1.0 BACKGROUND

1.1 Changing Context

Irrigation is an important component of wider agricultural production and rural systems, and globally accounts for approximately 70 per cent of water diverted from natural systems. It is a diverse activity with significant variations, both between and within regions, developed under local socio-economic, cultural and physical conditions. As such, the assessment of options is highly country and site specific. The purpose of this review therefore is to identify the type of options that can be considered appropriate in various situations, their effectiveness under conditions of good practice, enabling conditions necessary for their adoption, and process issues relating to inclusion of options assessment in the planning cycle. The term ‘options’ has been used rather than ‘alternatives’ in order to highlight that existing approaches are included in the assessment process.

Positions taken in the debate surrounding dams and irrigation include global analysis that calls for more storage and moves toward higher productivity of water use (IWMI, 1998), to adaptation of more traditional approaches with less emphasis on export crops and more on subsistence production (Goldsmith, 1998). The rapid development and intensification of production of agricultural land over the past fifty years and, in particular, the influences of the green revolution, have raised concerns regarding sustainability and equitable access to resources. A wide range of economic, social and environmental perspectives are evident in the debate, ranging from pure market economics that promotes distribution of water to the highest value user, through to social, cultural and ecological considerations of equitable access to resources. The extent to which externalities in the valuation of water can be included, that redistribution of water rights is feasible, and alternative livelihoods for the farming communities are available, also underlie the debate. The implications of these aspects and also the scope of improvements in agricultural production from interventions outside of irrigation alone will therefore be major considerations in the options assessment process and have been incorporated in the scope of this review. The challenges for the future will intensify rather than reduce with the global population likely to rise to approximately 8 billion by 2025, and in less developed regions, more than 50 per cent will be in urban areas.

Total global food production statistics do not reveal a significant food shortage in the near future. However, these figures mask the growing food gap in a number of poorer developing countries and the fact that malnutrition remains a serious problem. Per capita production has increased steadily from 1950 reaching a peak of 350kg per person by 1994. Subsequently, this has reduced to approximately 300 kg per person and projections indicate that by 2010, approximately 680 million people or 10 percent of the world’s population will be suffering from chronic malnutrition. Global imports of foodgrain are estimated to increase from 90 million tonnes in 1990 to 160 million tonnes by 2010 (FAO). The question facing many such countries is the extent they can afford such imports, in terms of foreign exchange, the purchasing power of rural communities and the infrastructure needed to distribute the produce. Other important factors relate to the effectiveness of agriculture production as a means to stimulate rural development and reduce urban migration, and the ability of countries to develop foodstocks to deal with natural disasters to which many are prone.

Across the world, competition for water is increasing and transfers from agriculture to other sectors is becoming a reality. With higher food demand and more internse competition for finite water resources, it is evident that the productivity of water has to increase. In South Africa for instance, the productivity of water in terms of the value of production per unit of water has now become an important performance indicator. (Ref to Orange River Replanning Study). The extent to which changes in current practice can sustainably meet increased food production, while meeting other in-stream requirements and the needs of the subsequent generations is a key consideration. The question posed for this review is to examine the extent to which advances can be made in demand management, introduction of alternative technologies and approaches (both agricultural and irrigation) and alternative sources of supply, and the influence these would have on decisions for planning and management of water resources and future dam projects.

The role of irrigation is set against a backdrop of diverse concerns and pressures including the need to provide more food for a rapidly growing population, increasing costs of new development, low economic and financial returns for staple crops, low efficiency and lack of governance in many public-run irrigation systems, high levels of financial subsidy and low levels of maintenance expenditure, questions of sustainability (both of the land and water resources as well as the physical systems themselves), and questions over the distribution of benefits and socio-economic inequities. The development and management of irrigation systems have been undergoing changes for some time, with the introduction of environmental and social assessment and moves toward decentralisation in decision making. The question here is whether these approaches and those proposed as alternatives are effective and sufficient Improvements need to be introduced to increase the sustainability and productivity of existing agricultural systems and new approaches need to be sought to meet increased demand within constraints of the wider water resources system.

Large scale development of irrigation systems, the introduction of high yielding varieties, and intensification of fertiliser and pesticide use, have changed traditional farming systems. While bringing significant global increases in production, there are concerns in developing countries that this change has marginalised small-scale farmers and led to further inequity in the distribution of landholdings. In addition, the influence of the larger farmers is often significant in terms of attracting more favourable water supplies at the expense of smaller farmers. The extent to which such inequity of access to resources impacts on development effectiveness will be examined in parallel to the absolute levels of benefit received and sustainability of the systems.

In many developing countries, government support for irrigation systems is reducing, resulting in cyclical deterioration of system infrastructure and concern that the challenges of future production and productivity increases will not be met. Responses to this situation have generally focused on a transfer of financial and management responsibility to the water users, but have generally not addressed the question of increasing productivity of water.. Proposals for the future of irrigation are characterised by a range of positions, including the adoption of major policy and regulatory reforms to increase the productivity of water and slow down the rate of demand increase, and the supply based response that advocates the development of new storage capacity. The supply based response leads to a clear physical presence, whereas the effectiveness of demand side management responses is less visible and more difficult to promote. The review paper will provide an insight into the options by evaluating the effectiveness of reforms to national policy and institutional frameworks where they have been attempted and to draw together findings from cases where alternative approaches have been explored, whether they be adaptation of traditional practices or adoption of new technologies.

Whether increased food production should come from intensive irrigation systems or from adaptations of traditional agricultural systems is closely associated with issues such as rights to water, sustainability, and the performance of large centralised systems. The approach needs to be addressed for a range of different stages of development – from emerging rural economies to more urban based industrialised societies. Food self sufficiency was previously the development objective of many governments although this is now changing to the concept of food security. The extent that this will lead to more imports of foodgrains is an issue influenced by national and socio-economic considerations and the extent that there are effective alternatives to agriculture as a base for rural development.

The long term sustainability of intensive agriculture is being questioned in a number of countries. The impact on water quality downstream and in the ground is subject to extensive investigation and regulation. At the field level, there is evidence of yield reduction in some intensive farming systems and an increasing demand for supplemental soil nutrients. Extensive irrigation in arid environments has led to higher groundwater levels and consequent waterlogging and salinity, resulting in yield depression and in severe cases, total production loss. These experiences have led to calls to internalise such costs at the time of project appraisal, to develop more sustainable approaches to agriculture development, and to develop ways of increasing production from degraded land and water resources.

Post evaluation studies conducted on past projects have identified that changes in the overall economic and social framework within which irrigation systems operate are frequently more complex than assumed; actual irrigation costs and benefits vary considerably from those predicted during project planning; and cost recovery is rarely achieved through irrigation fees, implying considerable government subsidies. Regulation of commodity prices can lead to suppression of farm incomes and subsidies for urban consumers. At a macro scale, globalisation and trade liberalisation is changing the incentives and selection of cropping patterns and downturns in economic performance affect the cost of inputs and local demand for agricultural produce. While it may not be possible to predict future trends with any degree of certainty, the process and procedures for defining the underlying assumptions and testing the robustness of various options has been incorporated in the review.

Similarly, sensitivity analysis is required with regard to hydrological parameters. Over the longer term, more extremes of droughts and floods have been predicted as a result of climate change. Hydrological analysis is not a precise science in situations where data are scarce - variability is to be expected. The important aspect therefore is the extent to which such variability can be captured in the planning stages, and the flexibility of the project design to respond to such changes tested prior to decisions being taken.

Efforts are being made around the world to improve the governance of irrigation systems through greater involvement of beneficiaries in planning and management. The autonomy of such groups and the effectiveness of decentralisation in improving performance and sustainability is highly variable. The primary driving force for such action is to reduce the government’s fiscal burden. External pressures have included introduction of greater accountability in system management and productivity increases. In such cases the institutional forms and degree of external support for the transitional process varies significantly. The extent to which such changes has affected productivity, efficiency and sustainability is uncertain. Concerns over governance of irrigation systems range from issues of vested interest at the time of project promotion to lack of accountability in the implementation and operational phases. Lack of integrated approaches to project planning as a result of sectoral government structure and processes also raises concerns over optimal use of natural and financial resources. In promoting improved governance, a key aspect to determine is the approach in cases where implementation capacity is not adequate.

Apart from new technological advances, both in the physical systems and from biotechnology, there is considerable potential for achieving improvements in existing systems through policy interventions and extension of existing technology, including better water management and reduction in harvest and post harvest losses. Policies to increase net returns to poor sections of the community and stimulate the rural economy need to be developed. In the post green revolution period, project appraisal was generally limited to quantification of direct agricultural benefits and dealt only in qualitative ways with the wider rural development impact. Methods to analyse these wider impacts and develop targets for development effectiveness and multiplier effects of irrigation provide a more accurate representation in project assessment.

The diversity of irrigation systems around the world and levels of development provide a wealth of information from which to draw lessons and provide guidance for improving productivity. However, the diversity of social, cultural and political systems also provides a barrier to the effectiveness of transferring such experiences. The contention is that with an appropriate development approach is taken, there is potential for considerable advances in the areas of efficiency of water (e.g. low cost drip irrigation, reuse of return flows, rainwater harvesting), production increases through improvements from biotechnology (varieties with shorter duration, higher yield, greater drought tolerance, improved rainfed varieties), and higher productivity and greater sustainability through institutional and management improvements, (accountability, autonomy) and institutional reforms, policy reforms (water rights and trading). The review paper will provide guidance on the effectiveness of these and other aspects and draw implications for the assessment of irrigation options in the planning and project cycles.

1.3 World Water Council Vision

A paper on the future of Water for Food and Rural Development is being prepared by the International Commission on Irrigation and Drainage (ICID), the International Water Management Institute (IWMI), the International Land and Water Research Institute (ILRI), FAO and others on behalf of the World Water Council (WWC) Vision to be presented at the World Water Forum in March 2000. the objective of the paper is to:

‘develop a widely supported Vision on the critical issues and trends or discontinuities affecting the water for food and rural development sector over the next 25 years with strategic directions the sector should follow’.

The process will comprise (i) modelling of impacts of various water use scenarios on long term global, regional and national food supply, demand and trade, (ii) a number of strategic issues papers including potential for rain-fed agriculture, water storage, and planning and managing for change, (iii) national stakeholder consultations. A draft paper will be presented at the Stockholm Water Week in August 1999.

The effectiveness of dam projects to deliver the intended agricultural development through irrigation will be assessed through the case studies and cross check analysis. The focus of this thematic review is aimed at assessing the effectiveness of various policy, regulatory, institutional and technical options and providing a framework for incorporating more rigorous assessment of options in the planning stages of a project. The review will identify good practice and provide a basis for evaluation of such approaches and recommend how new thinking can be introduced into the planning process. The review will include:

• an insight into the role and impacts of the alternative agricultural development models including the intensive agricultural and irrigation development growth model based on the technological advances of the ‘green revolution’ and the equitable development model. The summary will draw on published information for a range of representative regions and will report on the effectiveness and sustainability of the model and its consequent impacts The analysis will go beyond agricultural production to comment on subsequent influences on local, provincial and national economies and the effectiveness of the approach in stimulating rural development.

• an assessment of the advances and improvements in non-irrigation elements of agricultural production as they might effect decision making in future water resources development, including advances in rainfed agriculture, improved seeds and varieties, reduction in harvest and post-harvest losses, improved drainage, mitigation of salinisation, and others.

• quantification of the effect of improving demand-side management to increase the effectiveness of existing systems and contain increases in demand and identification of the conditions under which they would be appropriate. The options include the effect of increasing autonomy and accountability in system management, incentive systems for more efficient operation, pricing policies, affect of production subsidies, development and adoption of less water demanding crops, and internalising the costs of drainage and other impacts of irrigation; etc.

• evaluation of supply-side options and indications of the conditions under which they would be appropriate, including more localised small-scale irrigation, improved conjunctive use of surface and groundwater resources, the scope for introducing low cost - high efficiency systems; improved governance in system management; alternative sources of supply, e.g. rainwater harvesting and other localised storage, increased re-use of water and use of por quality water, and desalination

• a presentation of environmental and sustainability aspects related to more appropriate levels of fertiliser and pesticide applications (through organic methods, crop rotation, integrated pest management etc.), and reductions in waterlogging and salinity (through conjunctive use, local drainage solutions, salt tolerant crops, etc.).

• identification of the nature and scale of externalities that should be internalised for alternative development models and procedures for determining the sensitivity and robustness of alternative approaches to uncertainty

• recommendations for modifications to the planning cycle to accommodate recommended options in the decision making process, including proposals for participatory decision making and procedures for evaluating the effectiveness of options,

• proposals for building capacity for options assessment, with emphasis on cases where institutional systems that are limited in implementation capacity for policy and regulatory reform.

The basin studies and cross check analysis will illustrate the effectiveness of dam projects to deliver their intended agricultural development objectives. Depending on the stage of implementation, linkages with the China, India, Pakistan, Turkey and USA case studies will be established to (i) illustrate the effectiveness of the prevailing development model together with information on other countries gleaned from different sources and (ii) determine current practices for the assessment of irrigation options in the planning cycle.

As the irrigation system is a subset of the wider agricultural production system, which itself a part of the rural economy, there are strong linkages with other thematic reviews including I.1 Social impacts and equity (distribution of benefits); II.1 Economic, financial and distributional analysis (economic appraisal and sustainability, extent of multiplier effects); V.1 Planning approaches (how to incorporate options assessment); V.3 River basin institutional frameworks and management options (integrated land and water management); and V.5 Consultation and participatory decision making (how to involve people in decisions making on options). Linkages need to be developed with the four other thematic reviews in group IV in terms of policies and procedures for options assessment,

The output of the study will be linked to two of the wider outputs of WCD, namely (i) the framework of options assessment and decision making by providing a more quantitative assessment of the effect and significance of options to be considered and examples of good practice, and (ii) to the criteria, guidelines and standards encompassing specific principles and policies to assess alternatives for the initial stages of water resources planning prior to a decision being taken on a dam project and options to be considered during the project cycle regarding the scope and operation of the project.