This FAO Water Report presents a review of international knowledge and experience in charging for irrigation services, drawing from published literature and six commissioned case studies in five countries. Together, these sources provide a broad spectrum of theory and practice, from less-developed to more-developed countries. The purpose of the report is to make available the results of a Department for International Development (DFID) (United Kingdom) funded project to a wider audience in the hope of stimulating thinking about the practicalities of charging for irrigation water and, to an extent, explode a few popularly held myths about water pricing in agriculture.
Policies of water pricing are affected by, and in turn affect, a large number of other important issues in the irrigated agriculture sector, for example, operation and maintenance; turnover and water user associations; rehabilitation and modernization of systems; increasing competition for available water with other sectors/users; international trade and commodity pricing.
However, there is still a considerable lack of understanding of what impacts can be realistically expected from water pricing policies in practice. In order to focus attention on such a fundamentally important point, it was decided to confine the scope of this document to charging for defined objectives in irrigation, principally, for cost recovery and for limiting demand for water. Associated issues, including the ones set out above, are identified in the text but are generally not dealt with in detail.
To bring about any significant change in water use requires that users be charged volumetrically at prices many times greater than those required to cover costs. These issues present important technical and political challenges that must be recognized. The document underscores these important differences in objective and indicates the type of charging mechanism or other economic tool that may be appropriate to each.
An extensive bibliography is provided to help the reader interested in the broader background to the subject.
There is extensive debate and literature focused on the likely consequences of future trade liberalization under the Doha Development Agenda (DDA) of the World Trade Organization (WTO). Much of that debate focuses on the potential effects of trade reform on issues of poverty, welfare and national economic growth and development. This position paper aims to provide a brief review of those larger themes before moving on to examine what the consequences of trade reform may be for the irrigated agricultural sector. Preparation of this position paper was prompted by the following types of question:
Will the implementation of balanced, multilateral trade reform under the WTO bring about changes in commodity prices, market access and product dumping on a scale that will significantly alter the current role and status of irrigated agricultural production?
Will anticipated rises in commodity prices increase the viability of new investment in irrigation infrastructure?
Are small-scale irrigation farmers in a position to respond to changes in the global market?
Can such farmers compete with large-scale farms in their own countries and in the North?
What should be the response of agencies charged with the improvement of technical and institutional capacity in the irrigation sector to these and other issues potentially arising from trade reform?
What should be the response of agencies charged with improving the technical and institutional capacity in the irrigation sector to these and other issues potentially arising from trade reform?
The literature review undertaken by the authors has shown that there is no clear position and hardly any specific study about the impact of trade reform on the irrigated sector. The paper presents a balanced account of the different views identified. The paper concludes by identifying a possible role for organizations such as IPTRID to carry out or facilitate research for quantifying the opportunities and threats bearing on the irrigated production systems of individual nations as a consequence of trade liberalization.
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