soil, water, and agronomic prob-lems together; the availability of input and out-put markets; and a flexible approach withparticipatory monitoring. (See IN 8.3. See also“India: Community Organization for Sodic LandsReclamation,” in AIS, Module 4.)


Investments in technical assistance may includethe following:

• Drought and salinity programs

• Flood mapping and flood management plans


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• Drought and salinity programs

• Water retention

• Flood mitigation

• Flood protection measures

Pilots may include drought and salinity pro-grams. And finally, related investments mayinclude postflood emergency operations.

COPING WITH EXTREME CLIMATIC CONDITIONS

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INVESTMENT NOTE 8.1

INVESTING IN DROUGHT PREPAREDNESS

Relief efforts in drought-stricken areas are by defi-nition reactive and increase farmer dependence onnational and foreign governments. However wellintentioned, they may deprive farmers of incen-tives to adapt. From a poverty-reduction as well asfrom a cost-effectiveness point of view, it is prefer-able to handle drought as a risk for which govern-ments and farmers may prepare, in the hope ofmitigating its effects.

Drought is a normal part of climate for virtuallyevery country. It is a slow-onset, creeping phe-nomenon with serious economic, environmen-tal, and social impacts. It affects more peoplethan any other natural hazard. The commonresponse has been reactive, ineffective, anduntimely—usually leading to increased depend-ency on government and other organizations.The conventional response also adds to vulner-ability, because it provides a disincentive toadopt best management practices.

A risk-based management approach is more costeffective. It emphasizes improved monitoringand early warning systems; development ofstrong decision-support systems; identificationand implementation of mitigation actions; educa-tion and training of policy makers, naturalresources managers, and the public; and droughtmitigation plans that reduce the most seriousimpacts. This approach addresses the underlyingcauses of vulnerability rather than the symptoms(impacts). Investments in drought-mitigationplanning, management, and appropriate policieswill provide individuals and governments withthe tools necessary to reduce societal vulnerabil-ity to future droughts. A possible complement tothis kind of investments is offered by the devel-opment of financial weather-related risk-man-agement instruments (see box 1.7 in IN 1.3),which are being implemented in several coun-tries such as Morocco, Mexico, and India. For a

more detailed discussion see Hess (2002), deal-ing with several Indian states.

INVESTMENT AREA

There is no universal definition of “drought,”because its characterization is impact- andapplication-specific. A conceptual definition ofdrought is a deficiency of precipitation over anextended period of time with serious impactson human activities and the environment. Thisdefinition links intensity and duration to socie-tal impacts. Meteorological drought focusesonly on the intensity and duration aspects ofdrought. As drought conditions persist formonths, seasons, or years, other components ofthe hydrologic system will be affected. Forexample, agricultural drought is best defined bydeficiencies in soil moisture; hydrologicaldrought, by deficiencies in surface and subsur-face water supplies. The links between precipi-tation deficiencies and impacts are less directfor these drought types, with impacts laggingmeteorological drought. Conflicts betweenwater users increase as drought persistsbecause competition for surface and subsurfacewater supplies intensifies. Socioeconomicdrought is associated with the supply anddemand of some commodity, resource, or prod-uct that is influenced, though indirectly, by pre-cipitation amounts, timing, and effectiveness, aswell as by resource management practices.

Greater investment should be directed to lessen-ing risk associated with drought. Drought risk isdefined by a region’s exposure to the natural haz-ard and society’s vulnerability to it. Because cli-mate is variable through time, exposure todrought also varies from year to year and decadeto decade. Global warming and the probabilitythat drought and other extreme climatic eventsmay become more frequent in the future maytranslate into increased exposure to drought.Water resources planning should be based on theassumption that climate is variable and extremesare a normal part of climate everywhere.

Vulnerability to drought is defined by social fac-tors such as increases in population and regionalmigration trends, demographics, urbanization,


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land use changes, natural resources policies,water use trends, environmental awareness anddegradation, technology, and the like. Vulnerabil-ity is dynamic and must be periodically evaluatedat the local and national levels. The preparationof vulnerability profiles (who and what is at riskand why) can help individuals and governmentsat every level to better understand and systemati-cally address drought risk by concentrating onthe underlying causes of vulnerability rather thanthe symptoms (impacts).

Drought early warning systems must have thecapacity to detect the first signs of an emergingrainfall deficiency, the best indicator of meteor-ological drought, but other key drought indica-tors (reservoir levels, groundwater levels,stream flow) are also important. There are alsocritical social indicators (market data such asgrain prices and changing terms of trade for sta-ple grains and livestock as an indicator of pur-chasing power in rural communities, migrationof household members to search for work, sell-ing of nonproductive assets). All of these indi-cators provide decision makers with earlyinformation on emerging impacts in varioussectors. Climate indexes should be used to eval-uate the status of climate and water supplies,and potential impacts in specific sectors such asagriculture, energy, and urban water supply.This information should be supplemented bylong-range or seasonal forecasts. A droughtearly warning system must not only encompassmechanisms and procedures for the collection,analysis, and integration of information frommultiple sources in a timely manner, but alsoinclude procedures for the dissemination of thatinformation to potential end users. Training endusers about the value of this information in thedecision-making process is essential. Oncedrought conditions are detected, there shouldbe continuous information flow on the severityof conditions, potential impacts, and possiblemitigation or emergency response actions.

Best practices include development of a com-prehensive drought early warning system thatincludes collection of data for all meteorologicaland hydrological variables and for critical socialindicators and which integrates this information

into a timely and reliable assessment of severityand impacts. These data are commonly availablefrom national meteorological, hydrological, andagricultural services units. Development of anautomated weather data station network is rec-ommended to collect data from a broader spec-trum of meteorological variables and innear–real time for locations representative of theagricultural environment rather than the urbansetting. Automated networks can be establishedin most settings.

POTENTIAL BENEFITS

A comprehensive early warning system canprovide decision makers with information formaking timely decisions that can reduce theeconomic, social, and environmental costs andlosses associated with drought. Drought man-agement reduces the risk to people, property,and productive capacity. It is a critical part ofpoverty reduction strategies.


Shifting from crisis management to drought riskmanagement is difficult because governmentsand individuals typically take a reactiveapproach and little institutional capacity exists inmost settings to alter this paradigm. A 10-stepdrought planning methodology to assist inbuilding institutional capacity is illustrated inbox 8.1. Steps 1 through 4 focus on making surethe right people (scientists, policy makers, andstakeholders) are brought together, understandthe process, know what the drought plan mustaccomplish, and are supplied with enough datato make equitable decisions when formulatingand writing the drought plan. Step 5 describesthe process of developing an organizationalstructure for completion of the tasks necessaryto prepare the plan. One outcome of this step isthe conduct of a risk assessment to create a vul-nerability profile for key economic sectors, pop-ulation groups, regions, and communities. Itidentifies and ranks the most significant droughtimpacts; examines the underlying environmen-tal, economic, and social causes of theseimpacts; and guides the choice of actions thataddress these causes. This process can identify


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who and what is at risk and why. Understandingwhy specific impacts occur offers an opportu-nity to lessen them in the future through mitigat-ing actions.

Steps 6 and 7 describe the need for ongoingresearch and coordination between scientistsand policy makers. Steps 8 and 9 stress theimportance of promoting and testing the planbefore drought occurs. Finally, Step 10 empha-sizes that the plan must be kept current and beconstantly evaluated in the postdrought period.Although the steps are sequential, in practicemany are taken simultaneously.

Governments, nongovernmental organizations(NGOs), and international organizations haveincreasingly emphasized the development of adrought policy and preparedness plan. Simplystated, a drought policy establishes a set of prin-ciples or operating guidelines. It should be con-sistent and equitable for all regions, populationgroups, and economic sectors and consistentwith the goals of sustainable development. Itsoverriding principle is an emphasis on managing

risk through preparedness and mitigation. Thisprinciple can be promoted through more, or bet-ter, seasonal and shorter-term forecasts; inte-grated monitoring, drought early warningsystems, and associated information delivery sys-tems; preparedness plans at various levels ofgovernment; mitigation actions and programs; asafety net of emergency response programs thatensure timely and targeted relief; and an organi-zational structure that enhances coordinationwithin and among levels of government andwith stakeholders.

Australia developed a drought policy in 1992,and South Africa quickly followed. India has inplace many long-term strategies and measuresto reduce the impacts of drought. The UnitedStates has been moving toward, but has not yetenacted, a national drought policy.1

South Africa has a wide range of institutionalcapacity to respond to drought emergencies. Itsneighbors have no drought policy or plan,although most have some infrastructure torespond to drought conditions, but usually on areactive or ad hoc basis. In Botswana, droughtpreparedness planning is part of developmentplanning, and its institutional structure is welldefined, with local involvement at the districtlevel. In Swaziland, a consortium of NGOs hasbeen identified to address the needs of vulnera-ble population groups for drought and othernatural hazards.

LESSONS LEARNED

Individuals, governments, and others considerdrought a rare and random event. As a result,little, if any, planning is usually completed inpreparation for the next event. Because droughtis an inevitable feature of climate, strategies forreducing its impacts and responding to emer-gencies may and should be well defined inadvance. Almost without exception, the crisismanagement approach has been untimely andineffective and has done little to reduce vulner-ability to the next drought. Also, relief measureshave been poorly targeted. In fact, droughtrelief actually increases vulnerability to futureevents by reducing self-reliance and increasing


The 10-step drought planning process was originally based oninteractions with U.S. states but has been modified greatly toincorporate the experiences and lessons learned from manydeveloped and developing countries. It has been the basis fordiscussions at regional training workshops and seminars ondrought management and preparedness.This planning processhas evolved to incorporate more emphasis on risk assessmentand mitigation tools in response to the increasing interest indrought preparedness planning.The steps are as follows:

1. Appoint a drought task force or committee.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.5. Prepare and write the drought plan.6. Identify research needs and fill institutional gaps.7. Integrate science and policy.8. Publicize the drought plan and build awareness

and consensus.9. Develop education programs.

10. Evaluate and revise drought plans.

Source: Author.

Box 8.1 The 10-Step Drought Planning Process

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dependence on external assistance. If govern-ments and others provide assistance to thosemost harmed by drought, what incentive dorelief recipients have to alter the resource man-agement practices that make them vulnerable?In addition, agricultural producers and naturalresource managers that employ best-manage-ment practices are usually not eligible fordrought relief or assistance programs. In reality,governments not only promote poor manage-ment by providing drought relief, but alsoreward it.


Many drought mitigation actions exist for eachimpact sector. Conducting a drought risk assess-ment will help identify the most essential miti-gation actions for each of these sectors toreduce drought vulnerability. Recommenda-tions for investment in the agricultural, munici-pal, and industrial sectors and generalrecommendations to benefit all sectors are sum-marized below.

Agriculture

• Train farmers on best-management prac-tices and conservation irrigation.

• Encourage the use of innovative cultiva-tion techniques to reduce crop water useand provide guidance on alternative crop-ping systems and crop types to employduring droughts.

• Conduct crop irrigation efficiency studies toimprove water management.

• Provide farmers with real-time irrigationscheduling and crop evapotranspirationinformation.

• Monitor soil moisture and provide farmerswith real-time data.

• Encourage installation of water-efficient irri-gation technology.

• Develop an actuarial-based crop insuranceprogram for agricultural producers.

Municipal and industrial

• Provide guidance to local government andwater supply providers on long-term watermanagement issues, including droughtplanning.

• Encourage water reuse as part of an ongo-ing water conservation program.

• Provide water efficiency education for indus-try and business.

• Develop and implement an incentives pro-gram to encourage efficient use of existingwater supplies.

• Assess and classify the drought vulnerabilityof individual water supply systems.

• Identify vulnerable water-dependent indus-tries, and fund research to help determineimpacts and improve predictive capabilities.

General

• Improve the reliability of seasonal climateforecasts and increase their use to improvedecision making for water management.

• Establish an automated weather station net-work to provide end users with near–realtime data to improve decision making.

• Alter operating procedures for reservoirmanagement during drought.

• Augment water storage capacity of surfaceand subsurface systems to improve drought-coping capacity.

• Conduct feasibility studies to evaluate thepotential for desalinization of saltwater.

• Improve information delivery systems andprovide technical assistance to improvedecision making by government officials,agricultural producers, and water managersduring droughts and help create the neces-sary infrastructure.

• Improve water conservation practices fordomestic and agricultural sectors duringdrought and nondrought periods.


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• Monitor the effects of drought on waterquality for both surface and groundwatersupplies.

The World Bank has several lending instru-ments to stimulate progress in drought riskmanagement. The Specific Investment Loanprogram may facilitate development of institu-tional capacity. Because a shift from the crisismanagement approach to a risk managementapproach must be gradual, the Adaptable Pro-gram Loan may offer the opportunity to transi-tion to this new paradigm. Moving to risk-baseddrought management requires restructuring ofcurrent emergency assistance programs andbuilding consensus among stakeholders on pri-orities for mitigation measures. Governmentagencies possess considerable institutional iner-tia toward maintaining the status quo (in otherwords, maintaining current emergency droughtrelief programs). Effective drought risk manage-ment requires building consensus between gov-ernment and stakeholders. The best time todevelop a drought policy and a preparednessplan is right after a disastrous drought. The les-sons learned in attempting to manage thedrought crisis without a viable plan and the far-reaching impacts associated with drought arefresh in the minds of policy makers, naturalresources managers, and the public. The Bank’sEmergency Recovery Loan program is intendedto restore assets and production levels after anatural disaster. This program could be effectivein implementing drought disaster–resilient tech-nology, including creation of a comprehensiveand integrated early warning and delivery sys-tem and appropriate training programs to avoidor mitigate the impact of future droughts.


Investment opportunities in drought mitigationare numerous and varied. As part of thedrought planning process, a critical step is theidentification of appropriate mitigation actionsthat will address those sectors, populationgroups, and regions most at risk. As potentialmitigation options are identified, each shouldbe evaluated in terms of its potential to

decrease both short-term and long-termdrought impacts and consistency with sustain-able development goals. Below are examplesof investment options that should be consid-ered by the World Bank to increase resiliencyto drought.

• Establish automated weather networks toprovide decision makers with improved andmore comprehensive local and nationalinformation as part of an integrated droughtearly warning system.

• Invest in research to improve the reliabilityof seasonal climate forecasts to providedecision makers with timely information.

• Improve the infrastructure for deliveringreliable information to decision makers,including the development of training pro-grams through agricultural extension andother services and others to improve theapplication of information in making risk-based decisions.

• Develop institutional capacity for risk-baseddrought management by establishing anational drought policy and preparednessplan through the application of droughtplanning methodologies.

• Develop national water policies directed atimproving water management and facilitat-ing water transfers, especially during watershortages.

• Create water conservation programs andprovide local, regional, and national author-ities with opportunities for training on theimplementation of these programs.

• Establish risk-based crop insurance programs.

REFERENCE CITED

Hess, U. 2002. “Innovative Financial Services forIndia. Monsoon-Indexed Lending and Insur-ance for Smallholders.” Agricultural RuralDevelopment Working Paper No. 9. WorldBank, Washington, DC.


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USEFUL LINKS

Agriculture and Agri-Food Canada. “DroughtWatch.” Online at http://www.agr.gc.ca/pfra/drought/index_e.htm.

International Research Institute for ClimatePrediction. Columbia University. Online athttp://iri.ldeo.columbia.edu/.

National Drought Mitigation Center. University ofNebraska-Lincoln. Online at http://drought.unl.edu.

Queensland Government. “The Long Paddock:Climate Management Information for RuralAustralia.” Online at http://www.longpaddock.qld.gov.au/index.html.

SELECTED READINGS

Botterill, L. C., and M. Fisher. 2003. BeyondDrought: People, Policy, and Perspectives.Collingwood, Australia: Commonwealth Sci-entific and Industrial Research Organization.

Glantz, M. H. 1987. Drought and Hunger in Africa.Cambridge, U.K.: Cambridge University Press.

Rossi, G., A. Cancelliere, L. Pereira, T. Oweis, M.Shatanawi, and A. Zairi. 2003. Tools forDrought Mitigation in Mediterranean Regions.Boston: Kluwer Academic Publishers.

Wilhite, D. A. 2000. Drought: A Global Assess-ment. Vols. 1 and 2. London: Routledge.

______, ed. 2005. Drought and Water Crisis:Science, Technology, and Management.Boca Raton, Fla.: CRC Press. In press.

ENDNOTE

1. All “pending” legislation expires and has tobe reintroduced in the new Congress. Nodrought legislation was passed by the out-going Congress per Steve Lanich, HouseEnvironmental Affairs Committee 1-12-05.

This Note was prepared by Donald Wilhite of the Interna-tional Drought Mitigation Center, with inputs from ShobhaShetty. The Note was reviewed by Jean-Marc Faurès of theFood and Agriculture Organization (FAO).


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INVESTMENT NOTE 8.2

INVESTING IN FLOODCONTROL AND MANAGEMENT

In flood management and protection, structural andnonstructural measures need to be balanced in abasin context. The measures often involve sensitivetradeoffs that require well-structured discussionbetween the main players.The development and sus-tainability of flood management plans presupposesbuy-in by stakeholders, including the poor, and rein-forcement of the institutional clout of units favoringnonstructural measures.

Floods affect more people—140 million in anaverage year—than all other natural and tech-nological disasters put together. From 1998 to2002, 683 flood disasters were recorded, withmost people affected in Asia (97 percent) andthe remainder largely in Africa (OFDA/CREDdatabase—see References Cited). Exposure tofloods will increase as more people respond topopulation growth by moving to areas prone toflooding such as floodplains and deltas and asglobal climate change increases heavy runoffand reduces infiltration.

In many areas, floods are not only hazards, butalso sources of groundwater recharge andrenewal of soil fertility. Cyclic floods improvewater quality, maintain aquatic ecosystems, andsustain inland fisheries. In poor regions, floodsare the main source of irrigation water. Invest-ment in improved flood management and pre-paredness can reduce vulnerabilities andimprove the positive effects of floods.

INVESTMENT AREAS

A broad repertoire of flood management meas-ures is required to reduce the negative impactof floods and improve their positive impact.Structural measures such as flood embankmentsand storage reservoirs have their place, butabsolute protection from flooding is oftenimpossible, unaffordable, or simply undesir-able. In many cases, a combination of structural

and nonstructural measures and water manage-ment improvements offers the best value formoney. This combination is summarized asintegrated flood management, the process thatintegrates land and water resources develop-ment in a basin, aiming at trading off the bene-fits from using floodplains and utilizing floodflows against minimizing losses from flooding(WMO/GWP; see References Cited).

Water retention measures improve the capac-ity of river basins to retain unusual rainfall. Inmany basins, the original retention capacityhas changed, and often diminished, because ofdeforestation, river training, development ofstormwater removal systems, increase inmetallic surfaces, blockage of natural drainagepatterns, and conversion of natural depres-sions. Catchment protection, afforestation pro-grams, and mountain stormwater systems slowdown runoff and attenuate flood peaks. InWest Africa, efforts to integrate road planningand water management, using road levees asbarriers, impeded runoff and improved infiltra-tion. In plains, drainage systems play a crucialrole in water retention. Drainage systems cre-ate soil storage capacity to buffer excess rain-fall and runoff. They can slow downstormwater runoff, control water tables, andimprove soil chemistry. The benefits of suchcontrolled drainage systems are twofold:improved flood management and increasedagricultural production.

Other water retention measures utilize runoffand flood water for irrigation. With measuressuch as gully plugging, contour bunding,trenching, and recharge wells, monsoon rain-fall is controlled in the upper catchments andused to improve soil moisture and rechargeshallow aquifers. These programs often triggerindividual or small group investments in tanksand wells. Watershed programs in AndhraPradesh, India, established payback periods offive years or less (Wassan 2004). Water har-vesting in high rainfall areas slows down ero-sive sheet flow and increases shallowgroundwater tables, enhancing the reliabilityof rain-dependent paddy cultivation. In North-east India such investment had short paybackperiods (CDHI n.d.)


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Spate irrigation systems also use runoff and floodflows. Small and medium-scale seasonal floodsfrom ephemeral rivers are diverted for irrigation.Investments in civil head works have compli-cated the management of the sedimentationprocesses and shifted control over the flows toupstream land owners, creating substantial socialproblems. Different and often cheaper modalitiesmerit preference. Support in the shape of earth-moving equipment to build smaller “traditional”systems is often more effective.

The same argument applies to inundationcanals and flood recession cultivation, where arising perennial river overtops its banks andinundates the banks and plains alongside theriver, allowing farmers to grow crops on theresidual moisture. Water productivity in floodrecession agriculture can be high (box 8.2)and, in several dams in Africa, controlled floodreleases are part of the operating proceduresto continue capturing this benefit.

Even greatly enhanced retention and storagedoes not offer absolute protection from flood-ing. Measures to mitigate flood impacts andreduce susceptibility to damage offer scope forcomplementary investments. They includefloodplain regulation, design and location offacilities, building codes and flood forecasting,and availability of controlled overflow areas.They may be supported by robust flood fore-casting and warning systems. Disaster pre-paredness will further reduce the impact offlooding—with coordinating and control mech-anisms, supported by information campaigns,the construction of safe shelters, and the estab-lishment of coordinated emergency responsemechanisms (box 8.3). The challenge is tomaintain rigor during periods when there areno major floods.

Flood protection measures such as dikes, levees,and flood embankments are justified in areaswith high population densities, historical her-itage, and costly assets and infrastructure. Anexample is the Sfax Flood Protection project(2289-TUN), which protected Tunisia’s secondlargest city. The year before the project, the citysuffered a severe, 1-in-130-years flood thatcaused US$80 million in damage. This project

extended a dike, dug a belt canal around thecity center, and rehabilitated natural drains at acost of US$27.7 million and a postproject eco-nomic rate of return (ERR) of 23 percent.

POTENTIAL BENEFITS

The primary benefits of flood managementinvestments derive from reduction of potential


At the confluence of the Hadejia and Jama’are Rivers lies alarge floodplain. After construction of the Tiga and ChallawaGorge Dams upstream, this floodplain decreased from300,000 hectares to less than 100,000 hectares. Net economicbenefits from the floodplain (agriculture, fishing, fuelwood)were about US$32/1,000 cubic meters of water, whereasreturn from crops grown in the Kano River irrigation schemewas less than US$2/1,000 cubic meters of water.

Source:World Bank 2003.

Box 8.2 Northern Nigeria:The Floodplain of the Hadejia-Jama’are Basin

In the wake of the catastrophic Super Cyclone of 1999, theOrissa disaster management project introduced flood and dis-aster preparedness measures in 10 coastal subdistricts in India.The following was achieved:

• Community contingency plans were prepared in 1,600 vil-lages, starting with participatory risk assessment andmapping.The plans called for the construction of schoolbuildings that would double as shelters, installation ofraised tubewells, construction of storage for nets and dryfish, road and embankment repair, and alternative buildingtechnologies. Mock drills tested the contingency plans.

• The community plans were integrated into subdistrict dis-aster management plans.

• Local task force groups were created and given training infirst aid, rescue evacuation, water and sanitation, sheltermanagement, and carcass disposal.

• A ham radio system was developed for use during emer-gencies and control rooms were established in the sub-district centers.

The project was completed in 18 months on a slim budget ofUS$211,000 thanks to volunteer input. The preparednessmeasures were successfully activated in the 2001 floods andthe 2002 near-cyclone.The challenge is to maintain alertness inyears without threats.

Source: Victoria 2002.

Box 8.3 The Orissa Disaster Management Project

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damage—in terms of loss of life, damage toproperty and infrastructure, crop loss, servicedisruption, and increased poverty (UN-ESCAP).

Flood damage can be phenomenal. In China inAugust 1998, floods claimed 2,300 to 3,000 livesand caused damage estimated at US$20 billion.Two other floods in the Republic of Korea thesame year caused US$1 billion in damage (UN-ESCAP).


Flood mapping is useful for assessing an area’svulnerability to flooding, the value of its assets,and the feasibility and impact of flood manage-ment investments. In preparing flood manage-ment investments, decision makers mustcompare packages of flood management meas-ures at basin level (table 8.1). Decision makersshould consider not only these measures’ bene-fits in terms of reduced flood damage, but alsotheir positive or negative effects on inland fish-

eries, riverine ecology, water recharge, soil fer-tility, and local irrigation.

A second point to acknowledge is that interests indifferent options vary and may conflict with oneanother. A good example is the flood control anddrainage projects in Bangladesh (box 8.4). Inlands that include flood control and drainage,agricultural land in the floodplains was protectedagainst flooding, but this often pitted fisherfolkagainst farmers. In these circumstances, politicaland social feasibility comes into play. It is hard toaccept the message of “giving up” certain areas,where a braiding river can no longer be con-trolled. This was a finding in the BangladeshDrainage and Flood Control Project (864-BD),where local politicians fiercely resisted the retire-ment of embankments. They pushed for the con-struction of expensive groynes, but in the endthese structures could not reverse the change inthe riverbed. The best package may not be theone with maximum economic benefits, but theone that offers the most acceptable tradeoff


Measures Potential strong points Potential weak points

Water retention Additional benefits such as recharge, May not protect against peak floods, whichirrigation, and drainage may still cause substantial damage

Investment can be multipurpose

Flood mitigation Possibility of extensive coverage at low Requires discipline, which in case offinancial 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

Protects low-lying areas, where poor neighborhoods are often situated

Results in very high demand after flood disasters

Source: Author.

Table 8.1 Summary of Strong and Weak Points in Flood Management

May interfere with inland fishery and aquatic systems

May reduce river storage capacity

May make land acquisition difficult

May raise investment costs

May generate high recurrent costs that might not be paid

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between divergent interests. It is through stake-holder involvement in assessing options that suchsolutions can be reached.

Investments in flood management need to besupported by policies that safeguard water reten-tion and storage capacity by protecting upper-catchment vegetation, protecting wetlands forflood storage, restricting sand and gravel miningin rivers, and regulating development of roads,railways, and built-up areas. Investing in theenforcement of such policy measures gives bet-ter value for the money than remedying the con-sequences of the lack of enforcement. The sameapplies to policy measures regulating access anduse of flood-prone areas. Such low-cost meas-ures keep maintenance costs down. In spite ofsome efforts, there are no cases of cost recoveryof flood protection by the direct beneficiaries.This point is made in several Bank Implementa-tion Completion Reports, for instance the Small-Scale Drainage and Flood Control Project(955-BD) in Bangladesh. At best, costs are recov-ered as a surcharge on a general tax or water

fee—yet this presupposes the existence of a rev-enue collection system. More commonly, invest-ment in flood protection is inscribed on thegovernment budget and rarely leads to effectivepreventive maintenance. This is a strong argu-ment in favor of measures with additional func-tions for which users would be willing to pay.

Given the high negative opportunity costs of notinvesting in integrated flood management, sev-eral lending modalities can be used in flood man-agement and flood protection. Table 8.2 gives anoverview of some of these, but it is important to


The Chalan Beel flood control and drainage project inBangladesh failed to recognize the different interests thatcome into play in flood management. The construction ofembankments interfered with local floodplain fishery. Themany cuts made in the embankment structures to enable fish-ing ultimately rendered them ineffective.

Source:Abdel-Dayem et al. 2004.

Box 8.4 Conflicts in Flood Protection

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 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 andflood-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.

Table 8.2 Examples of Possible Loans

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be selective in deciding where to invest. This wasa major lesson of the Bangladesh Drainage andFlood Control project (864-BD). Investments inrelatively simple polders without pumpeddrainage in shallow flooded areas were econom-ically justified, but similar investments in deeperflooded areas were not.

LESSON LEARNED

The main lesson learned concerns the value oflooking at water retention and flood storagecapacity at basin level. A package of invest-ments and measures has to be identified to pre-vent and attenuate flooding, mitigate its impact,and protect areas with high-value assets.


• Avoid isolated perspectives and falling intothe trap of assuming that some investmentareas—particularly civil engineering works—are always appropriate. This is a challenge incountries where the organizations responsi-ble for flood management have been gearedtoward flood protection works, and wherewater management improvements, floodpreparedness, and land use planning to helpattenuate flood peaks have no institutionalhome.

• Capacity should be strengthened to enforcenonstructural measures.

• Community-based disaster preparedness is anecessary element in building up responsecapacity to deal with flood impact.


Investment opportunities for practitioners includethe following:

• Developing a basin-level flood managementplan

• Preparing an integrated package of waterretention measures, flood impact mitigation,and flood protection

• Flood mapping to assess the effectivenessof alternative flood management packages

• Reinforcing capacity to enforce and imple-ment nonstructural measures

• Establishing mechanisms to settle divergentinterests and undertake local planning

• Installing water retention measures—including measures to utilize flood flows

• Preparing flood impact mitigation measures,including controlled flooding

• Preparing flood protection measures

REFERENCES CITED

Abdel-Dayem, S., J. Hoevenaars, P. Mollinga, W.Scheumann, R. Slootweg, and F. van Steen-bergen. 2004. “Reclaiming Drainage:Towards an Integrated Approach.” Agricul-tural and Rural Development Report 1,World Bank, Washington, DC.

CDHI (Centre for Development of Human Initia-tives). n.d. “Water Harvesting and Soil Con-servation in High Rainfall Areas.” Online athttp://www.cdhi.org/upl_pdf/wwguide.pdf.

OFDA/CRED (Office of United States ForeignDisaster Assistance and Center of Researchon the Epidemiology of Disasters). “Interna-tional Disaster Data Base.” Catholic Universityof Louvain, Brussels. Online at http://www.cred.be/emdat/profiles/disaster/flood.htm.

UN-ESCAP (United Nations Economic and SocialCommission for Asia and the Pacific). “WaterHazards, Resources and Management forDisaster Prevention: A Review of the AsianConditions.” Available online at http://www.unescap.org/enrd/water_mineral/disaster/watdis5.htm.

Victoria, L. 2002. “Impact Assessment Study of theOrissa Disaster Management Project.”Bangkok: Asian Disaster Preparedness Center.


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Wassan/ Water Conservation Mission. 2004.“Report on Watershed Impact AssessmentStudy.”

WMO/GWP (World Meteorological Organisa-tion and the Global Water Partnership),Associated Program on Flood Management.Online at http://www.wmo.ch/apfm/.

World Bank. 2003. “Water Resources and Envi-ronment: Environmental Flows: FloodFlows.” Technical Note C3, World Bank,Washington, DC.

SELECTED READINGS

Associated Programme on Flood Management2003. “Integrated Flood Management: Con-cept Paper.” World Meteorological Organi-zation/Global Water Partnership.

Du Plessis, L. A. 2002. “A Review of EffectiveFlood Forecasting, Warning and ResponseSystem for Application in South Africa.” InWater SA 28 (2): 129-1–38.

Few, R. “Flooding, Vulnerability and CopingStrategies: Local Responses to a Global

Threat.” In Progress in Development Studies3 (1): 43–58.

Parker, D. J. (ed). 2000. Floods, vols. I and II.London: Routledge.

Van Steenbergen, F. 1997. “Understanding theSociology of Spate Irrigation.” In Journal ofArid Environments 35 349-3–65.

For guidelines on spate irrigation, see http://www.spate-irrigation.org.

For information on flood mitigation, see theWeb site of the Association of State Flood-plain Managers in the United States athttp://www.floods.org/home/.

For more on disaster preparedness, see the Website of the Asian Disaster Preparedness Cen-tre at http://www.adpc.net/.

This Note was prepared by Frank van Steenbergen, withinputs from Abla Ilham and Alessandro Palmieri. It wasreviewed by Bart Snellen of the International Institute forLand Reclamation and Improvement (ILRI).


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PLANNING SCARCE WATER RESOURCES USINGEVAPOTRANSPIRATIONQUOTAS:THE HAI BASIN INTEGRATED WATER ANDENVIRONMENT PROJECT INCHINA

What is new?Water resources planning and man-agement using units of evapotranspiration (ET) isuseful wherever water is scarce. It makes particu-larly good sense where irrigated agriculture is themajor water user. The approach is practical andaims to make the utilization of water resources sus-tainable and raise farmer incomes. It helps to maxi-mize agricultural production in water-scarce areasin a sustainable way. It raises farmer social capitaland improves farmer access to information.

In water-short areas, it is important to managewater resources in terms of the amount lost forother uses. Water mobilized by large irrigationsystems can be divided into the portion thatcrops, trees, and weeds use for ET, and theportion that returns to the surface water orgroundwater systems. The portion consumedthrough ET is the amount lost for users down-stream; this is often called the net extraction.1

Managing water resources in terms of netextraction encourages farmers to maximize thebenefits from the ET allocated to their area.Farmers will reduce the evaporation and tran-spiration that does not contribute to plantgrowth. For example, they will reduce evapo-ration by reducing waterlogged areas, by irri-gating when evaporation is lowest (at nightinstead of during the day), by using moisture-retaining mulches, and by replacing opencanals and ditches with pipes. They may alsoreduce plant transpiration by weeding, usingwater stress–resistant varieties, and fine-tuningdeficit irrigation.

The Hai Basin project in China will pilot waterresources planning through allocation of ETquotas. In this basin, where Beijing is located,water availability is only 305 cubic meters percapita, which is 14 percent of the national aver-age and 4 percent of the world average.Groundwater is pumped at a rate of 26 billioncubic meters a year, mostly for irrigation.Abstraction exceeds recharge at a rate equal toone-third of total abstraction. Excess abstractionis 13 billion cubic meters a year, 9 billion cubicmeters of it through groundwater overexploita-tion and 4 billion cubic meters through overuseof surface water.


The objective is to increase the volume andvalue of agricultural production in the demon-stration areas using a target ET amount. Thisamount will be less than the current ET, a goalthat can be achieved only by reducing nonben-eficial ET and raising crop water use efficiencyin the narrow sense of the word.

The productivity of irrigation water is the resultof a host of factors, among them plant breed-ing, soil fertility, fertilization, plasticulture,tillage, weed control, soil moisture manage-ment, drainage, soil salinity, soil sodicity, irriga-tion scheduling, deficit irrigation, irrigationtechnologies, and techniques and cropping pat-tern changes. The project will therefore workwith farmers on irrigation and cultivation aswell as general management practices toimprove their water productivity (WP).

The project will estimate ET in the demonstra-tion areas with remote sensing techniques,drilling down to farm plots if need be. It will tar-get reductions in nonbeneficial ET and increasesin crop water use efficiency in selected demon-stration areas. It will work with farmers toreduce ET to these target levels, while aiming tomaintain, if not raise, farmer incomes. It will cor-relate this ET information with data on produc-tion and farmer income and develop spectrumsthat show the range of yields and incomes per


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unit of ET for several crops. The project willidentify irrigation, cultivation, and general man-agement practices with low, average, and highWP and train farmers with low WP in the prac-tices of the high-WP farmers.

OUTPUT AND IMPACT

Water resources management is primarily a bot-tom-up undertaking that requires individualinvolvement of the water users. The project willwork directly with farmers and farmer groupsto achieve its objectives. It will form andstrengthen water user associations throughwhich farmers will learn to manage water con-sumption within allocated (target) amounts ofET while increasing the volume and value oftheir production, including switching to higher-value, less water-consuming crops.

Output is likely to be sustained, and evenexpanded, after completion. The objectives are inthe interest of both farmers and government. Pro-viding farmers with assistance during the projectand keeping water use within the allocated limits,local water bureaus and agriculture bureaus willincrease their own knowledge and skills.

WIDER APPLICABILITY

Water resources planning and managementusing ET units is useful wherever water isscarce. It makes especially good sense where

irrigated agriculture is the major water user. Theapproach is practical and aims to make the uti-lization of water resources sustainable and raisefarmer incomes. It helps maximize agriculturalproduction in water-scarce areas in a sustain-able way. It raises farmer social capital andimproves farmer access to information. Relianceon monitoring through remote sensing makes itapplicable everywhere because the entire globeis served by satellites.


China. “Hai Basin Integrated Water and Envi-ronment Management Project.” Active. Pro-ject ID P075035. Approved: April 4004.Within World Bank, available at http://proj-portal.worldbank.org.

ENDNOTE

1. If return flows are unusable because of poorquality of the return flows or of the receivingwater body, they are not recoverable and canbe considered “real” losses. In this profile, weare concentrating only on “real” water sav-ings related to ET reduction and not reduc-tions in other nonrecoverable losses, whichwould also be “real” water savings.

This Profile was prepared by Douglas Olson and reviewed byJack Keller of International Development Enterprises.


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FIGHTING THE ADVERSEIMPACTS OF CLIMATECHANGE ON AGRICULTURE

What is new? Agricultural water investment proj-ects can do much to enable rural communities toadapt to negative impacts of climate change such asdrought, soil degradation, and waterlogging.To allevi-ate or reverse negative climate effects, newapproaches and technologies such as combininginfrastructure investment and economic incentives,diversification, satellite technology, and climate infor-mation can be used.

Poor rural people depend on natural resourcesbut live in marginal areas and lack the knowl-edge and resources to adapt easily to the unex-pected. Changes associated with climate aretherefore likely to affect them more than anyother group.

Table 8.3 summarizes the impact of climatechange on seven sectors, among them rainfedagriculture and agriculture with water control.

In what way can World Bank projects addressthis vulnerability for people already exposed tomultiple poverty-associated liabilities? (See box8.5 for climate-related components in WorldBank projects.) For an answer, this profile looksat Brazil’s “Land Management II—Santa Cata-rina” project and China’s “Tarim Basin” and“Tarim Basin-II” projects. Components of theseprojects help farmers mitigate the impact of cli-mate change, even though they were notdesigned for that purpose.


THE LAND MANAGEMENT II—SANTA CATARINA PRO-JECT. The Land Management II project wasimplemented in Brazil’s southern province ofSanta Catarina between 1991 and 1997. Itsobjectives were to increase agricultural produc-tion on 81,000 small farms, make land and


Sectors Economic impacts Ecosystem impacts Welfare indicator Impacts on the poor

Agriculture Loss of agricultural Pests and diseases Poverty incidence Food poverty andproduction malnutrition

Irrigation, drainage, Drought, waterlogging, Impact on biodiversity Percentage of area Vulnerability to droughtand watershed and electricity irrigatedmanagement shortage

Drinking water Infectious and Unhygienic conditions Access to water Disease burden andand sanitation waterborne diseases and sanitation pollution

Public health: Mortality and Epidemics Disability-adjusted Infectious diseasesmalaria 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 moderntraditional energy and quality energyfossil fuels

Disaster Impacts on multiple Ecosystem diversity Loss prevention Extreme vulnerabilitymanagement sectors and productivity through mitigation

and adaptation

Source: Reddy, Dinar, and Mendelsohn 2004.

Table IP 8.3 Climate Impacts on Natural Resources-Using Sectors and Implications for the Poor

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water management sustainable, improve farmincomes, and protect the environment. Theproject sought to introduce land and watermanagement methods that would allow farmersto cope with changing climatic conditions thatlead to soil degradation. The main project com-ponents were agricultural extension, research,incentives for sustainable land management,land use planning, mapping, and monitoring ofthe environment.

THE CHINA TARIM BASIN I AND TARIM BASIN IIPROJECTS. The Tarim Basin in Xinjiang UygurAutonomous Region in northwest China sup-ports 5 million people. Its arid climate impliessignificant ET, much of which does not con-tribute to agricultural production or human use.Basin inhabitants depend mainly on agriculture,which suffers from water shortages, salinity,and waterlogging.

Tarim Basin I was implemented between 1991and 1997 to improve irrigation and drainage,develop hydropower and agriculture, strengthensupport services for agriculture and livestockdevelopment, and restore the Tarim Riverecosystem. Tarim Basin II is underway. It isexpected to improve the productivity of a low-yielding irrigated area of 105,350 hectares,reclaim a nonproductive area of 75,350 hectares,improve drainage, and support institutionaldevelopment initiatives for water managementand delivery.

OUTPUTS AND IMPACTS

THE LAND MANAGEMENT II—SANTA CATARINA PRO-JECT. Through appropriate extension activities,the project promoted minimum tillage, seedprocessing, and adaptive research by upgradingagrometeorological stations. Land managementinitiatives supported moisture conservation on400,000 hectares in 523 microcatchments, withspontaneous adoption on 480,000 hectares innonproject catchments. Reduction of soil losshelped reduce the cost of soil enrichment andstabilization, waterborne diseases, and mainte-nance costs of rural roads. Macroeconomicadjustments and decisions to join Mercosur andthe Southern Cone free trade area affected theproject through lowered output prices, but

farmers who had improved their land manage-ment suffered only small income drops.

THE CHINA TARIM BASIN I AND TARIM BASIN IIPROJECTS. The Tarim Basin projects increasedcrop yields by 20–47 percent in high areas and68–118 percent on low-lying land. The projectsachieved an ERR of 33 percent in terms ofimproved crop production and reclaimed42,000 hectares, benefiting 104,000 householdsand 33,000 livestock owners. Per capitaincomes grew by 250 percent in six years (fromY400–610 in 1991 to Y1,030–1,510 in 1997). Theproject used innovative mechanisms to sup-press hail, which used to badly damage cropsin the Weigan prefecture. The hail was detectedby radar and suppressed by seeding the cloudswith silver iodide.

Tarim Basin II utilizes remote sensing data fromLandsat and the U.S. National Oceanic andAtmospheric Association to map biomass pro-duction, maximize consumptive use, andreduce nonbeneficial ET. The project estimateswater productivity of the water user associa-tions and establishes water use quotas at sub-basin level so that adequate water is deliveredto the middle and lower reaches of the TarimRiver when rainfall is low and ET is high.


Some of the techniques used in these projectscould be adapted for use in other geographicand institutional settings. Adaptation could be


• Low agricultural productivity and high levels of povertyare associated with marginal climates.

• World Bank project investments tend to concentrate inmarginally climatic regions.

• Project implementation reports present anecdotal evi-dence on climate events but do not provide informationon their influence on project outcomes.

• The components show wide variation in their sensitivityto climate variables, which is reflected in the project ERR.

Source:Authors.

Box 8.5 Reflections on Climate-RelatedComponents in Bank Projects

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simple changes in management practices andavailable technologies at farm level or supportthrough government-sponsored planning andadvisory services. In either case, data andappropriate institutions have to be available.

Addressing site-related climate problems is anefficient and cost-effective way to cope withsuch issues. For example, in the case of theprojects in this profile, combining remote sens-ing with socioeconomic data allows evaluationof the relationships between site productivity,climate, and project performance.

REFERENCE CITED

Reddy, R. C., A. Dinar, and R. Mendelsohn, R.2004. “Climate Influence on World BankAgricultural Portfolio in Brazil and India.” InAjay Mathur, Ian Burton, and Maarten vanAalst, eds. “An Adaptation Mosaic: A Sampleof Emerging World Bank Work in ClimateChange Adaptation,” 53–70. Washington,DC: World Bank, World Bank Global Cli-mate Change Team. Available online athttp://lnweb18.worldbank.org/ESSD/envext.nsf/46ByDocName/AnAdaptationMosaicASampleoftheEmergingWorldBankWorkinClimateChangeAdaptationPart1/$FILE/AnAdaptationMosaicCCteam2004part1.pdf.

SELECTED READINGS

Burton, I., and M. van Aalst. 2004. “Look BeforeYou Leap—A Risk Management Approachfor Incorporating Climate Change Adaptation

in World Bank Operations.” February. Wash-ington, DC: World Bank, World Bank GlobalClimate Change Team. Available online athttp://lnweb18.worldbank.org/ESSD/envext.nsf/46ByDocName/LookBeforeYouLeapARiskManagementApproachforIncorporatingClimateChangeAdaptationinWorldBankOperations/$FILE/LookBeforeYouLeapCCteam2004.pdf.

Kurukulasuriya, P., and S. Rosenthal. 2003. “Cli-mate Change and Agriculture, A Review ofImpacts and Adaptations.” EnvironmentDepartment Paper No. 91. World Bank,Washington, DC.

Mathur, A., I. Burton, and M. van Aalst, eds.2004. “An Adaptation Mosaic: A Sample ofEmerging World Bank Work in ClimateChange Adaptation.” Final draft, February.World Bank, World Bank Global ClimateChange Team, Washington, DC.


Brazil. “Land Management II—Santa Catarina.”Closed. Project ID: P006473. Approved: 1992.

China. “Tarim Basin Project.” Closed. Project ID:P003556. Approved: 1991.

China. “Tarim Basin II Project.” Closed. ProjectID: P046563. Approved: 1998.

This Profile was prepared by Ariel Dinar and Rama ChandraReddy and reviewed by Ian Noble and Peter Jipp.


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INVESTING IN PARTICIPATORYAPPROACHES FOR THE CULTI-VATION OF NEW VARIETIESAND SOIL AND WATERCONSERVATION IN INDIA

What is new? Stakeholder involvement openedthe door to success for two World Bank projectsto help poor farmers increase yield from mar-ginal land. The success of the projects is mostlydue to the local community’s sense of ownershipthrough its involvement in selecting and testingnew varieties and technologies, the high prioritygiven to the cultivation of local grasses, and theclose collaboration between research institutionsand the projects.

Community involvement through village devel-opment committees (VDCs) and “ownership” ofintroduced technical packages has been crucialto meeting project objectives and introducingnew technologies in the last decade. Successfulpilot projects in integrated watershed develop-ment and combating soil sodicity1 through bilat-eral and multilateral investments have led toscaling up of further investments.


Bank investment in watershed development topromote and adopt moisture and soil conserva-tion measures started in the 1980s with pilotoperations to test technologies under field con-ditions. Some bilateral small (village and dis-trict-size) investments were also introduced.Moderate success was achieved in introducingsoil and water conservation measures, espe-cially in rainfed areas (600 to 1,000 millimetersaverage annual rainfall). Technical success ledto twin investments in integrated watersheddevelopment in the geographically contiguousShivalik hills in India (Jammu and Kashmir,Punjab, Haryana and Himachal Pradesh) andthe plains (Orissa and Rajasthan). In both proj-ects, vetiver grass (vetiveria zizanoides) wasplanted for soil conservation through terracing

and contour cultivation, but the benefits of localgrasses were not explored.

Beneficiaries did not identify with introducedvetiver grass and considered it a top-down gov-ernment program. Testing drought-tolerantcrops, including fodder, was not a high priority,and the horticultural crops, fruit, and vegetablecrops promoted had to have adequate water.During the mid-term review (December 1993),both projects were restructured to rectify short-comings and realign objectives and priorities bytaking on the following:

• Involving communities in testing introducedtechnologies

• Assigning high priority to use of local grasseswith economic benefits in fodder and robemaking and using vetiver where applicable

• Streamlining relationships between benefi-ciaries and forestry departments in grasscollection

• Including livestock development in projectactivities by providing improved feed, mak-ing fodder available, and offering artificialinsemination and other veterinary services

• Introducing drought-tolerant varieties ofcrops, particularly grains such as barley,wheat, and maize and horticultural cropssuch as guava, pomegranate, and amla(cape gooseberries)

• Planting napier grass (pennisetum pur-pureum) as a source of green fodder infield borders

To implement proactive participatory concepts,community organizations such as VDCs wereformed as incubators for sustainable projectobjectives. A “show and tell” approach wasused in which project staff and communityorganizations introduced new villagers to theideas and techniques. This participatoryapproach was instrumental in designing theIntegrated Watershed Development project,known as “Hills II,” which covered the Shivalikhills in five states, including Uttararchal.


276

Watershed development in India has provenhighly cost effective as a mechanism for reach-ing many of the rural poor (including the land-less, women, and disadvantaged groups) andhaving a large and sustainable impact on theirlives. The bottom-up participatory involvementof communities in project formulation andimplementation ensured their ownership andeffective benefit- and cost-sharing arrangementsfor project investments. This implied that, ifcommunities and their VDCs were proactivestakeholders, flexibility could be woven intoproject design and investments. Project imple-mentation plans were proposed by project staffand finalized after consultation with VDCs.Aide-mémoires, signed by VDCs and projectstaff, specified the rights and responsibilities ofeveryone involved.

The participatory approach of empoweringbeneficiaries was also adopted in reclamationof sodic lands in Uttar Pradesh (UP) in two suc-cessive Bank-financed projects in 1993 and1998. Other agencies were involved on asmaller scale in UP: the European Union inthree districts in 1994 and the government ofthe Netherlands in two districts.

The pilot project (UP Sodic I) tested andadopted several technologies based on system-atic soil testing, digging surface drainage,drilling tubewells, applying gypsum, leachingwith good quality groundwater, crop manage-ment, and regular flushing of salts from linkdrains. NGOs were actively involved in trainingbeneficiaries and in effective, forward-lookingproject management. The technologies used arebased on extensive research by national andinternational institutions. The Indian Council ofAgricultural Research and its affiliated researchinstitutes (particularly the Central Soil SalinityResearch Institute at Karnal, Haryana), con-tributed to the development and implementa-tion of technical packages including varietaldevelopment and testing of salt-tolerant barley,wheat, and rice varieties and green manureunder field conditions. UP Sodic I brought thefirst green cover to about 64,000 hectares of bar-ren land, surpassing the initial 50,000-hectareobjective. At full development, UP Sodic II(1998) would bring into cultivation about

150,000 hectares and incorporate project activi-ties into the main government-supported pro-gram in a unified approach.2

Achieving sustainability in combating droughtand salinity is a central objective of Bank invest-ments, particularly in watershed developmentand reclamation of sodic soils. The project com-ponents were broadly based on the following:

• Forming community development groupsto proactively empower project beneficiar-ies including the landless, women, and dis-advantaged groups

• Promoting suitably tested technical pack-ages and their adoption and modificationaccording to local conditions

• Sensitizing project staff to the changesneeded for a bottom-up approach througheffective institutional development programs

• Making inputs available at the time needed,particularly seeds, seedlings, agrochemicals,and soil amendments

• Rationalizing subsidies by enacting evolvingbenefit- and cost-sharing arrangements

• Upgrading infrastructure for drinking waterand farm-to-market roads

• Minimizing water loss and waste throughoperation and maintenance (O&M) proce-dures agreed between communities andproject management

• Establishing effective monitoring, evaluation,and feedback systems involving beneficiaries

OUTPUT AND IMPACT

At full development the Integrated WastelandDevelopment Program (IWDP) of Hills II wouldtreat about 200,000 hectares, 75 subwatershedsserving 1,920 villages in the five project statesout of a total area of 522,000 hectares. Duringpreparation and early project implementation,visits by groups of beneficiaries to treated subwa-tersheds in earlier projects proved instrumentalin fostering exchanges of ideas not only with


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beneficiaries, but also with project managementstaff. Experience from Uttaranchal was alsovaluable, because the European Union wasinvolved in promoting participatory aspects andestablishing a revolving fund for watershedmaintenance with beneficiaries’ contributions.The visits also helped in exchanges of technolo-gies, seeds, seedlings, and fodder.

Earlier projects and research efforts identifiedthe most appropriate vegetative technologiesfor watershed protection and management.However, the use of vetiver grass was per-ceived to be a Bank-driven technology. Thisperception was remedied for both Hills I andthe plains projects after the 1993 mid-termreview. Emphasis is now on selecting locallyavailable grasses and using indigenous technol-ogy to reduce soil loss from erosion andincrease on-site moisture and crop yields.

In rainfed areas, major crops are maize andpulses in the Kharif season and wheat and grainin the Rabi season. The Hills I project comple-tion report confirmed increase in both cropyields (40–60 percent) and cropping intensity (7percent) owing to increased availability ofmoisture and a rise in the groundwater table. Inaddition, construction of water-harvesting andminor irrigation structures ensured availabilityof irrigation and drinking water for domesticuse and livestock. With increased irrigation,more vegetables and fruits such as mango andguava were planted in the Rabi season. Milkproduction increased by 20–30 percent as aresult of improved availability of fodder andveterinary services.

The mid-term review of IWDP, Hills II (April 23,2002) and supervision report (October 19,2003) confirmed that implementation progressis satisfactory, and 1,260 VDCs have beenformed (80 percent of target). Wheat yieldshave increased from 2.3 tons per hectare to 2.9tons per hectare. Milk production has also risen,by 19–34 percent, as envisaged at appraisal.

As for the UP sodic reclamation projects, theresults are impressive—the land, once barren,whitish, and sodic, has become green and productive. Rice and wheat yields are double

the appraisal estimates. Cropping intensityincreased from 62 percent to 222 percent, withwheat and rice yields reaching 2.7 and 3.0 tonsper hectare, respectively. This has undoubtedlycontributed to poverty alleviation and reversalof soil and water degradation.

LESSONS LEARNED

Effective management of natural resources inmarginal and wastelands has proven techni-cally and socially feasible. Technically, devel-opment of drought- and salt-tolerant cropswas integrated with crop management, on-sitemoisture conservation, and soil conservation.Socially, proactive participation of projectstakeholders, particularly beneficiaries, is cru-cial to effective implementation of invest-ments. The support and coordination ofqualified project staff is essential to the real-ization of project objectives. Some of the keylessons learned are as follows:

• The Adaptable Program Loan is the recom-mended lending instrument for long-termdrought and salinity programs However, aLearning and Innovation Loan or a pilotoperation is suggested, if recommendedtechnologies and approaches have to betested before scaling up investments.

• Formation of community developmentgroups is essential to proactively empowerproject beneficiaries, including women,landless, and disadvantaged groups.

• Developing suitably tested technical pack-ages, and their adoption and modificationthrough local field testing, would ensure thesustainability of interventions.

• Project staff should be sensitized, througheffective institutional development pro-grams, to the changes needed for a bottom-up, participatory approach.

• Timely availability of financing of inputs,particularly seeds, seedlings, agrochemicals,and soil amendments should be ensured.

• Subsidies should be based on acceptablebenefit- and cost-sharing arrangements.


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• Infrastructure for drinking water and farm-to-market roads should be included in proj-ect activities.

• Agreed operation and maintenance proce-dures and cost-sharing arrangements shouldbe clearly delineated between communitiesand project management.


India. “Integrated Watershed Development Pro-ject—Plains (Hills I).” Project ID P009860.Approved: 1990.

India. “Integrated Watershed Management Devel-opment Project (Hills II).” Active. Project IDPO41264. Approved: 1999.

India. “Uttar Pradesh Sodic Lands ReclamationProject I.” Closed. Project ID: P009961.Approved: 1993.

India. “Uttar Pradesh Sodic Lands Reclamation II.”Active. Project ID: PO50646. Approved: 1998.

India. “National Agricultural Technology Pro-ject.” Active (expected closing date: June 30,2005). Project ID: P010561. Approved: 1998.

Within World Bank, available at http://projportal.worldbank.org.

ENDNOTES

1. Sodic soils are salt-affected lands dominated bythe electrochemical bonding of sodium to clay.This results in the dispersal of the finer soil par-ticles, impedance of water and air movement,and creation of highly alkaline conditions thatmake the soil unsuitable for crops.

2. Another innovative project in this respect isthe National Agricultural Technology Project(NATP) in India. Its goals were to enhancethe role of agricultural research for croppingsystems and variety development and pro-mote the dissemination of research out-comes on crop varieties and technologicalinnovations for water saving and harvesting.The project supported research to enhanceperformance and effectiveness in respondingto farmers’ technological needs and devel-oped technology dissemination techniquesbased on greater accountability to, and par-ticipation by, the farming communities.

This Profile was prepared by Hamdy Eisa with inputs fromShawki Barghouti. It was reviewed by Aly M. Shady of theCanadian International Development Agency.


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99ASSESSING THE SOCIAL, ECONOMIC, ANDENVIRONMENTAL IMPACTS OF AGRICULTURALWATER INVESTMENTS

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, andthe 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 shouldtrack multidimensional measures of welfare such as data on income and poverty and indicators ofhealth and nutritional status. The resulting knowledge about investment returns and impactsenables choices about the most cost-effective way to reach poverty reduction targets. (See IN 9.1.)

• 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

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Scientific analysis of benefits can provide power-ful support to technical assertions or help over-turn prejudices. Rigorous analysis of costs andbenefits is highly valuable in steering resourceallocation. For example drainage—the “forgotteninvestment”—is systematically downplayed ininvestment programming, even though it is rela-tively cheap and irrigation investments devel-oped without proper drainage may proveunsustainable. A study in India showed that thecost of creating new irrigated land is US$6,400per hectare, while the cost of drainage isbetween $700 and $1,000 per hectare. Rigorousanalysis provides the material for advocacy tocorrect this neglect of drainage. (See IN 9.1 onmonitoring and evaluation and IP 9.1 on measur-ing the costs of “absence of drainage.” For moreon drainage, see chapter 5.)

ECONOMIC AND FINANCIAL ANALYSIS IMPROVES

INVESTMENT QUALITY. Economic and financialanalysis can help refine project design andensure that financial flows improve sustainabil-ity. One case study in chapter 7 examines aproject where analysis demonstrated that irriga-tion benefits could pay the costs of a commu-nity’s water supply. Capturing indirect benefitsand externalities can also improve investmentchoices. The indirect benefits of dams may dou-ble their direct benefits. The same is true formany agricultural water investments, becausesecond-round multiplier effects of creatingincomes and wealth in rural areas are high.Evaluation of these linkages is vital to assessingthe real impact of agricultural and water invest-ment in rural areas. Analysis is also invaluablein showing the distributional impact of invest-ments. In the case of untargeted programs, thishas often revealed unexpected benefits for thepoorest. (See IN 9.1 on methodology in gen-eral, IP 9.3 on multiplier effects, IP 7.1 onrural water supply and irrigation, and IP 5.1on evaluating multifunctional investmentswithin an integrated water resources manage-ment framework.)

SAFEGUARDS SHOULD IMPROVE INVESTMENT QUALITY

AND OWNERSHIP. Safeguard policies are designedto integrate social and environmental concernsinto decisions about investment design. Theycan help to reduce and mitigate adverse environ-mental and social impacts, and transparencyrequirements ensure that stakeholders are con-sulted. Seven of the 10 safeguards may be trig-gered by agricultural water projects: typicalimpacts might include downstream and third-party effects from surface and groundwater with-drawals, polluted runoff and drainage water, andloss of farmland and displacement. Safeguardsmay be seen as imposing a cost on countries andWorld Bank teams. However, technical supportis available and properly applied safeguardsshould, in fact, improve investment quality andownership. (See IP 9.2 and IP 9.5.)

BENCHMARKING IS A USEFUL MEANS OF IDENTIFYING

SHORTFALLS IN IRRIGATION PERFORMANCE AND OF

DESIGNING IMPROVEMENT PROGRAMS. To tackle theproblem of poor irrigation performance, bench-marking systems have been developed that allowcomparison of performance between similarschemes. Benchmarking allows decision makersto measure performance, to identify reasons forvariations between schemes, and to draw up anagenda for change. The approach could be gener-alized within the World Bank as part of the moni-toring of key performance indicators. (See IP 9.4.)


Typical investments in this area may include thefollowing:

• Monitoring and evaluation systems

• Impact evaluation studies

• Economic modeling of multipliers anddirect and indirect impacts of multifunc-tional investments such as dams

• Benchmarking for irrigation modernization


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INVESTMENT NOTE 9.1

MONITORING ANDEVALUATING THE POVERTYIMPACTS OF AGRICULTURALWATER PROJECTS

Monitoring and evaluating (M&E) the poverty impactof agricultural water investments may allow someconclusions about returns on different types ofinvestments and their contributions to povertyreduction. M&E of the poverty impact should receiveattention early in project preparation to ensure ade-quate data collection capacity, collection of the righttype of data, and a system set-up that allows analysisand interpretation. Broad consultations and earlyuser involvement in the design and implementationof the M&E system are important to build consensusand ownership.

Agricultural water projects contribute in severalways to achieving the Millennium DevelopmentGoals of eradicating extreme poverty andhunger and ensuring environmental sustainabil-ity. Increased yields and cropping area andshifts to higher-value crops help boost theincomes of farm households, generate employ-ment, and lower consumer food prices. Theyalso stabilize incomes and employment. Com-munity participation and the creation of wateruser groups have become integral parts of theseprojects, which have empowered users andmade them self-reliant. Mainstreaming M&E willhelp generate the data to establish the cost-effectiveness of projects in reducing povertyand propose ways to improve it.

INVESTMENT AREA

M&E systems are usually based on four steps:

• Deciding what information is needed

• Assessing the availability and requirementsof tools for collecting and analyzing thedata needed

• Deciding on outputs of the M&E system,who will produce them, and how they willbe used

• Determining the resources needed to set upand run the M&E system

Each step of M&E of agricultural water projectsshould focus on poverty but the first step isespecially important: defining the indicators,the types of data, and the procedures for ana-lyzing and evaluating them.

INDICATORS. In addition to the standard indica-tors for inputs (resources assigned to projectactivities) and outputs (for example, the lengthof irrigation canals upgraded or built), outcomeand impact indicators are needed to monitorwelfare dimensions such as health status, con-sumption, and income levels (box 9.1).

These data, collected for different groups ofproject beneficiaries, measure which targetgroups receive the most benefits and thesegroups’ satisfaction or dissatisfaction with thebenefits. Beneficiary groups may be distin-guished according to income status (sometimesproxied by landholding status, if adequate dataon income status are unavailable), ethnicity,indigeneity, and gender. Good assessments

ASSESSING THE SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF AGRICULTURAL WATER INVESTMENTS

Outcome indicators

• Crop yields, cropping patterns, and production levels• Output and input prices• Fisheries and livestock production• Employment rates and wages

Impact indicators

• Share of population below the nationally established ruralpoverty line or share of population with less that $US1 aday pre- and postproject

• Prevalence of underweight and stunted children (meas-ured by height for age and weight-for-height) pre- andpostproject.

Source: Author.

Box 9.1 Some Outcome and Impact Indicators for Monitoring Poverty in AgriculturalWater Projects

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have also collected indicators on interventionscomplementary to agricultural water–relatedprojects (such as the establishment of market-ing infrastructure and processing facilities) andhave monitored the quality of services affectingthe impact of investments. Because projects donot take place in isolation, the inclusion ofquantitative and qualitative information onintervening and/or external influences on theselected indicators is recommended. As shownin box 9.1, one would include anything elsethat might influence the output/input prices orthe prevalence of child malnutrition.

TYPES OF DATA. Well-designed baseline surveysare an essential tool for collecting data forinvestment planning purposes, monitoring, andevaluation. Poverty maps have also provedvaluable tools for targeting and monitoringpoverty (box 9.2).

Depending on the project interventions, base-line surveys usually collect data at several levelssuch as the village, watershed, household, plot,and individual through a combination of house-hold and individual surveys and participatorymethods. To allow statistically significant infer-ences from the data, the sampling frameworkmust be appropriate. Surveys have been donein-house by implementing agencies, but theyare frequently contracted out to a research orsurvey firm or an institution. This approach isgenerally preferred.

A rigorous “with/without” design may be justi-fied to evaluate the impact of an investmentthat is critical to poverty reduction but whichsuffers from substantial knowledge gaps aboutwhich approaches work best or when a newapproach should be tested. With/without evalu-ation helps determine whether reductions inpoverty result from project interventions orother causes. Controlled impact evaluations aredemanding in terms of the analytical capacityand resource requirements, and not all invest-ments warrant them.

PROCEDURES FOR ANALYZING AND EVALUATING MONI-TORING AND EVALUATING (M&E) OUTPUT. Initialplanning for M&E includes developing the man-agement information system. It should allow dis-aggregation of key data by social and economicgroups to allow monitoring of the poverty impactof activities. It should also enable an assessmentof the inclusiveness of project activities.

Emphasis on poverty M&E early in projectpreparation can ensure that data collectioncapacity is adequate, that the right type of data iscollected, and that a system is set up that allowsanalysis and interpretation. Broad consultationsand early user involvement in the design andimplementation of the M&E system are importantto build consensus and ownership (box 9.3).

Early involvement of potential data users (typi-cally the project implementing agency) andbroad consultations with researchers, benefici-aries, donors, and implementers during the ini-tial design stage have been helpful in buildingconsensus on what to monitor and how to do itand in generating a sense of ownership amongthe various stakeholders.

RESOURCE REQUIREMENTS. The resources neededfor poverty M&E vary from project to project,depending on the scope of project activities andsystems set up for M&E. For example, conduct-ing a full-fledged household survey to collectdata on welfare measures may be costly, butalternative rapid assessment methods couldprovide a more affordable alternative for meas-uring poverty impacts. Alternatives includeapproaches such as collecting “core welfare”


Poverty maps are spatial representations of poverty assess-ments.They combine survey with census data and graphicallypresent indicators of poverty such as per capita income ordaily subsistence levels or well-being indicators such as lifeexpectancy, child mortality, and literacy.

In the Peruvian Social Fund project, FONCODES, povertymaps, in conjunction with community poverty assessments,helped target community-based projects including small irriga-tion projects. Superimposing remote sensing data (publiclyavailable satellite images) with poverty maps provides enor-mous scope for better water resources planning, poverty tar-geting, and impact assessments. (See also IP 9.1.)

Sources: Author;World Bank 1998.

Box 9.2 Poverty Maps

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indicators (typically assets) that help trackchanges in consumption and income.

POTENTIAL BENEFITS

Agricultural water–related projects that monitorpoverty impacts have improved poverty target-ing and tailored activities to maximize benefitsduring implementation. They have made end-of-project assessments of the returns andimpacts from different types of investments,allowing more cost-effective planning andimplementation of future investments (box 9.4).


CONDUCTING AN IMPACT EVALUATION. The objec-tive of impact evaluation is to measure theresults of the project interventions on dimen-sions of poverty (box 9.5). Impact assessmentnecessitates answering a counterfactual ques-tion, “What would have happened in theabsence of the intervention?” Establishingcausality is necessary for impact evaluation.Answering the counterfactual requires identify-ing a comparison or control group that does notreceive the project intervention and comparingthis group to the treatment group. The controlgroup must match the treatment group in termsof its socioeconomic aspects and the physicalcharacteristics of its site.

Experimental or quasi-experimental designs aregenerally used to address the counterfactual. Inexperimental design, the intervention is allo-cated randomly among all eligible beneficiaries.Experimental designs need to be set up prior tothe investment. Quasi-experimental designs, incontrast, attempt to generate control groupsafter the intervention by means of statistical andeconometric methods such as propensity scorematching, computing double differences, orusing instrumental variables (Baker 2000).

QUANTITATIVE VERSUS QUALITATIVE DATA: Integrat-ing qualitative and quantitative approaches inmonitoring and evaluating poverty impacts hasproven very effective. Quantitative analysisresults in more generalizable results, but quali-tative and participatory methods allow in-depth

study of selected issues, cases, or events andcan provide critical insights into beneficiaries’perspectives, the dynamics of a particularreform, or the reasons behind results observedin a quantitative analysis. A special attempt canbe made to monitor the satisfaction of the poorwith the project through focus group or otherqualitative methods.


Plans for the M&E system for the Sujala Watershed project inKarnataka, India, are a good example of how such a system canbe set up to evaluate the poverty impacts of an agriculturalwater project.

Impact indicators to be monitored in the project include thefollowing:

• Households—incomes, expenditures (consumption), assets• Village/community—employment and wages, empower-

ment and equity, including opportunities for women andvulnerable groups and changes in access to services

• Watershed—cropping patterns and production, improve-ments in groundwater levels, and reductions in soil loss

Plans for the baseline surveys include selection of control villagesto assess the “without” project situation. Impact assessments areplanned at mid-term and at project completion. In addition, thestakeholders will do periodic self-assessments. The projectintends to evaluate the poverty impact on small and marginalfarmers, landless persons, women, and indigenous people.

Source: Government of Karnataka 2003.

Box 9.3 India:The Sujala Watershed Project

Contributing to poverty alleviation by providing land to thelandless, together with rehabilitating sodic-affected land, wereprimary objectives of the Uttar Pradesh projects. Projectinterventions were targeted to households below the povertyline, and project impacts were monitored by a third party.Theevaluation of the pilot project pointed to key areas tostrengthen the poverty impact, which received attention in thesecond project.This included a greater emphasis on strength-ening women’s self-help groups and involving them in micro-enterprise activities to augment household incomes.Additionally, to ensure sustainability of reclamation andincome from the land, the importance of ensuring that thedrainage systems were maintained was emphasized.

Source: Jeeva Perumalpillai, Essex,World Bank, personal communication.

Box 9.4 Monitoring Poverty Impacts in the Uttar Pradesh Sodic Lands ReclamationProjects I and II

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• Involve beneficiaries early in the M&Eprocess. Broad consultations and earlyinvolvement of users in the design and imple-mentation of the M&E system will do muchto build consensus and ownership.

• Use beneficiary self-assessments and otherparticipatory approaches so that assessmentscan be made mid-course. There may be along time lag in realizing a reduction inpoverty from agricultural water–related proj-ects, and the poverty impact often cannot beevaluated until well after a project ends.

• Keep the number of indicators collectedwithin manageable proportions.

• Ensure that a good baseline survey isundertaken. Without a proper baseline, it isdifficult to monitor progress and evaluatethe impacts of investments.

REFERENCES CITED

Baker, J. L. 2000. Evaluating the Impacts ofDevelopment Projects on Poverty: A Hand-book for Practitioners. Washington, DC:World Bank.


An example of an impact evaluation that also attempted to examine the poverty impact of agricultural water–related projectsis a study by the International Food Policy Research Institute (IFPRI) evaluating watershed development projects in India.Theprimary objectives were to assess the following: (1) Which watershed projects were most successful in raising agriculturalproductivity, 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 suchas 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 werefirst used to predict program participation, and then the variation of outcome indicators with predicted values of programparticipation 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 andAndhra 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 projectimpacts was collected from interest groups through open-ended discussions. Control villages were selected and roughlymatched 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 andmonitoring 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 wascombined with sound technical inputs performed best of all.The authors also found that equity issues remained a problem andrespondents perceived that project benefits rose with landholding size, and that the landless and near-landless people weremost likely to report negative effects from projects. For example, across projects while 45 percent of households with 2 ormore hectares claimed they had benefited from watershed projects, only 12 percent of the landless and 19 percent of farmerswith less than 1 hectare claimed to have benefited. On the other hand, 19 percent of the landless felt that they were harmed bythe 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.

Box 9.5 India: An Example of an Impact Evaluation of Watershed Development Projects

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Government of Karnataka. 2003. OperationManual: Sujala Watershed Project. Banga-lore: Government of Karnataka WatershedDevelopment Department.

Kerr, J., G. Pangare, and V. Pangare. 2002.“Watershed Development Projects in India:An Evaluation.” IFPRI Research Report No.127. International Food Policy ResearchInstitute, Washington, DC.

World Bank. 1998. “Implementation CompletionReport.” Peru Social Development andCompensation Fund Project, Report No.18016. World Bank, Washington, DC.

SELECTED READINGS

Henninger, N., and M. Snel. 2002. Where Arethe Poor? Experience with the Developmentand Use of Poverty Maps. Washington, DC.:World Resources Institute.

Prennushi, G., G. Rubio, and K. Subbarao. 2002.“Monitoring and Evaluation.” In World Bank,Poverty Reduction Strategy Source Book.Washington, DC: World Bank. Availableonline at http://poverty.worldbank.org/library/view/4480/.

This Note was prepared by Mona Sur and reviewed by SarahCline,Timothy Sulser, and Mark Rosegrant of IFPRI.


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ASSESSING THE ECONOMICBENEFITS OF LAND DRAINAGE

What is new? Investment in drainage has thepotential to lift out of poverty large numbers ofpeople who live in waterlogged and saline areas.This Innovation Profile discusses how the poten-tial benefits of drainage investment were assessedin two settings. One was dominated by smallhold-ers located on an Indian irrigation system and theother by large farm enterprises typical of EasternEurope.This Innovation Profile also shows that it iseconomically feasible to drain a moderatelyaffected area.

In northwest India and other tropical semi-aridareas, irrigation canal systems were built manydecades ago, but rising water tables haveundone part of the effort, causing waterloggingand soil salinity. In those areas, hundreds ofthousands of farmers are watching their alreadysmall farms shrink, and their yields and incomesare falling through salinization. This profile dis-cusses a way of assessing the economics ofinvesting in the installation of surface and sub-surface drains in the state of Haryana.

The profile also discusses the method used toestimate the potential benefits of rehabilitatingdrainage systems in large farm enterprises inthe humid lowland areas of Central and EasternEurope. It is based on work in the East SlovakLowlands, typical of humid and semi-humidareas in the temperate zone.

The two methods look only at agricultural ben-efits and do not include estimates of the impactof well-functioning drainage systems on theprotection of houses, buildings, roads, andother infrastructure from damage by highgroundwater levels and occasional floods ortheir impact on the quality of drinking waterand human and animal health.

OBJECTIVES AND DESCRIPTION:THE NORTHWEST INDIA CASE

The potential benefits of surface and subsurfacedrainage are equal to the damage caused bywaterlogging and soil salinity. This damage caneasily and accurately be assessed through a soilsalinity classwise analysis, based on sets of data onsoil salinity level and crop yield. These data can becollected through systematic samplings within agrid of predetermined dimensions. The requireddimensions depend on the size of the project areaand the number of samples needed to reflect vari-ations in soils and soil salinity within the area.

To analyze the effect of soil salinity on cropyield and assess the total loss of production dueto excess salinity, the data were grouped intoclasses. Next, the percentage of the project areaunder each class was determined. The averagecrop yield at all observation points in a soilsalinity class was calculated for all classes.Finally, the relationship between soil salinitylevel and crop yield was established.

The loss of production due to soil salinity wascalculated by subtracting the average crop yieldin each of the other soil salinity classes from theaverage crop yield in soil salinity class I (that is,the soil class unaffected by salinity). Using theproportion of the total area under each class,researchers calculated the weighted averagecrop loss per hectare. The total crop loss in theproject area was calculated by multiplying theaverage crop loss per hectare by the number ofhectares in the area.

From input data also collected at the observa-tion points, the relationship can also be estab-lished between soil salinity level and netproduction value, and the total loss in net pro-duction value in the project area can be calcu-lated. This is important, because the loss in netproduction value due to soil salinity is equal tothe loss of net income, and soil salinity affectsnet crop income much more than it does grossyield. The classification of soil salinity isexplained in box 9.6.


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If the data are collected by, or under closesupervision of, experts who will process andanalyze the data, conclusive results can beobtained in one agricultural year (one or twoseasons). With 12 expert months, and another24 laborer months, data collection, processing,and analysis can be completed for an area of2,000 to 5,000 hectares. The result will be aclose assessment of the damage caused bywaterlogging and soil salinity and, conse-quently, a close estimate of the potential bene-fits of land drainage development.

OBJECTIVES AND DESCRIPTION:THE EAST SLOVAK LOWLANDS

In the East Slovak Lowlands, an assessmentwas done to determine the financial feasibilityof improving the water management systems toattract investment in rehabilitation. To assessthe effect on the yield of different crops of sub-soiling, flushing the subsurface drainage sys-tems, and cleaning the drainage canals, 12large experimental fields were divided into twoparts, each planted with the same crop. In onepart, all three necessary interventions were car-ried out; in the other part, two out of the threeinterventions. Both parts received the sameamounts of agricultural inputs. At harvest time,in each part an equally wide representativestrip was harvested and the yields were com-pared. Care was taken to ensure comparablesoil conditions and microrelief in each strip.The positive yield difference was attributed tothe third intervention, and the negative resultto its absence.

In addition, daily rainfall was recorded duringthe entire year. The experiments were repeatedtwice. By analyzing the collected yield datawith the help of a long-term series of annualrainfall data, the long-term effect (or the bene-fits) of subsoiling, proper subsurface drainage,and canal cleaning could be assessed. In addi-tion to the assessment of the benefits of thethree interventions, their costs were also meas-ured through time-and-motion studies.

OUTPUT AND IMPACTS:THE NORTHWEST INDIA CASE

The study done in the Gohana pilot in north-west India provided reliable estimates of thedamage caused by waterlogging and soil salin-ity in the area. The results of the study are sum-marized in box 9.7.


Soil salinity classes are categorized based on an interval of foursoil salinity units. Soil salinity is expressed as the electrical con-ductivity of the saturated soil extract (ECe), and the units areusually expressed in dS/m or mmhos/cm. Class I covers theinterval 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 agriculturalcrops, soil salinity barely affects crop yields. Consequently, theclass I soils are considered “unaffected,” and the average yieldof a specific crop in class I is taken as that crop’s “referencelevel.” Crop damage due to soil salinity in the higher classes ismeasured against the class I reference level. Soil salinity in classII is called “marginal,” in class III “moderate,” in class IV“severe,” and in class V “extreme.” In class V, no more crops aregrown, because their gross production value scarcely exceedsproduction costs, excluding labor.

Source: Author.

Box 9.6 Classification of Soil Salinity

In the project area, 44 percent of the land was unaffected, 33percent marginally affected, 10 percent moderately affected, 7percent severely affected, and the remaining 6 percentextremely affected.

• The average per hectare loss in gross production valuewas 12 percent over the whole project area and 22 per-cent in the affected area.

• The average per hectare loss in net production value wasa good 20 percent over the whole project area, and 37percent over the affected area.

• Because of the scattered nature of the drainage problem,the losses were “unevenly” spread over the project area.

Source: Author.

Box 9.7 Damage from Waterlogging and Soil Salinity in the Gohana Pilot Project

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General data and results

Even in this area with only a moderate drainageproblem, the effect on the weighted averagenet production value is strong, and it is the lossof net production value that reduces thefarmer’s income. The experiment was repeatedin the (small) Konanki pilot area in AndhraPradesh in southeast India.

In both Gohana and Konanki, surface andsubsurface drains were installed. Croppingintensities, crop yields, and farm incomes sub-stantially increased, demonstrating that landdrainage can be central to combating poverty.It is also cost effective, because conservingalready irrigated areas by (sub)surfacedrainage costs only a third as much as build-ing new irrigation systems. Drainage develop-ment on the hundreds of thousands ofwaterlogged hectares in northwest India(Haryana, Punjab, and Rajasthan) could saveat least 100,000 farmer families from sinkingbelow the poverty line. Health and living con-ditions would also strongly improve.

OUTPUT AND IMPACTS:THE EAST SLOVAK LOWLANDS

The experiments provided an accurate assess-ment of the benefits and the costs of proper sub-surface drainage in the lowland areas of theEastern Slovak Republic and in similar lowlandsin Central and Eastern Europe, as well as a closeapproximation of the financial feasibility of reha-bilitating the drainage systems. At a discount rateof 10 percent, the benefit-cost (B/C) ratio forsubsoiling varied from 1.7 to 2.3. The B/C ratiofor canal cleaning could not be accurately estab-lished because there were not enough suitablesites, but an earlier study indicated that it wouldbe feasible if it increased average yield by only 2percent. The B/C ratio of the three interventionstogether was more than 1.25, again at a discountrate of 10 percent. This figure is conservative,because experiments were done in dry years.The inputs were low, however, because of thepoor economic state of the farm.

The method is simple and can easily berepeated by trained farm managers, although

analysis of the data requires some expertise.The analysis shows that rehabilitating thedrainage systems through canal cleaning, drain-pipe flushing, and subsoiling is financially andeconomically feasible even when nonagricul-tural benefits—such as infrastructure protection,reduced waterlogging, flood prevention, andthe proper discharge of polluted drainage efflu-ent so that it does not degrade water quality—are not taken into account.


Experiments and studies must be financiallyindependent of the collaborating institutions sothat their financial problems will not influenceresearch progress and quality. The availabilityof machinery and equipment, such as a tractor,a drain flushing machine, and a water tankmust be secure at all times. The same applies toequipment for canal cleaning and subsoiling(Eastern Europe only). Progress should berecorded carefully for accurate cost calculation.

Waiting for the drainage component of an irri-gation project to become economically feasibleis economically and socially questionable. Wait-ing will only increase crop and income losses,thus increasing impoverishment in the affectedrural areas (Asia only).

Areas for project development, whether this isrehabilitation or construction, should be care-fully selected, taking due account of soil andwater management conditions. In addition, thequality of (farm) management should be con-sidered, as well as the willingness of theprospective beneficiaries.

Project development should include the estab-lishment of (an) institution(s) to secure properoperation and maintenance (O&M) of thenewly constructed or rehabilitated drainage sys-tems. The beneficiaries should be closelyinvolved in this O&M.

Good local managers and staff are available.They should be involved from the beginning inplanning and implementing the project(s). Expa-triate consultants are needed only to coordinate


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activities carried out by the multidisciplinarygroup of local experts and to coach them in theinterdisciplinary work.

The M&E of the project activities should bedone by a small number of independent foreignconsultants with the help of highly competentlocal consultants willing to do the fieldwork.

If good use is made of the experience gained inearlier projects, successful implementation offinancially feasible projects can be achieved.Improving land drainage will have a strong pos-itive effect on the regional economy andpoverty. There is no doubt about it.

SELECTED READINGS

Alterra-ILRI. 2003. “Improving Water Managementfor Agriculture.” Final Report of the PSO+ Pro-ject. Institute for Land Reclamation andImprovement, Wageningen, The Netherlands.

Datta, K. K., and C. de Jong. 2002. “AdverseEffect of Waterlogging and Soil Salinity onCrop and Land Productivity in the North-west Region of Haryana, India.” Agricul-tural Water Management 57: 223–38.

Datta K. K., C. de Jong, and O. P. Singh. 2000.“Reclaiming Salt-Affected Land through Drainagein Haryana, India: A Financial Analysis.”Agricultural Water Management 46: 55–71.

———. 2002. “Feasibility of Subsurface Drainagefor Salinity Control in the Trans-Gangetic

Region of India.” Irrigation and Drainage51: 275–92.

Hanaumanthaia, C. V., K. K. Datta, and C. deJong. 2004. “The Effect of Soil Salinity onCrop Production in the Konanki Pilot Area(Andhra Pradesh), India.” Course material.Agricultural Water Management.

ILRI. 1995. “Pre-Feasibility Study of a WaterManagement Project in the East Slovak Low-lands.” International Institute for LandReclamation and Improvement, Wagenin-gen, The Netherlands.

———. 1999. “The Effect of Soil Salinity onLand Productivity in the Gohana Area inHaryana State, India.” Annual Report ofthe International Institute for Land Recla-mation and Improvement. Wageningen,The Netherlands: ILRI.

———. 2000. “Improving Water Management forAgriculture.” Inception Report of the PSO+Project. Institute for Land Reclamation andImprovement, Wageningen, The Netherlands.

Rehak S., and J. Alena, eds.1998. “Working Doc-uments for the Feasibility Study of a Multi-Functional Rural Development Project inthe East Slovak Lowlands.” Hydromeliora-cie, Bratislava, Slovak Republic.

This Profile was prepared by Cor de Jong and reviewed bySarah Cline,Timothy Sulser, and Mark Rosegrant of IFPRI.


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GUIDING ENVIRONMENTALAND SOCIAL SAFEGUARDASSESSMENT INAGRICULTURAL WATERPROJECTS

What is new? Safeguard policies aim to integratesocial and environmental concerns into projectdesign and the borrowing country’s decision-mak-ing process. Seven of the World Bank’s 10 policiescan be triggered by agricultural water projects.Todecide whether to apply safeguards to an agricul-tural water project, Bank staff need to interpretthe scope of the policy and may also have to har-monize Bank policies with those of cofunders.Issues for clients include cost and technicaldemands and the resolution of conflict betweennational law and the policies.

The World Bank has 10 safeguard policies (box9.8) designed to achieve the following:

• Be mechanisms for integrating environmen-tal and social issues into decision making

• Provide a set of specialized tools to supportdevelopment processes

• Support participatory approaches and trans-parency


Most safeguard policies require that (1)potentially adverse environmental impactsaffecting the physical environment, ecosys-tem functions and human health, and physi-cal cultural resources, as well as specificsocial impacts, be identified and assessedearly in the project cycle; (2) unavoidableadverse impacts be minimized or mitigated tothe extent feasible; and (3) stakeholders beprovided with timely information so that theyhave an opportunity to comment on both thenature and significance of impacts and theproposed mitigation measures.

Mitigation measures are covered by the Disclo-sure Policy (World Bank 2002a, 2002b),whichpromotes access to information so that stake-holders in proposed projects can comment onboth the impacts and proposed mitigationmeasures. As a consequence, safeguard policiescontribute to democratic processes in develop-ing countries by opening up informationsources and promoting the participation ofaffected populations.

OUTPUTS AND IMPACTS

Water-related agricultural projects are bothinvestment and Development Policy Lendingprojects where either more water is to be usedor the current water supply is to be used moreefficiently. These projects include sectoralimprovements through the introduction ofwater use charges, development of water usergroups, and devolution of water managementresponsibilities; development and rehabilitationof infrastructure such as dams, weirs, ground-water pumping, canals, delivery systems as wellas dryland water infrastructure such as pans,dams, and bores; improvements in drainageand development of water reuse and water con-servation measures; and improved operationalpractices such as weather forecasting, irrigationscheduling, and O&M activities. Such projectscan have both detrimental and beneficial envi-ronmental and social impacts.

Typical detrimental environmental impacts fromwater-related agricultural projects include theeffects of surface water withdrawals on down-stream ecosystems; effects of increased ground-water use on water-dependent, sensitiveecosystems such as wetlands; and increasedconcentrations of fertilizers and agrichemicalsin runoff and drainage water from agriculturalintensification. Water-related agricultural proj-ects can also lead to beneficial environmentalimpacts—water “saved” through increased agri-cultural water use efficiencies (water charges,drip irrigation) may reduce pressure on waterresources; or improved water application anddrainage may reduce environmental degrada-tion and pollutant discharges.


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Typical detrimental social impacts include lossof productive farmland from new or rehabili-tated water resources infrastructure, physicaldisplacement of farmers and villages because ofnew water storage and irrigation schemes, lossof access to traditional water resources bynomadic groups, and disruption to traditionalsocial structures through the influx of peopleattracted to economic growth areas because ofwater resources investments.

The policies most likely to be triggered in water-related agricultural projects are OP/BP 4.01Environmental assessment, OP/BP 4.04 Naturalhabitats, OP 4.09 Pest management, OP/BP 4.12Involuntary resettlement, OD 4.20 Indigenouspeoples, OP/BP 4.37 Safety of Dams, and OPN11.03 Cultural property. OP/BP 4.01 is anumbrella policy that allows identification of

potential environmental impacts, some of whichmay be covered in more detail by other safe-guard policies. OP/BP 4.01 and OP 4.09 apply toSector Adjustment Loans as well as to investmentloans. All others apply to investment activities.

Projects are categorized by the task team intoone of three classes, A, B, or C, representingtheir possible environmental impacts. CategoryA projects are likely to have “significantadverse environmental impacts that are sensi-tive, diverse, or unprecedented”; category Bprojects are likely to have “adverse environ-mental impacts”; while category C projects arelikely to have “minimal or no adverse environ-mental impacts.” A fourth category, FinancialIntermediaries (FI), is used for projects wherethe full extent of project investments cannot beforeseen during project preparation, such as


OP/BP 4.01 Environmental assessment—An umbrella policy requiring environmental assessments to cover a broad range ofpotential 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 agriculturalprojects (chemical methods can be supported where justified)

OP/BP 4.12 Involuntary resettlement—Avoiding resettlement where possible and, where not, ensuring that resettled people arefully 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 notsuffer 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 economicdevelopment 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 ofsafety 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 internationalwaterways 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 indisputed 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.

Box 9.8 World Bank Safeguard Policies

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when there is a small grants component. TheEnvironmental Assessment Sourcebook (WorldBank 1991) and its Updates provide informa-tion on categorizing projects.


Issues for Bank staff

The wording of the safeguard policies isinevitably somewhat ambiguous and open tointerpretation (World Bank 2002c) because notevery circumstance can be covered and all ambi-guities removed without introducing costly rigidi-ties. Thus, the “significant conversion ordegradation of critical natural areas” in the naturalhabitats policy requires some interpretation, partlybecause the criticality of an area varies across dif-ferent interest groups1 and partly because impactsof agricultural water projects can be difficult topredict. For this reason, the terms of reference ofthe environmental assessment should include athorough evaluation of the importance of poten-tially affected natural areas to different interestgroups, the nature and extent of likely impacts inthese areas, and possible mitigation measures.

Nor do the policies cover all circumstances. Forexample, OP/BP 7.50 refers specifically to inter-national surface waters, even though exploita-tion of transboundary groundwater resourceswithout notifying affected neighboring countriescan have just as serious repercussions socially,politically, and environmentally. Thus, projectswith transboundary groundwater impacts shouldbe treated in the spirit of this policy so that theunderlying purpose of the policy is achieved.

OP/BP 4.12 is one of the most important forwater-related agricultural projects, especiallythose with components involving dams. Thepolicy focuses on involuntary resettlementbecause of its potential for severe social disrup-tion and loss. However, people accepting vol-untary resettlement face many of the samedifficulties reestablishing their lives and liveli-hoods as those involuntarily resettled, but donot benefit from the same level of oversight andprotection through the policy.

Only the environmental assessment (OP/BP4.01) and the pest management (OP/BP 4.09)

policies address development policy lending—an increasingly important component of Banklending activities (see IN 1.2). Efforts toimprove agricultural water resources manage-ment through water sector reforms are likely tolead to increases in adjustment loans with theirpotential for minor social dislocation and envi-ronmental improvements.

Most multilateral and bilateral lending agencieshave some form of social and environmentalsafeguard policies. The task team needs toreach an agreement with cofunders and theborrowing country about the application of thesafeguard policies. This is not usually difficult,but adds a burden to the work of the task teamduring project preparation.

Issues for borrowing countries

The safeguard policies can impose a consider-able cost on a borrowing country. For example,projects proposed for noncritical natural areas(OP/BP 4.04) have to demonstrate that thereare no feasible alternative sites and that thebenefits of the project outweigh the loss of thefunctions of the natural area. Establishing thiscan be time consuming, costly, and viewed asan impediment to progress by the borrowingcountry. The longer-term benefits, particularlythe ecosystem services supplied by naturalareas, should be included in these assessmentsso that these benefits of protecting natural areasbecome apparent to the borrowing country.

Borrowing countries may also lack the technicalcapacity to carry out or oversee environmentalassessments for category A and B projects.Impacts such as the downstream effects ofchanges in river flows from increased irrigationwithdrawals can be difficult to assess in anycountry, let alone those with limited technicalcapacity. The Bank can assist by assessing thecountry’s capacity through Economic SectorWork, by providing advice to the country byadding an environmental expert to the taskteam, and by including components thatstrengthen the country’s capacity to performenvironmental assessments and implementenvironmental management plans.


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The safeguard policies generally represent ahigher standard of protection than provided bylaw in most borrowing countries. Bank disclo-sure policy requires that more informationabout projects be made publicly available thanis normal in most countries, and the resettle-ment policy can have more generous eligibilitycriteria than found in the laws and customs ofmany borrowing countries (box 9.9).

Discrepancies between the borrowing countryand Bank policies can cause resentment aboutintrusion into internal country affairs. In somecases, the borrowing country may choose toapproach another lending institution with lessrigorous policies.

Guidance and resources available to Bank staff

The task team should establish the environmen-tal category of a project as early as possible sothat an environmental assessment can be com-menced, if needed. The assessment of potentialenvironmental and social impacts and possiblemitigation measures can then be obtained intime to influence the project design.

The Bank’s regional offices and anchor unitspossess considerable environmental and socialexpertise. In addition, specialist groups such asthe Groundwater Management Advisory Teamof the Bank-Netherlands Water Partnership Pro-gram (GW-MATE) are available to assist. Thisexpertise should be used to strengthen taskteams and to guide country counterpartspreparing environmental assessments, socialimpact assessments, and management plans.

The regional and anchor safeguard staff canadvise on interpreting safeguards when the pol-icy appears ambiguous or does not appear toapply directly to project circumstances. In addi-tion, training courses in the application of thesafeguard policies are offered by the QualityAssurance and Compliance Unit.

REFERENCES CITED

World Bank. 1991. Environmental AssessmentSourcebook. Washington, DC: World Bank.[Twenty-eight Updates to the Sourcebookhave been published.]

———. 2002a. Disclosure of Operational Infor-mation. BP 17.50. Washington, DC.: World Bank.

———. 2002b. The World Bank Policy on Dis-closure of Information. Washington, DC.:World Bank.

———. 2002c. “Safeguard Policies: Framework ForImproving Development Effectiveness: A Dis-cussion Note.” World Bank, Washington, DC.


The safeguard policies are available from theSafeguards Web site at http://lnweb18.worldbank.org/ESSD/sdvext.nsf/52ByDocName/SafeguardPolicies.

Advice can be obtained from the safeguardsunits in each of the regional Vice-Presiden-cies. In addition, the Quality Assurance andCompliance Unit provides training coursesin the implementation of the safeguard.

Groundwater Management Advisory Team(GW-MATE) Web site: http://lnweb18.worldbank.org/ESSD/ardext.nsf/18ByDocName/SectorsandThemesGroundwaterFunctionsandObjectives.

ENDNOTE

1. Annex A to OP/BP 4.04 provides detail onthe definition of significant critical areas.

This Profile was prepared by James Richard Davis andreviewed by Colin Rees and L. Panneer Selvam.


The Vietnam Water Resources Assistance project will improvefarmers’ access to irrigation water in six irrigation systems.However, some land will be lost because of canal rehabilita-tion, and a few households will have to be relocated. Thenational government’s decree on compensation for land acqui-sition was broadly in conformity with the Bank’s policy exceptthat individuals without formal title to land would have beentreated less favorably than those with formal title.Through dia-logue, it was agreed that all individuals affected, irrespective oftheir legal status, would be fully compensated.

Source: Author.

Box 9.9 Vietnam Water Resources Assistance Project

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ESTIMATING THE MULTIPLIEREFFECTS OF DAMS

What is new? This Innovation Profile outlines theimportance of multiplier effects of large multipur-pose water projects and what a multiplier analysiscan tell us about their indirect impacts. Multipliersestimate the investment’s total (direct and indirect)effects of an investment in relation to its directeffects. Multiplier models based on the SocialAccounting Matrix and the Computable GeneralEquilibrium also estimate the impact on income dis-tribution and poverty. This profile also summarizesthe first results of a multicountry World Bank studyon multiplier effects and income distribution impactsof dams (Bhatia, Scatasta, and Cestti 2005).

Investments in water resources projects includ-ing multipurpose dams generate a vast array ofeconomic impacts in their region and at interre-gional, national, and even global levels. Theimpacts are both direct and indirect. Indirectimpacts are called multiplier impacts. Ex postand ex ante evaluations of these projects, whenbased on a cost-benefit analysis, tend to esti-mate only direct impacts such as irrigation,hydropower, water supply, fish production,recreational benefits, and flood control. Theydo not take into account the indirect economicimpacts, although they may run up to 90 per-cent of the direct economic impacts.1 The mul-tiplier values for large multipurpose dams inBrazil, India, and the Arab Republic of Egyptrange from 1.4 to 2.0, meaning that for everyone dollar of value added directly by the proj-ect, another 40 cents to one dollar were gener-ated through indirect effects.

Recent reports by the Operations EvaluationDepartment (OED) of the World Bank and theWorld Commission on Dams also make thesepoints. The OED writes that “dams providingwater for irrigation also produce, in general, sub-stantial benefits stemming from linkages betweenirrigation and other sectors of production,” but noestimates are available on the indirect benefits of

the projects reviewed in the OED report (WorldBank 1996, 20). Similarly, the World Commissionon Dams states in its final report that “a simpleaccounting for the direct benefits provided bylarge dams—the provision of irrigation water, elec-tricity, municipal and industrial water supply, andflood control—often fails to capture the full set ofsocial benefits associated with these services. It alsomisses . . . their ancillary and indirect economicbenefits” (World Commission on Dams 2000, 129).


The major indirect impacts of dam investmentsinclude the following:

• Interindustry impacts from backward andforward linkages that increase demand foroutputs of other sectors

• Consumption-induced impacts arising outof income increases generated by the directdam outputs

Estimating indirect effects is a necessary step toimprove our understanding of the impact ofdams. Indirect effects are induced by the link-ages between the direct effects and the rest ofthe economy.

Water releases from a dam to irrigate cropsincrease agricultural output. Raised outputrequires more seed, fertilizer, pumpsets, dieselengines, electric motors, tractors, fuels, electric-ity, and so on. Increased output also encouragesentrepreneurs to set up food-processing (sugarfactories, oil mills, rice mills, bakeries) and otherindustrial units. Similarly, water releases from amultipurpose dam to provide electricity forhouseholds generates new demand for appli-ances and prompts the establishment of newbusinesses and factories. Changes in industrialoutput require more inputs from sectors such assteel, energy, and chemicals, among others. Insum, water releases for power and irrigationgenerate demand for inputs and opportunitiesfor processing.

Increased industrial and agricultural outputgenerates additional household incomes.Higher incomes raise consumption of goods


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and services, which, in turn, encourages pro-duction of agricultural and industrial commodi-ties. Changes in wages and prices have bothincome and substitution effects on expenditureand on saving decisions of owners of the vari-ous production factors, which further affectsdemand for outputs in both the region and thewider economy. Induced impacts reflect thefeedbacks associated with these income andexpenditure effects and also include impacts ongovernment revenues and expenditures.

For estimating a project multiplier value (table9.1) for a dam, we need a numerator that esti-mates the regional value added under a “withproject” situation as well as the regional valueadded under a “without project” situation. Wealso need a denominator that estimates thevalue added from the sectors directly affected bythe major outputs of the dam (such as agricul-tural output, hydroelectricity, and water supply).

For example, the multiplier for the Bhakra Damin India has been estimated at 1.9, meaning thatfor every 100 paise of value added directly bythe dam, another 90 paise were generated inthe region through indirect effects.

How to conduct multiplier effect analysis for a project

Multiplier analysis requires a multisectoralmacro model of the region with quantitativeinformation on the linkages of sectors and insti-tutions (government, households, firms). Givenresources and time constraints, the selection ofa multiplier analysis tool takes into account theavailability of input/output (I/O) tables or socialaccounting matrix (SAM) databases and of com-putable general equilibrium (CGE) models forthe region where the project is located.

The World Bank completed a multicountry study(Bhatia, Scatasta, and Cestti 2005) on the multi-plier effects of dams (box 9.10) in 2003. Thestudies include three large dams in Brazil, India,and Egypt with multiregional or economywideimpacts; and one small check dam in India withconsiderable local and spillover effects.

For the Brazilian case study, a semi-input/output(S-I/O) model was calibrated for the northeast

region, with technical coefficients, shares, andrates computed based on the 1992 regional I/Omatrix (Bhatia, Scatasta, and Cestti 2005). Oneversion of the model assumes that the construc-tion of large dams in the northeast would relaxsupply constraints sufficiently to treat as non-tradables all sectors but those directly affectedby the dams. A second version of the model isbuilt with supply constraints on 10 additionalsectors, treated as tradables.

SAM-based, fixed-price, multiplier models havebeen used to provide a quantitative analysis ofthe direct and indirect impacts and income dis-tribution impacts of the Bhakra Dam and BungaCheck Dam in India (Bhatia, Scatasta, and Cestti2005, ch. 3 and 4). For estimating the multiplierimpacts of increased agricultural production andelectricity output available from the BhakraDam, a SAM-based multiplier model was cali-brated for the state of Punjab for the period1979–80, almost 20 years after the dam wascompleted. The effects are divided into directand indirect. The indicators, capturing theeffects, include production and value added, aswell as disaggregated household incomes andtheir distribution. For the Bunga case study, aSAM-based model for the period 2000–1 wasused to assess the economic impacts of addi-tional irrigation available from two check damsin the village.

The analysis of the impacts of the Aswan HighDam (Bhatia, Scatasta, and Cestti 2005, vol. 2,ch. 4) is based on an extended version of the


Regional value added withproject minus regional value added

Definition of without project

project multiplier Value added of agriculture and electricity with project minus value added of agriculture and electricity without project

Source: Author.

Table 9.1 Values of Variables Required for theEstimation of a Project Multiplier of the Bhakra Dam Project, India

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IFPRI standard CGE model. For comparison, theimpact has also been simulated with the modelrun in a fixed-price multiplier mode (replicatinga SAM multiplier analysis). The database uses aSAM for 1997. The effects of the dam that havebeen covered are changes in the supplies ofirrigated land and water; changes in the sup-plies of electric power; and changes in yieldsand production technology (primarily changesin fertilizer use). The analysis covers the maindirect and indirect effects of the dam, includingdisaggregated household incomes and their dis-tribution, in a typical year during its lifetime.

OUTPUTS AND IMPACTS

The results from the World Bank multicountrystudy on multiplier effects of dams are given inbox 9.10. In addition to multiplier values, themultisectoral, economywide models used formultiplier analysis provide quantitative esti-mates of income distribution and povertyimpacts of dams. The SAM-based, fixed price,multiplier models and CGE models provideincome and consumption estimates underwith/without project situations for varioushousehold groups (rural self-employed, agri-cultural labor, marginal farmers, household


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 BrazilHydropower: 10.5 GW capacity; irrigation 330,000 hectares

2. Bhakra Dam system in northwest IndiaHydropower: 2,880 MW; annual output 14 billion kWh; additional irrigation 7.1 million hectares

3. Aswan High Dam, EgyptHydropower: 2100 MW; annual output 8 billion kWh per year; perennial irrigation to 350,000 hectares.

4. Check dam at Bunga village, Haryana, IndiaIrrigation: 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 casestudy 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 (100paise) generated directly, another 78 to 90 paise were generated in the region as downstream or indirect effects. For theAswan High Dam, multiplier values range between 1.22 and 1.4 in the three simulations.The multiplier value for the impact ofcheck 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 distributionand poverty impacts of dams. For example, in the case of the Bhakra Dam, agricultural labor gained an estimated 65 percentin 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 urbanhouseholds.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 largefarmers.The increase in the incomes of marginal farmers was 50 percent compared with the average increase of 48 percentunder with/without project situations.The increase in the income of small farmers was 59 percent compared to the averageincrease of 48 percent under with/without project situations.

Source: Bhatia, Scatasta, and Cestti 2005.

Box 9.10 Multiplier Values and Poverty Impacts of Selected Dams in Brazil, India, and Egypt

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quintiles in rural and urban areas). These datahave been used to compute “gains” or “losses”associated with the dam for each category ofhousehold (box 9.10).2


Investments in irrigation and hydropower proj-ects have very significant indirect economicimpacts that could be as high as 90–100 percentof direct economic impacts. Such indirectimpacts must be taken into account in a com-prehensive analysis of the economic, social, andenvironmental impact of large water projects.The benefits from irrigation and hydropowerprojects to agricultural labor, the poorest ruralgroup, are sometimes higher than benefits toother households. Thus, investments in largewater projects may help reduce poverty in theregion and beyond.

Multiplier analysis is important for large waterprojects—agricultural and other infrastructureprojects that have significant regionwide impacts.Such an analysis should be carried out for allprojects where it is important to evaluate indirectimpacts and impacts on the rural and urban pooror agricultural labor households or tribal popula-tions. Some of the potential investments suitablefor a multiplier analysis are as follows:

• Large-scale surface or tubewell irrigationprojects

• Multipurpose dam projects

• Hydropower projects

• Projects that include a river-link to bringwater to a region

• Water conservation programs

The design and application of modeling tech-niques that compute multipliers can be used toexplore the impacts on expected project out-comes of alternative assumptions about sectorcharacteristics, policy packages, and structureof the economy. Economywide models (SAM-based, fixed price, or CGE) should be used forassessing the full range of direct and indirectdevelopment impacts of dam projects, includ-

ing the impacts on income distribution andpoverty reduction. Such assessments are neces-sary in the context of ex post evaluations,which can be a valuable tool for the identifica-tion and design of alternatives for new projects.

REFERENCES CITED

Bhatia, Ramesh, Monica Scatasta, and Rita Ces-tti. Forthcoming. Indirect Economic Impactsof Dams: Methodological Issues and Sum-mary Results of Case Studies in Brazil, Indiaand Egypt. 2 Vols. Washington, DC: WorldBank.

Gittinger, P. 1982. Economic Analysis of Agri-cultural Projects. 2d ed. EDI Series in Eco-nomic Development. Baltimore: JohnsHopkins University Press.

World Bank. 1996. “The World Bank’s Experi-ence with Large Dams—A PreliminaryReview of Impacts.” Operations EvaluationDepartment Report No. 15815. World Bank,Washington, DC.

World Commission on Dams. 2000. “Dams andDevelopment: A New Framework for Decision-Making.” The report of the World Commissionon Dams, issued November 16. Availableonline at http://www.damsreport.org.

SELECTED READINGS

Bhatia, Ramesh, Monica Scatasta, and Rita Ces-tti. 2003. “Study on the Multiplier Effects ofDams: Methodology Issues and PreliminaryResults.” Paper presented at the Third WorldWater Forum, Kyoto, Japan, March 16–23.

Bell, C., Peter B. R. Hazell, and R. Slade. 1982.Project Evaluation in Regional Perspec-tive—A Study of an Irrigation Project inNorthwest Malaysia. Baltimore and London:Johns Hopkins University Press.

Hazell, Peter B. R., and C. Ramasamy. 1991.The Green Revolution Reconsidered: TheImpact of High-Yielding Rice Varieties inSouth India. Baltimore: Johns HopkinsUniversity Press.


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Robinson, S. 1989. “Multisectoral Models.” In H.Chenery and T. N. Srinivasan, eds. Hand-book of Development Economics. Vol. 2, pp.885–947. Amsterdam: Elsevier Science.

Taylor, J. Edward, and Irma Adelman. 1996. Vil-lage Economies: The Design, Estimation, andUse of Village-Wide Economic Models. Cam-bridge: Cambridge University Press.

ENDNOTES

1. It is sometimes asserted that, in cost-benefitanalysis, “Shadow prices that include care-fully traced indirect changes in value addedinclude the multiplier effects while mini-mizing the danger of double counting.”And “. . . most of the multiplier effect isaccounted for if we shadow-price at oppor-tunity cost” (Gittinger 1982, 61). However,in practice, when cost-benfit analysis is per-formed for large water projects, shadowprices are not estimated in a regional

framework and the use of shadow pricesmay not include multiplier effects.

2. Some of the impacts on the poor in otherregions are not captured by the multiplieranalysis carried out for a particular region.For example, in India, the urban poor havealso benefited from surplus foodgrains fromBhakra distributed all over the countrythrough fairprice shops. Bhakra Dam con-tributed 30 million tons, 60 percent of totalfoodgrains procured by public distributionagencies during 2000–1. Remittances(around Rs 3,548 million or US$75 millionduring 1995–6) sent by migrant laborersworking in the Bhakra command have ben-fited millions of poor in the villages in Biharand Uttar Pradesh, with resulting multiplierand downstream effects.

This Profile was prepared by Ramesh Bahtia of Resourcesand Environment Group, New Delhi, and reviewed by SarahCline,Timothy Sulser, and Mark Rosegrant of IFPRI.


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BENCHMARKING FORIMPROVED PERFORMANCE INIRRIGATION AND DRAINAGE

What is new? Increasing water demand fromnonagricultural sectors is placing severe pressureon the irrigation and drainage sector to reducethe abstraction of water from surface andgroundwater systems. Performance assessmentwithin the irrigation and drainage sector has beenwidely discussed in recent years, and genuineattempts are now needed to improve perform-ance. Benchmarking is a practical approach to setrealistic targets for key processes. It introducescompetition in a setting characterized by naturalmonopoly and presents regulators and seniormanagement with a tool for M&E progress inmanagement and resource use. World Bank staffcan make the difference in promoting bench-marking, by using such an assessment as part ofproject preparation.

Irrigation and drainage schemes in many coun-tries are monopoly enterprises managed bygovernment agencies, frequently operating withlittle accountability to the captive water users.Service delivery, often poor—unreliable, inade-quate, and untimely—impairs agricultural pro-duction, especially on farms at the tail end ofthe system. Excess water results in waterloggingand loss of crop production.

Benchmarking offers an opportunity to com-pare performance between irrigation anddrainage schemes, identify best practices, andreplicate them on schemes that perform lesswell. It makes information on performanceavailable to stakeholders—in particular, waterusers. It is an important addition to perform-ance-assessment procedures because it helpsset achievable targets.

Benchmarking is about moving from one level ofperformance to another. It is about changing the

way in which irrigation and drainage systems aremanaged and about raising the expectations ofall parties as to what performance is achievable.It is a change-management process that requiresidentification of shortcomings, and then accept-ance by key stakeholders of the need, and path-ways for achieving the identified goals.


Benchmarking enables an organization to makean objective comparison between its own per-formance and that of best practice elsewhere. It isdefined as “a systematic process for securing con-tinual improvement through comparison with rel-evant and achievable internal or external normsand standards” (Malano and Burton 2001).

Benchmarking is part of a strategic planningprocess that asks and answers such questionsas, “Where are we now?” “Where do we want tobe?” and “How do we get there?” Of course,farmers and managers may use the same data tocompare their schemes with others.

There are six key stages in benchmarking (fig-ure 9.1):


FIGURE 9.1 STAGES IN BENCHMARKING

1Identificationand planning

2Data

collection

6Monitoring

andevaluation

5Action

3Analysis

4Integration

Benchmarkingprocess

Source: Malano and Burton 2001.

300

1. Identification and planning. The objec-tives of the benchmarking program andkey processes contributing to performanceare defined. Organizations with similarprocesses are identified, key performanceindicators are formulated, and a dataacquisition program formulated. Use ofkey descriptors (box 9.11) enables similarschemes and processes to be identified forcomparison.

2. Data collection. Data are collected and per-formance indicators calculated. These dataare for the scheme under review and otheridentified schemes and will include processand output performance indicators. Addi-tional data may have to be collected for thebenchmarking exercise beyond thosealready collected for day-to-day systemmanagement, operation, and maintenance.

3. Analysis. Data are analyzed and the per-formance gap(s) identified in the keyprocesses. The analysis also identifies thecause of the performance gap, and theaction(s) to close the gap. Recommenda-tions are formulated from the optionsavailable, reviewed, and refined. Furtherdata collection may be required for diag-nostic analysis if certain processes are notfully understood.

4. Integration. To achieve change, the actionplan has to be integrated into the opera-tional processes and procedures, requiringacceptance by key stakeholders. Bench-marking programs may fail at this stage ifinsufficient attention is paid to winningacceptance for the action plan. Increas-ingly, service contracts between the irriga-tion and drainage service provider andwater users are being introduced, allowingwater users to play a key role in settingservice delivery performance targets.Information on realistic and achievable tar-gets can be obtained through the bench-marking process of identifying bestpractices and service providers to be heldaccountable to levels of performanceachieved on similar schemes.

5. Action. Implementation of proposedactions, to which leadership by seniormanagement is key.

6. Monitoring and evaluation. An importantpart of the change-management programis monitoring the implementation of theplan and its impact on the key processesas disclosed through monitoring of theperformance indicators (box 9.12). Stake-holder monitoring is key.

OUTPUTS AND IMPACTS

International benchmarking draws on the expe-rience of the program started by the AustralianNational Committee of the International Com-mission on Irrigation and Drainage (ANCID) in1998. During 1997–8, the committee reportedthat 33 irrigation systems were covered, using alimited set of performance indicators. Subse-quent annual benchmarking exercises (ANCID2000) reported on 46 systems using 47 perform-ance indicators in four key management areas:system operation (7 performance indicators),environmental management (5 performance


• Irrigable area• Drained area• Annual irrigated area• Climate• Water resources availability• Water source• Average annual rainfall• Average annual reference crop potential

evapotranspiration (ET)• Method of water abstraction • Water delivery infrastructure• Type of water distribution• Type of drainage• Predominant on-farm irrigation practice• Major crops (with percentages of total

irrigated area)• Average farm size• Type of irrigation system management• Type of drainage system management

Source: Malano and Burton 2001.

Box 9.11 Descriptors for Irrigation and Drainage Schemes

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indicators), business processes (22 performanceindicators), and financial management (13 per-formance indicators).

Similar initiatives have since been launched inother countries. In Sri Lanka, Jayatillake (2003)reports work by the Irrigation ManagementDivision of the Irrigation Department to bench-mark scheme performance across the country.Cropping intensity across 52 schemes was astarting point for identifying relative perform-ance, and a range of between 0.35 and 2.0 wasfound. In five schemes in one water resourcessystem, benchmarking was used to reduce theperiod of water issues made from reservoirsduring the Maha and Yala seasons in order toconserve limited water supplies (figure 9.2).Further international comparative assessmentswere then made with other rice-based schemesusing the Online Irrigation Benchmarking Ser-vice (OIBS 2003) benchmarking tool (figure9.3) of the International Water ManagementInstitute (IWMI).

Statewide benchmarking of medium- andlarge-scale irrigation and drainage schemeshas been carried out in Maharashtra, India(Sodal 2003). Five key output and processindicators have been identified: irrigationpotential created and utilized; seasonal and

total annual irrigated area; water use effi-ciency; recovery of irrigation water charges;and crop yields. With the basic data collected,work is now underway to identify the better-performing schemes and the processes con-tributing to this performance.


• Annual irrigation water delivery per unit irrigated area(cubic meters per hectare)

• Main system water delivery efficiency• Total annual volume of drainage water removal

(cubic meters per year, cubic meters per hectare)• Drainage ratio• Cost-recovery ratio• Total management of operation and maintenance (MOM)

cost per unit area (dollars per hectare)• Total maintenance expenditure per unit area

(dollars per hectare)• Total gross annual agricultural production per unit area

(tons per hectare)• Output per unit of irrigated area (dollars per hectare)• Output per unit of water consumed

(dollars per cubic meter) • Water quality (chemical, biological, salinity) • Change in water table over time (meters)• User satisfaction with service delivery• Complaints by users

Source: Author.

Box 9.12 Widely Accepted BenchmarkingPerformance Indicators

FIGURE 9.2 REDUCTION OF MAHA SEASON WATER ISSUES THROUGH BENCHMARKING

Day

s

1994/5 1995/6 1996/7 1997/8 1998/9

Season

1999/2000 2000/1 2001/2

Kaudulla

Minneriya

Giritale

ParakramaSamudra

2002/3

151 146 121 128 137 133 121 127 126

151

156

152

162

145

152

154

149

158

133

131

150

136

125

141

135

126

150

125

127

161

132

128

151

123

133

157

Source: Jayatillake 2003.

302

In Turkey, Cakmak et al. (2003) applied the pre-liminary set of indicators presented by Malanoand Burton (2001) to five schemes, identifyingnoteworthy differences in water delivery per-formance (figure 9.4). From this study, the bet-ter-performing schemes were identified, onedifficulty encountered being that differentschemes performed best according to differentindicators. This emphasizes the need to be clearat the outset on identifying the key objectives of

a scheme (such as maximization of crop produc-tion, or protection of livelihoods), and selectingkey performance indicators accordingly.


Benchmarking is a means to understanding cur-rent relative performance of irrigation anddrainage schemes in a growing number of coun-tries. Most schemes in the initiative supported by


FIGURE 9.3 PLOT OF COMPARATIVE ANALYSIS USING THE ONLINE IRRIGATION BENCHMARKING SERVICE

Rela

tive

irrig

atio

n su

pply

/Irrig

atio

n de

man

d

0

3.0

2.5

2.0

0.0

1.5

1.0

0.5

10 20 30 40

Irrigation scheme number

50 60 70

Other(s)Selected schemeSelected season

Source: OIBS 2003.

FIGURE 9.4 COMPARATIVE PERFORMANCE OF WATER DELIVERY IN FIVE TURKISH SCHEMES

m3 /

ha

Rela

tive

Irrig

atio

n Su

pply

/Irrig

atio

n D

eman

d

Batman-Silvan

16,000

14,000

12,000

10,000

8,000

0

6,000

4,000

2,000

3.0

2.5

2.0

1.5

0

1.0

0.5

Devegeçidi Derik-Kumluca

Nusaybin Cinar-Goksu

WDCA (m3/ha) WDIA (m3/ha) Relative Irrigation Supply/Irrigation Demand

Source: Cakmak et al. 2003.Note: m3/ha = cubic meter per hectare.

303

the World Bank, the International Commissionon Irrigation and Drainage (ICID), the Food andAgriculture Organization (FAO), and IWMI are instages 1, 2, and 3, although some reports havebeen received that management changes havebeen made based on benchmarking results. Tosome extent, the first two stages are the easypart. More difficult is the identification of the rea-son(s) for performance gaps between differentschemes and the action needed to raise the per-formance of the less well-performing schemes.The true impact of the benchmarking initiativewill be felt when reports are received detailingaction in stages 4 and 5.

As with any change-management process, keyfactors in ensuring success in stages 4 and 5 arestrong leadership, communication, and gainingownership. Strong leadership is needed to cre-ate the future vision, to develop strategies, andto make the change happen. Communication isneeded with stakeholders to provide informa-tion gained from the gap analysis and to clearlyidentify the benefits to be derived from chang-ing the way things are done. This should besupported by measures to gain ownership ofthe proposed changes such as meetings withstakeholders to discuss and debate the pro-posed changes.

World Bank staff can make a difference in pro-moting benchmarking by using such an assess-ment as part of project preparation. The currentversion of the Project Appraisal Document(PAD) includes a section for key performanceindicators to enable M&E. The choice of suchindicators is generally made on an ad hoc basis,and the resulting list does not facilitate any com-parison between similar projects. Hence, apply-ing the proposed stepwise methodology wouldenable management to implement M&E basedon more meaningful and comparable indicators.

For schemes in the public sector, benchmark-ing is a political issue, assuming a genuinedesire and rewards for improving performance.Governments and reform advocates may usebenchmarking to put reform of irrigation man-agement on the national agenda. Public score-cards may prompt environmental groups and

other nonirrigation stakeholders to demandimprovements and an end to wasteful use ofland and water resources, as has happened inthe state of Victoria, Australia. Better perform-ance is about better resource use, more pro-ductive agriculture, and enhanced livelihoods,particularly for those with limited access towater within irrigation and drainage systems.

REFERENCES CITED

ANCID (Australian National Committee of theInternational Commission on Irrigation andDrainage). 2000. Australian IrrigationWater Provider—Benchmarking Report.Victoria, Australia: ANCID.

Cakmak, B., M. Beribey, Y. E. Yildirim, and S.Kodal. 2003. “Performance of IrrigationSchemes: A Case Study from Turkey.” Spe-cial Issue on Benchmarking in the Irriga-tion and Drainage Sector. Irrigation andDrainage 53(2).

Jayatillake, H. M. 2003. “Irrigation Benchmark-ing in Sri Lanka.” Special Issue on Bench-marking in the Irrigation and DrainageSector. Irrigation and Drainage 53(2).

Malano, H., and M. Burton. 2001. Guidelines forBenchmarking Performance in the Irriga-tion and Drainage Sector. Rome: Food andAgriculture Organization, International Pro-gramme for Technology and Research inIrrigation and Drainage.

OIBS (Online Irrigation Benchmarking Service).2003. Online at http://www.lk.iwmi.org:82/oibs/main.htm.

Sodal, S. V. 2003. “Present Practices and Oppor-tunities for Performance Improvement ofIrrigation Schemes in Maharashtra State ofIndia.” Special Issue on Benchmarking inthe Irrigation and Drainage Sector. Irriga-tion and Drainage 53(2).

This Profile was prepared by Martin Burton of ITAD~WaterLtd, Hector Malano of University of Melbourne,Australia, andIan Makin of IWMI. It was reviewed by Maria Saleth.


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APPLYING ENVIRONMENTALAND SOCIAL SAFEGUARDPOLICIES TO AGRICULTURALWATER OPERATIONS ANDMONITORING THEM DURINGTHE PROJECT CYCLE

What is new? The Bank’s Environmental andSocial Safeguard Policies (“Safeguards”) are man-dated instruments to help integrate environmentaland social considerations in the planning and imple-mentation stages of the project cycle.This Innova-tion Profile reviews adverse environmental andsocial impacts associated with agricultural wateroperations, steps needed to mitigate such impactsin the sector policies and the project cycle, andproblems observed and lessons learned in thedesign and implementation stages of past projects.The importance of evaluating institutional arrange-ments and ensuring monitoring of agreed mitiga-tion measures is stressed.


This Innovation Profile elaborates on IP 9.2,which provides guidance on the incorporation ofthe Bank’s Safeguards into agricultural wateroperations such as irrigation and drainage, waterlogging and salinity control, groundwaterabstraction, and water reuse and conservation atsectoral and project levels. It is designed forthose in agriculture and water sector agenciesspecifically concerned with the planning andmanagement of investment operations, includingpreparation and implementation of environmen-tal and social assessments, supervision of tendercontracts, and monitoring and evaluation of mit-igation measures.1 It may also prove useful togovernment environmental agencies and otherrelevant organizations responsible for assistingthe agricultural sector in the application of Safe-guards, as well as to NGOs and the public.

This Innovation Profile identifies significantpotential environmental and social impacts(direct and indirect) normally associated with

agricultural water operations. It demonstrateshow, for effective and sustained application ofSafeguards, mitigation measures may be inte-grated into the project cycle to ensure timelymanagement and coordination within andacross the agriculture sector. The need for priorreview of the relevant policies, legislation, andregulations and the importance of appraisingagriculture and water sector administrative/insti-tutional arrangements and capacity are stressed.Finally, this Innovation Profile cites issues thatthe Bank and the borrower need to recognize asparticular challenges to mainstreaming environ-mental and social safeguards at project designand implementation stages.

POTENTIAL ENVIRONMENTAL AND SOCIALIMPACTS OF AGRICULTURAL WATER PROJECTS

The potential environmental impacts of projectsmay be direct, indirect, or cumulative. Directenvironmental impacts (also known as primaryimpacts) are caused mainly by such develop-ment actions as water abstraction, diversion orimpoundment, and land grading, and includeloss of habitat as well as modifications to thehydrology of watersheds and to the water andsalt content of soils. Direct impacts also involvethe human environment, especially displace-ment of indigenous peoples or rural settlementsor disruption of their lifestyles, as well asincreased incidence of water-borne diseases,particularly when reusing irrigated wastewater.Unless appropriately mitigated, other factorssuch as constraints on access to water, land,and vegetation may result in significant loss orreduction of incomes of landowners, tenants,and sharecroppers. Extensive ditching andrelated excavations associated with a majordrainage project may potentially intersect sitesof local or national cultural significance.

Indirect impacts (also known as secondaryimpacts) may sometimes have more profoundconsequences than do direct impacts. They mayaffect larger geographic areas of the environ-ment than anticipated and continue well afterproject completion. Examples include gradualdegradation of vulnerable ecosystems such aswetlands, seawater intrusion into downstream


305

freshwater systems, and overpumping ofgroundwaters. Other common indirect impactsassociated with new or rehabilitated projectsinvolve increased deforestation, influx of set-tlers, deterioration of surface water qualitythrough erosion of land cleared or modified forconstruction to enhance agricultural productiv-ity, and the application of agricultural chemi-cals. Downstream indirect impacts may be inthe form of reduced agricultural productivityand incomes due to change in water levels andthe like.

Cumulative impacts can generate additive orsynergistic impacts and result in damage to thefunctions of neighboring ecosystems. This isparticularly the case with investments involvingmultiple subprojects, for example the impactsof the creation of access roads for transportingproduce to markets or the establishment ofsmall check dams in a concentrated area. Othercumulative impacts involve modifications toriver or stream flows and maintenance of water-dependent ecological functions and services ina catchment area. (See box 9.13.)

Virtually all undesirable impacts may beavoided or controlled by the adoption of miti-gation measures. This may be attained by theformulation of environmentally and sociallysound designs and appropriate institutionalarrangements for implementation, the imple-mentation of contract clauses by the contractorto ensure environmentally and socially soundconstruction and work practices, and diligentmonitoring and supervision.

INTEGRATING ENVIRONMENTAL ASSESSMENTAND OTHER SAFEGUARDS INTO INVESTMENTOPERATIONS

The integration of Safeguards into investmentoperations consists of several steps:

Review of relevant policies, laws, and regulations forwater sector operations

The first step involves a broad review of thecountry’s current policies and legislative andregulatory practices relevant to the applicationof the Bank’s Safeguards and determining levels

of complementarity and departure. Most coun-tries have enacted environmental laws consti-tuting the legislative and regulatory basis forconducting an environmental assessment(EA)—which includes an assessment of socialdimensions—as part of project developmentand implementation; articles and regulationsmay also list project categories subject to EAand, by inference, social assessment (SA), andother Safeguards. They may also have sectorguidelines covering safeguards and theseshould be consulted during the review.

Invariably, regulations require a clear definitionof the rights and obligations of the investingparty (government authorities and/or the pri-vate sector) and the general public. Conse-quently, before initiating any activity, thereshould be a clear understanding of all Safe-guard procedures to follow and authorities andother stakeholders (including the public) to beengaged and consulted. In particular, all partiesshould know the required EA/SA procedures tofollow; the assigned responsibilities to prepareand approve the EA, Environmental Manage-ment Plan (EMP), and/or the SA—and, asrequired, a Pest Management Plan (PMP) andother appropriate mitigation plans; and,arrangements to monitor and evaluate theapplication of the relevant Safeguards. Such


The importance of maintaining river flows has been demon-strated in several subcomponents supported under this proj-ect. Completed irrigation works abstract water fromneighboring rivers that, in some cases, have resulted in denyingany downstream flow during the dry season. Downstreamusers have been marginally affected but the impact on riverecology has been substantial and is under investigation by theDepartment of Environment.

Increasing realization that flows are critical to maintainingecosystems has generated moves to understand and describelinks between flows and ecosystem functioning so that “envi-ronmental flows” can be specified and thus minimize the loss ofvalued ecosystem features.This realization may be mobilized todescribe flows for a river that will (1) minimize or mitigate theimpacts of new water resources development, (2) rehabilitatesystems impacted by past developments, and (3) allow calcula-tion of the costs of compensating people for such impacts.

Source: Author.

Box 9.13 Tanzania: Social Action Fund Project

306

parties should also know what sanctions mightbe imposed in cases of noncompliance.

Many countries have signed several interna-tional conventions and agreements that serve asguidelines for environmental protection in agri-culture and water resources projects. These tar-get biodiversity conservation, wetlands ofinternational importance, world cultural andnatural heritage, migratory species, climatechange, desertification, and hazardous wastes.The advice of the environment authority orequivalent organization should be sought con-cerning the conventions’ and agreements’ appli-cation to agricultural water projects.

REVIEW OF SECTOR-SPECIFIC POLICIES,REGULATIONS, AND PROCEDURES

A parallel analysis should be undertaken ofexisting sector-specific policies, responsibilities,and regulations (along with a review of the sec-tor investment planning process for review andapproval of investment projects) to determinewhether environmental and social Safeguardissues are covered adequately in the processingof both sectorwide and project-specific invest-ments. This includes appraisal of in-countrycapacity for the effective application of Safe-guards and, as appropriate, recommendingmeans to strengthen relevant institutions foreffective execution of investments. This is espe-cially critical for sectorwide investments.

It is important to ensure that government andprivate sector units responsible for contractmanagement, quality control, and monitoring atregional and district levels have clear objectivesand procedures, including those for reportingthe effective application of all Safeguards dur-ing implementation.

In keeping with the requirements of the Envi-ronmental Assessment Safeguard Policy(OP/BP 4.01), a review should be conductedof public consultation/participation andgrievance redress mechanisms and practices.In addition, the borrower should make thedraft EA (for category A projects) or any sep-arate EA report (for category B projects)

available in-country in a local language andat a public place accessible to project-affectedgroups and local NGOs prior to appraisal.(See table 9.2 for the classification of EA cate-gories.) It is good practice to disclose thedraft EA report through the information-shar-ing agencies, such as the InfoShop of theWorld Bank.

Review of Bank and other donor Safeguard requirements

The Bank’s Safeguard policies should bereviewed with the borrower during the initialstages of project preparation. For the most part,Bank and borrower EA policies will be comple-mentary, though differences sometimes occurover project classification, public consultation, ordisclosure. Such differences should be resolvedas early as possible. Other Safeguards may not beas well accommodated and require special atten-tion and defining arrangements for their effectiveimplementation with the borrower. If the projectinvolves other donors, steps should be taken toensure complementarity and consistency in theapplication of all relevant Safeguards. Where nec-essary, an environmental and social managementframework should be developed to fill any gapsthat may exist between local laws and regulationsand international best practice.

Review of the project cycle

The EA Safeguard policy is specificallydesigned to integrate EA and other Safeguardrequirements with the project cycle. This inte-gration is essential to providing timely environ-mental and social information for decisionmaking at key stages in the project cycle—when findings may indicate practical siting anddesign changes—to avoid or minimize adverseimpacts or better capture the project’s benefits.Sector agencies and other parties have theopportunity to review and comment on a proj-ect as it is formulated and, where necessary,require changes to avoid or reduce adverseimpacts before irrevocable project decisions aremade. Likewise, all parties can monitor the mit-igation measures to ensure their implementa-tion to a satisfactory standard.


307

The Bank’s increasing use of programmatic,sector-based loans and time-slice investmentsinvolving multiple subprojects has stimulatedthe use of the Sectoral Environmental Assess-ment (SEA). The assessment undertakes a sec-torwide environmental and social analysis ofpolicies and investment strategies before majordecisions are determined and supports the inte-gration of Safeguard concerns into long-termdevelopment and investment planning. SEAsare also suitable for analysis of institutional,legal, and regulatory aspects related to the sec-tor and for making recommendations on Safe-guard standards, guidelines, law enforcement,and training, thus reducing the need for similaranalysis in downstream EA work. Details onfurther advantages and use of SEAs may befound in World Bank (1993).

For EA and other Safeguards to be incorporatedinto sectorwide and project-specific activities, itis essential to understand the project and therelationships within and between the sector andits partners, including the private sector. Thiswill help determine the particular Safeguardactivities to be synchronized with each stage ofthe project cycle and identify the partiesresponsible for these actions.

A summary of the triggers and mechanisms forachieving policy objectives of each Safeguard isprovided in table 9.2.

The application of Safeguards within the projectcycle involves several stages:

STAGE I: SCREENING (CLASSIFICATION) OF PROJECTS

Screening serves two major purposes: to deter-mine if proposed projects require an EA or theapplication of other Safeguards, and to indicateactions to ensure compliance with the relevantSafeguards.

OP/BP 4.01 (Environmental assessment) classi-fies the proposed project into one of four cate-gories (A, B, C, or FI) depending on the type,location, sensitivity, and scale of the project andthe nature and magnitude of its potential envi-ronmental impacts. Consequently, the TaskTeam needs to determine classification of the

proposed project with the borrower, the needfor an EA, and the likely level of environmentalplanning and management. Depending on thecountry, an SA may be required as a separatedocument. However, the Bank and the bor-rower should ensure the integration of environ-mental and social concerns and their mitigationfor final decision making.

STAGE II: PREPARATION OF THE EA/SA (SCOPING)

Scoping involves identifying and narrowingdown potential environmental and social impactsof the project (including alternatives) so thatefforts focus solely on those likely to be of signif-icance. For a project to be properly scoped, a sitevisit and preliminary consultations with relevantstakeholders must be included. It is important notonly to cover all environmental and social issuesknown at inception of the project (and identifiedduring screening), but also to allow breadth andflexibility so that unanticipated impacts may beidentified and, if significant, addressed at anytime during the project cycle.

Alternatives to a proposed project are a majorrequirement of the Safeguard on EA and shouldbe explored at this stage. They may includeimproving the efficiency of existing projects,such as the adoption of integrated pest manage-ment (IPM), and locating an irrigation ordrainage project where adverse environmentaland social impacts may be minimized. The dif-ferent impacts described should indicate whichare reversible or unavoidable and which may bemitigated. The analysis should address the costsand benefits of each alternative and incorporatethe estimated costs of any associated mitigationmeasures. The alternative of maintaining the cur-rent status should be included for comparison.

It is also essential at this stage to prepare Termsof Reference (TORs) for the EA/SA and obtainthe necessary expertise to conduct the assess-ments. Special studies such as those on resettle-ment and pest management and the necessaryspecialists to conduct them should be noted.The Bank and the borrower should subject theTORs to review and approval by the relevantBank specialist(s) and the borrower’s environ-mental regulation agency.


308


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 toEnvironmental 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 anydegradation 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 shouldPest 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 mayresettlement 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 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 governmentForestry 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.

Table 9.2 Policy Triggers and Mechanisms

309Decisions to undertake and mobilize resourcesfor the preparation, assessment, and review ofenvironmental and social Safeguards are theresponsibility of the relevant sector agencies. Theborrower should ensure that appropriate staff isselected to undertake the required decisions onits behalf and is responsible for contractors, con-sultants, and engineers from specialized govern-ment agencies or the private sector undertakingthe implementation of the Safeguards.

STAGE III: MANAGING THE APPLICATION OF SAFE-GUARDS

The main objective of the environmental andsocial assessments is to predict the potentialnature and magnitude of positive and adverseimpacts, evaluate their significance, and deter-

mine mitigation measures. The main tasks involvethe following:

• Collecting information/data on existing con-ditions (baseline studies) from records, sur-veys, and consultation with local residents,experts, and professionals

• Characterizing the existing environmentaland social conditions and predicting the sig-nificance of major impacts (includingreviewing expected trends within the pro-ject’s influence area)

• Developing approaches to avoid, mitigate,or compensate any adverse impacts and toresolve conflicts and enhance positiveimpacts


Policy Triggers Mechanisms for achieving policy objectives

OP/BP 4.11 Applies to all projects The borrower assesses the project’s potential impacts on physicalPhysical 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 qualifiedSafety 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.

Table 9.2 Policy Triggers and Mechanisms (Continued)

310

• Determining the institutional responsibilitiesfor completing the EA and ensuring theimplementation of mitigation measures andneeded institutional strengthening require-ments, including provisions for training

• Producing the required EA/SA reports andmanagement plans: EMP, Resettlement ActionPlan (RAP), IPDP, or PMP as required by theSafeguards policies

• Providing for the involvement of the publicin the assessment and for reviewing theproposed project in an open, transparent,and participatory manner.

At all times, it is essential to ensure close consul-tation between the assessment and engineeringdesign teams, especially on provisions for thereports and management plans and public con-sultation. The developer is ultimately responsiblefor ensuring compliance with statutory require-ments. Components of effective participationrequired by the Safeguards include the following:

• Identification of groups or individuals inter-ested in or affected by the proposed project

• Provision of accurate, understandable, perti-nent, and timely information

• Dialogue between those responsible fordecisions and those affected by them

• Assimilation of public views with the decision

• Feedback about actions taken and how thepublic influenced the decision.

It is important that implementers of this stageidentify and confirm linkages to environmentallegislation and regulations and Safeguards perti-nent to the project, and describe proposed mit-igation measures to accommodate public viewsderived from consultation with the public.Equally, to ensure that mitigation measures areimplemented effectively and on time, clauses incontract documents should specify environ-mental and social practices to be adopted dur-ing construction and related activities. In turn,provisions should be made so that suitably

experienced, independent supervisors maymonitor them.

STAGE IV: REVIEWING THE ADEQUACY OF THE

EA/SA REPORT(S) AND MANAGEMENT PLANS

This stage of the process calls for an intensivereview of the draft EA (and SA as required) andmanagement plans by the borrower and theBank; all parties are expected to make com-ments and offer recommendations for revisionsas needed. The following items should be con-sidered in determining the adequacy of thereports and plans and giving approval:

• Has the EA/SA addressed all the importantissues raised in the TORs?

• Is the executive summary adequate, that is,does it highlight significant impacts andtheir mitigation and management sufficientfor decision making? Does it cite outstand-ing issues?

• Are the baseline studies complete? Do theyaddress pertinent issues? Are the methodsthat are used scientifically and technicallysound?

• Is the section on predicted impacts and theirassessment rigorous, that is, has the assess-ment included the environmental/socialimpacts or consequences of adopting alter-natives (such as development schemes,management/operational practices, capitaland operating costs, and costs of mitigationmeasures)?

• Are mitigation measures stipulated alongwith monitoring/supervision responsibili-ties, costing, and scheduling arrangementsin the Environmental Management Plan(EMP), RAP, or other plans?

• Is the project in compliance with nationallegislation and regulations and with donorrequirements (if applicable)?

• Are institutional arrangements for coordina-tion, problem solving, reporting, and thelike in place?


311

• Are proposals for institutional strengtheningand training provided?

• Has community consultation proven effec-tive and been adequately recorded?

• Are references given and is there a glossaryof terms used?

• Are the EA/SA reports and managementplans clearly and coherently organized andpresented so that they may be understood,especially by the decision makers and thepublic?

• Do the reports provide information neededby the decision makers to assess whether ornot the environmental and social conse-quences are acceptable?

Comments should be submitted to the EA/SATeam for discussion and review. If necessary,the Team may need to conduct more workwhere data are required or provide explana-tions to resolve apparent inconsistencies. TheTeam should be clear about what issues are tobe addressed, when and how mitigation meas-ures are to be applied, what agency is responsi-ble for implementing them, and estimates oftheir cost.

STAGE V: MONITORING AND SUPERVISION OF SAFE-GUARDS

Monitoring and supervision provides informa-tion for periodic review to ensure that antici-pated impacts are maintained within the levelspredicted, unanticipated impacts are suitablymitigated, and the benefits of the EA and otherSafeguards are retained as the project is imple-mented and operated. To do this, the followingshould be arranged :

• Provide information for periodic review(and possible modification) of the EMP,RAP, or other plan to help optimize theapplication of Safeguards at all stages of thedevelopment process

• Assess performance and monitoring compli-ance with Safeguards and legal and regula-

tory requirements and agreed conditionsspecified in construction contracts andoperating licenses

• Demonstrate to all parties (including thepublic) that the project activities complywith Safeguard requirements, including con-sultation and disclosure, and that mitigationmeasures are being implemented effectively

• Undertake regular site visits by the sectoragencies and environment agency to super-vise environmental and social measures andhelp resolve issues

Construction site supervision teams may carryout many of the monitoring and supervisionactivities with guidance from environment/socialspecialists. However, regular visits to the siteswill need to be undertaken by specialistsemployed as part of construction supervisionteams. Monitoring findings will be judged by theapplication of the indicators specified in the EMPor variant (such as groundwater and surfacewater quality) and provisions in environmentalcontract clauses (such as removing and retainingtopsoil for subsequent rehabilitation).

STAGE VI: EVALUATING THE EFFECTIVENESS OF THE

SAFEGUARDS

Evaluation of EA/SA reports and managementplans involves determining whether or not Safe-guard issues were anticipated and the effective-ness of mitigation measures and of institutionalarrangements, including strengthening andtraining. Items to evaluate include the following:

• The extent to which recommendations in theEA/SA and management plans were followed

• The extent to which the EA/SA and man-agement plans influenced decision makingduring project preparation, appraisal, andimplementation

• Assessment of project operation and main-tenance activities as they affect environmen-tal and social considerations, such as thefunctioning of mitigation measures and thestatus of staff training programs


312

• Evaluation of the costs and benefits result-ing from adopting Safeguard measures

• Problems areas to be considered in futureapplication of Safeguards for the sector(s)

ISSUES FOR THE BANK AND THE BORROWER

A number of systemic problems in the effectiveapplication of environmental and social safe-guards have been identified in studies of envi-ronmental and social safeguards implementationby the OED and the Quality Assurance Group(QAG). These are caused by design weaknessesat entry and deficiencies in supervision:

Problems due to design weaknesses are the fol-lowing:

• Project components were sometimes overlyambitious and complex in their manage-ment of safeguards.

• Institutional arrangements were fragile, oftenbased on an expectation that a champion(individual or technical body) was judgedsecure enough to sustain the functions in anunstable institutional environment.

• Analysis of institutional capability/organiza-tion was inadequate, particularly for identi-fying weaknesses in coordination across thesectors.

• The complexity and constraints of thelegal/planning process was underappreciated;in addition, the phasing of environmental andsocial requirements with engineering/plan-ning needs was frequently absent or poorlyconceived, and the timeframe for their imple-mentation was insufficient.

• The monitoring and evaluating frameworkwas typically generalized: indicators (out-puts/outcomes) lacked potency.

• There was a lack of guidance for supervi-sion (that is, there was no supervision plan),including designated use of specialists.

• Synergy with neighboring projects (tempo-ral and spatial domains) was not registered.

• Team members were not experienced inenvironmental planning and management.

Problems due to supervision weaknesses arethe following:

• There was a need for earlier interventionsto help restructure and modify components(especially in terms of institutional arrange-ments and responsibilities), for sharpeningof the baseline studies, and for reorderingmanagement priorities.

• The Team was reluctant to reshape supervi-sion requirements, including the composi-tion of Team members.

• Supervision was inadequate at the site level.

• The preparation of supervision objectiveswas not coordinated with the borrower’sagencies.

• There was a lack of appropriate support bythe borrower and Bank management.

These issues present constant challenges andrequire diligence by Task Teams and ProjectManagement Units to ensure compliance withthe Safeguard policies.

REFERENCE CITED

World Bank. 1993. Sectoral EnvironmentalAssessment. Environmental SourcebookUpdate No. 7. Washington, DC: World Bank.


World Bank. 1991. Environmental AssessmentSourcebook, Volume II: Sectoral Guidelines.Washington, DC: World Bank.

———. 2003a. “Environmental Aspects of WaterResources Management.” Water Resourcesand Environment Technical Note A 1. WorldBank, Washington, DC.


313

———. 2003b. “Environmental Flows: Conceptsand Methods.” Water Resources and Envi-ronment Technical Note C.1. World Bank,Washington, DC.

The Safeguard Policies are available from theWorld Bank’s Safeguard Web site athttp://www.worldbank.org/safeguards.

Advice on the application of Safeguards maybe obtained from the Safeguard Units in theregional vice presidencies and the QualityAssurance and Compliance Unit (QACU).Refer to http://www.worldbank.org/safeguards.

ENDNOTES

1. For large dams, the reader should refer toAnnex B for the BP section of OP/BP 4.01(Environmental assessment).

2. Annex A to OP/BP 4.04 provides detail onthe definition of significant critical areas.

3. It is sometimes asserted that, in cost-bene-fit analysis, “Shadow prices that includecarefully traced indirect changes in valueadded include the multiplier effects while

minimizing the danger of double count-ing.” And “...most of the multiplier effect isaccounted for if we shadow-price atopportunity cost” (Gittinger 1982, 61).However, in practice, when cost-benefitanalysis is performed for large water proj-ects, shadow prices are not estimated in aregional framework and the use of shadowprices may not include multiplier effects.

4. Some of the impacts on the poor in otherregions are not captured by the multiplieranalysis carried out for a particular region.For example, in India, the urban poor havealso benefited from surplus foodgrains fromBhakra distributed all over the countrythrough fairprice shops. Bhakra Dam con-tributed 30 million tons, 60 percent of totalfoodgrains procured by public distributionagencies during 2000–1. Remittances(around Rs 3548 million or US$75 millionduring 1995–6) sent by migrant laborersworking in the Bhakra command have ben-efited millions of poor in the villages inBihar and Uttar Pradesh, with resulting mul-tiplier and downstream effects.

This Profile was prepared by Colin Rees and reviewed by L. Panneer Selvum and Pramod Agrawal.


315

INDEX

Tables, figures, and boxes are indicated by t, f,and b respectively.

Adaptable Program Loan (APL), 14, 15t, 262, 277Adjustable Program Loan (APL), 170Adjustment loans, 292Adverse climate impacts, 272–274Afforestation-reforestation, 235, 264Agricultural drought, 258Agricultural Growth and the Poor: An Agenda

for Development, 3Agricultural Investment Sourcebook (AIS), 3,

22, 68, 102–103, 144, 174, 206, 238, 256 Agricultural output, 294–295

Agricultural Sector Adjustment Loan (ASAL), 33Agricultural trade

food security and, 38implementation of, 40investment in, 39–40, 42–43lending related to, 40blessons learned from, 42open, 22recommendations related to, 42–43reforms in, 22research issues, 40–41

Agricultural water. See Water management;Water use efficiency (WUE)

Agricultural Water Management: An Agendafor Sustainable Development, 3, 7

316

Agricultural water strategy (AWS)benefits of, 26defined, 24elements of, 24–26implementation of, 26–28investment in, 29lessons learned from, 28–29planning cycle, 25brecommendations related to, 29of Tanzania, 24

Agriculturechemical residues, 182climate impacts on, 272–274drainage impact on, 190bflood recession, 265investment in, 5–6irrigated, 219low water return in, 5poverty reduction by, 7rainfed, 151bwastewater use in, 157

Alley-cropping, 225Allocative efficiency, 53Alternative crop systems, 261Ambilivily and Ambondromifehy watersheds,

226bAntibiotics, 247, 248Aquaculture activities

adoption of, 248benefits of, 245export-focused, 247implementation of, 246–247introduction to, 238, 244investment in, 244–245lessons learned from, 247–248recommendations related to, 248–249

Aquatic vegetation, 120, 121Aquifers (See also Groundwater)

contamination, 169groundwater, 150, 157, 165, 167tubewells and, 152

Area based water charges, 46t, 47Arid regions

biodrainage in, 199evaporation ponds in, 196waterlogging and, 177

Armenia, 43, 47b, 52Artificial evaporation ponds, 197Asia

drainage development in, 177b, 179

pro-poor irrigation in, 115bRUPES program in, 233bwater management in, 19t

Asset transfer, 54Aswan High Dam, 178b, 295, 296bAustralia

biodrainage in, 198, 199drainage interventions in, 183birrigation issues in, 67, 93–95technology benefits in, 125bwater reforms in, 80bwater rights in, 48b

Australian National Committee of theInternational Commission on Irrigationand Drainage (ANCID), 300

Automated weather data station network, 259,261, 262

Automationapplicability issues, 140centralized, 140introduction to, 139objectives of, 139–140prerequisites for, 140b

Bangladesh, drainage investments in, 191bBangladesh Drainage and Flood Control

Project, 266, 268Bank Procedure (BP), 291bBaseline surveys, 282, 283b, 284Belt canal, 265Benchmarking

benefits of, 299comparative assessment, 302fdefined, 280, 299drainage schemes and, 300bimpact of, 300–302objectives of, 299–300performance indicators, 301bpromoting, 299, 303stages in, 299fwater issues and, 301fwider applicability, 302–303

Beni Amir project, 135bBenue River, 245Bhakra Dam, 295b, 296b, 313Biodiversity loss, 227Biodiversity niches, 232Biodrainage

applicability issues, 199in arid regions, 199


317

in Australia, 198, 199impact of, 198–199objectives of, 198purpose of, 198

Biological concentration, 199bBiomass, 227, 234, 273Brazil

AWS of, 26b, 27, 28crop diversification in, 111bdam investments in, 296bwater rights in, 84bWorld Bank projects in, 86, 113, 274

Bunga Check Dam, 295, 296bBurkina Faso, 219, 220b

Californiagroundwater management in, 164bwater trade in, 81

Canalsdrainage, 127maintenance, 120

Capacity-building programsactivities related, 91tbenefits of, 87donor-recipient partnership in, 89implementation of, 87investment in, 87irrigation and, 211, 212lessons learned from, 89recommendations related to, 90–91soil fertility management and, 223strategy, 89technology and, 131

“Cap and trade” schemes, 215Capture fisheries, 244, 247Carbon Fund, 206Caribbean, water management issues in, 19tCatchments, 232, 233b, 264, 273Cauca Valley (Columbia), 233bCau Son-Cam Son Irrigation scheme, 135bCentral Africa, water management in, 88bCentral Asia. See AsiaCentralized automation, 140Cereals production, 6Chalan Beel flood and drainage project, 267bChile, water rights in, 83bChina

CWRAS of, 60, 61evapotranspiration in, 130f

groundwater overexploitation in, 128, 130b,146b

irrigation charge system in, 48, 49bRed Soils Project in, 215bSustainable Coastal Resources Development

Project in, 245water use efficiency in, 56World Bank projects in, 215b, 217, 231, 271,

274Climate impacts, fighting

impact of, 273introduction to, 272objectives of, 272–273wider applicability, 273–274Climate change, 6–7, 234, 255–256, 264, 272,

306Climate indexes, 259Climatic conditions, 255–256Coalition Building for Reform of the Office du

Niger, 94bColorado, groundwater management in, 165bComite Tecnico de Aguas Subterraneas-COTAS,

163bCommunity-based fish culture, 246bCommunity-based soil conservation projects.

See Soil conservation projectsCommunity-driven development (CDD)

approaches, 11benefits of, 240–241government and, 239implementation of, 241introduction to, 237–238investment in, 239–240lessons learned from, 241–242participatory approaches and, 277recommendations related to, 242–243requirements for using, 242bwatershed management and, 240b

Computable general equilibrium (CGE)models, 294, 295, 296, 297

Computerized gate movement, 140Conetoe Creek project (North Carolina), 193bConjunctive water use

benefits of, 158–159defined, 144in India, 156b, 157b, 158binstitutional issues, 159–160introduction to, 156investment in, 144, 156–158, 160–161lessons learned from, 160

INDEX

318

in Mexico, 159brecommendations related to, 160

Contour bunding, 264Controlled drainage

applicability issues, 194benefits of, 193–194defined, 193drainage systems and, 202, 203in Egypt, 194bobjectives of, 193

Controlled impact evaluations, 282Conveyance efficiency, 53“Core welfare” indicators, 282, 283Cost-benefit analysis, 313Cost recovery issues

irrigation charges and, 48, 49soil conservation projects and, 228watershed project and, 231water supply and, 252

Council of Australian Governments (COAG)Water Reform Framework, 80

Country Assistance Strategy (CAS), 14, 26, 243Country Water Assistance Strategies, 187Country Water Resources Assistance Strategy

(CWRAS)assessment of, 60description of, 59–60

equation, 59impact of, 60introduction to, 59lessons learned from, 61objectives of, 59of Philippines, 60bpoverty reduction and, 60tpurpose of, 14, 23World Bank projects and, 61

Credit systems, 223, 227Croatia, biodrainage in, 199Crop(s)

breeding, 40cultivation, 230restrictions, 188varieties, 275water charges and, 46t, 47water productivity, 128b

Crop diversificationbenefits of, 111effective O&M and, 125implementation of, 111–112introduction to, 110

investment in, 110–111, 112lessons learned from, 112recommendations related to, 112tubewell irrigation and, 145

Crop patternconjunctive management and, 159controlled drainage and, 194water rights and, 128–129, 131b

Crop yieldcontrolled drainage and, 193irrigation and, 135b, 152soil salinity and, 286, 287btechnology and, 129bwatershed project and, 230

Cultivated land, 230Cultivation techniques, 261Cultural values, wastewater reuse and, 187

Dam investmentsimpact of, 296–297in India and Brazil, 296bintroduction to, 294objectives of, 294–296wider applicability, 297

Dams, safety of, 309tDeep tubewell irrigation

benefits of, 152implementation of, 152–153introduction to, 150investment in, 150–151, 153–154lessons learned from, 153, 154brecommendations related to, 153

Deforestation, 227Demand management

AWS and, 28irrigation charges and, 48water management project and, 170

Developing countriesdrainage systems in, 176, 178water management and, 91

Development Policy Lending (DPL)benefits of, 33–34effectiveness of, 33features of, 31–33implementation of, 34as a lending instrument, 14, 15tlessons learned from, 35purpose of, 31recommendations related to, 35–36water projects and, 290


319

Diesel pumpsets, 114Direct seeding, 227Disaster preparedness, 268, 272tDisclosure Policy, 290, 293Disputed areas projects, 309tDissemination plans, 29Distributor modules, 139“Dog-eat-dog” attitude, 166Downstream ecosystems, 290Drainage

canals, 127climate issues and, 272tcrop diversification and, 112in humid tropics, 177bimpact of, 190bnetworks, 110on-farm, 110rehabilitation, 179schemes, 300b, 301, 302technology, 174, 176water, 246b

Drainage Integrated Analytical Framework(DRAINFRAME). See DRAINFRAME

Drainage investmentsapplicability issues, 191assessing benefits of, 286–289decline in, 5–6DRAINFRAME and, 192bin Egypt, 191bimpact of, 191introduction to, 190objectives of, 190

Drainage Master Plan (Pakistan), 191bDrainage projects

flood management and, 266operation and maintenance of, 123–125planning of, 123, 126btechnology for, 127–132

Drainage systemsbenefits of, 176–177ditch-type, 198flood management and, 264implementation of, 177–178introduction to, 176investment in, 176, 179lessons learned from, 178–179recommendations related to, 179rehabilitation of, 286, 288subsurface, 196

Drainage systems O&M

applicability issues, 203design process and, 202fin Egypt, 201–203impact of, 202–203objectives of, 201

Drainage water reusebenefits of, 182in Egypt, 182bimplementation of, 182–183introduction to, 181investment in, 181lessons learned from, 183quality concerns related to, 182, 183recommendations related to, 183–184

DRAINFRAMEdrainage investments and, 191, 192bparticipatory planning and, 174, 177watershed management and, 234

Drinking water, 251–253, 272t, 277, 278Drip irrigation systems, 115, 117Drought

agricultural, 258conjunctive management and, 158defined, 258early warning systems, 259hydrological, 258meteorological, 258, 259participatory approaches and, 276planning process, 259, 260b, 262policy, 262relief, 260risk, 258socioeconomic, 258vulnerability to, 258–259water rights and, 79water supply and, 78

Drought preparednessbenefits of, 259implementation of, 259–260introduction to, 255–256, 258investment in, 258–259, 262lessons learned from, 260–261recommendations related to, 261–262

Dry area ecosystems, 211Dublin Principle, 24, 25, 28

East Asia. See AsiaEast Slovak Lowlands, 287, 288Economic incentives

benefits of, 55

INDEX

320

features of, 57bimplementation of, 56investment opportunities and, 53–55, 57lessons learned from, 56–57recommendations related to, 57water management project and, 171water-saving technologies and, 106in water use, 22, 53World Bank projects and, 54b

Economic rates of return (ERRs), 190Economic Sector Work, 292Ecosystem services, 232, 233b, 235, 292Egypt

controlled drainage in, 194bdam investments in, 296bdrainage systems in, 178b, 191b, 201–203DRAINFRAME applications in, 192bfish farming in, 246birrigation project in, 132bwater reuse in, 182b, 183World Bank projects in, 52, 184, 192

EIER-ETSHER Group, 88bElectromechanical automatic gates, 140El Fadly Water Board (Egypt), 201Emergency Recovery Loan (ERL), 14, 15t, 262Endemism rate index, 227Engineers. See Planners and engineersEnvironmental assessment (EA) policies,

305–308, 310–311Environmental Assessment Safeguard Policy, 306Environmental concerns, 248Environmental management, 170Environmental Management Plan (EMP), 305Environmental Protection Agency (EPA), 233bEnvironmental regulations, 246, 249Environmental services

benefits of, 215, 216tpayments for, 214, 232, 233b, 234

Environmental sustainability, 7Environment Strategy, 3Erosion mitigation, 226Europe

drainage development in, 178bwater management in, 19t

Evaporation pondsapplicability issues, 196–197in arid zone, 196artificial, 197impact of, 196objectives of, 196

Evaporation rates, 196bEvapotranspiration (ET)

biodrainage and, 199in China, 130fdrought preparedness and, 261environmental management plans and, 128, 129bforests and, 233btechnology and, 131bwater resource planning and, 270–271

“Evapotranspiration (ET) quotas”, 101, 103Expatriate resource persons, 36Extreme climatic conditions, 255–256

Fadama User Association, 146bFarmer-irrigators

applicability issues, 98–99approach, 98impact of, 98introduction to, 96objectives of, 96–97

Farmersaquaculture activities and, 244, 246CDD/SF approaches and, 242controlled drainage and, 193–194drainage systems and, 202grants for, 223groundwater development and, 241birrigation issues and, 150, 210–212PIM and, 71–75revenues of, 227soil conservation projects and, 226soil fertility management and, 219, 222wastewater reuse and, 188water management and, 90water resource planning and, 271watershed project and, 230

Farmers-Managed Irrigation Systems (FMIS)Act, 82b

Farmingfish, 246bshrimp, 246sustainable, 229

Fertilizer use, 222Financial Intermediaries (FIs), 291, 307, 308tFiscal policy, 55Fish farming, 246bFlap gate, 139Flood

damage, 266disasters, 264


321

embankments, 264mapping, 266mitigation, 266bprotection, 265, 266b, 267brecession agriculture, 265

Flood managementbenefits of, 265–266implementation of, 266–268introduction to, 256, 264investment in, 264–265, 268lessons learned from, 268loans for, 167brecommendations related to, 268strong and weak points in, 266bwater quality management and, 174

Floodplain depressions, 245, 264, 265Flow dividers, 123Flow rate monitoring, 139Flow-through irrigation, 127Fodder crops, 240bFood and Agriculture Organization (FAO), 120,

182, 248, 303“Food for work”-type investment, 221Food-processing units, 294Food production, water resources and, 6–7Food security

aquaculture activities and, 245investment in, 39–40lessons learned from, 42water scarcity and, 38

Food Security Special Program, 90bForestry Law, 214Forests, evapotranspiration and, 233b“Formosa”, 111b

Gal Oya irrigation system, 240bGeographic information systems (GIS), 131, 229Global Environmental Facility (GEF), 15, 26Global Environmental Fund’s OP 15 program, 235Global warming, 258 (See also Climate change)Gohana Pilot Project, 287b, 288Governments

aquaculture activities and, 247CDD/SF approaches and, 239, 240conjunctive management and, 159DPLs and, 35–36drainage systems and, 177, 178, 191drought preparedness and, 260, 261, 262farmer networks and, 98irrigation issues and, 93, 94, 148

O&M technologies and, 119PIM and, 70, 74, 75policy framework and, 22safeguard policies and, 306soil fertility management and, 222tubewell irrigation and, 146water entitlements and, 81water investment and, 68water management project and, 171watershed project and, 230water use efficiency and, 56–57WUAs and, 73

Groundwater (See also Aquifers)abstraction, 147b, 150, 153, 270aquifers, 165, 167designated, 165bdevelopment, 111b, 241bdrought preparedness and, 262governance of, 162, 166irrigation systems and, 120legal framework for, 167overdraft, 6, 12overexploitation of, 130b, 146b, 162, 166, 208quality of, 146, 148recharge, 157, 160, 233b, 264regulation of, 147bsaline, 157tubewells and, 145wells, 145b

Groundwater irrigationadvantages of, 143–144, 150b, 152crop yield and, 152problems of, 144surface water and, 144

Groundwater managementbenefits of, 162in California, 164bin Colorado, 165bimplementation of, 162–166introduction to, 162investment in, 162lessons learned from, 166in Mexico, 162, 163brecommendations related to, 167

Groundwater Management Advisory Team ofthe Bank-Netherlands Water PartnershipProgram (GW-MATE), 293

Guatemala, water supply and irrigation in, 251,252b, 253

Gully plugging, 264

INDEX

322

Hadejia-Jama’are Basin, 265bHai Basin Integrated Water and Environment

Management project, 128, 130bHai Basin project, 103, 270Hatcheries, 246, 247, 248Hazard analysis and critical control point

(HACCP), 247Herbicides, 121Higher-value crops/species, 244, 281Human health, wastewater reuse and, 187Hybrid Policy and Investment Loan (HPIL), 14,

15t, 33Hybrid systems, 251, 253Hydraulic gates, 139Hydraulic infrastructure, 78, 156, 160Hydrological drought, 258Hydrological cycle, 182Hydropower projects. See Dam investments;

Irrigation projects

Impact evaluation, conducting, 283Imperial Irrigation District, 136Income generation, 108bIndia

aquaculture activities in, 244benchmarking process in, 301conjunctive water use in, 156b, 157b, 158bcrop water productivity in, 128bdam investments in, 295farmer networks in, 96–98groundwater wells in, 145birrigation project in, 50bparticipatory approaches in, 275–278water reforms in, 82bwater reuse in, 183watershed development in, 275, 283b, 284bWorld Bank projects in, 52, 86

Indian Council of Agricultural Research, 276,284b

Indigenous Peoples’ Development Plan (IPDP),310

Indira Gandhi Nahar project (India), 199Indonesia

Groundwater Development Project in, 154bwater management in, 88bWATSAL of, 32bWorld Bank projects in, 36, 155

Industrial output, 294In-field irrigation efficiency, 53Infrastructure. See also Technology

AWS and, 28CDD/SF approaches and, 242climate impacts and, 272tconjunctive management and, 159drought preparedness and, 262evaporation ponds, 196groundwater management and, 167hydraulic, 78, 156, 160irrigation projects and, 105, 124, 125bwater control, 223

Inland areas, 246Innovations grants, 223Input management, 247Input/output (I/O) tables, 295Institutional development, 170Institutional innovations, 16Institutional reforms, 72Institutional Revolutionary Party (PRI), 94bIntegrated Irrigation Improvement Management

project (Egypt), 191Integrated Wasteland Development Program, 276Integrated water and soil fertility management

(IWSFM), 220bIntegrated Water Resources Management

(IWRM), 28Integrated Watershed Development project,

275, 278International Bank for Reconstruction and

Development (IBRD), 41International Commission on Irrigation and

Drainage (ICID), 120, 303International Development Association (IDA),

108b, 216, 229International Finance Corporation (IFC), 23International Food Policy Research Institute

(IFPRI), 284bInternational Fund for Agricultural

Development (IFAD), 15International Institute for Land Reclamation

and Improvement (ILRI), 90International Monetary Fund (IMF), 31International Network on Participatory

Irrigation Management, 97International Programme for Technology &

Research in Irrigation and Drainage(IPTRID), 120, 179

International Waterlogging and SalinityResearch Institute (IWASRI), 90

International Water Management Institute(IWMI), 120, 127, 301


323

International waterways projects, 309tInvestment opportunities

in aquaculture activities, 244–245AWS and, 24–26, 29in capacity building, 90–91in conjunctive water use, 144, 156–158,

160–161in crop diversification, 110–111, 112in drought preparedness, 258–259, 262economic incentives and, 53–55in flood management, 264–265, 268in food security, 39–40in groundwater management, 162in irrigation, 114, 150–151, 153–154,

208–209, 212ISCs and, 45–49in land drainage, 176, 179in monitoring and evaluating, 281–283in O&M technologies, 119–121PIM-related, 70–71, 73–76in RAP, 134–135in remote-sensing technologies, 127–128in soil fertility management, 219, 223in wastewater use/reuse, 185–186in water management, 87, 90, 219, 223in water-saving technologies, 105, 106, 107,

109in water scarcity, 39–40in watershed management, 214–215, 217World Bank, 16, 17t

Investment returns, 10Involuntary resettlement, 308tIraq, 209–210Irrigation. See also Agricultural water strategy

(AWS)advisory services, 107bclimate impact on, 272tcosts, 71development policy, 55efficiency, 129bEnvironment Strategy and, 3equipment, 63–65flow-through, 127furrow, 121gender-sensitive, 75investment in, 5–6, 10, 105blow water return and, 5management transfer, 67with mine water, 158bmodernization, 101, 102

O&M technologies, 119–122on-demand, 152on-farm, 110pro-poor, 115bRDS objectives and, 2schemes, 300b, 301, 302subsidies and, 9–10wastewater reuse and, 187water management and, 4–5water supply and, 251–253WRSS and, 2–3

Irrigation and drainage (I&D) sector, 31Irrigation and Training Research Center (ITRC),

135bIrrigation projects

in Armenia, 47b, 52funding issues, 45in India, 50investment in, 78modernization of, 135, 136, 139–140operation and maintenance of, 123–125planning of, 123, 126btechnology for, 127–132wider applicability, 297

Irrigation reformsapplicability issues, 94–95in Australia, 93crop diversification and, 112farmer networks and, 96–98impact of, 93–94introduction to, 93in Mali and Mexico, 51b, 94b, 95bobjectives of, 93

Irrigation service charges (ISCs)benefits of, 49implementation of, 49introduction to, 45investment opportunities and, 45–49, 51lessons learned from, 50in Morocco, 48brecommendations related to, 50–51water use efficiency and, 22

Irrigation systemsautomation of, 139–140challenges facing, 127in China, 48, 49bdrip, 115in Egypt, 132bflood management and, 265government-owned, 105, 107, 134

INDEX

324

groundwater and, 120in Guatemala, 252blow-energy, 212modernization of, 135, 136on-demand, 132bpiped, 105, 106bsedimentation of, 226

Jala Spandana, 97Jordan

water use efficiency in, 55b, 56bWorld Bank projects in, 36–37

Karnataka State Agriculturalist Society, 96Kenya, soil fertility management in, 220b, 222Kesterson Reservoir, 197bKotri Left Bank, 192bKyoto Protocol, 206, 235

Labor supply, smallholder irrigation and, 116Lake Karoon (Egypt), 197Lam Pao Scheme, 111bLand

consolidation, 110–111contracts, 230management, 273reclamation, 128–129, 131btilting, 216b, 225

Land and Water Conservation project, 108Land drainage

benefits of, 176–177impact of, 287–288implementation of, 177introduction to, 174, 176investment in, 176, 179lessons learned from, 178–179objectives of, 286–287poverty reduction and, 286recommendations related to, 179wider applicability, 288–289

Land Management II-Santa Catarina Project,272–273

Land tenure systemsirrigation and, 116soil conservation projects and, 225, 227watershed management and, 216, 230

Large-scale irrigation (LSI), 239, 240bLatin America, water management in, 19tLearning and Innovation Loan (LIL), 15t, 277Left Bank Outfall Drain (LBOD), 192b, 196

Lending instruments/programdrought preparedness and, 262for flood management, 267bfor irrigation technology, 223rapid appraisal method for, 134–138reorienting, 16, 17t, 18for water-saving technologies, 105–109of World Bank, 15t

Lerma Chapala Basin, 159bLetter of Developmental Policy (LoDP), 31, 32Limarí Basin, 83bLined canals, 124, 125, 135, 136Loess Plateau Watershed Rehabilitation project

impact of, 229–230introduction to, 229lessons learned from, 230–231objectives of, 229

Los Angeles County Flood Control District, 164b

Madagascar Environment Program, 225, 226bMaharashtra Water Resources Regulatory

Authority (MWRRA) Act, 82bMaha season, 301Mahaweli Restructuring and Rehabilitation proj-

ect (MRRP), 73bMain San Gabriel River Basin, 164bMaking Sustainable Commitments: An

Environment Strategy for the WorldBank, 3

Maliirrigation reforms in, 94bmango exporting project in, 41b

Market-based incentive systems, 232Market conditions, 116Market opportunities, 228Mauritania, 43–44Mechanized technologies, 114, 117Medium-scale irrigation, 239, 240Mekong Delta Water Resources Project, 251Meteorological drought, 258, 259Mexico

conjunctive management in, 159bgroundwater management in, 162, 163birrigation issues in, 51b, 95bRAP outcome in, 137bwater rights program in, 79bWorld Bank projects in, 86, 140

Micro-irrigation installations, 101, 102, 103, 105,121

Middle East


325

crop diversification in, 112bwater management in, 19t

Millennium Development Goal (MDG), 7Mine wastewater, 158bModeling techniques, 184Modernization of irrigation projects, 135, 136,

139–140Monitoring and evaluation (M&E) systems

benchmarking process and, 300benefits of, 283implementation of, 283introduction to, 279investment in, 281–283planning for, 282purpose of, 281recommendations related to, 284resource requirements for, 282–283

“More crop per drop” criteria, 30, 87, 152, 193 Morocco

irrigation charges in, 48bRainfall-Based Contract in, 39bRAP in, 135bwatershed management in, 240b, 241water use efficiency in, 55b, 56

Multiplier analysis, 297, 313Multiplier impacts/values/effects

of dams, 296bdefined, 294how to conduct, 295

Murray Darling Basin, 48b, 183bMWRI programs, 201

Napier grass, 275National Agriculture Technology Project

(NATP), 278National Association of Environmental Action

(ANAE), 225bNational Drainage Project (Egypt), 190bNational Drainage Project (Pakistan), 191b, 196National Water Law, 79bNatural habitats, 308tNatural resources management, 241, 242Natural salt lakes, 196Nepal

groundwater development in, 241bsoil fertility management in, 222

Netherlands, The, 199Network of Aquaculture Centers in Asia-Pacific,

248Neyrtec float gates, 139

Nigeriaflood management in, 265birrigation in, 146b

Nile Delta, 182b, 183, 190b, 196Nile River Basin, 178bNitrate, phosphorous, and potassium (NPK)

fertilizer, 221Nondesignated groundwater entitlements, 165bNongovernmental organizations (NGOs)

aquaculture activities and, 247DPLs and, 34drought preparedness and, 260farmer networks and, 98participatory approaches and, 276safeguard policies and, 306soil conservation projects and, 226

Nonirrigation inputs, 116Nonpaddy crops, 110Nonpoint source pollution, 193, 214Nontributary aquifers, 163, 164North America

controlled drainage in, 193bdrainage development in, 178b

Ogallala aquifer, 165bOn-farm surface drainage systems, 176b, 177bOn-farm water-saving technologies. See Water-

saving technologiesOnline Irrigation Benchmarking Service

(OIBS), 301Operational Policy/Bank Procedure (OP/BP)

8.60, 31, 37Operation and maintenance (O&M)

of drainage systems, 123–126, 177b, 178,201–203

of irrigation projects, 31, 123–126, 154bparticipatory approaches and, 278water charges and, 46, 47b, 78water loss and, 276water reforms and, 82bwater-saving technologies and, 106b, 107

Operation and maintenance (O&M)technologies

benefits of, 121implementation of, 121–122introduction to, 119investment in, 119–121lessons learned from, 122recommendations related to, 122selection of, 119

INDEX

326

Operations Evaluation Department (OED), 11,311

Orissa Disaster Management Project, 265bOverabstraction, 153

Paddy crops, 110Pakistan

crop water productivity in, 128bDRAINFRAME applications in, 192bevaporation ponds in, 197World Bank projects in, 192

Participatory approachesimpact of, 276–277introduction to, 275lessons learned from, 277–278objectives of, 275–276

Participatory irrigation management (PIM)benefits of, 71implementation of, 71–72introduction to, 68, 70investment in, 70–71, 73–76lessons learned from, 74recommendations related to, 74–75risks of, 71b

Periurban agriculture, 157Peru, water management in, 89bPeruvian Social Fund project FONCODES, 282bPest Management Plan (PMP), 305, 308tPhilippines, CWRAS of, 60b, 61bPhysical culture resources, 309tPiloting approach, 16Piped irrigation systems, 105, 106bPlanners and engineers

for drainage systems, 202, 203for irrigation projects, 135, 136remote-sensing technology and, 130

Policy-based loans, 68Policy framework/reforms

agricultural trade and, 38–43AWS and, 24–29DPL and, 31–37governments’ role in, 22overview of, 8–9, 21

Polluter pays principle, 178, 187Pollution, 183, 193, 214, 215Polychlorinated biphenyls (PCBs), 248Polyphagous organism, 121Poor-quality water

conjunctive use with, 157, 158b, 160reuse of, 174

wastewater reuse and, 186Poverty maps, 282bPoverty reduction

by agriculture, 7aquaculture activities and, 247CDD/SF approaches and, 242climatic conditions and, 256CWRAS and, 60tdam investments and, 296birrigation projects and, 11–12soil stabilization and, 215bTanzania’s water policy and, 24bwater projects and, 281–284watershed project and, 229, 230water supply and, 252

Poverty Reduction Strategy Paper (PRSP), 16,26, 243

Pragathi, 96, 97bPrecipitation deficiencies. See DroughtPre-tubewell conditions, 151bPrivate agencies, 119Private sector units, 306Programa de Modernización del Manejo de

Aqua (PROMMA), 163bProgrammatic Development Policy Lending

(PDPL), 15t, 32, 35Programmatic economic and sector work

(PSEW), 14Programme National de Gestion des Terroirs, 221Project Appraisal Document (PAD), 303Project multiplier value, 295b“Pro-poor agreement”, 38Pro-poor interventions, 244Pro-poor investments, 239, 279Public health, 272tPublic investment/sector

in agriculture, 5–6in aquaculture activities, 245b, 247, 248benchmarking process and, 303

Punjab Private Sector GroundwaterDevelopment project, 147b

PVC pipes, 108b, 115b

Qat chewing, 170Quality Assurance Group (QAG), 311Quality Assurance and Compliance Unit

(QACU), 313Quasi-experimental designs, 283

Rainfall-Based Contract, 39b


327

Rainfed cropsbiodrainage and, 199climate impact and, 272irrigation and, 208water management and, 219, 221

Rapid appraisal procedure (RAP)benefits of, 135implementation of, 136indicators used in, 134bintroduction to, 134investment in, 134–135lessons learned from, 136in Morocco, 135boutcomes of, 137brecommendations related to, 136, 138in Vietnam, 135bwatershed management and, 217

Raymond Basin, 164bReaching the Rural Poor: A Renewed Strategy

for Rural Development (RDS), 2Red Soils II Area Development Project (China),

215b, 216Rehabilitation Investment Loan (RIL), 37Remote monitoring, 139Remote-sensing technologies

applications, 129bbenefits of, 128conjunctive management and, 160implementation of, 128–130introduction to, 127investment in, 127–128, 131–132lessons learned from, 130outcomes of, 127bpoverty maps and, 282brecommendations related to, 130–131

Renewable energy, 272tRepublic of Yemen

AWS of, 27b, 28CWRAS of, 60, 61bgroundwater management in, 162water conservation in, 108World Bank projects in, 30

Research and development (R&D) projectsirrigation and, 210water management and, 88, 90

Reservoir fisheries, 245Resettlement Action Plan/Resettlement Plan

(RAP/RP), 310, 311Resettlement Policy Framework (RPF), 308tResource sharing, 234

Rice-fish systems, 246bRisk-Management Instruments, 39bRiver-basin level, 159River flows, maintaining, 305bRock phosphates, 221RUPES program, 233bRural development, 177bRural Development Strategy (RDS), 2, 3Rural water supply and irrigation. See Water

supply and irrigationRural water supply and sanitation (RWSS), 251,

252

Safeguard policiesapplication of, 309–310EA/SA reports and, 310–311effectiveness of, 311–312impact of, 290–292list of, 291bmonitoring of, 311objectives of, 290, 304policy triggers and, 308t–309tproblems related to, 312purpose of, 280, 290review of, 306sector-specific, 306–307wider applicability, 292–293

Sahayoga, 96Saline drainage water, 197, 199bSalinity, 215, 276Salinity Control and Reclamation project, 159Salinization

crop diversification and, 110drainage systems and, 176, 178, 198–199impact of, 2, 7land drainage and, 286tubewells and, 145, 147, 152water quality management and, 173water-saving technologies and, 106–107, 110

Salt deposition, 197Salt lakes, 196Sana’a Basin Water Management project

applicability issues, 171benefits of, 171components of, 170hydrological facts about, 169–170impact of, 170introduction to, 169lessons learned from, 171objectives of, 170

INDEX

328

risks of, 171Sanitary-phytosanitary standards (SPS), 247Sanitation, 252, 272tSan Joaquin Valley (California), 199bSatellites. See Remote-sensing technologiesSeasonal climate forecasts, 262Seasonal floodplains, 246bSecretariat of Water Resources (SRH), 84Sector Adjustment Loans/Credits

(SECALs/SECACs), 37Sectoral Environmental Assessment (SEA), 307Sedimentation, 226, 232, 233bSeepage problems, 197bSemi-arid regions

irrigation technologies and, 105, 107soil fertility management in, 220b, 222tubewells and, 145waterlogging and, 177

Semi-input/output (S-I/O) model, 295Sfax Flood Protection project, 265Shadow prices, 313Shallow tubewells irrigation. See also Ground-

waterbenefits of, 145–146implementation of, 146–147introduction to, 145investment in, 145, 148lessons learned from, 147in Nigeria, 146bpre-tubewell conditions and, 151brecommendations related to, 148

Shanxi Poverty Alleviation project, 245“Show and tell” approach, 275Shrimp farming, 246Silt deposition, 124, 214, 226Slope erosion, 124Smallholder farmers

PIM and, 71ZATAC and, 63–64

Smallholder irrigationbenefits of, 114–115implementation of, 116introduction to, 114investment in, 114lessons learned from, 116–117recommendations related to, 117technology financing issues, 117in West Africa, 115b

Small Scale Drainage and Flood ControlProject, 267

Small scale irrigationCDD/SF approaches for, 239–243tubewells for, 145–148

Sobradinho Dam, 296bSocial accounting matrix (SAM) databases, 294,

295, 296, 297Social action fund project, 305bSocial assessment (SA) policies, 305, 307,

310–311Social fund (SFs) approaches

benefits of, 240–241implementation of, 241introduction to, 239investment in, 239–240lessons learned from, 241–242recommendations related to, 242–243

Society for Water Resource Development, 96Socioeconomic drought, 258Sodic soils, 276, 278Soil

degradation, 225berosion, 226, 230, 233bmanagement, 110stabilization, 215b

Soil conservation projectsapplicability issues, 227–228impact of, 226–227introduction to, 225objectives of, 225–226participatory approaches for, 275–278watershed project and, 230

Soil fertility managementbenefits of, 219–221flood management and, 264implementation of, 221introduction to, 206investment in, 219, 223lessons learned from, 221–222recommendations related to, 222–223

Soil salinityclassification of, 287bconjunctive management and, 159land drainage and, 286remote-sensing technology and, 129bwaterlogging and, 287b

South Africaconjunctive water use in, 158bdrought preparedness in, 260

South America, drainage development in, 179South Asia. See Asia


329

South-Asian Rice-Wheat Consortium, 219, 220Southeast Asia. See AsiaSouth India Farmers Organization for Water

Management, 97Specific Investment Loan (SIL), 15t, 32–33, 262Spot market, 83bSri Lanka

benchmarking process in, 301World Bank projects in, 76WUAs and, 72, 73b

Stakeholder participationin AWS, 26, 27t, 28benchmarking process and, 299, 300, 303DPL and, 33drainage investments and, 190, 191birrigation issues and, 95, 239participatory approaches and, 276, 277technology and, 130watershed management and, 217

Sub-Saharan Africairrigation in, 210bwater management issues in, 19t

Subsidiesirrigation and, 9–10, 147participatory approaches and, 277water efficiency issues and, 53–55water-saving technologies and, 106, 107b

Subsurface drainage systems, 196, 286–289Sujala Watershed project, 283bSupplemental irrigation (SI), 206

benefits of, 209–210implementation of, 210–212investment in, 208–209, 212issues related to, 208lessons learned from, 212purpose of, 208recommendations related to, 212in Sub-Saharan Africa, 210bin Turkey, 210

Supply chain development, 116–117Supply management, 170Surface drainage, 286–289Surface irrigation methods/projects

drought preparedness and, 261groundwater irrigation and, 111, 150, 157,

163, 164lessons learned from, 160pre-tubewell conditions and, 151breconfiguring, 156–157wastewater reuse and, 185

water-saving technologies and, 105Sustainable farming, 229, 246Syria, 209b

TanzaniaAWS of, 24b, 27social action fund project in, 305bWorld Bank projects in, 30

Tarim Basin projects, 128, 129, 131b, 273Technical assistance

climatic conditions and, 256–257drought preparedness and, 261economic incentives and, 57effective O&M and, 126binstitutional reforms and, 69irrigation issues and, 104, 144, 207water quality management and, 175water resources assessment and, 23water reuse and, 181watershed management and, 207ZATAC and, 64

Technical Assistance Loan, 36Technology. See also Remote-sensing

technologiesadoption of, 227, 228drainage, 174, 176irrigation issues and, 107, 108, 117, 223making use of, 10–11O&M, 119–122RAP and, 138soil fertility management and, 222water control, 125water resources and, 6–7

Terms of Reference (TORs), 307Thailand

crop diversification in, 111bWorld Bank projects in, 113

Trade facilitationagricultural trade and, 41–42recommendations related to, 43water scarcity and, 40

Trade policy framework, 55Trade reforms, 22Transboundary groundwater resources, 292Treadle pumps

cost issues, 64, 103irrigation and, 114, 115b, 117

Treated wastewater reuse. See Wastewateruse/reuse

Tree plantation

INDEX

330

biodrainage and, 198watershed project and, 229, 231

Tubewells. See Shallow tubewells irrigationTunisia

water management in, 88bwater reuse in, 186b

Turkeybenchmarking process in, 302irrigation in, 210

United Nations Economic and Social Commis-sion for Asia and the Pacific (UN-ESCAP), 266

Unlined irrigation canal, 120, 124Upper levels associations (ULAs), 82bUpstream-downstream resources management,

232Upstream populations, 206Urbanization, 157Urban wastewater, 157User operation and maintenance. See

Operation and maintenance (O&M)Uttar Pradesh Sodic Lands Reclamation Project,

276, 278, 283b

Vetiver grass, 215, 275, 277Vietnam

RAP in, 135bWater Resources Assistance project in, 293bWorld Bank projects in, 253

Village development committees (VDCs),275–277

Virtual water concept, 38b, 40“Virtuous circle”, 102Volumetric entitlements, 79, 80, 81Volumetric water devices, 46t, 47Voluntary resettlement, 292

Warping dams, 229Wastewater disposal, 158bWastewater use/reuse

in agriculture, 157benefits of, 186drought preparedness and, 261implementation of, 186–187investment in, 185–186, 188lessons learned from, 187–188private participation in, 187brecommendations related to, 188in Tunisia, 186b

water quality management and, 174, 175Water

boards, 201, 202, 203control, 223delivery system, 212, 302fharvesting, 234, 264pollution, 214productivity, 211b, 270resources, 6–7, 80–81retention, 264, 266b, 268supply, 78trade, 81

Water and Land Management Institute, 96Water charges

allocation methods, 46twater pricing and, 54, 56

Water conservationdrought preparedness and, 261, 262participatory approaches for, 275–278in Republic of Yemen, 108bwatershed project and, 230

Water entitlements. See Water rightsWaterlogging

conjunctive management and, 159drainage systems and, 110, 176, 177birrigation projects and, 124salinization and, 7, 107soil salinity and, 287btechnology and, 129btree plantation and, 198water quality management and, 173water tables and, 286

Water management. See also Policyframework/reforms; Soil fertilitymanagement

benefits of, 40, 87, 219–221capacity building and, 69, 73, 74CDD/SF approaches and, 239–243challenges facing, 4–7changing emphasis of, 8tclimatic conditions and, 256defined, 2development policy for, 7–8in different regions, 16, 18, 19tdonor-recipient partnership in, 89drought preparedness and, 262governance for, 9government’s role in, 107bimplementation of, 87, 221integrated approaches to, 11


331

introduction to, 1, 219investment in, 87, 90, 219, 223knowledge transfer for, 88lessons learned from, 89, 221–222in Peru, 89brainfed crops and, 219, 221RAP and, 138RDS objectives and, 2recommendations related to, 90–91, 222–223for sustainability, 12watershed management and, 232–235WRSS and, 2–3in Zambia, 89b

Water markets (See also Water rights)advantages of, 79water allocation and, 80, 81water rights and, 51, 54, 78–84

Water projectscategories of, 291EA and safeguards integration into, 305–306impact of, 290–291, 304–305policies related to, 291bpoverty reduction and, 281–284screening of, 307

Water qualitydrought preparedness and, 262irrigation issues and, 116wastewater reuse and, 185wastewater treatment and, 187waterlogging and, 173water projects and, 305

Water productivity 39-40, 45, 68, 70-75, 90, 105,127-132, 173, 265, 270, 273

Water reformsin Australia, 80bfarmer networks and, 98in India, 82bintroduction to, 67–68

Water resource planningapplicability issues, 271impact of, 271introduction to, 270objectives of, 270–271

Water Resources Action Program (WRAP), 63Water Resources Assistance project, 293bWater resources management

drainage investments and, 190–192implementation of, 41investment in, 39recommendations related to, 43

reforms, 159water management project and, 171water reuse and, 185

Water Resources Management Group (WRMG),59

Water Resources Sector Adjustment Loan (WAT-SAL), 32b, 33, 34

Water Resources Sector Strategy (WRSS), 2–3Water reuse. See Wastewater use/reuseWater rights

assessment of, 79assignment of, 54in Australia, 48bbenefits of, 78–79in Brazil, 84bcropping pattern adjustment and, 128–129droughts and, 79formalization of, 51implementation of, 79–81, 82investment in, 69, 84–85irrigation issues and, 120, 153ISCs and, 50land reclamation and, 128–129legal framework, 82, 84blessons learned from, 81–83market-based, 83brecommendations related to, 83–84tradable, 48b, 50training farmers for, 90water management project and, 171

Water Rights Adjustment Program (WRAP), 79Water-saving technologies

adoption of, 103, 105benefits of, 106–107in group context, 108bimplementation of, 106–107introduction to, 101–103investment in, 105, 106, 107, 109lessons learned from, 107recommendations related to, 107–109

Water scarcitydrainage water reuse and, 181–184food security and, 38groundwater management and, 166investment in, 39–40ISCs and, 45water resource planning and, 270–271

Water sectorlending instruments for, 15treforms, 67–68

INDEX

332

Watershed managementbenefits of, 215CDD/SF approaches and, 240climate impact on, 272tcommunity-based, 225–228implementation of, 215–216introduction to, 214investment in, 206, 214–215, 217lessons learned from, 216in Loess Plateau, 229–231recommendations related to, 217water management and, 232–235

Watershedsdevelopment, 275, 276flood management and, 264projects, 283b, 284bservices, 232

Water supply and irrigationimpact of, 252introduction to, 251objectives of, 251–252wider applicability, 252–253

Water tables (See also Groundwater, Aquifer)controlling, 176bdrainage systems and, 179, 193, 194rise in, 174, 177tree plantation and, 198, 199waterlogging and, 286

Water treatmentgaps, 186bhybrid systems and, 253investments in, 233b

Water use efficiency (WUE). See also Economicincentives

improving, 53irrigation service charges and, 22water projects and, 290

Water user associations (WUAs), 25controlled drainage and, 194farmer-irrigators and, 96, 98irrigation issues and, 147, 151, 154, 212O&M technologies and, 119PIM and, 70–71, 74water investment and, 68water management and, 88, 89b

water reuse and, 183water rights and, 80, 83bwater-saving technologies and, 106water use efficiency and, 54

Weather data station network, 259, 261, 262Weed infestation, 124West Africa, irrigation issues in, 115bWetlands, 290“With/without” design, 282Wivenhoe Dam, 215Women

aquaculture activities and, 245, 248irrigation issues and, 211PIM and, 71, 72b, 75water management and, 88–89

Women Irrigation Network (WIN), 89bWorld Bank

lending instruments of, 15tsafeguard policies, 290–293strategies, 2–3

World Bank projectsin Armenia, 43, 52in Brazil, 86, 113, 274in China, 215b, 217, 231, 271, 274climate-related components in, 273bCWRAS and, 59–61in Egypt, 52, 184, 192in India, 52, 86in Indonesia, 36, 155in Jordan, 36–37Madagascar Environment Program,

225, 226bin Mauritania, 43–44in Mexico, 86, 140in Pakistan, 192in Republic of Yemen, 30in Sri Lanka, 76in Tanzania, 30in Thailand, 113in Uzbekistan, 249in Vietnam, 253

World Commission on Dams, 294World Conservation Union (IUCN), 16World Cultural and Natural Heritage, 306World Wildlife Fund (WWF), 16


333

Yala season, 301Yangtze and Pearl River catchments, 215bYaqui Irrigation project, 136Yellow River Basin, 157, 229

Zambia, water management in, 89bZambia Agribusiness Technical Assistance

Center (ZATAC)description of, 63–64

focus of, 63impact of, 64introduction to, 63irrigation credit and, 64objectives of, 63wider applicability, 64–65

ZATAC Integrated Coffee Program, 64Zero-tillage technique, 226

INDEX

334

ECO-AUDITENVIRONMENTAL BENEFITS STATEMENT

The World Bank is committed to preserving endangered forests and natural resources. We havechosen 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 bythe Green Press Initiative—a nonprofit program supporting publishers in using fiber that is notsourced from endangered forests. For more information, visit www.greenpressinitiative.org.

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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 incentivesn Designing institutional reformsn Investing in irrigation systems improvement and modernizationn Investing in groundwater irrigationn Investing in drainage and water quality managementn Investing in water management in rainfed agriculturen Investing in agricultural water management in multipurpose operationsn Coping with extreme climatic conditionsn 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

shaping the future of water for agriculture - world bank internet

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