APPENDIX 7: COUNTRY CASE STUDY - WATER POLICY REFORM IN PAKISTAN

ACRONYMS USED

EXECUTIVE SUMMARY

Current situation

Pakistan made rapid progress in agricultural production from the 1960s to the 1980s due to a judicious mix of water, mechanization and fertilizer availability: in the 1960s, growth stemmed primarily from expansion in acreage and water resources; in the 1970s, most of the growth came from productivity increases. The area under cultivation increased rapidly as a result of increased water availability, leading to increasing food crop production and thus contributing to overall economic growth.

In the last 30 years, Pakistan has made substantial progress in developing surface-water infrastructure. Total water availability doubled between 1968 and 1997, going from 64 million acre feet (79×10⁹m³) to 134 million acre feet (165×10⁹m³). Since the 1980s, however, serious supply-side constraints have emerged in the water sector, leading in turn to stagnant agricultural production and yields.

The irrigation sector is plagued by problems of poor design, inequitable distribution, unreliable delivery, waterlogging, salinity, inadequate investment in operation and maintenance (O&M), and low water charges. These problems are compounded by lack of coordination between government agencies responsible for development and distribution of water supplies, and a lack of any serious attempt to address core issues.

The Indus Basin System in Pakistan is the largest natural-flow irrigation system in the world. The system design was originally conceived to maximize cropped area, with equitable distribution of water supplies and minimum administrative interference. Though development of barrages and reservoirs have increased control of water resources, distribution remains on historical patterns, with increasing mismatch between water requirements and use.

Lack of natural drainage in the Indus Basin System has been the major cause of salinity, compounded by seepage, rising water tables, inadequate water for the leaching requirements of soils, inadequate drainage of saline areas and the rapid increase in tube-wells during the last three decades. Investment in the system has been declining; whereas capital costs in the past were recovered from users over time, these have become insufficient to cover even O&M costs. Part of the problem is that water charges are not linked to O&M needs. Low surface-water charges are a direct outcome of treating water as a public good. Since water is considered free, there is a reluctance to pay for it. In addition, there are a variety of institutions involved in distribution and supply of water, O&M, and development and planning of water resources at provincial and federal levels, with inadequate coordination among agencies. The result is a poorly planned and inefficient delivery system.

Strategic options and recommendations for policy action

In today’s global economic climate, Pakistan needs to revisit the role of the government in agricultural sector, moving towards a renewed focus on economic decision making, conducive to enhancing the agricultural sector’s contribution to economic growth, food security and natural resource management.

Any future strategy for agriculture needs to recognize the importance of comprehensive water resource management, carefully combining both augmentation of water supplies and demand management policies, particularly those promoting efficient water use.

Key actions should include:

· Formulating a comprehensive water resource management strategy.

· Encouraging efficient functioning of the market, with greater private sector participation.

· Providing an enabling environment aimed at optimal crop production per unit of water consumption.

· Encouraging private sector participation in future irrigation investment.

· Promoting in the water sector policies that rely on demand management, aimed at encouraging private sector involvement in efficient use and delivery of water resources.

· Undertaking a programme of lining of water courses and canals.

· Concentrating any large investment undertaken by the public sector on salinity control measures, including constructing drainage facilities to lower water tables, disposing of saline water and providing for proper levelling.

· Encouraging private tube-wells as an effective means of providing drainage in saline water areas to lower the water table.

· Providing incentives for on-farm improvements - especially water conservation and land levelling - by the private sector.

· Enabling the extension services both to promote cost-effective measures for improving watercourses and to disseminate information on optimal crop water requirements.

· Enhancing coordination among the various public sector departments involved in water resources management, especially for assessment, planning and rehabilitation of areas affected by waterlogging and salinity, and for assessment of crop-related water requirements.

· Reorienting and improving technical advisory and extension services provided by the various provincial departments to farmer organizations. In this context, information mass media should be mobilized for educating farmers.

· Pursuing vigorously the programme envisaged under the National Drainage Programme (NDP) towards the development of private trading of water to enable the system to move towards greater efficiency and resource allocation. In this regard, the government could:

- enact the requisite water property rights legislation to establish the basis for legal water trading;

- restructure the irrigation departments;

- encourage formation of private farmer’s associations; and

- work towards bringing a greater area under the NDP programme, beyond the pilot stage.

1. INTRODUCTION

Irrigated land, accounting for around 90% of agricultural production, dominates the agricultural sector in Pakistan. The agricultural sector contributes around 26% to GDP and over 70% to exports, and employs over half of the labour force.

Pakistan has made rapid progress in agricultural production in the last 30 years as a result of a judicious mix of mechanization, and fertilizer and water availability. The area under cultivation increased as a result, and this expansion also contributed towards increasing food crop and livestock production.

However, since the 1980s, serious supply-side constraints have emerged in the water resources sector. As a result, the irrigated area has not expanded significantly. With increasing requirements for the agricultural sector, water availability is constrained.

There is a need to revisit agricultural policies, and water sector policies in particular, in Pakistan. For agriculture to become an engine of growth for the agrarian economy of Pakistan, there is a need to reorient policies towards greater efficiency and intensification of agricultural land and water use. For any meaningful increase in productivity of the agricultural sector, irrigation delivery efficiency is necessary.

2. AGRICULTURE AND WATER RESOURCES MANAGEMENT

The agricultural sector has vital linkages with overall economic growth, food security, poverty and environment. Agriculture has an important role in overall economic growth. According to an estimate for the Asian countries, a 1% growth in agricultural GDP is commensurate with a 1.5% increase in overall GDP. The importance of the agricultural sector, through both direct and indirect linkages to the other sectors in the economy, is particularly pronounced for an agrarian economy such as Pakistan.

As in many other developing countries, the government’s interventions in the agricultural sector were aimed at providing cheap and affordable food for the populace and raw material for the industrial sector, considered to be the engine of growth.

Most economic distortions which now appear in the form of structural constraints stem from the basic precept that the government should be responsible for providing food security and insulating farmers from price fluctuations. Output prices of agricultural commodities were kept artificially low - through direct controls, tariff and non-tariff barriers - to keep the cost of living down. At the same time, government policies supported agriculture by providing liberal input and output subsidies on fertilizer, mechanized inputs, seed and water.

Water resources management was considered synonymous with expansion of water resources, with little regard for demand management issues. During the 1960s and the 1970s, large investments were undertaken by the public sector. Groundwater development was pursued initially through public sector investments and later by encouraging the private sector by giving liberal subsidies for tube-well installation. Together with low electricity tariff charges for energy for tube-well pumps, subsidies on water became substantial. Between 1960/61 and 1980/81, the total area under irrigation increased by 43%. The area supplied from tube-wells increased from 250 000 ha in 1960/61 to 2.81 million ha in 1980/81 - an elevenfold increase in two decades.

Combined with the other input subsidies, increased water availability led to rapid increases in acreage and agricultural production, with concomitant agricultural growth. In the 1960s, growth came from expansion in acreage and water resources; in the 1970s, most of the growth came from productivity increases. However, by the 1980s yields had stagnated, primarily due to water resource constraints. Expansion in irrigated area was a mere 15% in the 15 years from 1980/81 to 1995/96.

Whereas expansion of water resources led to increased agricultural production and growth, it has also been a major contributory factor in waterlogging and salinity, sedimentation and overall resource degradation.

Due to distortions brought about by government interventions in the agricultural sector and the water sector, productivity in the agricultural sector has been circumscribed. Since the early 1990s, agricultural production of some of the basic food crops, wheat and edible oil has been unable to keep pace with the burgeoning population, which is expected to double every 25 years. Stagnant output levels has necessarily led to increased levels of food imports. Total food imports almost doubled from 1984-85 to 1995-96, mainly imports of wheat, pulses and edible oil. Imported wheat constituted 17% of total consumption in 1994-95; pulses were 21%; and edible oils a huge 72% (MFA, 1996).

With population growth at the high rate of 3.0%/year, the past policy of maintaining availability of subsidized food has had increasingly high costs associated with it. Though the government was successful in providing food to a large and growing population in past decades, direct and indirect interventions in the agricultural sector have led to distortions in input supplies, such as in water use. As a result of rising food imports, huge and increasing subsidies through public enterprises have put tremendous pressure on scarce budgetary resources. In the long run this has resulted in serious resource degradation problems and eroded the efficacy of the sector and defeated the purpose of cheap and affordable food for all.

At present, the major constraint on further expansion of land is limited water resources. The total cultivated area in Pakistan has been constant in the last two decades. The cornerstone of policies aimed at increasing agricultural production and food security is closely tied to natural resources management in general, and availability of water in particular. Future gains in agricultural expansion and productivity remain closely tied to efficiency of water use.

3. REVIEW OF THE CURRENT SITUATION

Pakistan covers a total land area of 79.6 million ha, of which the cultivated area is 21.6 million ha (GOP, no date). The agricultural sector in Pakistan is dependent on irrigation. Irrigated land constitutes 80% of total agricultural land compared to 25% for India and 35% for Indonesia.

The Indus Basin System in Pakistan is the largest natural-flow irrigation system in the world. The Indus Basin also encompasses one of the most favourable environments for large-scale intensive and productive irrigated agriculture. Field surveys conducted by the Government of Pakistan and the International Food Policy Research Institute termed Pakistan and Thailand as two Asian countries capable of producing exportable food on a sustainable basis into the next century (de Moigne et al, no date).

Pakistan’s agriculture is based on the oldest and the largest gravity-flow irrigation system in the world - the Indus Basin irrigation system. The agricultural sector is the major user of water in Pakistan. Irrigated agriculture provides 90% of food and fibre production in the country. Of the total 21.6 million ha of cultivated area, 80% is irrigated while the remainder is rainfed. While direct rainfall contributes about a minimal 10% to crops, the bulk of water for agricultural use comes from the irrigation system.

The irrigated area is supplied from both surface water and groundwater. The major source of water is the Indus Basin Irrigation System, which covers 17.2 million ha. The Indus Basin system comprises the Indus River, its tributaries, 3 major reservoirs, 19 barrages, 12 link canals, 43 canal commands and around 107 000 watercourses. Together with water courses and ditches, the total length of the system is around 1.6 million miles (2.6×10⁶km) (World Bank, no date).

Pakistan has made substantial progress in developing surface water infrastructure. Total water availability doubled from 64×10⁶ acre feet (79×10⁹m³) in 1965 to 134×10⁶ acre feet (165×10⁹m³) in 1996-97 (GOP, no date). The total water flows through the irrigation system in Pakistan amounts to 180×10⁹m³; of this, 131×10⁹m³ flows through the irrigation system via the canals, weirs and barrages; an additional 48×10⁹m³ is pumped from groundwater (World Bank, no date). A substantial part of the flow, however, is lost from the system through leakages and seepage, with little captured through recharges. An estimated 40×10⁹m³ passes to the sea.

Whereas the irrigated area increased by 63% between 1959/60 and 1989/90, it increased by only 1.8% during the next 8 years - an annual average increase of less than 0.5%. By 1995-96, the total irrigated area, supplied through canals, tube-wells, wells and others sources, was 17.2 million ha.

Pakistan has a total population of around 130 million. With an average rate of population growth of around 3.0%, it is expected to double every 25 years. This puts enormous pressure on agricultural resources - both land and water.

According to the Report of the Pakistan National Commission on Agriculture (MFA, 1996), a sustained growth of 5% per year in the agricultural sector requires an annual increase in annual water availability of 1.6%. On the basis of this estimate, Pakistan needs total water flows of 156×10⁹m³ through the canal command areas by the year 2000. This underscores the need to provide for an additional 25×10⁹m³ in the next three years.

4. WATER SECTOR POLICY ISSUES AND PROBLEMS

The irrigation sector is plagued by problems of poor design, inequitable distribution, unreliable delivery, waterlogging, salinity, inadequate investment in O&M and low water charges. These problems are compounded by lack of coordination between government agencies responsible for distribution water supplies and development, and a lack of serious attempts to address core issues.

4.1. SUPPLY-BASED IRRIGATION PROBLEMS

Pakistan’s irrigation system was designed to be supply based. The river water is diverted into canals and weirs and subsequently, through moghas, into smaller distributaries which are designed to self-adjust the flow to the farms in line with the flow of the canal. The canals are unlined and there are few structures to regulate the flow.

The system design was originally conceived to maximize cropped area with equitable distribution of water supplies and minimum administrative interference. Though development of barrages and reservoirs has increased control of water resources, distribution remains on historical patterns, with increasing mismatch between water requirements and use. The problem is particularly acute for tail-end users.

Whereas the original design was suitable for low cropping intensities, it leads to inequitable supply and contributes to rigidities in - and inefficiency of - operations.

4.2. INEQUITABLE DISTRIBUTION OF WATER

The irrigation system is characterized by inequitable distribution of water, particularly to the tail-enders. Water to the farmers at the head of the watercourse command is greater than to those at the end. Whereas losses due to seepage were taken into account when establishing the historical distribution pattern (on which the system is operated), increased seepage due to poor maintenance, leakages and illegal diversions have rendered these distribution pattern inefficient, with considerably reduced flows to tail-end farmers.

Due to inequitable distribution, farmers have resorted to groundwater pumping through increased use of tube-wells. With government subsidies on installation and operations, tube-wells supplement water availability and provide greater control in matching supply to requirements.

4.3. DRAINAGE AND SALINITY PROBLEMS

There have emerged several constraints on land resources in Pakistan brought about by irrigation and natural resource depletion. The flat topography of the land forming the Indus Basin System, together with the semi-arid climate, has led to drainage and salinity problems.

Lack of natural drainage in the Indus Basin System has been the major cause of salinity, aggravated by seepage, rising water tables, inadequate water for the leaching requirements of soils, inadequate drainage of saline areas and the rapid increase in tube-wells during the last three decades. Most of the excess water lost during irrigation flows to the sea due to the absence of natural drainage in the area. As a result, return flows are minimal. Surface and drainage systems have not kept pace with requirements, with maintenance emerging as a major problem, limiting yield and productivity.

The large canal irrigation system over the years has contributed to waterlogging and salinity, currently affecting 8% of the soil in the Punjab and around 15% in Sind and equivalent to an estimated loss of more than one third in annual yields on slightly saline areas and two thirds in moderately saline areas (World Bank, no date). According to an estimate by the Soil Survey conducted in 1981 for the government, around 8% of the gross command area was severely salt affected. A World Bank study estimates that around 25% of potential production of major crops is foregone due to salt salinity (World Bank, no date).

High evaporation in the semi-arid climate compounds the problem of salinity. Seepage from watercourses, canals, rivers and irrigated areas with inadequate natural drainage has led to a rise in water tables. The total area with a water table less than 5 feet (1.5 m) below the surface is estimated to be around 2.4 million ha (de Moigne et al., no date). Increasing diversion of water from rivers and canals over the years has led to a rising water table, compounding the problem of salinity in some areas. The sedimentation load in the Indus River is the fifth highest in the world and has contributed to loss of storage capacity in the Tarbela Dam reservoir at the rate of 14% every 10 years (de Moigne et al., no date).

4.4. LOW O&M AND INVESTMENT IN THE IRRIGATION SECTOR

Another factor responsible for the lack of efficient delivery of the irrigation system in Pakistan has been decreasing investment in the O&M of the system. Investment in the system has been declining; whereas capital costs in the past were recovered from users over time, these have become insufficient to cover even O&M costs. Part of the problem is that water charges are not linked to O&M needs. In addition, they are collected by the Provincial Irrigation Departments (PIDs) and become part of the general revenue. As such, the farmers see no direct benefits of any O&M accruing to them and are reluctant to support any increase in water charges.

Investment and spending on irrigation in Pakistan has been primarily undertaken by the government. Since the mid-1980s, public spending on irrigation has declined at the rate of 4%/year (de Moigne et al., no date). In 1983, the government undertook the first Irrigation Rehabilitation project, under which all provinces increased funding by 15% (World Bank, no date). Though these nominal levels were maintained, actual funding was much less, and has fallen short of requirements. Over the years, as budgetary constraints increased, capital investment in irrigation declined. Part of the problem has been the increasing inadequacy of recoveries. The World Bank estimated the funding gap between actual and the 1988 funding levels to be around 24% for 1992; around 24% in the province of Punjab and a high 37% in the province of Sind (World Bank, no date).

4.5. LACK OF INSTITUTIONAL COORDINATION AND DELIVERY CAPACITY

There are a variety of institutions involved in distribution and supply of water, maintenance, development and planning of water resources at the provincial and the federal levels, with inadequate coordination. The result is a poorly planned and inefficient delivery system.

There are various central and provincial government agencies involved in maintenance and distribution of water resources. At the federal level, the Water and Power Development Authority (WAPDA) is responsible for water resources management, assisted by MFA, the Geological Survey of Pakistan, and the Federal Flood Commission. The mandate of WAPDA encompasses water resources development, planning and execution of irrigation schemes, drainage, flood control, and prevention of waterlogging and salinity.

Each season, WAPDA assesses water availability, while water requirements are assessed and communicated to WAPDA by the PIDs, based on the capacity of individual canals and the storage policies related to the two seasons - rabi and kharif. Water released by WAPDA is then distributed within the canal command system by the PIDs. The design of the irrigation system enables the supply to self-adjust to water flows. As such, actual water availability depends on the pattern of supply at the canal head (World Bank, no date).

WAPDA is also responsible for O&M of the large reservoirs and inter-provincial link canals, while the maintenance of the system above the mogha is the responsibility of the PIDs. The farmers are responsible for maintenance of watercourses and channels. At the same time, drainage is the responsibility of the federal government and is developed by WAPDA, but handed over to the provincial departments. O&M costs are recouped through water charges or levying drainage cess, or a combination. In Punjab and North West Frontier Province (NWFP), water charges are estimated by the PIDs, and in the other two provinces by the Provincial Revenue Departments (PRDs). Collection of charges is the responsibility of the PRDs (World Bank, no date).

Lack of effective coordination among the multiple federal and provincial government agencies in water resources management and delivery has hampered water resources development and distribution. Insufficient planning and project preparation, inefficient management, poor O&M, and administrative problems at both the federal and the provincial levels have impeded efficient water supply in accordance with crop requirements, leading to system inefficiencies. As an example, the PIDs and the provincial agricultural departments have different administrative structures; whereas the administrative structure of the PIDs is based on canal command areas, that of the provincial agricultural departments is restricted to a district. As such, PIDs involved in assessing water needs for the canal command areas plan according to their jurisdiction, with little input to or coordination with the agricultural departments for planning optimal water supply for crop requirements.

Lack of institutional capacity has resulted in a weakening of management structures and enforcement capability of the statutory laws. Whereas large farmers resort to payments to government officials for additional water, others resort to illegal pumping. At the same time, farmers are unwilling to pay water charges, since in the face of these anomalies in distribution, they perceive water charges as not related to adequate water supply by the government departments.

Both as a result of design-based problems and of past low O&M inputs, the system efficiencies are low. The World Bank estimated that water delivery efficiency was around 30-40% from the canal to the root zone (World Bank, no date). Furthermore, due to both poor design and operational inefficiencies, the historical objective of equitable distribution of water is not being achieved. In particular, farmers at the tail end do not get sufficient supply of water. The self-regulating nature of the system leads to inefficiencies and a mismatch between water requirements and supply.

4.6. WATER CHARGES

As in other developing countries, water in Pakistan has been treated as a public good. Whereas non-exclusion of water may be a reality for river and canal water, due to ineffective control, irrigation should be regulated according to market-oriented principles at the lower tiers of distribution.

Historically, water charges have been kept low to provide an incentive for farmers to use more water. From 1959 to 1969, water rates were raised in the Punjab and NWFP. In 1978, the Government of Pakistan raised water rates by 25% for all crops. In addition to keeping water charges low, the government has subsidized private tube-well installation. A subsidy was also provided through low electricity tariffs. As a result, the area irrigated from tube-wells increased from 1.1 million ha in 1969-70 to 2.83 million ha in 1995-96 - an increase of over 150% (GOP, no date). Whereas tube-wells have contributed considerably towards minimizing erratic canal water supply and increasing water supplies to the farmer, their use has also led to low productivity of water per unit of consumption, with considerable waste.

Electrically powered tube-wells in fresh groundwater areas are charged a flat rate per month (though the choice of a variable levy was recently introduced with the 1997 national budget). Since the cost of pumping has been traditionally low, due to low tariffs, this encourages the pumping of unlimited water for use or sale.

Low surface-water charges are a direct offshoot of treating water as a public good. Since it is considered free, there is a reluctance to pay for it. Other concerns stem from the fear of possible monopolization of water by large farmers if it becomes tradable, with the concomitant danger of increased variability in water supplies.

However, the current - and ongoing - practice of payments to government officials for additional supplies indicates that many of the farmers are ready to pay for increased water supplies. Trading of water is common at the watercourse and channel levels, which are operated and maintained by the farmers themselves. According to WAPDA surveys, water trading occurs on around 70% of all watercourses, despite its prohibition under the Canal and Drainage Act, 1873 (World Bank, no date). The price of traded water in informal markets ranges from PRs 100 to PRs 400 per acre foot for privately pumped tube-well water; for that on the watercourses it ranges from PRs 100 to PRs 700 per acre foot. This is indicative of the willingness of farmers to pay for water when they are assured of delivery. This substantiates the argument that, if surface water is also allowed to be freely traded above the watercourse and channel level, farmers would be willing to pay for additional water supplies.

Table 1 Major constraints in the water sector - A policy matrix for Pakistan

Note: (1) 0 = least; 5 = most.

5. GOVERNMENT POLICIES AND ACTIONS IN THE WATER SECTOR

Government of Pakistan policies in the past have taken the form of response to emerging problems rather than trying to pre-empt them. The Government of Pakistan has been responsible for all investments in irrigation and drainage systems. The Indus System Rehabilitation Programme (ISRP) Phases I and II was undertaken for the rehabilitation of surface irrigation and drainage systems. However, even with the completion of both ISRP I and ISRP II in 1993, more than 18 000 km of canals remained in need of rehabilitation.

Fresh groundwater development has increasingly supplemented surface water for agricultural use in Pakistan. In the last ten years, the major contributory factor in increases in agricultural growth was the rapid growth in use of groundwater, especially by tail-enders and in the face of inequitable and erratic supplies. Under the national Salinity Control and Reclamation Projects (SCARP) programmes, public tube-wells were transferred to the private sector, which encouraged the growth of private tube-wells for augmenting supplies for agricultural use.

Flat topography and lack of natural drainage has resulted in surface and sub-surface drainage problems in the irrigated areas. In the 1960s, the Government of Pakistan, with World Bank support, embarked upon a 10-year SCARP programme for controlling waterlogging and salinity through groundwater resources development. The programme consisted of providing 31 500 public tube-wells, 7 500 miles (12 000 km) of major drainage channels and 25 000 miles (40 000 km) of supplementary drains in 10 areas of Punjab and 16 of Sind. In 1973 this was supplemented by a government-funded, accelerated programme focusing more on groundwater development and making drainage a by-product only. Of a total of 17.7 million ha, about one-third requires drainage; of this area, 1.8 million hectares are currently included in the SCARP programmes (World Bank, no date). A total of 43 drainage schemes are proposed in the current Eighth Five-Year Plan 1992-97. In saline groundwater areas, SCARP tube-wells provide sub-surface drainage, while in freshwater areas they supplement irrigation. In the early 1990s, installation of private tube-wells was encouraged by the government, and, under the SCARP Transition Pilot Projects, private tube-wells were installed while public tube-wells established under the earlier SCARP programmes were privatized, with their ownership and management transferred to the private sector.

The government has also sponsored high-return investments towards improving the delivery efficiency of the system. The On-Farm Water Management (OFWM) projects, initiated in 1981, were aimed at improving watercourses, providing water extension services and developing farmers’ associations. By 1990, 17 000 water users’ associations (WUAs) had been formed under the projects, aimed at providing farm labour to rehabilitate watercourses which are controlled by the farmers themselves. WUAs were given a legal status to undertake maintenance and registered with the provincial authorities. Another objective of the pilot projects was to encourage formation of farmers groups for collective planning, construction and operation of irrigation and drainage schemes and for water extension services.

Though successful under the project, the benefits did not spread to other areas as had been expected. Improvements in watercourses remained limited to OFWM project sites. By 1990, out of a total of 107 000 watercourses, only 17 715 had been improved, with another 7 685 expected by 1995. WUAs did not take off in terms of becoming self-sustaining collective action groups. Part of the problem in recent years was that the government component of funding (70%) was not always forthcoming due to national budgetary constraints, but a major reason was that, traditionally, farmers had their own system of maintenance and of collective decision making through village committees. Once the project funding finished, the WUAs became more or less dormant.

In 1997, with the help of the World Bank, the Asian Development Bank and the Japan Overseas Economic Cooperation Fund, the Government of Pakistan embarked upon a National Drainage Programme (NDP) aimed at promoting agriculture by reducing waterlogging and salinity. The NDP is a 25-year programme, with a budget of $US 785 million, of which the Government of Pakistan will contribute 30%. The programme is aimed at rehabilitation and improvement in drainage of around 13.5 million acres (5.4 million ha) of waterlogged area, reduction in soil salinity, and better O&M of the irrigation system.

Under the NDP, revisions in the institutional structure are envisaged, aimed at improving revenue collection and coordination among administering departments, and a gradual shift and ultimate takeover by private farmers’ organizations. Autonomous Provincial Irrigation Development Authorities will be set up in canal command areas, with responsibility for delivery of water allocated in the canal command areas and for levying and collecting O&M charges on behalf of the government agencies. At the same time, existing farmers’ organizations will be strengthened, and new ones encouraged, to engage in water resources management for development of private trading in water in the long term. Farmers’ organizations are already involved in trading of water, though on an informal basis, at the watercourse level. The NDP seeks to strengthen farmers’ organizations as a first step towards better revenue collection and service delivery, and to encourage private sector organizations to mature into entities capable of efficient service delivery when these functions shift from the public sector to private farmers’ organizations. Financing would be provided to farmers’ organizations for developing water supplies through additional tube-wells or though purchase of water from other organizations. Though initially on a pilot basis in a few canal command areas, the programme is a promising first step towards establishing private water markets in Pakistan.

The new government which took office in March 1997 has given considerable attention to revitalizing the agricultural sector with the objective of improving food security and enhancing agriculture’s contribution to economic growth. Support prices for various crops have been increased to bring them in line with international parity prices; improved agricultural credit is being provided and a renewed emphasis has been placed on the promotion of agricultural research. NDP aims to improve irrigation and drainage facilities. To reduce dependency on imported wheat, 1998 has been declared the ‘Wheat Year’ for Pakistan.

6. STRATEGIC OPTIONS: RECOMMENDATIONS FOR POLICY ACTION

In today’s global economic climate, Pakistan needs to revisit the role of the government in the agricultural sector, to move towards a renewed focus on economic decision making which is conducive to enhancing the agricultural sector’s contribution to economic growth, food security and natural resources management. Under the economic reform programme, distortions - including budgetary subsidies in agriculture - have been removed. The few remaining are in the process of being dismantled.

Agriculture in Pakistan is, among other factors, severely constrained by the availability of water. The future agricultural strategy needs to take cognizance of comprehensive water resource management involving both augmentation of water supplies and policies for demand management, particularly those promoting efficient water use.

In order to meet the growing food requirements of the country, a comprehensive water resource management strategy needs to be formulated, taking into account macro-economic parameters of a growing population, growing demand for various food items, investment requirements and public sector budgetary constraints.

The government should limit its intervention in the agricultural sector to policies which encourage efficient functioning of the market and greater private sector participation.

The role of the government should be limited to providing an enabling environment aimed at optimizing crop production per unit of water consumption.

Macro-economic issues and budgetary constraints indicate that the private sector should be encouraged to participate in future irrigation investment.

Irrigation at canal level and above, as well as drainage, requires huge investments that the private sector may not be willing to undertake in Pakistan. As such, investment in both of these are likely to remain in the public sector. A few investments are ongoing, while others are planned in the Ninth Five-Year Plan. However, in the face of severe budgetary constraints in the short term, water sector management should rely on demand management and on encouraging private sector involvement in water management, especially for more efficient use and delivery of water resources.

A detailed programme of lining of watercourses and canals should be prepared.

Any large investments undertaken by the public sector should be directed towards salinity control measures, including construction of drainage facilities to lower the water table, disposal of saline water and provision for proper levelling.

With high returns, the private sector can be effectively mobilized for groundwater development, on-farm improvements and construction of field-level drains. Private tube-wells should be encouraged as an effective means of providing drainage in saline water areas to lower the water table, especially where water tables are very close to the surface.

As a matter of policy, incentives should be given for on-farm improvements by the private sector for water conservation and land levelling.

Cost-effective measures for improving water courses should form part of expanded extension services, which should also disseminate information on optimal water requirements for crops.

Coordination among the various departments is required. Inter-agency cooperation between federal government agencies, such as WAPDA, and the PIDs and provincial agricultural departments is necessary for water resources management.

Similarly, the Food Control Commission and the provincial departments should confer regularly for assessment, planning and rehabilitation of areas affected with waterlogging and salinity. Water assessment for crop requirements should be taken conjunctively by the PIDs and provincial agricultural departments.

The various provincial departments should reorient and improve technical advisory and extension services for farmers’ organizations. In this context, the mass information media should be mobilized for education of farmers.

Whereas a good start is being made under NDP, the momentum needs to be maintained. The programme envisaged under NDP should be pursued vigorously towards the development of private trading of water to enable the system to move towards greater efficiency and resource allocation. In this regard, the government should consider:

• enacting the requisite water property rights legislation to establish legal water trading;
• restructure the irrigation departments;
• encourage formation of private farmers’ associations; and
• work towards bringing a greater area into the NDP programme, beyond the pilot stage.

BIBLIOGRAPHY

de Moigne, G., et al. No date. Country experiences with water resources management: economic, institutional, technological and environmental issues. World Bank Technical Paper, No. 175.

GOP [Government of Pakistan]. No date. Economic Survey 1995-96.

GOP. No date. National Conservation Strategy.

GOP. No date. Report of the National Commission on Agriculture.

MFA [Ministry of Food and Agriculture]. 1996. World Food Summit Country Position Paper on Food Security: Case of Pakistan.

World Bank. No date. Pakistan: Irrigation and Drainage, Issues and Options. Washington DC: World Bank.