The Pricing of Irrigation Water Preliminary Considerations

The rules for pricing irrigation water vary widely, within and between countries. It appears that the rules for setting prices are neither systematic nor uniform.79 The only consistent feature of irrigation prices is that they usually are well below the cost of supplying the water. As the World Bank has stated, tariffs for irrigation water are usually far below even the prices of municipal water, which are inadequate for covering costs, and most governments have not even put forth a policy of trying to recover irrigation system costs through water charges.80

A review of international experience in water pricing concluded that, for 13 developing countries, the recovery of operating and maintenance costs ranges from 20-30% in India and Pakistan to about 75% in Madagascar.81

In spite of the reluctance of many governments to charge more for irrigation water, experience

Once established, irrigation projects become some of the most heavily subsidized economic activities in the world. In the mid-1980s, Repetto estimated that the average subsidies to irrigation in six Asian countries covered 90 percent of the total operating and maintenance costs. Case studies indicate that irrigation fees are, on average, less than 8 percent of the value of benefits derived from irrigation (FAO, 1993, p. 232).

has shown that farmers may be willing to pay more for it provided that the supply is reliable. This is a major caveat that often is not satisfied in gravity-fed systems. It has been pointed out that:

Farmers are noted for their reluctance to pay water rates for water from public irrigation schemes. It is interesting to note, however, that the same farmers are often willing to spend considerable amounts (per unit volume of water) to develop groundwater supply. The obvious conclusion is that farmers are willing to pay for water if it is reliable and somewhat flexible.82

The World Bank has noted the willingness of poor farmers to pay for irrigation, linking it to the reliability of the supply of water:

Information on communal and private irrigation systems in various countries in Asia shows that even very poor farmers will pay high fees for good-quality and reliable irrigation services.

• In Bangladesh, it is not uncommon for farmers to agree to pay 25 percent of their dry season irrigated rice crop to the owners of nearby tubewells who supply their water.

• In Nepal. . . farmers contribute large amounts of cash and labor to pay the annual cost of operations and maintenance. For example, in six hill systems studied in detail, the average annual labor contribution was sixty-eight days per hectare. In one thirty-five-hectare system, annual labor contributions were approximately fifty days per hectare, while cash assessments averaged the equivalent of more than one month of labor.

Although many of these farmers are very poor in an absolute sense, they are willing to

81. Ariel Dinar and Ashok Subramanian, Water Pricing Experiences: An International Perspective, World Bank Technical Paper No. 386, The World Bank, Washington, DC, USA, 1997, p. 8.

82. H. Plusquellec, C. Burt and H. W. Wolter, 1994, p. 11.

pay for good-quality irrigation services that raise and stabilize their income. Thus, the critical issue is providing these poor farmers with reliable, profitable, and sustainable irrigation services.83

0 0

Post a comment