Management of water in agriculture goes beyond commodity production and addresses a broad spectrum of social, economic and environmental services. The specific objective of agricultural water management is to provide a more reliable and adequate water supply to the crop in question through capture, storage, transfer, distribution throughout the irrigation schemes, and application at field level. Equally rainfall can be harvested and shallow groundwater resources recharged from direct percolation of rainfall and seepage from watercourses. Such physical management will always modify the natural cascades and circulation of water in watercourses and aquifers, and consequently have significant impacts on economic activities, environmental process and people's health. These impacts are known as externalities in the sense that they impact things outside the immediate vicinity of the productive activity.
As with any other human activity, agriculture will always generates externalities which go beyond the primary objective of the activity and can be positive or negative. During the second half of the 20th century, the growing concerns of environmental impacts (pollution) and natural resource depletion have put pressure on industrial activities to eliminate or compensate for their negative externalities, that is, 'internalizing the externalities'. Agriculture is also under pressure to reduce the impact of its negative externalities, particularly those associated with the application of fertilizers and pesticides. But there is now a much wider recognition that agricultural water management has profound positive impacts going much beyond the strict economic systems of crop production. These externalities result from the multiple roles water plays in landscape processes and land management activities and are apparent in a wide array socio-economic and environmental settings.
Management of water for agriculture can result in quite tangible and visible results such as fisheries and tourist amenities in artificial lakes and streams, power production, enhanced recharge to shallow aquifers and augmentation of domestic water supply. The social values generated by agricultural water management may not be so apparent but are nonetheless very important and include the wholesale socio-economic viability of rural areas, the development of social capital required to manage irrigation systems and the expansion of transport and marketing infrastructure to sell agricultural produce. The positive environmental values include the, creation of artificial wetland systems and associated biodiversity, the promotion of perennial vegetation and micro-climatic amelioration which, in some harsh climates, can make big improvements in the human environment. Equally, land management for rainfed agriculture can also yield positive impacts. Shaping the landscape for harvesting (dry areas) or storing water (rice paddy fields), have profound effect on diminishing erosion and protecting downstream areas from floods. Some irrigation practices can also contribute to the recharge of the groundwater with positive effects on the domestic supply of the near-by population.
Recognizing the diversity and the amplitude of these externalities is fundamental to sustainable development. In the context of the global institutional reform pushing towards more responsive management approaches, each use of water and each positive effect of agriculture practice needs to be recognized appropriately through both regulated allocations and market transactions. In many instances, multi-purposes projects (power production, flood control and irrigation) have proved an effective way to share the costs between several uses, despite the apparent management conflicts. The solution is to take into account all the services provided by such multi-purpose initiatives and share the cost of management in an equitable way.
What is seen by many as an almost unbearable challenge for the agriculture sector - internalizing the externalities - might in fact be seen as a major opportunity to promote a sustainable development in rural areas. By only focusing on crop production, agricultural water management will become unsustainable in economic and environmental terms. But a much more refined appreciation of positive and negative externalities will recognize and reward all water uses and can reduce pressure on the environment while paving the way to economically balanced management. It is in this sense that agriculture needs to draw attention to the multiple roles and effects of agricultural water management in rural and urban areas, and to internalize them in the local systems of land and water governance.
