Have Low Irrigation Service Charges Disadvantaged the Poor ?

Intizar Hussain i.hussain@cgiar.org Senior Economist, International Water Management Institute (IWMI) Colombo, Sri Lanka
The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors or the governments they represent. ADB makes no representation concerning and does not guarantee the source, originality, accuracy, completeness or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented.

Access to irrigation water is a significant determinant of poverty alleviation

Poverty Incidence in Irrigated and Un-irrigated Settings 90 80 70 60 50 40 30 20 10 0

P o v e rty In cid en c e (% )

Country

Irrigated

Un-irrigated

Income Poverty (%) 10 20 30 40 50 60 80 90 0

WID-NP LID-HP QID-NP PID-HP Nam Duang KDS Nam Thach Han NSLC G-K Kalibawang 10-R Glapan 9-R 13-R Kakowal Klambu Kiri Krogowan Phalia 14-R Pabna Harsi Lalian Khikhi Hak ra-4 Halali Khadir

Reasons supporting proposition 70

Estimates of Income Poverty across Systems

Systems

Anti-poverty impacts of irrigation vary across and within systems and depend on:
Irrigation infrastructure condition/management Water allocation/distribution policies, procedures and practices Production technology, cropping patterns, crop diversification; Support measures, e.g., input and output marketing, information (In) equity in land distribution

Key Determinants of Irrigation Performance

Institutional arrangements Implementation effectiveness Service delivery Incentives, water rights, regulations and Availability of funding Spending mechanisms

Irrig atio n Ch arg e (US $/h a)

80 70 60 50 40 30 20 10 0 9 -R L a lia n 1 0 -R K h ikh i 1 4 -R H a rsi N SLC 1 3 -R Gla p a n K a lib a w a n g L ID -H P Nam N a m Th a ch 0 20 40 60 80 100 120

Irrigation Charge (US$/ha) and Collection rate in Selected Systems

System Collection Rate (%) Irrigation Charge (US$/ha)

Co llectio n rate (% )

Low Irrigation Charges Justifications often Offered

Affordability and willingness to pay; Positive externalities of irrigation impacts; Political sensitivity; Irrigation water viewed as a public good.

How Low Irrigation Charges are Disadvantageous to the Poor

When irrigation charge is low: Revenues and funds available are low; Maintenance is neglected, infrastructure condition deteriorates, overall availability and access to water is reduced; Little or no incentive to deliver high quality services; Users paying low charges feel they have little entitlement; Accountability linkages.

How Low Irrigation Charges are Disadvantageous to the Poor

When irrigation charge is low: No incentives for users to use water efficiently; Overall availability and access to water is reduced; Non-poor, the powerful and those having locational advantage grab more than their due share; Applied uniformly to all socio-economic groups worsens income and resource disparity.

Low Performance = High Poverty

Figure Productivity/ ha, Poverty (%) and Irrigation Charge (US$/ha) 1600 1400 1200 1000 800 600 400 200 0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0

GVP ($/ ha)

HC (%)

Irrigat ion Charge (US$/ ha)

Infrastructure Condition and its Maintenance Matters

Conveyance Losses per 1000 ft (cuses) -0.100 0.000

1299 15 - L 9499 6 - L 8609 0 - L 8109 0 - L 2794 0 - R 2300 0 - L II 2300 0 - L I 2250 0 - R 2004 9 - L 1460 0-L 1250 61-L 3100 0 - L 7712 9 - R 6879 8 - R 2440 0 - L 2400 0- L

0.100

0.200

0.300

0.400

0.500

0.600

0.700

Watercourse # (improved)

Conveyance losses across im proved and un-im proved Watercourses

Investments in Infrastructure May Be Ineffective

Watercourse # (un-improved)

1324 16 R 1324 16 R 9753 9-L 8609 0-L 8109 0-L 2164 2-R 1806 0-R 1804 0-R 1701 7-L 2300 1-L II 9900 -R 8780 -R 2950 0-T L 2828 8-R 2083 0-R 9700 -R 9580 -L 2030 00-R 1253 92-R 3361 0-L 3100 0-L 7765 0-L 6879 8-R 6750 0-R 2440 0-L

CL per 1000 ft (Cusec) CL per 1000 ft (cus) Imp

Water Allocation /Distribution and Service Delivery Matters

Access to Water, and Crop productivity (kgs/ha)

4500 4000 3500 3000 2500 2000 1500 1000 500 0 6000 5000 4000 3000 2000 1000 0 Canal water Total water Productivity

W a te r (m c u b e )

Head

Middle Location

Tail

P ro d u c ti v i ty (k g s / h a )

Poverty Impacts of Irrigation in Punjab, Pakistan

45

Poverty Gap

44 43 42 41 40 39 38 37 36

Head

Middle

Tail

Irrigation Charge for Various Land Sizes and for Poor and Non-Poor Farmers, Punjab, Pakistan
Annual irrigation cost for various land size categories 6000 4995 5000 4477 Annual irrigation cost to the poor and the non-poor
4200

Rs/ha/year

3146 3000 2000 1000 0

Rs/ha/year

4000

3980

4152

3594

4150

4100

4096

4050

<1 1.1 -<3 - <5 - <10 >10 3.1 5.1

Land Size Categories

Poor

Non-poor

Irrigation Charge in Hakra - 4- R, Punjab

250 200 161 195 199

175

182

Rs./ha

150 100 50 0

1997

1998

1999

2001

2002

Improvements on crop areas and equity in water distribution - (Hakra- 4R)

27500 27115 27000 27115 2.5 2 2 1.8 3 2.5

26500

Hectares

26079 26000 25614 25500 25575 1 1.5 1.23 1.09

25000

0.5

24500

1997 1998 1999 2001 2002

10-R

Kakowal

Lalian

Khadir

Hakra-4

Conclusions
Low irrigation charges and inefficient collection lead to poor performance; Need to base irrigation service charge on commercial principles, Need for institutional arrangements for irrigation management to be made more: decentralized, participatory, and financially autonomous; incentive oriented for efficient collection and spending of revenues Service providers to meet certain standards.

Key Messages
Irrigation water is a divide between poverty and prosperity Where water is cheap, production is low and the poor are rarely reached.

Alternate Policy Options

10000 9000 8000 7615 8043 9341

Rs. million

7000 6000 5000 4000 3000 2000 1000 0

Opt-1 Opt-2 Opt-3

Policy Options
Option -2 would result in annual redistribution of Rs 736 million Option - 3 would result in annual redistribution of Rs 1362 million

Thank you
i.hussain@cgiar.org