Water

1. Water and Development: The Importance of Irrigation in Developing Countries Karina Schoengold and David Zilberman

2. The importance of water • 80% of the human body is made up of water. • Water is crucial element of our food and materials • 75% of the earth’s surface is covered with water. • only 3%, is fresh. • Only1% of the water is available for human consumption. • Much of this water contain chemicals making it inappropriate for human consumption. • We distinguish between water quality and quantity problems. • On average we have sufficient water to meet human needs. The problem is water distribution.

3. Many do not have access to water • Region Percent of Total Population Absolute Number of People without Access to Water in without Access to Water 1994 (in millions) • Africa 54 381 • Latin America • & the Caribbean 20 97 • Asia & the Pacific 20 627 • Western Asia 12 10 • Total 26 1,115

4. Water quality concerns -water born diseases

5. Water policy concerns-quality • Water quality concerns in the tropics are not limited to human health. Contamination of water by arsenic and mercury in mining activities are major concerns in the tropical forest. Such contamination is hazardous to the forest ecosystems and their bio-diversity. • When the miners are small, informal organizations, the regulation of toxic material in mining is a difficult non source point pollution problem. Solutions are difficult to implement because of the population density, large scale and weak government. • Establishing of mobile unit that can track violators and a legal system to prosecute is a major priority.

6. . Social Concerns. • Waterborne diseases. Bad project planning resulted in spread of malaria and other water born diseases as vector spread in canal and dams. • Displacement of native populations. The development of water projects in the last century has led to the displacement of 40 – 80 million people. Compensation for these forced changes has usually been minimal, if it occurs at all. • International conflicts and water supply. There are 261 rivers that cross international boundaries. The division of water resources between countries can either be a source of conflict or a reason for necessary cooperation. 162 treaties were signed an implemented for cooperative water management. Some major disputes ar not settled

7. Heterogeneity of water • There are differences in water availability within regions-in Brazil,Mexico, California, Hawaii, Russia, there are regions of floods and surpluses and deserts. • Differences in water availability over time matter - at the same year you may have floods and shortages • Differences in water quality are crucial- consumption, farming of various crops and production require minimum quality. • Value and use of water dependent on • location • Time • Quality

8. Different uses of water • consumptive usage is diversion + consumption of the water through • transforming it into water vapor (where it is “lost” to the atmosphere), • letting it seep into the ground, or • significantly degrading its quality. For example • Residential • Industrial • Agricultural • Forestry • non-consumptive usage. Do not educe water supply and, frequently, do not degrade water quality. Examples • Fisheries use water as a medium for fish growth. • Hydroelectric users extract energy from the water. • Recreation may involve using water as a medium (example: swimming) and/or extracting energy from the water (examples: white-water rafting, surfing) • Transportation is especially important use of water in the tropics.

9. Agriculture Values of water vary • Agricultural value of water r varies between crops and locations. A relatively small faction of the water (20%) generates much of the value (more than 70%). • Crops such as flowers and strawberries can pay more than $500/AF, cotton can afford paying $40-100/AF and pasture $30/AF and less. • Values of water vary by location,land quality and according to market conditions. • Industry and residential users are able to afford to pay much more than agricultural field crops. Their demand is relatively small (33%) but is continually growing.

10. Overview of irrigation • irrigated land has increased from 50 mha (million hectares) in 1900 to 267 mha today. • Between 1962 and 1996 the irrigated area in developing countries increased at 2% annually. • Irrigation has been crucial in meeting the food demand of doubling world population since WWII. • Irrigation projects have been costly in terms of capital, environmental degradation& human health. • Design and management of water resources have been flawed. There is a growing perception of water supply crisis,but we have a water management crisis. • As population is likely to grow double again, we need to reform water institutions and policies. • This presentation first assesses water situation and then introduces direction for reform.

11. BENEFITS OF IRRIGATION • Irrigation increases crop yields.- The 17% of land that is irrigated is producing 40% of the global food • The value of production of irrigated cropland is about $625/ha/year ($95/ha/year for rain-fed cropland and $17.50/ha/year for rangelands). • Irrigation affects total factor productivity (TFP) beyond the input value of the water(evanson,pray,Rosegrant)., • Irrigation allows improve timing and spatial distribution of water. It allows double cropping, it enables supply stabilization. It enable production of vegetables and fruits. • Increases consumer well being& employment & farm income(net income increase per family in Africa was $150 - $1000) • The high productivity of agriculture slowed expansion of deforestation.

12. Productivity of irrigation • 1% increase in irrigation increase productivity by .12-.25%. • But these are marginal effects • There is a significant heterogeneity within fields-35% of yield variance is within field • There is a significant fixed effect of water. • Irrigation may double or even triple yields,it increase water availability and controls when and where water is available. . The high yields of irrigations may reflect climatic effects-desert areas have higher sun energy and degree days that with irrigation leads to higher yields Modern irrigation and pumping modify ranking and values of land- irrigation technologies is water quality augmenting.

13. Water as complement to other factors • Species evolution (distribution and survival) depend on and adjust to water conditions... Plants have shallower roots when water is abundant. Water abundance is key to tropical ecosystems. But they are vulnerable to water shortages. • Draught is a relative concept-In parts of Florida and Java a week without drain is a draught • Water affects the state of other factors. Water movement causes soil erosion,drown wild life and destroys property. It lead to migration of species and changes in bio-diversity. • Water productivity depends on other factors. For example Climate (degree days)- • Soils • It may be worth while to export water to regions with warm and dry climate and good soils.

14. Water Projects • Projects modify bodies of water to enhance some aspects of productivity. They may include • Navigation projects • Storage projects • Flood protection projects • Hydroelectric project • Projects may have negative environmental and social effects. • A correct analysis of net discounted benefits is a useful guide for project selection. It should account for non market impacts and uncertainties. • Project design should consider institutional and non structural solutions. Redesign of incentives may lead to water savings preventing a need for a new dam. • Cost of projects vary. Costs over run reduce the net benefits of projects. Projects have non market costs as well.

15. Water variability and projects in the tropics • Water conditions in the tropics vary- there are deserts in Brazil and Africa,and desertification is a continuous concern in both continent. Land and water management projects can slow these processes. He challenge is cost effective and environmental sensitive design, leading to efficient and equitable outcomes. • Projects to improve water flow and reduce water stagnation are also important to improve transportation and to improve public health. • A major priority is to eliminate water borne diseases-using structural solutions (drainage, sanitation),management activities( pest control) and medical treatment • Flood control projects used for storage and hydro electric power generation may be very valuable in the Hymmalaya’s foothills and other regions. • .

16. COSTS OF IRRIGATION Capital cost 1

17. COSTS OF IRRIGATION Capital cost 1. • The capital costs of water projects have been underestimated. • A recent study of 81 dams found that the average cost overrun was 56%. • The cost of irrigation has increased substantially since the 1970s. • Irrigation costs now average $480,000 per square km.Cost varies by location - the capital cost in China is $150,000 per square km, while the costs in Africa capital costs are $1,000,000-2,000,000 per square km. • Mexico's irrigated area has actually declined since 1985 due to lack of capita

18. Other costs of projects Environmental cost Habitat destruction Blocking migration of native species • Increased emissions of greenhouse gases. • Increased salinity levels in freshwater supplies • Water logging and salinization of land- • Cost 11Billion annually • 20% of the irrigated land worldwide is affected by salinity • 1.5 million hectares are taken out of production each year as a result of high salinity levels in the soil. • Decreased levels of sediment and nutrients in water-Nile

19. Cost of variability are reduced through storage and trading • The uncertainty and variability of water conditions are major sources of concern. • The cost of adjustment to random climatic and water conditions can be reduced by institutional changes-increase in water trading, structural changes-expansion of storage facilities. And schemes such as conjunctive use. The optimal strategy choice depends on cost vs benefits. • The gain from trade can increase as trading possibility expand. Expanding water trading may entail: • Investment in expanded conveyance facilities • Reducing constraints on trading • BUT Trading may cause third party effects that have to be taken into account in design of system of trading

20. Virtual water • Value of water vary by location. Defining a water shortage as a situation where water per capita is below a certain level is not always useful when a region with minimal water can use it productively and generate resources to buy cheap water intensive crops. • For example, an acre foot of water used in flower production is equivalent in the value of productivity to 30-40acre feet used in wheat. • Measure of water shortages should combine water availability and productivity. Water constraints are less binding as trade opportunities expand.

21. Water Rights and water Markets • When population is scarce and waterabundant-thjere is open access to water. • Riparian rights emerge in regions bordering bodies of water. Users are entitle to use water adjoin to their land but not to divert water. • Prior Appropriation is a Queuing system allowing diversion of water where diversion right are determined according to • First in time first in line • Use it or lose it • PA was designed to induce investment in diversion .But PA does not provide incentives for water conservation. • Transferable Rights in water lead to trading and investment in conservation. Trading design has to be adjusted mitigate negative third party effects. Transition to Trading may not be worth while if gains are smaller than the transition costs.

22. water trading issues • Transferable rights-annual (rent) and/or permanent (sale) • Sale by government. • In vs out of the basin. • Sale of effective vs applied water. • Compensation to third party • Active vs passive trading • Options to buy/sell • Chile/California/Columbia/

23. Improved Water Pricing Systems • In most countries, the revenues received fall far short of the costs of water without attempt to recover the initial capital cost • Recovery of operation and maintenance costs ranges from a low of 20-30 percent in India and Pakistan to a high of close to 75 percent in Madagascar • The most common pricing systems are per-hectare fees • Per acre fees may vary by season and crop. • Brazil combines hook up fee with volumetric fee. • Volumetric inaccurate • Subsidies of 25%-50% are common

24. Overuse of Groundwater Resources • . Tube-well use in India increased by more than 100-fold between 1960 and 1985 • As much as 8 percent of , food crops grow on farms that use groundwater faster than the aquifers are replenished • Groundwater levels have been dropping at 25-30 cm per year. At depths below 15 meters, tubewells will not function, and a well must be abandoned. • The percentage of land where the water table is below 10 meters has increased from 3 percent to 46 percent between 1973 and 1994.

25. Ground water management • Ground water is a complement and substitute to surface water. It may replace surface water during draught period and be a permanent source of irrigation water. • Conjunctive use When ground water is used as a reserve- it is accumulated during wet years and pumped during dry. • Permanent pumping is sustainable if pumping is equal to replenishment. • Ground water is a common pool resource and may be overused. Without regulation we might have the tragedy of the commons. Users should be charged extra for the cost their pumping impose on the inventory. • Water and energy subsidies in India and other countries lead to depletion of ground water aquifers.

26. Improve ground water management • India increased pumping by 300% since 1951-86 • Farmers should pay user fee and not be subsidized, either directly ( through lower water prices)or through subsidized energy • Tiered pricing may address poor • Monitoring is needed-may need regional ground water authorities.

27. Water quality: Point and non point pollution • Agricultural and municipal activities contaminate buddies of water.Water quality policies distinguishes between • Source point pollution when the pollution can be monitored and regulated through financial incentive or direct control. • Non Point sources which can not be linked to specific pollution, but are engaged in polluting activities that can be regulated. For example, government may ban certain waste management practices or establish, require or subsidize best management practices. Producers may be penalized or subsidized not based on their pollution but on activities correlated with pollution. • Monitoring and enforcement of environmental regulations are difficult. In many cases the parties affected are very powerful, or very poor and political will to implement water quality rules is not there.

28. Water Governance institutions • There are economics of scale in implementing water diversion and mining projects. Some are executed and financed by government agencies. There is also large scope for collective action among private parties in cooperating to manage and develop water resources. • Water user associations (or water districts) are being established to have better cooperation and local representation in developing water and other natural resources. These organizations are collectively obtain resources needed for investment and establish and enforce rules that lead to socially beneficial water and resource management,. • Such organizations may be responsible to water distribution and control of non point source pollution.

29. Inefficiencies in micro-level water management • Farmer selection of crops and irrigation technologies affect water use. • Conservation technologies increase water use efficiency but require higher per acre cost • There is 6% adoption of sprinkler and 1% adoption of drip. • There are low tech “drip” like technologies • Low pricing of water is not justifying adoption • Efficient Pricing of water and drainage will lea to aoption

30. Actions to Improve Efficiency of Irrigation Efficient investment in irrigation projects • Capital subsides and under-costing the environment lead to oversized projects • Not all capacity needs to be used in start of project-over capacity is needed to deal with uncertainty • Learning is crucial-delay is worth while-invest when it is optimal not at first moment when NPV is positive • Project desgn should include institutions for allocation • Consider water logging cost and drainage in project design • Trade and the Concept of “Virtual Water”-forget self reliance- use water for best outcome build storage and trade.

31. Use of Non-Traditional Water Sources The world’s 7500 desalting plants can produce 0.1% of the world’s water use. Price of desalinated water is between $.70-$1.00 per M3. Reclaimed water may be produced at a cost of 30 to 40 cents per cubic meter., Partially reclaimed water is used in production of industrial crops such as cotton. For cotton and certain vegetables, yield levels can be maintained if high quality water is used early in the life of a plant and more saline water is applied towards the end of the season.

32. IMPROVED CONVEYANCE AND THE ALLOCATION OF WATER. • Poor management of irrigation systems leads to conveyance losses of up to 50 percent • The social benefit of canal maintenance is greater than the private benefit. Ignoring these leads to under investment in canal maintenance, resulting in • shorter canal systems than optimal • over-application of water upstream • Water systems run by a water user associations are more efficient and better maintained (Madagaskar,india,China).WUA tax members and improve distribution and pricing.

33. Lessons of water resource management • Water storage matters. The storage facilities enabled agricultural and other systems to survive severe draughts in many parts of the world. • Ground water aquifers are valuable reserves. Pumping new wells increased supply availability and reduce draught costs. • Conservation makes a difference, Adoption of conservation technologies and more precise use of resources enabled water system to survive variability and shortages. • Crisis trigger change Draught or flood situations were behind some of the main water reforms in recent years. • A mixed portfolio of policies is most desirable. Solutions to complex water problem involve combining structural changes with new technologies, education and incentives.

34. Example:California’s trading during drought • During the 1987-91 draught California (which shunned water trading) introduced a trading schemes - the water bank. • The water bank demonstrated the power of trading to reduce adjustment to shortages. Productivity of water in California varies across locations, trading allowed water to be used wherever they have the highest value. • Buyers and sellers gain from trading. The water bank enable to sustain many of the perennial crops and provided owners of water rights who engage in relatively low return activity to earn higher incomes from water sale. • The gains from trading is greater in periods of higher scarcities Climatic and storage variability cause the value of water to fluctuate, and value of water in the west side may vary from $5 to $200 per AF. • Trading was introduced in Chile, India, China and other regions.

35. Conclusions • Need more impact assessment of irrigation and more econometric studies of performance. • Irrigation crucial to productivity-some systems are not sustainable because of over pumping • There is much potential to increase water productivity through incentives • A priority is to increase trading within regions and to improve maintenance-through institutional changes • Irrigation technologies and improvement in varieties are another sources of improved water productivity in agriculture. • Water management is a major challenge-cost benefit needed to improve investment choice and integrate agriculture and environment and urban water use. Main challenge is efficient irrigation at the regional level.

36. Refernces • David Zilberman, Ujjayant Chakravorty, and Farhed Shah, “Efficient Management of Water in Agriculture,” Decentralization and Coordination of Water Resource Management, ed., Douglas D. Parker and Yacov Tsur (Boston: Kluwer Academic Publishers, 1997), Chapter 22. As part of the book series, Natural Resource Management and Policy, Ariel Dinar and David Zilberman, editors.International Water Management Institute (2001) home page: http://www.cgiar.org/iwmi/home/wsmap.htm • K. William Easter, Mark W. Rosegrant and Ariel Dinar, "Formal and Informal Markets for Water: Institutions, performance, and Constraints," The World Bank Research Observer, 14:1, pp. 99-116. • Richards, Alan (2001) “Coping with Water Scarcity: The Governance Challenge” Center for Global, International and Regional Studies Working Paper. University of California, Santa Cruz. http://www2.ucsc.edu/globalinterns/wp/wp2001-4.pdf