Options for Pro-Poor Water Reforms

1. Options for Pro-Poor Water Reforms SIMI KAMAL Member GWP TEC Chairperson, Hisaar Foundation

2. Context • The greater part of the world’s poor reside in Asia Pacific region (75 percent) • The poor in Asia Pacific region are concentrated in environmentally fragile ecological zones • Millennium development goal of halving world poverty by the year 2015 • Current trend of establishing Integrated Water Resources management We have to ask the question “can we really reduce poverty through water reforms?”

3. Scope of Paper • Experience from the Asia Pacific region • Case study from Pakistan • Rationale for pro-poor water reform options

4. What Does Water Reforms Mean? The term water reform is usually understood to cover: • Governance • Laws • Institutions • Processes • Regulations

5. Access and Control Over Land In Asia Pacific Region: • Economic and social disparities distort access to land and water • Existing social and cultural biases further distort the intent of inheritance laws • Inadequacies of legal structure limits ownership and control by poor women and other disadvantaged groups

6. The relationship between water and poverty is often determined by some external factors • Political will and political representation • Local government linkages and decentralization

7. Four distinct sectors in the debate • Irrigation systems and poverty reduction • Land and water rights in relation to poverty • Reduction of poverty through participation and user management • Environment, poverty and conservation

8. Size of Land Holdings • In the Asia Pacific region the average farm size is now approximately 1.6 hectares. • In China average farm size has fallen from 0.56 hectares in 1980 to 0.4 hectares in 1999. • In Pakistan it has fallen from 5.3 hectares in 1973 to under 3 hectares in 2004. • In comparison the average farm size is 67 hectares in Latin America.

9. Irrigation Systems and Poverty Reduction • Irrigation has long been seen as a main tool of reducing poverty • It is seen as a package of technologies, institutions and policies that underpins increased agricultural output in the Asia Pacific region • Past experience has shown that this package has not yet fully succeeded in doing away with poverty • Similar irrigation reform packages in different contexts have different results

10. In China irrigation and agriculture have developed in the context of a long-term national program to eradicate poverty • Vietnam has adopted fair land distribution approach to land (and irrigation water), and rural development as a whole • In Indonesia, irrigation development has been part of a large transmigration scheme funded by government • South Asia has adopted policy in which distributional issues have largely been ignored • Irrigation reforms have benefited the poor in China and Vietnam much more than in South Asia

11. Irrigation Benefits • Indirect broader benefits of irrigation usually much larget than direct local-level benefits • This means less impact on local poverty • Despite overall poverty-reducing nature of irrigation, income poverty exists in most canal irrigated areas • Around a third of all households in irrigation systems live in overty

12. Water Rights, Land Rights and Poverty • Water rights are understood and internalized largely as customary practices • Regulations on water rights are often unclear and incomplete • Water users may have little knowledge of the laws and regulations that define formal water rights

13. What are Water Rights? • Water rights may be composed of various bundles of rights to access, consume, manage and transfer • Water rights are usually structured differently and are more limited than rights to land and movable property • The term “water use rights” seems more appropriate • Water rights are usually a form of property rights • Secure property rights can play a vital role in expanding opportunities for poor people to escape from poverty

14. Reduction of Poverty through Participation and User Management

15. Past 25 years have been many attempts to improve irrigation management through increased participation • This was driven in part by: • frustration with irrigation operation and maintenance • head-tail inequalities in water distribution • Neglected repairs • Lack of resources for maintaining infrastructure

16. Financial Requirements Whopays Financial Requirements Who pays Taxpayers Interest Interest Taxpayers Replace-ment No one Replace-ment Excess man-power Users O & M Taxpayers Taxpayers Users EfficientO & M Users b. Pakistan a. Australia The Financing of Water Services in Pakistan Source: Pakistan’s Water Economy: Running Dry, Report, The World Bank, November 8, 2005, pg 59

17. ’Token’ particpation • Meetings held • Water user associations formed • Trainings conducted These are used to measure user participation and management instead ofsubstantive shanges

18. Participation in political vacuum • Water user groups can end up as political pressure groups with aspirtions other than equitable distribution of water • Show little result in terms of increased incomes or reduced costs • No set of agreed indicators on what is ’pro-poor’ participatory management

19. Water conservation and enviroment • Policies on water conservation often disregard livelihoods of men and women • The poor depend heavily on environmental ’goods’ • Sometimes one kind of right (for example water irrigation right) can take away another (access to common enviromental goods)

20. Struggling to Address Poverty Through Water Reforms – The Case of Pakistan

21. Pakistan’s Water Scenario • The vulnerability of the vast Indus Basin irrigation system and greater need for operating flexibility and assurance is now accepted in Pakistan • High population growth • Persistent poverty • Lagging growth in the rural sector • Looming constraints on water resources for irrigation • Poor development and management strategy

22. Poverty Conditions • Realities of water availability, it’s regime, the climate, weather, delta conditions and the market have changed • The way of managing farms and using water at farm level has not • About 45 % of cultivable area is under cultivation • Poor management and distribution of irrigation water has rendered a large area of land uncultivable

23. Low crop yield • Thousands of local farmers whose livelihood depended on agriculture are facing economic hardship • 97 percent of 140 MAF of surface water used in irrigation, managed by public sector • Unchecked exploitation of groundwater in private sector (20 MAF)

24. Comparison of Productivity Per Unit of Land and Water

26. Low Irrigation Charges as a benefit to Poor • The very low irrigation service charges in Pakistan are justified on account of poverty and are assumed to benefit the poor • In the setting of inequities in land and water distribution the low level of irrigation charge does not necessarily benefit the poor • Low charges lead to under-spending on O&M works and the system performance is very poor

27. The application of a single level of irrigation service charges across areas and system has led to a situation where the poor landless farmers end up subsidizing the rich landowners.

28. Land Tenancy System & Poverty • The existing pattern of land distribution in Pakistan is not egalitarian • Organization of production is heavily dominated by sharecropping arrangements where the tenants are insecure • Unless the tenant’s position is improved, the landowners are likely to receive a lion’s share of the total benefits of watercourse improvement, a substantial part of which is being subsidized by the government.

29. Water Sector Reforms • Government of Pakistan has embarked upon water sector reforms in the country • These have been implemented in parts of the irrigated areas of the two larger provinces, Punjab and Sindh • These reforms have combined irrigation and drainage functions into single Provincial Irrigation and Drainage Authorities supported by Water Management Ordinances 2002 • The idea is to move towards farmer management of both irrigation and drainage

30. Participatory Institutions Set Up as Part of Water Sector Reforms • Area Water Boards (AWBs) • Farmer Organizations (FOs) • Watercourse Associations (WCAs) • These participatory organizations are to slowly take over the rehabilitation and maintenance of 10 canal command areas

31. The Reality on the Ground • In theory the system sounds equitable and feasible • The problem arises in the way the Ordinance defines a farmer who may become a member of the Farmer Organization • This ‘farmer’ is one who owns land • This leaves out the majority of farmers that actually deal with water on a daily basis and till the land – the poor landless sharecroppers.

32. What Can be Done • In order to enhance the probability of the benefits of water rehabilitation and infrastructure development reaching the poor landless farmers, the inclusion of both men and women from this group is necessary in the WCAs and FOs • Such inclusions many not be forthcoming substantively in the short term • It can be fostered through offering infrastructure development and repair investment incentives on high priority to those WCAs and FOs that include landless sharecroppers and women

33. Official Government Policy • Integrating irrigation, hydropower and agricultural development investment • Modernizing both the water infrastructure and the institutional and governances management systems • Balance of investments in water infrastructure and water management • Balance in supply management and demand management • Secure water entitlements or rights

34. Government Strategy • The new initiatives in the water sector are modeled to recover the maintenance and restoration cost • Water Conservation • Renovation of remaining 90,000 watercourses (45,000 out of 135,000 have already been lined) • Improving watercourse maintenance • Organizing sustainable water users associations (WUAs) • Introducing water saving irrigation technology

35. Realities! • Expenditure on water supply and sanitation (normally held to be the most pro-poor of water programmes) for the year 2006-2007 was projected as 0.12% of the GDP • Current annual development plans claim to spend approximately 40-50 percent each year on water infrastructure resources development – the type of development that does not generally benefit the poor • Not clear how water entitlements and rights are to be secured • Not clear how the demand for more irrigation water will be balanced with need for conservation and environmental flows • The mighty river Indus has no water downstream from Kotri Barrage for 10 months of the year and the Indus delta has been effectively destroyed.

36. Rationale for Pro-Poor Water Reform Options

37. Defining ‘Pro-Poor’ More Clearly • Any arguments for and policy for pro-poor water reform must clarify what is meant by the term ‘pro-poor’ • Too often pro-poor intervention is taken to mean any investment or programme that creates physical facilities and institutions, the socio-economic performance of which is seen in terms of aggregate benefits to society as a whole – not specific benefits to defined groups of the poor.

38. Measuring the ‘Pro-Poor’ in Water Reforms • For water reforms to be pro-poor, the criteria should be not only be the change in the structures of water institutions, the new laws, the number of hectares developed or rehabilitated, but also the number of households and persons who benefited and by how much. • We need to be able to measure not only the aggregate productivity benefits but also the various types of benefits (economic, social, development, political) and the share of the poor in total benefits

39. Need for Separate Sets of Indicators To define specific benefits to the poor and then to measure their achievement requires different sets of appropriate indicators for different contexts • For water entitlements as part of access to environmental goods • For water rights as groups, individuals and institutions in irrigation and agriculture • For access to potable water in rural and urban contexts (where the poor may pay many times more than the rich).

40. A look at Asia Pacific experiences has shown that no single set of water reform interventions have been sufficient for effective poverty alleviation in all water sectors • A balanced and realistic approach is required under each set of circumstances • An effective package of pro-poor water reforms may require interventions in areas other than water • This points towards more proactive use of IWRM approaches that calls for a balance among water efficiency, equity and environmental sustainability

41. Approaching Different Water Reform Sectors • We have seen how different factors impact upon different sectors of water use and management • To be pro-poor each of these sectors would have to work with different sets of interventions under different conditions • Sometimes reform processes will have to create the necessary conditions first, within which pro-poor approaches can be realized

42. Pro-Poor Irrigation Reforms Irrigation and agriculture reforms are likely to generate significant outcomes for the poor only if some or all of the following conditions exist or can be created: - Land holdings are more or less of the same size (and not skewed between some huge farms and many tiny ones) or land is better distributed through land reforms - Farmers are socio-economically homogeneous (ie all hold land titles rather than some owning land while the others are landless and caught in a system of sharecropping land tenure) and can compete for benefits equally - Irrigated agriculture is profitable as a whole

43. - Actual benefits of irrigation go to all types of farmers (both land owners and the landless) and can be easily calculated - There are incentives in place for better managing service delivery and quality - Farmers pay for water based on satisfactory service delivery (ie service providers are made accountable) - Irrigation schemes and programmes are specifically designed to benefit the poor by putting in specific conditions for investments, repairs and rehabilitation of water infrastructure

44. Water Rights Reform • In terms of water rights as a means of alleviating poverty, in situations where land ownership determine water rights, it is land ownership that needs to be tackled effectively as a pro-poor intervention • In cases where a right to quantum of water is determined by type of use, tradition or legal entitlement, water reform will need to ensure that all those that are entitled are clearly defined as such, through legal recourse.

45. Given that the Asia Pacific region has millions of farmers, both land holding and landless, and millions of people who have direct environmental entitlements, it would be extremely challenging, if not impossible, to recognize individual water rights • Water rights can be held by collective organizations such as water user associations, local government and water utilities. • However in a region of many inequalities, this option would be open to abuse The argument for the role that secure rights to land can play in reducing poverty are much more compelling in the Asia Pacific context than water rights

46. Poor-Poor Participation Reform • As yet no set of agreed indicators to show poverty reduction or degree of ‘pro poor-ness’ as a result of stakeholder participatory and user management of water • Water reform options in this area are likely to remain perfunctory • Indicators need to be developed • Ways found to determine the direct and impacts of participatory decision-making and user management, especially in circumstances where the participants are socially or economically ‘unequal’.

47. Water Conservation Reform • There has been perhaps the greatest thrust in terms of water reform initiatives in this area • There has to be a stated and proactive pro-poor affirmative action (of the type seen in women’s empowerment movements and interventions) • Conservation attempts often end up displacing the very poor whose survival depends on environmental entitlements • Water conservation projects can undergo a process to explicitly state the number of poor people, the nature of their water entitlements, and how they can be helped to come out of poverty (or at least be prevented from becoming even poorer).

48. Thank You!