APPENDIX 4: COUNTRY CASE STUDY - A FRAMEWORK FOR THE DEVELOPMENT OF A WATER POLICY REVIEW FOR CYPRUS

EXECUTIVE SUMMARY

Cyprus is the largest island in the eastern Mediterranean, with an average annual precipitation of about 503 mm. There are no perennial rivers in the island, and about 36 000 ha, out of a total cultivated land area of 141 000 ha, is currently under irrigation. Improved irrigation methods are widely used, with drip systems predominant. Although irrigated land comprises only 25% of the cultivated land, it contributes 60-70% of the value of production. Hence the importance of irrigation in Cyprus.

Annual water consumption is currently 215×10⁶m³, of which 75% is used for irrigation purposes. The balance is used for domestic purposes and, to a much lesser extent, for industrial uses. The total water needs are projected to increase to 287×10⁶m³/year by 2020. Current water consumption is estimated to exceed the safe yield of the groundwater sources by 40×10⁶m³/year, (island-wide). Hence the aquifer is being used on a non-sustainable basis. In fact it is being mined. There is little scope for obtaining incremental local conventional water supplies. Current plans and studies exist for the eventual construction of another 100×10⁶m³ of storage space - current existing storage space amounts to 297×10⁶m³ - in various sites, but it is doubtful whether much of the impounded water will really be incremental to the existing supplies. In parallel with these plans, the Government is promoting the use of tertiary treated effluent for irrigation and the use of desalinized seawater for domestic purposes.

Both public and private irrigation schemes operate in the country. Public-sector-operated schemes are based on both surface water, stored during the winter in dams, and on tube wells. These schemes provide water for the users at full cost for domestic purposes and at subsidized prices for agriculture, currently set at 34% of the weighted average cost of all schemes. These rates are higher than those set by other countries with agroclimatic conditions similar to those prevailing in Cyprus. Private schemes recover whole cost for both types of water, although schemes operated by Irrigation Divisions and Associations or by Village Improvement Boards, in the case of domestic water supplies, are eligible for subsidies and long-term loans to assist in the construction phase. In both cases the water is piped to the end user and measured in cubic metres, at the individual field or household level. It is therefore easy to charge users on a volumetric basis, and this in fact the case.

Water quality is generally good for both domestic and field use. Recently, insecticide residues and high nitrate concentrations have been found in dam and tube-well water respectively. Water salinity is increasing in coastal areas, where intensive pumping has exhausted the aquifer and sea intrusion has occurred.

To bring about the highly crucial balance needed between supply and demand, it will be necessary, inter alia, to curtail expansion of the irrigated sector; to reduce water losses in the conveyance systems and field water applications especially in hilly areas; to change cropping patterns in favour of less water-intensive crops, grown preferably during the winter months; to marginally increase water tariffs in agriculture; and to initiate a vigorous public awareness campaign regarding the acute problem that exists. Tertiary treatment and re-use of effluent should also be further encouraged, together with increased use of desalination.

In parallel with these efforts, the existing legislation should be consolidated and updated. One sole Ministry should be delegated responsibility for implementing the legislation.

1. INTRODUCTION

Cyprus, a semi-arid country, is the largest island in the eastern Mediterranean, with a land area of 924 000 ha, of which only 63% is controlled by the Government^[1]. The mean annual rainfall is 503 mm, but most precipitation falls in the winter months of December to February. There is, however, substantial variation in rainfall, which ranges from 290 mm/yr in the East to 1 190 mm/yr in the Troodos mountains. Furthermore, there is considerable inter-annual variation in rainfall, with the occurrence of two or three years of below average rainfall being quite common. Statistically, there has been a 12% drop in annual precipitation since the beginning of the twentieth century, indicating a downward trend, which is of serious concern. This necessitates optimum planning for the preservation and management of the island’s water supplies. No river in Cyprus provides perennial flow, and there are of course no international rivers traversing the territory. Snow falls frequently during the winter in the Troodos mountains.

The total agricultural land area, crop and fallow, according to the 1994 Agricultural Census, was about 141 000 ha, of which about 36 000 ha was under irrigation, covering about 25% of the cultivable land and accounting for 60-70% of the total value of production. Historically, there has been an effort to increase the area under irrigated crops. Since there are no perennial rivers in the island, initial efforts concentrated on utilizing spate or spring irrigation water during the winter months, to be followed by shallow wells and larger, deep tube-wells. Following independence in 1961 and after the utilization of the groundwater resources, emphasis was directed at collecting and storing water in reservoirs or dams during the winter months for use throughout the year or between years. Total dam capacity had reached 297×10⁶m³ by 1994, up from 6.1×10⁶m³ in 1961, and there is now only limited scope, if any, for further increasing this capacity. Interbasin transfer of water is assured through the Southern Conveyor, stretching from the water-rich west to the water-deficit east; a pipeline 110 km long, ranging in diameter from 1 400 mm to 800 mm.

The conveyor is connected to most major dams, thus facilitating interbasin water transfers as needed. All irrigated areas of Cyprus use improved irrigation technology, mainly drip irrigation, with little room for improvements in this field. Water consumption was estimated at 215×10⁶m³ in 1994, with irrigation accounting for 75% of the consumption, and industrial, municipal and tourist demands, 25%. Water, for domestic supply purposes, is provided from the large dams, most of which have a dual purpose, and, following treatment, is piped to the various cities and villages. Groundwater is also used, and combined use of ground- and surface water is quite common. Agriculture’s contribution to GDP currently amounts to about 6%, down from 7.5% in 1988, and provides 10% of employment. Nevertheless, agricultural exports continue to account for about 25% of merchandise exports and a further 11% of processed agricultural products. In recent years there has, however, been increasing demand for water for tourist and municipal use, and this trend is likely to continue. Projections indicate that, if present water policies are retained, water demand can be expected to increase from 215×10⁶m³ (1994) to 287×10⁶m³ (2020). Cyprus has no substantial quantities of incremental water, from conventional sources, which are currently unutilized and which can be used to meet this projected demand over the next twenty years. Hence the need to develop and implement as quickly as possible an efficient water sector policy.

This paper could serve as a guideline towards formulating such a water sector policy for Cyprus and it follows, to the extent possible, the guidelines presented in the FAO/UNDP/World Bank publication (FAO, 1995).

2. WATER RESOURCES: THEIR UTILIZATION AND GOVERNMENT POLICIES

2.1. SURFACE WATER RESOURCES

Island-wide, Cyprus is divided into 9 hydrological regions, each of which is subdivided into distinct catchment areas. With the exception of a few minor streams at elevations over 1000 m, fed by the melting snow, there are no rivers in any watershed with a perennial flow.

2.2. GROUNDWATER RESOURCES

The main groundwater aquifers are the Western Mesaoria, Kokkinochoria, and the Akrotiri. Smaller aquifers exist in other parts of the country, particularly near the coast and in restricted river valleys.

Collectively, these three sources in 1994 provided a total of 215×10⁶m³ of water for both irrigation (160×10⁶m³) and domestic, including industrial, use (55×10⁶m³). The trend in recent years, which is likely to continue and intensify in the future, is that increasing quantities of water will be used for domestic water supplies at the expense of agriculture. This has been necessary, and will continue to be so, in view of the increasing standards of living and expansion of the tourist trade and industrialization on one hand, and, on the other hand, the limited total water available.

A water balance cannot be easily constructed for the Government-controlled area of Cyprus. A water balance for the whole island, however, now in urgent need of review, especially in view of the reducing annual average rainfall, indicates 900×10⁶m³ of renewable water resources per annum. About 600×10⁶m³ is considered to be surface runoff, of which up to 190×10⁶m³ is stored in reservoirs and hence available for use. Another 150×10⁶m³ is used for spate (run-of-the-river) irrigation and 260×10⁶m³ is lost to the sea. The natural aquifer recharge is estimated at 300×10⁶m³, of which about 270×10⁶m³ is pumped out or emerges from springs, with 70×10⁶m³ passing to the sea. Thus the total island-wide extraction from the aquifer is estimated at 340×10⁶m³/yr. On this basis, there could be up to 40×10⁶m³/yr of excess pumping over natural recharge. As a consequence of this “mining,” the whole of the island is experiencing a gradual but continuous decline in groundwater yield, a lowering of the water table, and - in certain areas - water salinification due to sea intrusion.

2.3. WATER QUALITY

Water quality problems in Cyprus are due to the presence of salts, and pollution from agriculture. High salt concentrations are becoming increasingly important in groundwater, due to overpumping and subsequent sea intrusion into the aquifer. Recent studies have also indicated that reservoir water is becoming increasingly polluted with chlorinated pesticides. A substantial part of the samples from reservoirs have been found to contain more pesticides than the higher permissible levels set by the European Union.

Water from wells is, however, free of pesticide residues, although higher-than-acceptable levels of nitrates are common in intensively farmed areas. Almost the entire population is provided with piped water for domestic purposes, treated to international standards, either from Government works in the urban areas or, in the case of rural areas, from Village Commissions who have the right to establish their own agency for developing local resources for domestic water supply. In such a case, they usually set up their own administrative structure and tariffs for users so that operation and maintenance (O&M) as well as a portion of the capital cost are recovered.

2.4. WATER LEGISLATION

The relevant legislation in Cyprus is rather complex, being covered by about fifteen laws, some of which have been in existence since the colonial era, covering all aspects of ground- and surface water extraction and storage respectively, as well as use. Basically, all ground- and surface water resources are vested in the State, and the Government has the power to construct and operate waterworks and to sell the water at prices fixed by the Council of Ministers and approved by Parliament. Existing legislation also allows for the Government to give permits to the private sector to drill wells, or construct irrigation works following an appropriate application and permit.

Water from Government-owned water structures (dams or wells) is usually pressurized and metered to users, who are charged at a fixed rate per cubic metre of water consumed. Owners of wells or other irrigation works - either individually or collectively (Irrigation Divisions) - carry out the construction and operation of these structures with private investment. Irrigation Divisions or Associations are assisted by public funds in the form of subsidies or long-term loans, or both, and pay no tariffs to Government for the use of the water. All farmers have the right to form Irrigation Divisions or Associations, and, following the granting of permits, to construct and manage irrigation schemes.

In 1994, approximately 50% of the irrigation water (80×10⁶m³) was derived from government-owned works, and the remaining 50% from non-governmental schemes The latter are of course responsible for O&M of their system, and members are charged an appropriate annual sum to cover capital costs and interest, as well as O&M.

Existing water rights, usually associated with spring water in the mountainous areas, are honoured by the Government. These are of no great significance, however.

2.5. CURRENT WATER TARIFFS

Currently, water originating from government-owned and -operated waterworks and which is used for municipal and industrial purposes is sold at full cost, under the provision for full cost recovery, i.e., depreciation as well as O&M. In general, these tariffs are progressive, a factor which tends to discourage misuse or waste of water, and vary depending on the local cost of the individual structures whence the water is derived. In exceptional cases, for small and isolated communities, domestic water supply can be partially subsidized. Such subsidy, for capital expenditure only, varies from 50-80%. Metering at individual household level is universal in Cyprus, which makes tariff collection possible and precise.

At the same time, the tariffs that can be set by the Government for irrigation water are currently limited to a maximum of 40% of the average cost of water (capital as well as O&M) from all government water works. In exceptional cases this can be increased to 65%. The rates currently charged cover only 34% of the above target (equivalent to a tariff of 6.5 Cyprus cents; approximately $US 0.12/m³) and draft regulations to increase this to 38%, allowed under existing legislation, had not been approved by Parliament, which has the ultimate authority over any increase in the cost, up to the maximum covered by existing legislation. Again, the distribution network is equipped with meters at the farm level, which makes the water quantity obtained precise. The present tariffs are sufficiently high to cover most O&M expenditure, and to encourage farmers to use efficient irrigation systems, hence, with the possible exception of some restricted mountainous areas, the almost exclusive use of drip irrigation technology in Cyprus today. Certainly these tariffs are higher than those prevailing in most neighbouring countries, but nevertheless, water from government waterworks is still subsidized annually to the extent of about $US 30 million. However raising tariffs to above 38% of the average unit cost of water could well discourage irrigated agriculture and lead to further urbanization, with all its associated social problems. At the same time, it would encourage farmers to re-orient quickly to crops with lower water requirements. Any water saved from the agricultural sector could become increasingly available for use by other sectors of the economy, which already pay full water cost.

2.6. NON-CONVENTIONAL WATER SOURCES

2.6.1. Treated effluent

This is not currently widely used in Cyprus. With the completion of central sewage plants in all major cities, it is expected that about 25×10⁶m³ of incremental water will be available for use by the year 2020. Most of this water will, however, be used for recreational purposes, including parks, hotel gardens, golf courses, etc., rather than in agriculture.

2.6.2. Water desalination

The first large sea desalination plant was commissioned in 1997. Its current capacity is about 7×10⁶m³/yr, but is expected to be doubled by 1998. Further desalination plants are currently being planned. This water is used exclusively for domestic purposes. The current cost per cubic metre is about 54 Cyprus cents ($US 1).

2.6.3. Other non-conventional water sources

Importation of water from abroad by tanker or in large water bags, or augmentation of rainfall by cloud seeding, are also potential alternatives. However, these have not been studied in depth and no information is available on their potential costs and benefits. Evaporation suppression from water surfaces is also a potential incremental source of water supply.

3. CURRENT ISSUES AND PROBLEMS

Based on the water assessment outlined in Section 2 above, it is clear that the current water supply situation in Cyprus is not only highly critical, but also unsustainable. The groundwater aquifer is already being overpumped - in fact mined - by at least 40×10⁶m³/yr (whole-island basis). Furthermore, recent water shortages have required rationing of water for both irrigation and domestic use, a process which has had to be increasingly resorted to in an effort to safeguard the existing, scarce water resources. Water pollution, in terms of salinification due to overpumping of the aquifer and consequent sea intrusion, is becoming increasingly apparent in the coastal aquifers. Pesticide residues are quite common in surface water stored in dams, and high concentration of nitrates can be found in the ground aquifers in areas which are intensively farmed.

Current government plans or projections to increase water storage capacity by about 100×10⁶m³ through the construction of new dams or small reservoirs are unlikely to lead to substantial incremental water supplies, since some of the new structures planned will impound water either already impounded by other dams further downstream or water that is already used to recharge the aquifer, which is subsequently pumped for irrigation purposes. Such dams could, however, provide better equity in that they could make water available to new areas, though to a large extent at the expense of currently irrigated lands.

To meet this current challenge and to plan for future needs for both agriculture and domestic water supply, it is necessary to formulate now a water policy, accompanied by specific strategies which can be put in place, in a clearly defined plan, over time. In the first instance, however, it is necessary to define clearly the existing issues and problems. Table 1 presents the basic problems in summary form.

Table 1 Problem matrix for the water sector in Cyprus

4. WATER POLICY OBJECTIVES

Noting the problems, issues and constraints identified in the foregoing analysis, the basic objectives of the Water Policy of Cyprus should be:

· To secure a balance between supply and demand which will be sustainable over time and at the least possible cost.

· To keep in check increasing demands for water by appropriate pricing mechanisms, and through appropriate information to the end users.

· To apply irrigation water more in line with actual plant requirements and not necessarily on a regular, calendar basis.

· To modify, to the extent possible, cropping patterns in favour of crops with lower water requirements, or promote annual winter grown crops which require considerably less irrigation water for growth and production.

· To reduce losses of domestic water from urban water supply distribution systems and to increase the efficiency of domestic water use.

· To emphasize high-value crops.

5. STRATEGY OPTIONS AND EVALUATION

To achieve the objectives outlined in Section 4, it would be necessary to develop an appropriate strategy, based on an evaluation of the potential options that might be available, using criteria that include effectiveness, efficiency, equity, public health, environmental impact, political and public acceptability, sustainability, administrative feasibility, international effects and others. These criteria are discussed in FAO, 1994.

5.1. STRATEGY OPTIONS

5.1.1. Water pricing

Currently, domestic water users are paying full water costs, i.e., capital as well as O&M, although this pricing policy has not yet been adjusted to include the cost of desalination of sea water, amounting to 7×10⁶m³/yr, provided initially in early 1997. According to existing legislation, water fees for irrigation are currently limited to 65% of the weighted cost of water. The current fees amount to 34% of the average unit cost, or $US 0.12/m³, out of a total average cost of $US 0.37/m³. Indicatively, current tariffs for water to growers result in water costing about $US 1 100/ha for citrus; $US 360/ha for spring potatoes and $US 400 to 800/ha for vegetables. These costs represent a substantial part of the total production costs, which not only precludes the production, and hence irrigation, of low-value crops, but in fact encourages farmers to optimize water use; hence the very wide application of drip irrigation. Increasing the water tariffs much beyond the current level would make the cultivation of most of the crops unsustainable. A marginal increase, say to 38%, could probably be absorbed through the further optimization of water use per unit area. For comparison, these charges are overall higher than charges currently levied in other countries with similar agroclimatic conditions.

5.1.2. Recycling of treated municipal water

By the year 2020 there should be an estimated annual tertiary treated quantity of water of 25×10⁶m³, up from 21×10⁶m³ in 2010 and 11×10⁶m³ in 2000. It is likely, however, that the high cost of the water distribution systems potentially needed, due to the geographical distribution of the urban areas vis-à-vis the main irrigation areas, will limit the use of this water substantially to amenity purposes, such as hotel gardens, parks and golf courses. Regardless of this possibility, the use of this water for amenity purposes could release other water, of suitably quality, for use in agriculture or for domestic purposes.

5.1.3. Desalination of seawater

This method, in spite of its high cost, is likely to play an increasingly important role in the future supply of domestic water in Cyprus.

5.1.4. Increasing water efficiency by reducing losses

In agriculture, there is little margin for improving either the conveyance or the field water application, both of which are already of high standard, with some minor exceptions in the mountainous areas. There would, however, be some margins for improving the agronomic water use efficiency, through the use of water according to actual plant needs.

On the domestic water supply side, mainly in the case of the municipal distribution systems, there remains potential for conserving water. As noted earlier, unaccounted-for water is now 23% of the total domestic sector. Although these figures compare favourably with the average “losses” in developed countries (25%) and for developing countries (40%), it is far too high for a water-scarce country like Cyprus, and has to be reduced. A 7% reduction in overall annual losses, i.e., reducing leakage to 16%, would imply a water saving of close to 4×10⁶m³/yr.

5.1.5. Modification of current cropping patterns

Some of the crops cultivated in Cyprus are water-intensive perennial crops, such as citrus or banana, or summer-grown vegetables, etc. Within the context of Cyprus’ potential European Union Membership and the associated need to restructure agriculture in order to become more competitive, it would be appropriate to investigate other options, such as emphasizing winter-grown crops, e.g., protected vegetables and flowers, which have water requirements lower than summer-grown alternatives, thus conserving scarce water supplies.

5.1.6. Maintaining water quality

It will become increasingly important to monitor carefully water quality and to take early action, legal as well as through intensive public awareness campaigns, to ensure that the quality of the water is maintained.

5.1.7. Control of the rate of reclamation of land for irrigated agriculture

Current incentives, including any subsidies, to increase the extent of irrigated land would need to be reviewed, since neither the potential labour force nor the water needed for irrigation purposes are available.

5.2. EVALUATION OF INDIVIDUAL OPTIONS

The options available and described in the previous paragraphs are brought together in the summary evaluation tables below.

All of the options tabulated below, because of the administrative, legal and institutional framework in place in Cyprus to day, can be implemented quickly once the political decisions are made. Three possible options have been analysed no further, namely the possibility of obtaining incremental quantities of conventional water sources for irrigation; substantial increases in water tariffs; and the option for maintaining water quality. This has been done for two reasons. With a current deficit of about 40×10⁶m³/yr, and almost complete utilization of all water resources, it is highly unlikely that new, substantial, sustainable and truly incremental water supplies can be made available in the country through the construction of additional dams. The full recovery of water costs by a substantial increase in the water tariffs is technically impossible to implement, since the growers’ net cash flows will be negative and they will not be able to pay. As regards water quality, the Government is already fully committed to maintaining and improving it.

The implementation of any water policy would be facilitated by consolidation and updating of the existing legislation, which has been made over the years on an ad hoc basis. The allocation of all responsibility to a single Ministry, with provision for consultations, could lead to better management of the water resources. Currently, responsibility is shared between the Ministries of Agriculture and of the Interior.

Table 2 Desalination of seawater

Table 3 Treatment of municipal sewage to tertiary level

Table 4 Reduction of unaccounted-for water in municipal distribution networks

Table 5 Water pricing (Increased to 38% of average cost for irrigation purposes)

Table 6 Modification to current cropping patterns

Table 7 Control of the rate of land reclamation or conversion of rainfed to irrigated land, or both

6. CONCLUSIONS

In view of, on the one hand, the significance of water in the quality of life as well as in the economic development of the country, and, on the other, the extreme scarcity of water, it is imperative that a National Water Policy be redefined for Cyprus, in order to ensure the sustainability of the country’s water resources and investments. This will ensure continued improvements in the quality of life for all its citizens, as well as economic development at minimal cost to the environment.

This paper has attempted to present the current water situation in the island, which is already unsustainable when extraction is exceeding recharge by up to 40×10⁶m³/yr island-wide, equivalent to about 20% of the annual water consumption in Government-controlled areas, and to present various strategy options aimed at adjusting annual water consumption to sustainable levels. Other potential options - including importing large quantities of water from abroad for domestic use, augmenting rainfall by cloud seeding, and suppression of evaporation from open water surfaces - have not been examined in this paper since not enough is known about potential cost and other implications.

As a result of this analysis it is possible to note that no single option is potentially available to resolve the Cyprus water problem. However, all options analysed, if applied holistically in a well thought out plan, to be implemented over time, would offer the necessary option for balancing supply and demand. It would be difficult to rank individual options in order of their acceptability following conventional economic criteria, since most of the criteria used have a fairly similar evaluation in most cases. However, an attempt has been made to rank them in order of their potential socio-political acceptability. Such a ranking could be prioritized as follows:

• Reduction of water losses from municipal distribution systems.
• Tertiary treatment of sewage water.
• Desalination of seawater.
• Increasing agronomic water use efficiency.
• Modification of current cropping patterns.
• Control of the rate of horizontal expansion of irrigated land.
• Increasing water prices for irrigation purposes to 38% of average costs.

In the process of preparing any new National Water Policy, it will be necessary to emphasize the issue of public awareness and the close involvement of all consumers and NGOs involved. The implementation of the holistic process identified above - or indeed any individual component - is not going to be painless, and the public has to be made aware of the issues and to be involved in the process. Failing this, implementation will be extremely difficult.

Finally it should be noted that all the options identified in this paper need to be further analysed and justified technically, economically and socially, bearing in mind the future socio-political developments on the island and potential admission to the European Union. Current and future political developments in the island will be especially critical, since both the Greek and Turkish communities will be substantially drawing upon the same groundwater aquifer in certain parts of the island. Aspects of food security and their significance should also be examined.

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Anon. 1997. Draft Strategy for Cyprus National Agricultural Development. Horizon 2010.

Cyprus Agricultural Research Institute. 1992. Norm input-output data for main crop and livestock enterprises in Cyprus.

Department of Statistics [of Cyprus]. 1994. Agricultural census.

FAO. 1994. Reforming water resources policy: a guide to methods, processes and practices. [Republished in 1995 as FAO Irrigation and Drainage Paper, No. 52]

FAO. 1995. [FAO/UNDP/World Bank] Water policy review and strategy formulation. A general framework. FAO Land and Water Bulletin, No. 3.

FAO. 1997. Irrigation in the Near East Region in figures. [FAO] Water Reports, No. 9.

Loizos Cr. Hadjioannou. 1987. The Climate of Cyprus: Past and Present. Meteorological Service of the Ministry of Agriculture and Natural Resources, Nicosia.

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