THEME 2: IMT AND ORGANIZATIONAL CHANGE

This is the Theme Note for the Theme 2 Session, about IMT and Organizational Change. The session will examine what changes are made in organizations in the irrigation sector and what kinds of organizational changes may be needed to support IMT and to ensure sustainable productivity of irrigation systems. We will consider how to develop criteria for successful organizational performance, how to organize the change process, how to create and strengthen water users associations (WAU’s) and the kinds of restructuring needed in irrigation agencies. The amount of attention for each issue will depend on the participants. To start up the discussion, we present ten key questions and a brief overview of sub-topics and issues.

Key Questions

1. What organizational options are used or discussed in your country to fulfil the basic functions that need to be performed?
2. What factors most determine what types of organizations were or will be adopted?
3. Through what organizational, managerial, financial and legal mechanisms will or could accountability and transparency be ensured between water users, lower level service providers, WUA leaders, scheme level staff and government?
4. What types of agents have been or will be used to establish user groups?
5. What WUA features impact most on improving water delivery to tail areas? Do WUAs take on other tasks than water service provision? What is the record of multifunctional WUAs compared to single purpose, water focused WUAs? Who should be members of the WUA: owners only, or tenants also? Should there be one or two members per farm?
6. How should criteria for service delivery be developed and defined?
7. What changes were or will be needed to shift the role of government from direct management of schemes to regulation and provision of support services?
8. In what ways was change brought to the irrigation and drainage sector, or how will or can it be brought? What mix was or will be used of, on the one hand, government leading and promoting the process and, on the other, key stakeholders helping define goals, shape the policy and legal framework, define capacity gaps and shape the implementation strategy?
9. How does or may IMT impact on the rural poor: what data are available?
10. How does or may IMT impact on the environment and water resource management?

Overview of sub-topics and issues

1. It has been theorized that irrigation sector organizations perform five basic functions:

• governing the service (define what the service should be and cost, determine and enforce rules, make key policy and management decisions such as approving a WUA constitution and by-laws, selecting leaders, approving budgets and O&M plans),
• providing the service (delivering water, maintaining, repairing and improving the infrastructure, measuring and monitoring deliveries, collecting and spending irrigation service fees, drafting O&M plans and budgets),
• paying for the service (mobilizing the funds, in-kind contributions, labor, materials and equipment needed to pay the cost of governing and providing the irrigation service),
• regulating the sector (whereby the government ensures that stakeholders comply with important government policies and laws) and
• supporting the service (facilitating the organizations that govern irrigation systems and that provide the irrigation services, as well as the public and private sector agents that provide support services for irrigated agriculture, agri-business and marketing).

2. The five functions could be performed by only one organization (the government) or by as many as five different organizations. Normally, at least two organizations are at work in the irrigation sector, and there are often more.

3. Most often, IMT transfers some or all of the first three functions to farmer-based organizations (e.g., governing, providing and paying for the service). After IMT, the government normally retains or strengthens its mandate to regulate the sector, while government and private sector organizations may share the role of providing support services.

4. At least eight basic kinds of organizations perform irrigation sector functions:

• Government, state or national (line department or integrated development authority, common in developing countries, less common in industrialized countries),
• Government, local: a district, township or municipality (Turkey, Asia, Latin America),
• Public utility: self-financing, professional organization responsible for a large area that may include multiple irrigation systems (Europe, Canada, USA and China),
• Irrigation district: semi-municipal non-profit entity with special authority and protections from liabilities responsible for the management of a single irrigation scheme (USA, Latin America, China),
• Mutual company: independent corporate entity (can be for profit), normally composed of water users which own the irrigation scheme and water rights through shareholding arrangements (USA, Mexico and a traditional variant of rights shareholding in Nepal, which is allocated to members on the basis of shares of investment in construction and improvement),
• Private company: a private sector firm or contractor that obtains a contract to manage an irrigation scheme from another governing organization, or a larger agri-business firm that owns the land and irrigation system (found in Latin America, USA, Africa),
• Water users associations: a group of water users which is organized informally or formally for the purpose of managing part or all of an irrigation system (found as governing and service provision entities in low-income countries, found as governing entities in middle and high income nations),
• Farmer cooperative: a multi-purpose association of farmers to provide agricultural, marketing and irrigation services (found in Latin America, Asia and Africa).

5. Each type of organization differs from the other ones in how democratic and how professional and sophisticated it is; how strong are its legal rights, authority, obligations, liabilities and immunities; how financially autonomous it is; how much potential it has to handle single-purpose versus diversified functions, more simple or more complex tasks and so on.

6. Accountability and transparency can be enhanced through the budget process and dissemination of financial reports (water users or their elected representatives approving or rejecting the budget or report), through legally enforceable service contracts (parties being accountable to each other for the fulfillment of their agreed obligations), summaries of annual reports distributed to all water users, through conflict resolution mechanisms, through technical, financial and social audits, through a program to benchmark service provision over time in terms of cost and quality, through user satisfaction surveys and public discussion of outcomes and yet other mechanisms. After management performance is made transparent to stakeholders, the key challenge is how to link performance levels to consequences for those responsible, through incentives, rewards and punishments.

7. With IMT, WUAs are meant to replace agency staff for management of some hydraulic levels (if not all) of irrigation systems, rather than act as their helping hands. The impulse to transfer management responsibility to WUAs typically comes from outside the agency. Recently, Mexico has used staff outside of the agency to establish and train the WUAs, and currently the National Drainage Program in Pakistan does the same. In the Philippines, under the Farmer Irrigator Organizer Program, farmers have been selected and trained to act as organizers. In Indonesia, under the Small Scale Irrigation Turnover Program, field operations staff of the irrigation agency were trained to organize WUA’s. This raises the issue of, Who should hire the organizers? Should organizers selected by and be accountable to the irrigation agency, to another government entity, or should they be selected by farmer groups from among the local population?

8. Other important WUA issues are membership and voting rights. Should membership be restricted to landowners, given the fact that the connection to an irrigation canal is part of the farm’s asset valuation? The issue of whether it is easier to collect irrigation service fees from landowners (if they are members) versus tenants, may be a consideration. Or perhaps tenants and sharecroppers should be members, given the fact that they may be the actual water users? Also, under what conditions should quotas be set for membership of female farmers? Or it may be possible to distinguish different levels of membership status, to make distinctions between rights and obligations of landowners, tenant water users, spouses, etc.

9. In areas with important tail areas that are not served, the distribution of voting rights may help bring water to the tails. Issues of importance are the experiences, advantages and disadvantages of rules according to which head, middle and tail reaches each elect their representatives to the WUA board compared to elections in which the entire command area elects the members. Does this provide an incentive to increase the served portion of the command? Should chairpersons be elected directly or by the elected members of the board, and what impact does each rule have on water delivery to the tail areas?

10. A fourth issue is multi-functionality of WUAs. Should the mandate of WUAs restrict them to the water service? This is often recommended by civil servants that represent the owner of the infrastructure and that look for ways to safeguard its integrity. Or should WUA’s be allowed to develop other sources of income and other types of activities? The latter is the normal course of action of many WUAs. What does experience show? Are multifunctional WUAs less robust than single purpose ones and do they maintain the infrastructure less well?

11. The purpose of irrigation and drainage is to provide an acceptable and sustainable water delivery and disposal service to farmers. Irrigation sector organizations can and should be assessed according to how well they contribute to this objective. The first step toward achieving organizational accountability for agreed standards of performance for service provision at the scheme level is for those who govern an irrigation system to identify service objectives for water acquisition, delivery and disposal; maintenance and improvement of infrastructure; financing irrigation; settling disputes and so on. Service objectives should be specified in clear, measurable terms. They should also specify what is an acceptable performance standard or level. At the sector level, the government should identify key performance criteria, relative to sector policy, and should derive monitorable indicators for data collection and analysis.

12. When scheme governance, service provision and financing are transferred to WUA’s, the role of the irrigation agency needs to shift. It should withdraw from the functions that were transferred and develop capacity to facilitate development of locally sustainable WUA’s. This usually implies restructuring: redistributing responsibilities within the organization (regrouping and resizing of departments, retracing of hierarchical lines, creation of new budget units and line items and the reassignment of budget authority). Participants are invited to discuss in particular the following important issues:

• Timing of restructuring: should the agency be restructured before, after or during transfer of management authority to WUAs? Mexico restructured its agency as transfer went on, because transfer was a component of comprehensive water sector reform. In Andhra Pradesh restructuring will take place when all 2^nd level WUAs are established. The National Irrigation Authority in the Philippines has seen continuos rightsizing, with little restructuring. In Pakistan the managers of the new autonomous agencies are appointed by the incumbent. They are therefore loyal to him, which seems to defeat the purpose of combating rent seeking. At the same time, no WUA federation is in place that can take over the management of the canals.
• When an agency shifts from a construction based make-up to post-IMT roles, certain staff are no longer needed and may receive benefit packages. How should this issue be handled when staff derive over half of their income from rent seeking?

13. At the sector level, a number of changes may be needed as a result of IMT. Partial or full withdrawal of the irrigation agency from direct management of irrigation systems may enable it to change its focus to improving regulation of the sector (to deal with issues of competition and allocation between users, water quality, monitoring, resource conservation, etc.). The agency, or other agencies, may be able to focus more on higher-level water management at the river basin, watershed or large aquifer levels. Also, irrigation agencies will have a continuing long-term role to play in providing technical and financial support to WUA’s and leadership training. Other government agencies and private sector entities will need to improve and modernize their capacity to provide support services to enhance the economic value of irrigated agriculture.

14. There is general agreement on the need to establish a reform program unit that steers, structures and phases the reform process, and that is guided by an inter-departmental committee that provides senior policy deliberation and guidance. It reports to the head of state and has the latter’s visible support. Participants may compare two options regarding the process and discuss the fit with their own or other countries.

• Top-down process: policy decision to establish WUAs and transfer management authority is taken within small circle and implemented through a centrally orchestrated organizing, mass communication and training effort (China, Mali, Mexico, Turkey) because there is limited political need for farmer support.
• A Strategic change process: all key stakeholders come together to forge an overall restructuring of the roles organizations play in the irrigated agriculture sector. It would involve stakeholder working groups (for deliberation and formulation of draft documents), a secretariat (for implementing and monitoring the reform program) and numerous public consultations, information campaigns, workshops, training courses, pilot activities and so on. It employs multi-stakeholder monitoring and evaluation on the basis of data that may be collected by third parties. Such a process helps in setting the national or state agenda, in generating and maintaining support and could help to remove uncertainty and suspicion, identify positive new roles for agency staff to play, and identify less painful ways to downsize an agency.

15. Irrigation development also aims to provide livelihoods to poor rural producers, in addition to its main goal of producing food for rural and urban consumers. How does IMT affect the rural poor? Does it improve their access to water, because IMT may bring about a new system of water rights? Or does it reduce their access because they may lease and then sell their water right to wealthy farmers? Does IMT provide new opportunities for NGOs to improve the livelihoods of the rural poor?

16. Post IMT entities may have water rights and an interest in conserving the resource, as opposed most irrigation agencies whose construction focus has often led them to take water availability for granted. Under what conditions and in what ways does or can IMT encourage investment in water conservation and water quality control?

Contact: imt-moderator@fao.org