CASE STUDY FROM TAIWAN

SURVEY ON IRRIGATION MODERNIZATION

Scheme of Tao-Yuan Irrigation Association

Prepared by Ko Hai-Sheng

August 2002

CONTENTS

1 BRIEF BACKGROUND

2 PART A: BRIEF DESCRIPTION OF THE MODERNIZED IRRIGATION SYSTEM- THE SCHEME OF TAO-YUAN IRRIGATION ASSOCIATION

2.1 Location
2.2 Land tenure structure
2.3 Date of Built: 1916 to 1924
2.4 Water Resources
2.5 Energy Source
2.6 System Type
2.7 Water Rights
2.8 Main Crops
2.9 Main Soils
2.10 Type of Infrastructure
2.11 Q design
2.12 O&M Costs
2.13 Other

3 PART B: MODERNIZATION PROCESS

3.1 Causes that led to system modernization
3.2 Steps of the modernization process: Who, what, how?
3.3 Organizational/Institutions involved, including users participation
3.4 Implementation of the modernization process
3.5 Actual modernization that took place
3.6 Was any Training done prior, during or after modernization? What, how and for whom?
3.7 Financing of the process
3.8 Estimated cost of the process; Total, per unit area
3.9 Was system performance evaluation done PRIOR to modernization?

4 PART C: IMPACT OF MODERNIZATION: DESCRIBE CHANGES, IF ANY, IN THE FOLLOWING ASPECTS OF THE SYSTEM AS RESULT OF THE MODERNIZATION ACTIVITY

4.1 Governance
4.2 Water rights, water allocation
4.3 Water service fee structure
4.4 Water service provider
4.5 Water distribution method
4.6 Have others systems in the country followed the same process?

5 PART D: CONSULTANT'S OWN CONCLUSIONS AND/OR COMMENTS/SUGGESTIONS/RECOMMENDATIONS

6 APPENDIX

Scheme of Tao-Yuan Irrigation Association

By Ko Hai-Sheng

On behalf of International Program for Technology and Research in Irrigation and Drainage (IPTRID) under FAO in Rome, International Water Management Institute (IWMI) sent a signed contract together with the Terms of Reference (TOR) and relevant background information for the captioned survey, dated 28 th May 2002, to Agricultural Engineering Research Center (AERC) of Taiwan to seek his acceptance of undertaking the captioned survey. The contract was received by AERC on 3 rd June 2002 and was co-signed by the Director of AERC, Dr. Chen. W. Liu on 6 th June 2002. The TOR of survey is attached in Appendix 1. In this connection, the survey committed by AERC has designated Mr. Ko Hai-Sheng, the Research Scientist, AERC and his assistants to carry out officially after signing the contract. The survey was completed within 10 working days as scheduled in TOR. The report was submitted on 26 June 2002 compiled from the result of survey in accordance with the signed contact for fulfilling its requirement. AERC received IPTRID's final comments on 17 July 2002. This version of final report submitted hereunder has incorporated those comments to a maximum extent.

Main Report of Survey

2. PART A: BRIEF DESCRIPTION OF THE MODERNIZED IRRIGATION SYSTEM- THE SCHEME OF TAO-YUAN IRRIGATION ASSOCIATION

2.1 Location

•  The location of Tao-yuan Irrigation Association on the island of Taiwan is shown in Map 1.

•  The irrigation system of Tao-yuan Irrigation Association is illustrated in Map 2.

•  The range of Tao-yuan Irrigation Association, in geographic coordinate, is shown below:

UL (upper left corner): 25 o 08' N, 120 50' E

LL (lower right corner): 24 o 41' N, 120 25' E

Map 1: Relative Location of Tao-yuan Irrigation to the other irrigation schemes in Taiwan

Map2. The Map of the Irrigation System of Tao-yuan Irrigation Association

Command and Irrigated Areas

Remark: a/ The cropping pattern of this scheme is a double paddy rice crop pattern, i.e. growing two crops of paddy rice a year, thus the irrigated area was usually about twice of the command area.

b/ In the year of 1995, the irrigated area was almost the same as command area, because a serious drought spelled out in the dry season from the December of 1994 to May 1995, and thus one crop of paddy rice was fallow; without undertaking any irrigation activity.

1. Prior to the Land Reform Period (1949):

(1). Land Lords (land owner): land lord receives as rent 60 per cent of total estimated land annual production, regardless of actual production. Land lord pays land tax but not production costs.

(2). Tillers or renters (Farmers): the renters kept the remaining 40 per cent of production, and had to pay all production costs and took risks of drought, flooding, insect and pet diseases.

(3). It was estimated that 60 per cent of land was rented out by non-farmer land lords, and the remaining 40 per cent was owned by farmers, i.e. they tilled their own land.

2. After Land Reform (after 1949 until now): the “ 37.5 per cent Rent Reduction Acts” was mandated in 1949, the details of these Acts are:

(1). The rent of land was reduced from the original 60 per cent of production to 37.5 per cent; but based on the actual production. It only counted on main crops (rice); as before the land lord also had to pay land tax.

(2). The land rental contract could not be cancelled without the agreement of renter; the renter had to bear all production costs and 37.5 per cent of water fees.

(3). The renter has the first priority to purchase the land when land is going to be sold; the Government would provide low-interest soft loan to farmers to purchase the land.

(4). The land-ownership structure had been greatly changed as a result of the implementation of these Acts. Nowadays, only about 5 per cent of land in this scheme is still owned by non-farmer landlord, with the remaining 95 per cent of the land owned by farmers.

3. Further explanation and clarifications:

(1). The average land size before implementation of the land consolidation program, which started at mid 1970s, was about 0.18 hectares; after the land consolidation program, it increased to 0.25 hectares on average. But one farmer family usually cultivates several pieces of land. Nowadays, the average family farm size is about 1.0 hectare in the selected area as well as in other areas of Taiwan.

(2). There were two types of farmers before the land reform, and now:

i) Farmers who own the land they cultivate don't have to pay any tenure, they are rent fee; this kind of farmer corresponded to about 20 per cent of the farmers before implementation of land reform.

ii) The remaining 80 per cent of the farmer rented the land they cultivated from landowners who usually didn't have any agricultural activity. These non-farmer landowners are called landlords. This second type of farmers obtained the right to cultivate the land on a contract basis and paid a rent.

(3). Before the land reform program, the rent was normally 60 % of the total production; After the land reform, the ratio was reduced to 37.5 %, by law.

(4). Before land reform, the land lords had to pay land tax as well as water fees; after land reform, the land tax and water fees were shared by land lords and tillers (farmers) in a proportion of 37.5 to 62.5 per cent, respectively.

(5). As a consequence of implementation of land reform most of the land lords did not receive sufficient profits from renting their lands, and thus they usually chose to sell their lands to their tenants. As of today, only about 5 per cent of the total irrigated area is still held by the above-mentioned landlords; remaining 95 per cent owned by the farmers themselves. This is exactly the goal of Land Reform Program, by which the Government intended to let all farmers have their land for cultivation; and to force the non-farmer landlord to give up their land and shift their capitals to invest in non-agricultural business.

(6). This tenure system is not unique for this irrigation system, and is applicable to the rest of Taiwan; Internationally, Taiwan was the only place accomplishing land reform without a bloody revolution.

(7). The land rental contract could not be terminated without the agreement of the renter. As such, the landlords had no choice but to sell their lands to their renters when they wanted to get rid of their lands. This new policy had two implications:

•  To ensure that tillers always had land to cultivate; and

•  To encourage land lords to sell their lands to their land tillers.

(8). Before land reform, the farmer did not pay land tax or water fees; after land reform, farmers have to share the land tax and water fees with landlords with the ratio mentioned above. Water fees are designated to cover 100 per cent of O&M costs of the system operation and less than 40 per cent of construction cost recovery with a very long grace and repayment period.

(9). After 1995, farmers are no longer required to pay any water fee; and Government pays on behalf of farmers, i.e. the Government subsidized to the irrigation associations the amount needed for O&M for the irrigation scheme.

Date of Modernization:

1.Phase I modernization: 1916 to 1924

2.Phase II modernization: 1957 to 1964

3.Phase III modernization: 1995 to now

Unit: 10,000 m³/year

As 99 per cent of this scheme is the gravity system, the energy consumption is limited to the operation of gates and intakes of the system. The total electricity billing costs were estimated at less than 0.2 per cent of total O& M costs. The unit cost of electricity fee is about US$0.2 per KW-hour for commercial users; and about US$0.1 to per KW-hour for agricultural purposes including operation of irrigation system.

The system type of this scheme is gravity and open channel type at both on-farm and secondary level. Only one sub-scheme with an area of about 50 ha has built a pipeline system to substitute on-farm open channel ditches. The initial investment cost of pipeline system was still too expensive and unable to compensate the saving of maintenance cost of open channel ditches.

1 . According to the “Water Law” of Taiwan, any water user is entitled to register water rights based on the actual need. This is done at the water rights registration office under the Department of Water Conservancy, Ministry of Economic Affairs.

2. The registration of water rights is permitted on first-come first-serve basis until the availability of water at certain location in certain period is exhausted. Therefore, notice to the public of full registration of water rights usually has to wait at least one month until no complain from any third party has been received by the registration office.

3. Submission of a registration of water rights must be accompanied and justified with a 10-day based crop water requirement program. The following principles apply or need to be considered:

(1). When a drought spell occurs, and the available water resources can not meet the need of all registered water rights, the order of priority for sharing the limited water resources is given to: domestic water; agricultural water; industrial water, and then others.

(2). Annual availability of water resources in Taiwan is characterized by very high fluctuation. In varies from only 30 per cent of long-term average in the lowest year, to 210 per cent in the highest year.

(3). As mentioned above, a detailed water utilization plan including every 10-day water requirement should be submitted when the water user is going to registers the water rights. The water registration office will analyze whether the planning is reasonable and close to reality or not. This implies that water rights are registered and approved on actual need basis.

(4) Since farm size is so small, irrigation water can not be delivered on a demand basis, and thus, a pre-scheduled water delivery system, namely “rotation irrigation” has been practiced for more than 40 years in Taiwan. The farmer will be informed of the water delivery schedule to his farm about two weeks in advance. Therefore, there is no need for farmer to ask for water every day.

(5). During rotation irrigation, within each cycle, the discharge of tertiary canals is normally kept constant. Farmers receive their amount of water proportionally to his farm size and soil characteristics.

(6). Water rights are registered on a collective basis. The operators of irrigation schemes, i.e. the irrigation association will register water rights for all the system on behalf of all farmers. The individual members of irrigation association will not be required to register their water rights separately.

(7). The Water Right registered is not normally equal to the actual availability. In this regard, the amount registered is usually much higher than the actual amount that the user obtains. In the Tao-yuan scheme this has normally been the situation. The comparison of the amount of water registered and actually diverted is shown below in the following table:

Table: Comparison of registered rights and actual water deliveries

(Unit: 10,000 m 3 )

Paddy rice

2.9 Main Soils

2.10 Type of Infrastructure

2.11 Q design:

18.0 m³/sec at the intake of Shiemen Reservoir

The table below provides information on different O&M costs and their corresponding percentages for the period 1991 to 2000, in the Tao-yuan Irrigation System.

Unit: US$1,000 (Constant price at 2000)

Remark: Foreign exchange rate in 2000: US$1.0=NT$31.23 (local currency);

Sources: Annual Statistic Book of Tao-yuan Irrigation Association

The same information of the table is presented in graphic form below:

There are about ten (10) industrial zones situated inside the command area of this scheme. Most of the waste water from those industrial zones are not treated appropriately and are directly drained into all creeks of the scheme. Water pollution of the water resources from creeks is becoming more and more serious. Water quality monitoring and control is now the newly emerging issue for scheme operation

3. PART B: MODERNIZATION PROCESS

3.1 Causes that led to system modernization

1. Modernization- Phase I (1916 to 1924)

(1).The policy of colonial Japanese Government needed Taiwan to produce more rice and sugar to meet their food sufficiency;

(2). Exporting rice and sugar was the potential for foreign exchange earnings; and

(3). Modernization-Phase I, consisted mainly of building a main intake upstream of the command area along the Ta-ku-kang River to increment water resources. The modernization connected about 20 existing small irrigation schemes into a new scheme. The total irrigated area of the new scheme was increased to 23,000 hectares from the original 6,000 hectares. The cropping pattern was changed from the original one crop of paddy to two crops of paddy rice per year.

2. Modernization-Phase II (1957 to 1964)

(1).Concerning the possible war between the two sides of the Taiwan Straight, the Taiwan Government's policy called to produce more rice and to enhance the level of food security. The modernization of the irrigation scheme included: construction of a big size reservoir, concrete lining of canals, a land consolidation program and improvement of canal related structures etc. The goal was to increase the availability of water, enhance irrigation efficiency and to expand the irrigable areas;

(2).Foreign exchange earnings, through exporting rice and sugar, were one of the viable methods before Taiwan's industrialization started;

(3). The modernization-Phase II was mainly to build a large reservoir at the site of the intake built during Modernization-Phase , increasing the irrigated area by about 20,600 hectares. This increased irrigable area was organized into a new irrigation association, namely the Shiehmen Irrigation Association. The service scope of the irrigation scheme was expanded to cover domestic and industrial water supply and an electricity power plant. With the reservoir, water resources for irrigation has become more stable than during modernization-Phase I. Yield of irrigated paddy increased by about 10 to 15 per cent compared to the modernization-Phase I.

3. Modernization-Phase III (1995 to now):

Irrigation Associations (IAs) in Taiwan are autonomous farmers' cooperative bodies, which have always been characterized by high water users' participations, including payment for operation and maintenance and for substantial portion of system improvement. Presently, users' participation in terms of financial self-sufficiency has totally stopped, and water users are no longer required to pay any water fee. Since 1995, the Government has become obligated to provide reasonable funds every year to IAs for keeping the system operable. However, provision of such funds to IAs is a heavy burden for the Government. Therefore, the Government usually requests all IAs to take appropriate austerity measures in order to reduce the operation cost. As a result, the status of O&M for all IAs in Taiwan can be described in the following manner:

(1). O&M costs for the operation of all irrigation systems in Taiwan has increased dramatically; likewise rice surplus have increased. Thus, irrigated rice production is no longer economically viable. The function of irrigation has changed from the enhancement of rice productivity to: maintaining food security; preventing further widening of the rural-urban income gap; for control of rice surplus, and for preserving ecosystem, biodiversity and multi-functionality of paddy field;

(2). In order to realize the above-mentioned needs, the latest modernization has emphasized on the enhancement of operation efficiency to reduce the O&M costs for irrigation system; and preserving soil and water for their sustainable utilization;

(3). The Phase III modernization took place in the same command area of the Tao-yuan Irrigation Association. No new irrigation association was organized;

(4). Modernization-Phase III started in 1995 when Taiwan had a very serious rice surplus, the Government had to carry out paddy fallowing program to reduce rice production. Meanwhile, the differentials of urban and rural incomes were widening, and most farmers were unable to pay water fees. Therefore, the Government suspended the authority of irrigation associations to collect water fees from the farmer. The Government has started to subsidize the total costs of O&M since that year; and

(5). In the wake of terminating the irrigation associations' authority for water fees collection, most irrigation associations found that the Government's subsidy was inadequate; and the Government was also aware that subsidizing all O& M costs has became a heavy burden. As a result, most of irrigation associations understood that they needed to take austerity measures to reduce the O&M costs. The third modernization accordingly started aiming at trying to reduce the operation costs.

1. Phase I modernization (1916 to 1924)

(1). Who:

The colonial Japanese Government initiated and implemented the modernization, and the farmer's organization, i.e. irrigation association, just followed Government's order and rendered their assistant role in completing the modernization.

(2). What:

Irrigation modernization included:

•  Construction of a main intake on the upstream of Ta-ku-kang River;

•  Construction of new water conveyance system consisting of a “leading” canal of 20,467 meters, a main canal of 25,376 meters; lateral canals for a total of 258,872 meters; and all required canal-related structures;

•  Construction of 231 on-farm water storage ponds;

•  Construction of 132 diversion weirs on small creeks;

•  Construction of on-farm irrigation ditches for 846,486 meters;

•  The irrigable area increased from about 6,000 hectares to 23,000 hectares with more stable water resources.

(3). How:

•  Detailed environment, geographic and soil surveys and investigations on the command area;

•  Social-economic, and agronomy related surveys;

•  Status investigation on existing irrigation schemes;

•  Drafted and legislated required laws and regulations to legitimate the modernization;

•  Engineering planning and design for Modernization

•  Drafting a modernization program and submitting it to the Government for review. A public hearing tooke place; an agreement among beneficiaries was signed to commit to participation in irrigation modernization including the planned cropping pattern, payments for cost recovery fees and O&M costs;

•  Government approved the modernization Program;

•  Government allotted budget for the modernization program;

•  Project implementation, completion, operation and maintenance; and

•  Government promulgated two related operational Acts, as follows:

(a). The Public Irrigation Utilities Acts:

•  All irrigation schemes either public or private sector are required to comply with the public utilities Acts; and thus modifications to their operation, must follow the regulations stipulated in these Acts. The Government has the authority to modify or change their operation; and

•  The Government has the authority to take over the operation of private irrigation schemes if necessary.

(b). The Official Irrigation Acts:

•  This Act was mandatory for areas where the irrigation schemes would be or has been constructed by the Government.

•  Once a farmer becomes a member of an official (public) irrigation schemes, he is obligated to follow all regulations stipulated in this Act, including the payment of cost recovery fees and O&M fees; and

•  Violation of the terms of the Act is considered a criminal offense, violators can be prosecuted..

2. Phase II modernization (1957 to 1964)

(1). Who:

Taiwan was restored as the Republic of China in 1945. Government's policy at that time was to prioritize the increase in rice production so as to assure national food security, and to earn foreign exchange from rice exports. Thus the Government was the initiator and the financial supporter for the second modernization.

(2). What:

•  A large size multi-purpose water storage facility was built at the original intake site, the Shiemen Reservoir. The following related structures were built:

•  One 133 meter high, 369 meter long earth rock filled dam; with maximum storage capacity of 310 million m 3 or 210 million m 3 with and without gate control, respectively.

•  One 45,000 KW hydraulic power plant;

•  An additional 36 kilometers of main canals; 136 kilometers of lateral canals and 163 kilometers of sub-lateral canals were constructed to increase the irrigated area by 20,600 hectares; mainly in the higher land.This scheme was organized as a new irrigation association, namely the Shiehmen Irrigation Association, different to the Tao-yuan Irrigation Association.

•  The irrigated area of Tao-yuan Irrigation Association was not increased, but the water resources became much more stable and the productivity of the irrigated area increased by about 15 to 20 per cent;

•  In addition to provision of water resources to the irrigation and power sectors, this new multi-purpose reservoir also provided 30,000 m 3 of water daily to the domestic and industrial sector;

•  Land consolidation for on-farm systems were about 85 per cent completed during that period; and

•  Canal related structures including water measurement devices and water controlling structures were 90 per cent improved enabling to carry out a more efficient rotation irrigation,

(3). How:

The procedures and step for the phase II modernization mostly followed the above-mentioned first modernization; except that the relevant laws were revised to include more democratic principles and rather higher beneficiaries' participation.

3. Phase III modernization (1995 to now)

(1). Who:

In order to reduce the operation cost, modernization of irrigation system this time was initiated by the irrigation associations themselves. However, technically and financially, the Government still provided about 20 per cent of financial assistance for the modernization process.

(2). What:

•  Computerizing all operations such as internal documentations, bookkeeping, statistics, irrigation planning and field data recording. Likewise, computerizing engineering surveys, design, and billing documentation, GIS for land ledgers, and irrigation and drainage systems;

•  Automation and remote control of main irrigation facilities, including check, intake and off-take gates;

•  Remote sensing the records of weather, hydrology and water measurering devices, and the automation of recording, transmission, and centralized display;

•  Set up about 30 sites for water quality monitoring stations, regularly sampling irrigation water at the water quality laboratory located in the Headquarters of irrigation association; and

•  Soil pollution monitoring and the establishment of a related laboratory are under planning; and it would be implemented within the next three years.

(3). How:

•  Most modernization this time were initiated and carried out by irrigation association himself;and not like in phases I and II which were planned, designed, financed and carried out by the Government;

•  The modernization activities were not well planned or scheduled; they will be carried out just depending upon the availability of funding and techniques;

•  Many modernization interventions were carried out on a “trial and error” basis, so some of them were not very successful or even failed and were hence given up;

•  Among irrigation associations, they learned and help each other with less Government assistance; and

•  Phase III modernization is still going on, and will continue over the coming few years.

1. Phase I modernization (1916 to 1924)

(1). Central Government:

•  Japan Cabinet: approved budget for modernization;

•  Taiwan Governor Office of Japan Colonial Government: Executing agency of modernization project.

(2). Tsou (County) Office: Implementing agency of the modernization;

(3). Tao-yuan Irrigation Association: one of main implementing agency;

(4). Agricultural Experimentation Stations inside the project area:

Conducting experiments on optimal cropping pattern and most efficient irrigation methods during the construction period.

2. Phase II modernization (1957 to 1964)

(1). Central Government:

•  Executive Yuan of the Republic of China: approved budget;

•  USAID Office in Taiwan: provide soft loan and grant for technical assistance;

•  JCRR (Joint Commission on Rural Reconstruction): US assistant office specialized in agriculture and rural development sectors; provision of technical assistance and financial supports

(2). Provincial Government:

•  Water Conservancy Bureau of Taiwan Provincial Government: Executing agency of modernization;

•  Shiehmen Reservoir Construction Committee: the implementing agency (on a job oriented temporary basis)

•  Tao-yuan Irrigation Association: support the implementation of the modernization; and

•  Local relevant agricultural experiment stations in charge of the arrangement of optimal farming schedule, irrigation method, and selection and recommendation of the most suitable varieties of rice and other upland crops, and

•  More than 60 per cent of beneficiary farmers had signed individual agreement to accept the Government's arrangements of new cropping pattern and to pay the project cost recovery (60 per cent of project cost) within 15 to 20 years)

3. Phase III modernization (1995 to now)

The third modernization has not been implemented on a project basis. There were no specific targets or an schedule and no special executing or implementing agencies has been set-up. Therefore the agencies and institutions involved are only limited below:

(1). Central Government

•  The Commission of Agriculture (COA): provision for partial financial supports;

•  Relevant agricultural experiment stations; and

•  Relevant engineering academic and research agencies;

(2). Tao-yuan Irrigation Association: implementing agency.

The details of implementation of modernization process have already been shown in Part B, II. Steps of the modernization process: Who, what, how? It would not be repeated here.

All modernization indicated in this report has actually taken place.

1. Planers and designers of modernization:

Most of the planers and designers for modernization were Government's employee. They had their regular training program. Special training program particularly for modernization were generally on a self- education basis.

2. System operators:

All irrigation operators to be in charge of the operation and maintenance of modernized irrigation system were provided on-job training programs to assure that they would understand and familiarize with the rules of the operation for modernized system. Most of trainers and trainees were usually the system designers, planners and operators.

3. Farmers:

Demonstrations in the relevant experimental stations were the commonly adopted method as training program for the benefit of farmers.

1. Except for the Phase III modernization, the Government' budget provided 100 per cent of financial supports to the implementation of modernizations including the costs of planning, design, and construction. The cost recovery from the beneficiary was limited to about 60 per cent of the construction costs. Repayment period usually included two years longer than construction period as the grace period; and repayment period was generally 15 to 20 years.

2. Phase III modernization is being implemented on a regular O& M basis. The Government is generally financing 40 to 100 per cent of annual required costs. No cost recovery mechanism has ever been designed or payments collected.

1.PhaseI modernization (1916 to 1924): No data available.

2. Phase II modernization (1957 to 1964) cost can be seen below:

The following notes apply to the previous table:

a/ The total cost of modernization of irrigation system includes about 30 per cent of the total costs of the dam, and the total costs of land consolidation, drainage improvement and other major improvement of infrastructure; undertaken until 1990s; but excludes the costs of power plants, and of the domestic water supply facilities;

b/. The average price escalation factor in engineering construction cost is estimated at 1.0 per cent per year;

c/. Foreign exchange rate in the year 2000 was averaged at: US$1.0=NT$32.23.

3. Phase II modernization (1995 to now):

(1). The modernization is not being carried out on a project basis; the progress of modernization depends on: availability of funding inclusive of Government's subsidy and the counterpart funds of the irrigation association.

(2). The average annual cost of the last 6 years is estimated at NT$9.0 million at the constant price of 2000, or NT$346 (4,000,000/26,000²) per hectare per annum equivalent to US$11.0 (346/31.23³) per hectare per annum.

(3). Phase III modernization is being carried out more as part of O& M operation rather than a project.

2 26,000 is the estimated the total command area.

3 US$ 1.0=NT$31.23

System performance evaluations were undertaken prior to each of the phases of the modernization process. The evaluations were carried out differently for each modernization phase, as shown below:

1. Phase I modernization (1916 to 1924):

•  Prior to the modernization, the Colonial Government was badly in need to provide sufficient food for both Taiwan and Japan. The Government had found that, the Tao-yuan area would be the most appropriate place to increase significantly the mount of rice production, through modernization of existing irrigation system;

•  The history of rice cultivation had already prevailed for more than 300 years, farmers were familiar with rice production; population density was one of the highest among various agriculture areas in Taiwan; labor shortage would not be a concern for rice production after modernization;

•  Soil is texture heavy and irrigation efficiency could be high;

•  The average annual rainfall recorded at that time was about 1,500 mm and its evenly distributed. Utilizing effective rainfall is appropriate;

•  River water resources were about 75 to 80 per cent adequate to meet the needs of irrigation requirements for two crops of paddy rice;

•  Social order was becoming stable;

•  The overall evaluation concluded that there was very high possibility to realize the target of irrigation modernization.

2. Phase II modernization (1957 to 1964)

•  Large-scale water storage reservoir was found important in order to significantly increase rice production;

•  Enhancement of irrigation efficiency techniques, through adoption of rotation irrigation at various levels, were found mature enough from experiment stations or demonstration farms;

•  Technique of design and construction of earth dam by local engineers became possible with a minimal of foreign technical assistance;

•  Effective use of fertilizers and pesticides with more reliable water resources resulted in an increase of rice production by 5 to 10 per cent;

•  From a macro economic point of view both food security (because of war concerns) and large scale increases in rice production were a national consensus at the time;

•  The modernization of irrigation scheme was deemed to be justifiable because the industrialization around the irrigation area had started and competition for use of water resources among various sectors could occur anytime in the future. Thus additional water resources development were required through construction of larger reservoirs,

•  The effective use of chemicals including fertilizers, insecticides, and pesticides had already occurred before the second modernization started; however, its effectiveness would be increased if more reliable water were available. This was one of the reasons that the Government decided to build a reservoir; and

•  Without reliable water, the increase in yields of paddy rice ranged from 15 to 20 per cent by applying fertilizers and other chemicals; with reliable irrigation water, the yield of paddy could be expected to increase additionally by 5 to 10 per cent without increases in the amount of fertilizer applied.

3. Phase III modernization (1995 to now).

•  High rice surplus had started since the mid 1980s ⁴, and the rice production costs in Taiwan at that time was about 300 per cent higher than the international trade price, thus the surplus rice not only could not be consumed in the local market but also could not be exported. Consequently, the Government had to start “ the Rice Fallow Program ”, under which a certain amount of cash was provided to farmers who were entitled to grow rice but were willing to leave fallow their land”. This Rice Fallow Program is still one of the important agricultural activities every year until now;

•  Following industrialization, the labor wage rate in Taiwan was increasing every year; correspondingly, the operation cost of irrigation schemes became higher every year. Irrigation associations could not operate the irrigation scheme just depending upon the water fees collected from the farmer, and thus the Government began to subside the O&M costs for all irrigation associations. The rate of subsidy to the O&M started from 40 per cent of the total at mid 1980s to 100 per cent in 1995;

•  Since rice surplus had occurred since 1995, increasing the yield of rice production and enhancing the irrigation efficiency was no longer the Government's agricultural policy. Since then, the emphasis of rice production costs has been placed on the food security, avoiding widening the income differentials between the urban and the rural population;

•  Correspondingly, it is no longer justifiable to increase the subsidy for O&M costs for all irrigation associations; and thus the Government had frozen the subsidy level at 300 kg paddy rice equivalent cash since 1995;

4 As mater of fact, rice surplus occurred due to the decrease in per capita rice consumption from 120 kg per capita per year in 1960s to 60 kg per capita per year in 1990s, simultaneously non-rice foods such as wheat products, meat, milk, wine, liquor were imported and consumed in substitution of rice.

•  Regardless of the Government's freeze on subsidies to irrigation associations for O&M costs, the actual cost for labor wages and staff salary kept increasing every year. It meant that all irrigation associations had no choice but to take both austerity measure and increase the operation efficiency to meet the decreasing availability of funds for O&M costs; and

•  Phase III modernization was an action program aiming at the enhancement of operation efficiency so as to reduce the O&M costs.

4. PART C: IMPACT OF MODERNIZATION: DESCRIBE CHANGES, IF ANY, IN THE FOLLOWING ASPECTS OF THE SYSTEM AS RESULT OF THE MODERNIZATION ACTIVITY

4.1 Governance:

Governance has never been a serious issue for the operation of irrigation schemes in Taiwan; and the above-mentioned three phases of modernization have never set “governance” as the main target for modernizations. No significant impact of modernization in the aspect of the governance of irrigation association has been found.

1. Phase I modernization (1916 to 1924):

•  Before industrialization started, about 80 to 85 per cent of developed water rights were associated with the irrigation sector; water uses for domestic water supply and industrial sectors was still very low.

•  During drought spells the irrigation sector was usually able to allocate adequate water to satisfy the needs of domestic uses and industrial purposes. Since the need for additional water from both sectors was so low compared to the needs of agriculture, regardless of shortages in agriculture, it could still cover the demand.

2. Phase II modernization (1957 to 1964):

•  Competition on the use of water between agriculture and non-agriculture sectors including domestic and industrial uses started in the early 1980s. When the water shortage of non-agriculture sectors occurred, the irrigation sector was always being asked to transfer part of its water to other sectors;

•  Before the mid 1980s, when ever was drought, water transfer from agriculture to non-agriculture sectors happened occassionally; after that time, the inter-sector water transfer begun on a regular basis; and the agriculture sector was usually compensated by cash from the non-agricultural sectors with the average rate of US$0.08 to US$ 0.12 per cubic meter;

•  The non-agricultural sectors shared only 5 per cent of the total water rights of the Sheimen Reservoir when it was completed in 1964; and now about 25 per cent of total water resources are consumed by domestic and industrial sectors. The trend appears to be increasing more rapidly than before.

3. Phase III modernization (1995 to now):

•  The competition over the use of limited water resources after the year 2000 is becoming more acute. The demand for water to be transferred from agriculture is always larger than the decrease in the area of agriculture;

•  The irrigation sector is not satisfied with the compensated prices for water being transferred; arguments over the amount of compensation has never stopped;

•  Regardless of the water rights registered in favor of the irrigation sector, whenever drought occurs, the Government always exercises his administrative power to allocate more water to the non-agriculture sector. This is because the production value per unit of water in the industrial sector is about 75 to 250 times that of the agriculture sector.

1. Phase I modernization (1916 to 1924):

(1). Cost Recovery Fee for Construction:

About 40 to 60 per cent of the total cost recovery fees were collected from the beneficiaries within 30 years; but the information of the exact percentage is not available.

(2).Water Service Fees for O&M:

The amount of water service fees collected were sufficient to provide 60 per cent of total O&M costs; but during the World War II, collection was intermitted.

2. Phase II modernization (1957 to 1964):

(1).Cost Recovery Fee for Construction Costs:

Sixty per cent cost recovery for construction costs was agreed with the beneficiary. But, after completing 85 per cent of the total amount to be collected, the Government paid on behalf of the farmer, because it had found that the farmer repayment capability had become very low.

(2).Water Service Fees for O&M Cost:

In principle, the beneficiaries had to pay 100 per cent of O&M costs; but a legal floor and ceiling for this kind of water fee collection was set, i.e. 30 kg of paddy rice equivalent in cash was the floor and 300 kg the ceiling. In most cases, only the ceiling was sufficient to maintain the system operable.

3. Phase III modernization (1995 to now):

Both the cost recovery and O&M fees were exempted since 1995, and thus farmer are free to use water and the Government pays for the farmer.

Overall Evaluations:

(1). After the modernization Phase II, in the period from 1970s up to the early 1990s, farmers were capable of paying water fees adequately in order for the irrigation association to cover 100 per cent of O&M cost and about 40 to 60 per cent of the cost recovery for construction cost. It is considered that such beneficiary participation was very rare at global scale. The World Bank always takes Taiwan's case in terms of farmer's financial participation as an ideal one for the development of irrigation projects. In this connection, during that period, the beneficiaries' financial participation was at amaximum; and

(2). The reasons of success in beneficiaries' participation are summarized below:

Planning for modernization must be done carefully, with maximum inputs of local staff, so then the plans can fit better locally and practically.

The implementation of modernization must be kept dynamic and flexible, the mechanism of adjustment and modification must be established in detail during the implementation;

Construction and management techniques must correspond to and be consistent with the capability of local staff. The most modern facilities and management technique might not be the best for every case; and

Beneficiaries' capability must be well and precisely estimated, and water fees should be determined based on the beneficiaries' capacity to pay.

The irrigation association has been the water service provider since the first modernization until now .

1. Gravity irrigation is the only method adopted for water distribution, at all times, for this scheme.

2. Rotation irrigation method has prevailed both on-farm and higher system.

System performance: agricultural water productivity, equity of water distribution, economic indicators, impact on environment, administrative and financial, farmers' satisfaction, etc.

1. Phase I and II modernizations were deemed to be fairly successful. The goals or target of modernizations were about 85 to 90 per cent realized.

2. Rice production had not only provided adequate food domestically, but also generated a surplus for export. The society of the scheme appeared prosperous after completion of modernization.

3. The increase of rice production was not only from expanding the cultivation area due to improved availability of water, but also from enhancing the yield per unit area by adopting techniques of pest and insect control, better use of fertilizers and efficient irrigation. The yields of paddy increased from an average of 1.0 to 1.5 ton of paddy per hectare to about 2.0 ton in the first modernization. For the second modernization, the average increase per unit area of rice production was about 10 to 15 per cent to 4.5 ton per hectare; yield of 6.0 ton per hectare were often found.

4. After adoption and implementation of rotation irrigation, equity of water distribution was considered to be one of the best in the World.

5. The percentage contribution to the national agriculture GDP was estimated at 5 to 8 per cent.

6. Because of the availability of water resources, population is increasing and recently more than 10 industrial zones were established inside the area of the irrigation schemes. The most important negative environmental impact has been that water resources pollution has been increasing.

7. The administration of this irrigation scheme is considered to be satisfactory to the farmer and the Government. The financial status of this irrigation association is one of the four best in Taiwan. The association is not only capable of properly maintaining the irrigation system, but also is able to support irrigation relevant research, domestically and internationally.

cost recovery and O&M costs) were too high for them. Sometimes, when droughts spells occur, their net farming incomes has been negative.

9. As for Phase III modernization, the program is still underway and final evaluation cannot be done yet. It can be mentioned however, that although the objectives of this modernization phase are mainly for the reduction of operation costs, it does not appear that those cost savings are being realized. Computerizing operation of the system and applying remote control or GIS etc. have actually improved operation efficiency and quality. But, in ordfer to handle those modernizations, the association needs to hire more well educated staff in detriment of the old staff; it can not be justifiable to laid them off now. Therefore, the total costs of the third modernization, as of today, does not appear to be significantly generating cost savings. However, in the long run, it may be more cost saving in the operation when the old staff is retired.

Yes! Other 17 irrigation schemes in Taiwan have all followed the same process. Actually, the process was formulated by the Government and could be considered to be Government's policy.

I.What is YOUR appreciation of modernization that took place?

One of the most important factors for the success of modernization is that the Government led the modernization process, and they had sufficient manpower to undertake the planning and design. They had never been in a hurry to implement the modernization until:

1. Technically, the modernization was very feasible;

2. Modernization never started until the whole financial resources had been found available;

3. Beneficiary's participation was at maximum;

4. About 99 per cent of technique was originated locally; therefore they are more suitable and practical.

II.Do you perceive any MAJOR gaps in the process that took place?

That the economical and financial benefits of modernizations were not 100 percent realized was found to be the major gaps in the process of modernization. In particular, farmers were usually unable to pay 100 per cent of cost recovery for construction toward the end of the repayment schedule.

•  Can the process be replicated elsewhere?

Yes, provided the Government has sufficient desire, financial capability and manpower to undertake planning, implementation, and maintain and operate modernized schemes.

•  What lesson can be learned from the modernization process that took place?

The international trade price of paddy rice is so low that very few countries could implement the irrigation modernization in an economically viable manner. Even the previous two phases of modernizations in Taiwan have been carried out mainly based on the political decision rather than economical justification. The cost for modernization of irrigation schemes is so high now that it can be carried out only based on social welfare or for political gaining; otherwise the modernization of irrigation schemes following the Taiwan example should be very cautiously planned.

•  Do you feel there is enough information in order to undertake a more IN-DEPTH study on the process some comments: Definetely YES !!!

FAO: International Program for Technology and Research in Irrigation and Drainage (IPTRID)-

Terms of Reference (TOR) for

Survey on Modernization of Irrigation Systems on

The Schemes of Tao-Yuan Irrigation Association, Taiwan

Part A. Brief description of the Modernized irrigation system, including, at least:

•  Location

•  Command Area

•  Irrigated Area

•  Land tenure structure

•  Date Built

•  Date Modernized

•  Water Resources

•  Energy Source

•  System Type

•  Water Rights

•  Main Crops

•  Main Soils

•  Type of infrastructure

•  Q design

•  O&M

•  Others

(The consultant is encouraged to present MOST of this information in table form)

Part B. Modernization Process

•  Cause that led to system modernization

•  Steps of the modernization process: Who, what, how?

•  Organizational/Institutions involved, including users participation

•  Implementation of the modernization process

•  Actual modernization that took place

•  Was any Training done prior, during or after modernization? What, how and for whom?

•  Financing of the process

•  Estimated cost of the process; Total, per unit area

•  Was system performance evaluation done PRIOR to modernization? Elaborate

Part C. Impact of modernization: Describe CHANGES, if any, in the following aspects of the system as result of the modernization activity

•  Governance

•  Water rights, water allocation

•  Water service provider

•  Water distribution method

•  Water service fee structure

•  System performance: agricultural water productivity, equity of water distribution, economic indicators, impact on environment, administrative and financial, farmers satisfaction, etc..

•  Have others systems in the country followed the same process?

Part D. Consultant's own conclusions and/or comments/suggestions/recommendations

•  What is YOUR appreciation of modernization that took place?

•  Do you perceive any MAJOR gaps in the process that took place?

•  Can the process be replicated elsewhere?

•  What lesson can be learned from the modernization process that took place?

•  Do you feel there is enough information in order to undertake a more IN-DEPTH study on the process some comments