Title: Guidelines for Planning Irrigation and Drainage Investment Projects...

FAO INVESTMENT CENTRE

Technical Paper N. 11

Guidelines for Planning Irrigation

and Drainage Investment Projects

1996

Table of Contents

FOREWORD

Objective of the Guidelines

INTRODUCTION

PART 1: RECENT LESSONS AND IMPLICATIONS FOR PLANNING

1. Irrigation in the Context of Water Resources Management

2. Irrigation Types and the Issue of Scale

3. Irrigation, Food Supply and Drought

4. Effective Implementation

5. Fiscal Sustainability

6. Water User's Associations

7. Social and Environmental Aspects

8. Choice of Technology

9. The Drainage Dilemma

10. Implications for the Planning Process

Further reading

Footnotes

FOREWORD

Publicly financed irrigation and drainage investment projects have too often performed
poorly. Sometimes the reasons have been unforeseeable or unavoidable. But in some
cases shortcomings were because planners gave inadequate consideration to
institutional constraints or to the practical problems of subsequent implementation, or
because there was insufficient commitment by governments or users to the
developments proposed. Delay, dilapidation, waste of scarce water and adverse
social and environmental impacts have been among the familiar consequences.
Lessons have been learned from these setbacks, however. These Guidelines give
prominence to the planning approaches which have evolved, and are still evolving, to
avoid future difficulties. The publication stresses sounder formulation of irrigation and
drainage investment strategies, improved conceptualization of project options, and
building stronger participation and commitment into the detailed planning process. The
intended users are FAO Investment Centre staff, trainees and consultants, as well as
local planning groups set up by governments to prepare investment proposals. Some
of the material may also be useful to consulting firms and financing institutions
involved in planning or appraising such projects. The following Investment Centre
Technical Papers complement and should be read in conjunction with these
Guidelines: Guidelines for the Design of Agricultural Investment Projects (No. 7,
revised 1995); Financial Analysis in Agricultural Project Preparation (No. 8, 1991);
and Guidelines on Sociological Analysis in Agricultural Project Design (No. 9, 1992).

Objective of the Guidelines

The objective of these Guidelines is to summarize present thinking and practice, and
to assist practitioners to plan irrigation investment projects and programmes that will
realize and sustain their full potential. They cover the whole investment planning
process, from formulation of subsectoral strategies, to conceptualization of project
options, and detailed planning of the preferred option(s).

INTRODUCTION

Why New Guidelines?

Irrigated agriculture has made a major contribution to food production and food
security throughout the world: without irrigation much of the impressive growth in
agricultural productivity over the last 50 years could not have been achieved.
Nevertheless it is widely accepted that the overall performance of ‘irrigation and
drainage’ (also implying reclamation and water control) investments has too often
fallen short of the expectations of planners, governments and financing institutions
alike (Ref: Report No. 13676, A Review of World Bank Experience in Irrigation,
Operations Evaluation Department, World Bank, Washington DC, 1994).

In 1992, the World Bank's Portfolio Management Task Force reported that major
problems that constrain the performance of World Bank financed investment projects
in various sectors, are:

inadequate consideration of institutional constraints and poor planning for

implementation; and

a lack of commitment to the success of the project by governments and users.

In the case of irrigation investments these problems are manifested in poor

project management, both at implementation and thereafter, and poor operation
and maintenance resulting from inadequate budget allocations or from rent
seeking by users and officials. These core problems usually give rise to, or are
accompanied by, a host of other technical, social and economic problems, such
as:

implementation delays and cost overruns;

premature degeneration of civil works and equipment;

 unreliable water supplies, or over-irrigation, waterlogging and salinity;

social problems, including problems of organization, equity, land tenure and

gender exclusion;

lower than expected output values, due to poor technical performance or

reflecting over-optimistic price projections by planners.

The World Bank Task Force stressed that the ultimate success of a project is to a
significant degree determined by what happens in the "upstream" planning process,
and that many implementation problems can clearly be traced to deficiencies here.
These findings are now considered generally valid by other international financing
institutions and donors. The lessons learned regarding these problems, and the new
approaches that have been developed to tackle them, therefore make new guidelines
essential and timely.

PART I: RECENT LESSONS AND IMPLICATIONS FOR PLANNING

Since the ultimate success of an investment is largely determined by the quality of the
upstream process of planning, it is pertinent to examine recent lessons learned from
experience and their implications for future planning. The main lessons are that water
is an increasingly scarce resource for which there are many competing demands that
are more profitable, socially and economically, than irrigation; also that low world
prices for basic food and fibre crops, together with typically high development costs,
have recently made new irrigation development increasingly difficult to justify. Even
so, world food supply will depend even more on irrigation in the next century than in
the present. Future irrigation investment must therefore focus on lower cost solutions,
both for new development and for rehabilitation, on making better use of existing
irrigation facilities and on increasing output value per unit of water used. Planners
should seek to establish the conditions that will promote this focus.

1. IRRIGATION IN THE CONTEXT OF WATER RESOURCES MANAGEMENT

In recent years, water issues have been the focus of increasing international concern
and debate (1) . More than two thirds of the water withdrawn from the earth's rivers is
used for irrigated agriculture; in developing countries the proportion is even higher -
more than 80 percent. But agriculture is a relatively low-value and often highly
subsidized water user. Competition for water with other sectors is already constraining
economic development in many countries; as populations expand and economies
grow this competition will intensify, as will conflicts between water users, or between
countries where such competition transcends international borders.

Cities and industries can afford to pay more for, and earn a higher economic rate of
return from, a unit of water than agriculture. Hence governments and financing
institutions are being forced to reconsider the economic, social and environmental
implications of investment in irrigation. As a result, it is likely that in future the water
sector will be less dominated by irrigation, and in some countries water formerly used
for agriculture is already being reallocated for higher-value uses.

The 1993 World Bank policy paper Water Resources Management crystallized much
of the thinking of governments and financing institutions with regard to the overall
management of water resources. It called for new approaches, including demand
management, - that is to say the use of economic, legal, institutional and other policy
interventions to influence the demand for water in order to improve the efficiency of its
use. In countries with significant water management problems, the international
financing institutions increasingly require the preparation of inter-sectoral water
resources management strategies to guide the lending programme in the water
sector, as a precondition to lending for irrigation. The implication is that loans for
irrigation development will not be made where this will prejudice other more profitable
or socially desirable uses of water.

These Guidelines, however, start from the assumption that water policy reviews have
indicated that irrigation is a justifiable option within the context of a country's overall
water resources management strategy, and that investment finance could be made
available for its development. The Guidelines therefore do not address the principles
and processes involved in water resources management strategy formulation, which
are well covered elsewhere (2) . The need for project planning to be in strict conformity
with such strategies nevertheless cannot be overemphasized.

2. IRRIGATION TYPES AND THE ISSUE OF SCALE

Irrigation Typologies

With about 250 million hectares irrigated throughout the world in vastly different
climatic and socio-political environments, some categorization of irrigation may be
thought desirable. Numerous typologies are commonly used, such as system size, the
nature of the water source, and whether schemes are operated publicly or privately.
Definition by size presents difficulties on a global level, since, for example, what might
be considered large-scale in some countries in Sub-Saharan Africa would be
considered as only small or medium-scale in South Asia. Furthermore, many of the
problems confronting publicly financed irrigation transcend scale, and some attempts
at categorization have confused "small-scale" with "traditional" or "informal" irrigation.
Definition by the type or nature of the water source does not recognize the very
different characteristics of major public surface water schemes based on dams in the
USA, for example, and small community-managed tank irrigation schemes in Sri
Lanka.

From the technical viewpoint, a further distinction can be made between rice
schemes, which comprise more than half of the world's irrigation, and non-rice
schemes, because of their fundamentally different characteristics. Since the rice plant
tolerates waterlogging and needs much more water to thrive than almost all other of
the major irrigated crops, it is dominant where water is cheap and plentiful, notably in
the humid eastern side of South Asia eastward through to Japan and Indonesia. Non-
rice projects are generally found in the drier or cooler parts of the developing world.
The design and operation of a rice-growing irrigation system is significantly different
from that for other crops: rice fields are waterlogged to reduce the weeding
requirements, whereas crops such as wheat, maize and especially cotton will die
under these conditions(3) . Once the crop is established rice schemes usually receive a
small but continuous flow to maintain flooded conditions; field-to-field irrigation is
acceptable because a down-catchment farmer will often use what an up-catchment
farmer wastes. Irrigation systems designed for other crops do not usually suit rice very
well, and vice-versa.

For the purpose of these Guidelines, irrigation could perhaps be categorized globally
as either public or private, ie by the degree of end-users' commitment of resources to,
and control over the operation of, the system, rather than the usual categorization by
scale. Even this is difficult to define precisely, since the share of public versus private
resources can vary widely between schemes. Nevertheless, public irrigation is defined
here as any irrigation in which government has the dominant financial interest or
management responsibility/control. Public irrigation may range in size from schemes
of hundreds of thousands of hectares, down to very small schemes of 10 ha or less;
but in each case these are initiated and developed under public authority and control,
and operated and maintained in the same way. This definition includes for example
state-owned large-scale estates (e.g. for sugar cane production), joint ventures
between government and quasi-government financial institutions, and large-scale
through to small-scale smallholder irrigation schemes set up under government
authority.

Conversely, private irrigation can be defined as any irrigation in which farmers (or a
private sector group) have the dominant financial interest or management
responsibility/control. It includes:

Farmer-managed irrigation schemes of a few hundred square metres to a

several thousand hectares, developed, operated and maintained by individuals,
families, communities, or local rulers and landowners, independently of
government, and generally for the production of basic food or fibre crops and
vegetables for local markets. Examples may be found throughout the world,
from small plots of paddy in Southeast Asia, shallow tubewells in the Indo-
Gangetic Plain, tank irrigation systems elsewhere in South Asia, qanat systems
in Iran, Afghanistan and Pakistan, the swamp and flood recession areas with
partial water control in Sub-Saharan Africa, to spate irrigation systems in
Southern Arabia. Some of these systems are hundreds of years old, in which
case they are often referred to as traditional irrigation.

Commercial irrigation, with units ranging in size from a few hectares to several
thousand hectares, financed, operated and managed by individuals or privately
owned companies. This category would include for example localized (4)
irrigation systems of 1-2 ha in extent, for the production of flowers, vegetables
or fruit, to larger overhead or surface irrigated schemes for the production high
value field crops such as tobacco, and privately owned sugar estates.

The most important differences between public and private irrigation as defined above
are that:

in public irrigation it is the government that plans, finances and implements

schemes, and in most cases farmers effectively receive a subsidized service;

in private irrigation, even though government may sometimes facilitate

development or provide incentives, farmers take their own investment decisions,
pay, implement, operate and maintain systems, and carry the risks.

Public irrigation therefore tends to be supply-driven and may incorporate political or

social objectives, while private irrigation is demand-driven and reflects financial
objectives or, at times, the survival strategy of the poor. These characteristics impinge
on many of the basic decisions for development planning and imply fundamental
influences on the investment approach. The features that make successful private
irrigation self-sustaining should if possible be emulated in planning public irrigation
investments. Thus farmers must be involved in the planning decisions, contribute at
least a part of the capital costs, and accept full responsibility for operation and
maintenance (O&M). As will be seen, the planning and investment trend in publicly
financed irrigation is to emulate those characteristics of private irrigation that make it
generally self-sustaining.

The Issue of Scale

According to a World Bank review of its experience in irrigation (5) , there is no

evidence to suggest that small-scale irrigation is more or less likely than large-scale
to achieve success, judged in terms of sustained economic internal rate of return.
Nevertheless, it can be argued that where irrigation institutions - public or private - are
still relatively weak, where there is a lack of capacity to plan, implement, operate and
manage large schemes, attention should focus on smaller developments. Smaller
schemes are more conducive to farmer management and control, and market
limitations for the crops produced often make such schemes the only viable choice.
On the other hand, there are many examples of the development of small public
irrigation systems, scattered over a wide area, that have overstretched the logistical
and staffing capabilities of irrigation agencies and have eventually failed. In theory,
larger developments should encourage more Government support, attract better
management, be easier to organize, and therefore enjoy better prospects for
sustainability.
There are numerous other arguments for and against large or small irrigation
schemes: for example, the obvious economies of scale and multiplier effects of large
schemes (see Box I-1). Many of the arguments are valid in some countries, for certain
irrigation types, but not in others. Thus, generalization should be avoided and the
issue of scale should be approached considering the individual circumstances of the
project and institutional capacities in the country concerned. As will be seen, there are
more important issues than scale: the overwhelming experience is that what is
important in predisposing irrigation to success is the extent to which it enjoys the
commitment of stakeholders (6) to good engineering design, quality construction,
efficient operation and adequate and timely maintenance.

Box I-1. Large versus Small Irrigation Schemes

Large Scale Small Scale

For: For:

Engineering economies of scale usually possible,
hence, potentially lower unit costs.
Governments more disposed to take the actions
necessary to ensure that project succeeds.
Economies of scale result in cost-effective provision of
extension services and social/economic infrastructure.
Greater regional impact of secondary benefits.
Easier physical planning of contiguous blocks than
scattered areas.
Usually less exacting technical demands for high level
professional skills for planning, implementing, operating and
maintaining.
Greater opportunity for farmers to participate in planning,
financing, implementing, operating and maintaining.
Better adapted to supplying local markets with (high value)
horticultural products without depressing prices.
Relatively simple organization and management.
Often quick yielding.

Smaller risk of irreversible adverse environmental and social

Against:
Demand for high level professional skills and
institutional capacity in planning, implementing,
operating and maintaining.
impacts
Against:
Diseconomies of scale sometimes result in relatively longer
period required to plan and implement (per ha developed).

Relatively complex organization and management
requirements; scope for farmer management limited to
tertiary system, hence greater recurrent cost burden to
government or other central authority (which may
offset potential economies of scale).
Fragmented distribution results in more difficult logistics for
implementation, extension coverage and provision of social
and economic infrastructure.

Longer period required to bring complete project into

production.

Greater potential for irreversible adverse

environmental and social impacts, such as
displacement of settlements or disruption of wildlife
habitats.

3. IRRIGATION, FOOD SUPPLY AND DROUGHT

Options and Alternatives for Food Supply

As populations in some developing countries continue to grow faster than increases in

food production, the options for meeting the consequent incremental demand for food
need to be considered. These are discussed below.

Rainfed Production of Food as an Alternative to Irrigation

Although between 30 and 40 percent of the world's food at present comes from the
irrigated 20 percent of total cultivated land, before contemplating further irrigation
development the potential for increased food output from rainfed areas should be
considered. There may be prospects for obtaining sustainable production increases
under rainfed conditions through relatively simple low cost technologies: for example
improved in situ water conservation techniques(7) , and the adoption of integrated pest
management and integrated plant nutrient management strategies. However where
land resources are scarce, further area expansion of rainfed food production could
increasingly involve more marginal areas, with a risk of increased deforestation, soil
erosion and general land degradation. In the less well-endowed areas particularly, the
potential for stabilization or intensification of existing rainfed production by increased
use of agrochemical inputs is also technically limited: either the possible gains have
already been achieved, or they are unlikely to be achieved because of aversion by
farmers to the known risks of investing in improved inputs in marginal rainfall areas.

Hence, even though irrigation development cannot, and perhaps should not, be relied
upon to meet the entire future increase in demand for food, supply can be expected to
depend to an even larger extent on irrigation in the next century than it has in this.

New Irrigation Development

Increased production through new irrigation development is nevertheless increasingly

difficult to justify economically for the production of basic foods, because of the
decline in world market prices for these crops(8) and typically high per hectare capital
costs (see Box I-2, also Annex 2 of Investment Centre Technical Paper 5 (9) ). The
situation may change in the longer term if, as world population grows, the demand for
food begins to outstrip supply. In this case prices might reasonably be expected to
approach the marginal cost of irrigated production, and the use of current World Bank
price projections for project analyses may be inappropriate(10). Indeed, should world
market prices for basic food crops show signs of recovery, this could significantly alter
the profitability of production of such crops under irrigation. Nevertheless, for the
foreseeable future any expansion of irrigation for the production of basic foods will
only be possible if substantial reductions in per hectare capital costs of new
development can be achieved.

In many countries, however, the better irrigation sites are already developed, and
hence new projects could be expected to cost even more per hectare than those
developed in the past. New irrigation development in these countries may therefore
increasingly be justified only for the production of relatively high value crops - for
which markets and marketing are often constraints - rather than for basic foods. In
this situation markets, as much as the availability of suitable sites, will determine the
pace of investment in new irrigation, unless lower cost technologies can be devised
and introduced. This is today's challenge to irrigation engineers.

Box I-2. Asian Food Production in the 1990s

The introduction and rapid spread of high-yielding rice and wheat varieties combined with heavy investment in irrigation
and rapid growth in fertilizer use in the late 1960s and the 1970s resulted in strong growth in output of these crops in
Asia. For rice, the rate of growth of yields increased from 1.7% per annum during 1958-66 (before the spread of
modern technology) to 2.9% during 1974-82. However, growth in rice yield, the primary contributor to rice output
growth throughout these periods, has slowed to 1.9% annually since the early 1980s.

Area expansion contributed about one-third of Asian rice output growth during 1966-74, but little after that. The annual
growth rate in rice output therefore declined in the 1980s, from 3.1% in 1974-82, to 2.2% during the period beginning
in 1982. Similar trends have occurred with wheat output.
 Reductions in the amounts of new investments in irrigation have been dramatic. Aggregate lending and assistance for
irrigation in Asia in the 1970s and 1980s by four major financial institutions a/ reached its peak in real terms in 1977-79.
By the mid-1980s it was less than 50% of the 1977-79 level. What has caused this decline in investment? Contributing
factors include the large public and foreign debt loads carried by most of the agriculturally based economies in the
region, the declining share of unexploited irrigation development potential in many countries in the region, inter-sectoral
competition for water, and increasing stringent project evaluation in response to political resistance from environmental
interests and those displaced or otherwise negatively affected by irrigation development.

However, the main reasons for declining investment are the increasing real costs per hectare of new irrigation
development and decline in world rice and wheat prices. Rosegrant and Svendsen presented real capital costs for
construction of new irrigation systems in five countries in South and Southeast Asia over the period 1966-88, the
unweighted average for which increased by a factor of 2.5, from US$1,744 to US$4,385 per ha, over the period. The
real price of rice and wheat over this period was halved, representing a swing of a factor of 5 in the ratio of costs to
benefits.

a / World Bank, Asian Development Bank, Japanese Overseas Economic Cooperation Fund, and US Agency for
International Development.

Source: Mark W. Rosegrant and Mark Svendsen (1993), Asian Food Production in the 1990s: Irrigation Investment and
Management Policy, "Food Policy", February 1993.

Intensification of Existing Irrigation Systems

Given that the cost of new irrigation development for food production is increasingly
difficult to justify, and that many existing irrigation systems perform below potential, it
is logical to consider intensification and increased output from existing systems. The
investment emphasis in recent years has therefore shifted towards improving the
latter, taking advantage of sunk costs to achieve incremental production at low
incremental cost. It is important here to note the distinction that has been made
between an endless cycle of rehabilitation, which is simply deferred maintenance, and
upgrading, which involves making existing schemes work better. Upgrading usually
calls for engineering, economic and sociological analysis to arrive at solutions.
Sectoral loans aimed at such improvements have become an important part of the
portfolios of the financing institutions, often linked to system management transfer to
the users (see Chapter 7).

Low Cost Irrigation

The above discussion focuses on irrigation development in formal systems and takes
no account of the existence, in various parts of the world, of large areas of informal or
traditional irrigation.

These, by definition, have been developed on the initiative of farmers rather than
governments, and have continued their existence in the same way. Traditional
irrigation systems are often characterized by poor water control, and consequent low
cropping intensities and yields. In many cases improved water control can be
achieved at comparatively low cost, and is often easily justified by the incremental
production that can be achieved as a result. Thus, given that in some countries the
area under traditional irrigation far exceeds the area under formal irrigation, the scope
for obtaining increased food production from these systems could be significant. The
identification of opportunities for such improvements may therefore be a priority for
planners. However, it must also be noted that the most important feature of these
systems is local initiative, responsibility and control; proposed improvements should
avoid inadvertent transfer of responsibility to government.

Apart from traditional irrigation systems, other opportunities exist for low cost
irrigation, particularly for localized irrigation, including systems based on the use of
clay pots for the storage and gradual release of irrigation water. These, and other
similar devices, often bring nutritional benefits to local communities because they are
generally used for fruit and vegetable production. They make efficient use of scarce
water, but are in general unsuited to large-scale food production (11).

Irrigation and Protection from Drought

In many regions of the world the major river systems have their headwaters in high
rainfall or snowmelt areas and flows are relatively insensitive to droughts in
agricultural areas downstream. Here the value of irrigation in "drought-proofing", by
creating greater yield stability and out-of-season food production, is undoubted.

In other areas subject to repeated and prolonged droughts, such as the Sahel,
northeast Brazil or southern and eastern Africa, although at first sight there would
appear to be no apparent alternative for improving local food security, irrigation does
not always provide full insurance against drought. In much of Sub-Saharan Africa for
example rivers and dams dry out and groundwater levels drop in years of recurrent
drought. It could therefore be argued that in these circumstances irrigated agriculture
is more vulnerable to drought than some less intensive forms of agriculture. Moreover,
even where irrigation potential remains unexploited in these areas, its development
cost nowadays will often only be justified by high value crops. These have limited
markets and will bring primary benefits to only a few of the people normally at risk.
Thus, despite its superficial appeal, irrigation development in these areas may not be
a fully effective means to combat recurrent drought, rural poverty and food insecurity.
There are unfortunately no easy, quick fixes for these problems. Further research is
necessary, aimed at developing viable technical recommendations that take account
of the recurrent drought cycle, including opportunities for non-farm rural employment.
Policy assumptions that automatically equate irrigation development with the
elimination of drought risks in such areas should be regarded with caution.

4. EFFECTIVE IMPLEMENTATION

Experience to date, well summarized in the 1992 report of the World Bank's Portfolio
Management Task Force referred to earlier, makes it clear that a key condition for
sustainable development impact from irrigation investments is implementability. This
requires:

that the implementation requirements of the project are matched to local

institutional capacity;

commitment to the project, built on stakeholder participation and local

ownership.

Other factors, such as good technical design, sound construction and financial
viability for the users are of course equally important. But experience indicates that in
the past irrigation professionals have often underestimated the attention which also
needs to be given to implementability.

Implementation Capacity and External Technical Assistance

The conventional project identification/preparation approach of the past has often

resulted in arriving at detailed project design only to find a mismatch with local
capacity to implement it. Money and technical assistance has then been provided to
bridge the gap. Technical assistance frequently then crowds out any local capacity,
and may in effect substitute for local management rather than strengthen it, bringing
no sustainable improvement.

In the conventional planning process, detailed start-up and implementation plans have
generally been considered as beyond the ambit of the identification/preparation teams
work. That this was inappropriate is now clear and a new approach has been found
necessary: projects should be planned to match local capacity for implementation,
which implies that planning teams should first acquire a thorough appreciation of this
capacity. If necessary the project scope and content may be reduced to match
existing implementation capacity. Technical assistance can then be applied
selectively, rather than indiscriminately as often in the past, for genuinely sustainable
capacity to be built. The planning process should therefore give specific attention to
an analysis of institutional capacity, and to providing a detailed programme to enable
the implementers to prepare themselves for carrying out the tasks expected of them,
once the project becomes effective.

Participation, Ownership and Commitment

Successful implementation requires participation in the planning and implementation

process by all stakeholders, in order to create a sense of ownership of, and
consequent commitment to, the project. This requires that the project planning
process should allow time for the borrower and users to participate in, or preferably
drive, the planning process, and for any potential losers to have a substantive
influence on decisions that affect their future. Ownership and commitment by the
users are unlikely to be achieved unless they consider that the project would meet
their felt needs(12) and they have a stake in the equity - that is, they share in or bear
all of the investment costs.

Building ownership and commitment through participation has often been difficult to
achieve in the past. The conventional sequence of identification/preparation, carried
out against tight deadlines by external planning teams, has seldom allowed time for
genuine participation (which should go beyond mere consultation), either by
government staff or farmers. On implementation, government irrigation engineers, for
their part, have usually seen irrigation only from an engineering, rather than a farming
or social, perspective. They have been reluctant to adopt participatory approaches
with farmers, mainly because of a misplaced belief that farmers are unable to
understand or make any contribution to technical matters, or because of concerns
that participation might delay implementation or result in design changes that
compromise the quality of the final product.

Undue delays in project approval and implementation are undesirable, not least for
the farmers; but taking time over stakeholders' participation in planning does not
necessarily mean delay. It can often pay dividends, by preparing the implementers,
ensuring smooth start-up, building farmers' commitment to change, and may
ultimately lead to more rapid implementation and a more sustainable development
impact. Experience has shown that the ultimate scheme design almost always
benefits from involving the users in the planning process. Farmers, or at least those
with some experience or knowledge of irrigation, from the poorest illiterate smallholder
to the richest well-educated commercial farmer, usually have practical ideas of what
works and what does not, from their detailed local knowledge of weather patterns,
hydrology, soils, markets, and so on. Communities often have strong preferences
regarding the nature and location of development that needs to influence planning,
such as aligning a canal to avoid excavation in sacred ground.

Participatory or consultative planning is essential in rehabilitation projects or the

upgrading of traditional farmer-managed irrigation systems, to take advantage of the
invaluable store of cross-disciplinary knowledge that farmers possess about the
existing systems. Projects that involve the displacement and resettlement of people
can only be planned and implemented effectively if those affected are involved in the
planning process and their suggestions and concerns taken fully into account.
As will be seen from Chapter 5, involving farmers in system design can also often
result in significant cost savings, particularly if the farmers themselves are expected to
take a share in the equity by contributing to the investment costs. Sound engineering
is essential, but it can nonetheless take account of the farmers' experiences and
preferences. Yet farmers, as a possible source of system design input, are still too
often ignored by engineers, and as a result schemes are often inappropriately
planned (see Box I-4).

Box I-4. Second Approximations:

Unplanned Farmer Contributions to Irrigation Design

Farmers interviewed on the Kosinggolan Scheme of the Dumoga Irrigation Project in North Sulawesi, Indonesia
frequently reported that during construction they had approached construction labourers or supervisors in the field to
suggest changes and were usually told that the design had been established by the government and could not be
changed. Often farmers relocated the construction markers when the crews had left. Others waited until construction
was finished and the contractors had moved on before altering the structures. Altogether, 27 design alterations were
identified in the sample blocks. Many cases involved multiple alterations that were interconnected.

The most common kinds of alterations observed were channels being relocated, streams being diverted or ponded,
project channels being abolished or not used, and channel offtakes or division points being relocated. Other actions
included redirecting project channels into drains or streams, making new channels, adjusting division box gates to
alter water divisions, making new flumes, destroying project flumes and lining channels. Several cases involved
relocating channels to follow farm boundaries, to accommodate low water requirement crops or to continue to make
use of pre-existing farmer-built structures such as small weirs, channels and ponds.

The most frequent reasons reported by farmers for making design changes related to questions of conveyance and
distribution efficiencies, farm boundaries and the conjunctive use of alternative water sources (in this case from
natural waterways or from return flow).

Source: Vermillion D.L., in Design Issues in Farmer-Managed Irrigation Systems, Proceedings of an International
Workshop of the Farmer-Managed Irrigation Systems Network held at Chiang Mai, Thailand, December 1989. IIMI,
Colombo, Sri Lanka (1990).

A Possible Role for Non-Governmental Organizations (NGOs) (13) in Participatory

Development

Farmers may be as uninterested in participation as government irrigation

bureaucracies, especially if in the past they have received free, though possibly
unreliable, irrigation services and are now expected to bear more of the costs. They
may often be suspicious of government officials, especially if they have been the
losers as a result of incompetent or corrupt practices. Farmers may therefore require
considerable persuasion to commit themselves to participate.

Participation usually also requires behavioural change in irrigation bureaucracies, and

until this is achieved they may not be in a position to implement participatory
development. Some bureaucracies have successfully employed young graduates in
social science to work directly with farmers to assist the latter to mobilize and
organize themselves to participate in project planning and construction(13). However,
for various reasons it is often difficult for irrigation bureaucracies to attract and retain
such staff. Even if such staff can be recruited, farmers may still hesitate to cooperate
fully with persons they regard as government agents. In this case what is often
required is a non-governmental intermediary, to identify community needs and
articulate them on behalf of the otherwise voiceless. While non-governmental
organizations vary in their ability to work with the poor and to cooperate with
government agencies, several of them have undertaken this role successfully.

However, caution is necessary to avoid any suggestion that NGOs should replace
more formal local institutions: in some cases, there would be advantages but in others
such a move could be counter-productive. Instead, suitably qualified and motivated
NGOs may be sub-contracted, either by local government (14) or through the farmers'
own administrative structures(15), to provide technical assistance services to animate
participation. They may also often assist in capacity building by training government
staff in this role.

5. FISCAL SUSTAINABILITY

The Need for Cost Recovery

Economic efficiency and fiscal sustainability demand that the capital costs of irrigation
infrastructure should eventually be recovered from the users, in order to permit longer-
term replication of investments. On equity grounds, it can also be argued that costs
should be recovered, as farmers who are able to irrigate tend to be amongst the better
off members of the rural population. In practice few countries have ever succeeded in
recovering much more than the O&M costs of public irrigation directly, although
indirect recoveries in the form of agricultural taxes or generally negative terms of trade
for the subsector have in some cases been important (see Box I-5).

Box I-5. Cost Recovery: Setting the Appropriate Level

A 1986 World Bank Operations Evaluation Department (OED) report described serious cost recovery problems on the
Muda project in Malaysia, where at the time of audit, water charges and land taxes remained far short of meeting O&M
costs. The prospects for raising direct cost recoveries were considered poor, partly because of the heavy burden on
farmers of zakat, a religious tithe, and a substantial sales tax collected from produce in the region. However, the audit
report concluded that if the zakat, estimated in an FAO study to be 5-7 percent of gross farm income, as well as the
indirect return to the government resulting from controlled prices were taken into account, the Muda farmers' combined
payment of water charges, taxes, and the production tithe covered all the O&M costs plus 20 percent of capital costs
(at 10 percent annual interest).

Source: OED Report No 6233, World Bank Lending Conditionality: A Review of Cost Recovery in Irrigation Projects.
World Bank, Washington DC, June 1986.

It has also been argued that the complexity of some irrigation and drainage schemes
justifies state intervention and subsidizing of part of the investment costs, without
which some worthwhile projects may not have been constructed. In these cases
capital costs not recovered may not really be subsidies if all the secondary benefits of
irrigation development are taken into account. In a case study of the Muda Irrigation
Project in Malaysia, for example, it was found that for every dollar of value added
generated directly by the project, another 80 cents were generated downstream(16).
Moreover, other researchers have argued that the multiplier effects of investment in
agriculture in developing countries are generally greater than those associated with
investment in other sectors (17). Nevertheless, the governments of many developing
countries faced fiscal crises during the 1980s that focused their attention on the
shortcomings of existing policies for financing irrigation, particularly with regard to the
O&M costs. The general consensus now, among governments and financing
institutions, is that users should pay all of the O&M costs and as much as possible of
the capital costs.

Cost Recovery, O&M and Water Charges

Problems with cost recovery and O&M form a vicious circle. Irrigators on public
schemes are commonly reluctant to pay any charges that they are not forced to: poor
collections lead to poor O&M, and an even greater reluctance to pay. It is also
generally accepted that the standard tactic for dealing with poor O&M in the past -
that of relying only on raising water charges - does not usually work, mainly because
revenue from water charges (if they are collected) is often returned to the general
treasury instead of being allocated to O&M. There are exceptions to this rule, for
example on public schemes in Morocco, but in these cases increased water charges
have been accompanied by improved service, hence greater willingness to pay on the
part of the farmer.

Any suggestion that irrigators on a public irrigation scheme cannot afford to pay even
the O&M costs needs to be examined very critically. If irrigators cannot pay it can only
be assumed that the scheme is either unviable - in which case the question should be
asked why it was built or what can be done to make it viable - or unreliable, in which
case measures should be taken to correct the situation. Moreover, there is an issue of
equity involved in subsidizing some members of society by way of artificially cheap
irrigation: in principle it may be a praiseworthy social objective, but with typically high
unit costs for irrigation development, the social impact would in most cases be greater
if any subsidy was spread more thinly over a higher proportion of the rural poor.
Fiscal constraints in many developing countries simply do not permit subsidies of this
kind anyway.

The application and collection of water charges can be further complicated by various
factors, including for example local customary law, or a fundamental belief in some
countries that water should be free. There is also the difficulty of volumetric
measurement. The first of these may be overcome to a certain extent by charging a
"service" fee for irrigation. But this usually takes the form of an area or crop-based fee
that provides no incentive for the efficient use of water and may thus contribute to
wasteful usage. Even if it were possible to charge individual farmers for water on a
volumetric basis, which it seldom is for most surface irrigation systems involving
smallholders, setting an appropriate charge may present some difficulty because of
local economic distortions (see Box I-5 above). Nevertheless, without some form of
volumetric charging, individual irrigators have little incentive to make more efficient
use of water.

One solution to the problem of water charges is to devolve financial autonomy for
O&M to users' groups, or to irrigation agencies dependent upon the users for finance.
Metering of water supplied to larger groups, even if only approximate, is usually more
technically feasible, and the group as a whole can then be charged. It becomes the
group's responsibility to allocate water amongst its members and to recover the
charges; the experience is that users' groups are more effective collectors of fees
than government agencies. However, this solution will depend for success entirely on
the cohesion of the group involved. Conditions for the sustainability of users' groups
are discussed later.

Users' Contributions to Capital Costs

Apart from the obvious fiscal advantage, a contribution by users towards the capital
cost of a new or rehabilitated scheme is an indication of demand and commitment. In
effect, this is an investment in equity and hence the scheme becomes to some extent
private, enhancing prospects for sustainability. For this to happen it requires that the
users will be in a position to make such a contribution, and that there are no economic
distortions in place that make it impossible for them to do so.

It also presupposes that government is committed to recovering costs. Yet there are
many examples around the developing world where governments and donors have
adopted the view that users are too poor to make any capital contribution. In these
cases the construction or rehabilitation of an irrigation scheme is often seen as a
welfare project rather than as an investment project, and farmers are paid in cash or
food to contribute labour to the construction of the scheme. There are no signs that
such an approach engenders any sense of ownership or responsibility. Farmers are
more likely to view construction simply as a source of off-farm employment, to regard
the scheme as government infrastructure and ultimately to show little subsequent
commitment to it. Moreover, the injection of large amounts of food into an area under
food-for-work programmes can sometimes depress agricultural prices and affect other
farmers' incomes.

Even among very poor populations, individuals and communities have been willing
and able to invest substantial amounts in cash and kind for projects that they consider
are worthwhile. If nothing else, irrigators or prospective irrigators can contribute
labour, even if only for a few hours a day, and provide locally available materials for
construction. Unwillingness to contribute implies a lack of demand for the irrigation
development proposed, hence a lack of commitment, which invariably leads to
unwillingness to accept O&M costs. Thus the International Fund for Agricultural
Development’s (IFAD) irrigation and drainage investment strategy (18) requires that
users should "contribute between 10-20 percent to the direct costs, preferably in kind
or labour", and that they should "pay for the cost of irrigation equipment (cash/loans)".
Experience suggests that this is not unreasonable, if the development proposed is an
appropriate response to local demand for irrigation (19). On some public systems in
Morocco, for example, up to 40 percent of the initial capital costs are recovered from
farmers, and private irrigators throughout the world - including those on traditional
farmer-managed irrigation schemes - are willing to pay up to 100 percent of the cost
of their schemes.

As mentioned, case studies have shown that requiring a capital cost contribution from
farmers can result in significant overall savings if farmers themselves are involved in
system design. For example, in the IFAD/World Bank-funded Communal Irrigation
Development Project in the Philippines, actual costs were US$ 4,100 per hectare
compared with the originally estimated US$ 7,000, not only because of the farmers'
contribution of labour and materials, but also because of farmer-led design
changes(20). Farmers will invariably seek the least cost solutions if they have to pay
even a part of the costs.

Land tenure problems can, however, be a constraint to users' participation in capital

costs. Where farmers are unable to gain legal or even customary title to their land
they are not normally willing to invest, unless they have confidence in long term
usufructuary rights. Legislation may therefore be necessary in order that freehold
tenure or long leases can be granted - for which reason, among others, government
commitment to the proposed investment is essential.

6. WATER USERS' ASSOCIATIONS

Water Users' Associations and Transfer of O&M Responsibility

Fiscal crises have in many cases forced governments to devolve financial and
managerial responsibility for existing irrigation systems to the users - in effect to
privatize them - and to ensure that users' groups on new schemes accept full
responsibility for O&M from the outset.

The degree of responsibility which water users' associations (WUAs) can be given for
management of a system depends on its scale. It is obviously unrealistic to expect a
WUA to take over full responsibility for a system that serves hundreds of thousands of
hectares and which was previously operated (even if poorly) by a large irrigation
agency. On the other hand there are other options available, such as users'
representation, either directly or indirectly through apex WUA organizations, on the
board of a financially autonomous irrigation authority, or for WUAs or their apex
organizations to make a contract for the provision of irrigation services with the private
sector. Smaller schemes, including their main water supply infrastructure, might on
the other hand be managed entirely by a WUA. The objective in either case is greater
user commitment, which can lead to more efficient use of the resources by helping to
overcome many of the problems that public irrigation systems face, such as
inequitable water distribution, corruption (see Box I-6), inefficiency and poor O&M.
Attention is nowadays being focused on how to achieve this commitment, and to what
extent WUAs can be assisted to form and to manage their own affairs.

Box I-6. Corruption in Public Irrigation Schemes

Social research and experience have shown that irrigation projects in some developing countries provide irrigation
engineers and other operational personnel with opportunities to raise significant amounts of illicit revenue from the
distribution of water and contracts, some of which may be redistributed to superior officers and politicians. Thus, in
return for financial inducements, irrigation engineers will award contracts to high-priced or unqualified, incompetent
contractors, and "turn a blind eye" to substandard work that saves costs for the contractor and increases his profit.
The results of such corruption are not usually immediately apparent, but substandard work obviously has a detrimental
impact on subsequent maintenance requirements and costs, contributes to the vicious circle of poor maintenance-poor
cost recovery-poor maintenance, and hence has an obvious bearing on sustainability. Financial inducements may also
be used to bribe ditch-riders and other operational personnel to enhance water supplies to one farmer, or a group of
farmers, at the expense of others, usually the poorest and least powerful, which often means tail-enders.

Corruption of this kind is considered to be one of the most important supply-side factors in the poor performance of
public irrigation. It has been very difficult to control in the past because of lack of financial discipline and accountability
within irrigation bureaucracies.

Source: Wade R, The System of Administrative and Political Corruption: Canal Irrigation in South India. Journal of
Development Studies 18(3): 287-328.

Conditions for Sustainability of Water Users' Associations

Experience to date in the formation of WUAs and the transfer of irrigation O&M
responsibilities to them has been uneven. The 1994 World Bank review of its
experience in irrigation, referred to earlier, concluded that some WUAs have been
stillborn, some have died in infancy, and some have lived on but performed no useful
function. Byrnes(21) concluded that most WUAs in World Bank-assisted projects in
Pakistan remain relatively weak. Meinzen-Dick et al., (22) reached a number of
conclusions regarding what leads to strong WUAs, the policy factors that can assist in
the development of such organizations, and the implications for constructive
interaction between irrigation agencies and WUAs, particularly for the transfer of
irrigation responsibilities.

These were summarized as follows:

WUAs are stronger if they can build upon existing "social capital", or patterns of
cooperation. It is therefore advantageous to work with existing successful
organizations wherever possible. Whether existing or new organizations are
involved in irrigation management, the organizations should be adaptable - to
their local conditions and to changes over time. WUAs are also likely to be
stronger if they are relatively homogenous in terms of members' background,
and assets. However, heterogeneity is manageable (or even, in some instances,
desirable), and defining membership to include all stakeholders - including
tenants and women - improves equity.

There is no single "optimal size" for WUAs. As size increases, transaction costs
increase and it becomes more difficult for members to monitor each other.
However, larger WUAs can achieve economies of scale, and take on more
tasks in irrigation management. Federation allows WUAs to expand and operate
on a larger scale, while still maintaining manageable interactions among
members of base-level groups.

The structure and role of WUAs depend on their degree of commercialization.

Greater commercialization allows WUAs to replace direct labour or in-kind
participation of members by hiring specialists, and allows them to expand in
size. However, it also creates a much greater need for accountability of leaders
and employees to the membership.

The range of WUAs shows great variability, but two broad models can be
identified. The first (or "Asian model") typically relies on direct participation of all
members, with smaller base units. These are often socially based, multipurpose
organizations and are likely to be most appropriate in socially cohesive societies
with smaller land holdings, low market penetration and simpler irrigation
technology. The second (or "American model") is a more specialized
organization based on hydraulic boundaries, and the organizations are focused
on irrigation rather than multiple activities. Such organizations are appropriate to
situations of larger land holdings, greater market development, and more
complex technology.

In any type of WUA, the benefits to farmers should outweigh the cost of
membership. The benefits of improved water supply, increased farm income,
and conflict resolution obtained through WUAs should offset the substantial
time, materials, cash, and interpersonal transaction costs of being involved in
the WUA. This implies that irrigated agriculture should be profitable enough to
create a demand for water, and WUAs should have a demonstrable effect in
improving farmers' control over water.

Organized farmers in WUAs can manage more advanced technology, and

higher levels of irrigation systems. Their expanded role in main system
management can provide a greater degree of control over water supplies,
which, where water is scarce, is a major incentive for farmers to participate in
WUAs.

Where public agencies retain operation and maintenance responsibilities at

higher levels of the system, they need to carry out these roles effectively so that
farmers will feel it is worthwhile for WUAs to carry out their functions at lower
levels. Developing a service orientation among agency staff and a collaborative
attitude between agencies and WUAs is essential for successful joint
management of irrigation systems and for management transfer programs.
Strengthening agency accountability to users through public information of
irrigation plans and programmes and providing financial autonomy for irrigation
agencies to rely on user fees for their budgets are strong incentives for the
agency to foster WUAs.

A supportive policy and legal environment is crucial to the sustainability of

WUAs. State policies of administrative and financial decentralization have
provided the impetus for many management transfer programmes which
diminish the role of the state and expand the role of WUAs. A facilitating legal
framework is critical to give WUAs the ability to deal effectively with external
groups, operate bank accounts and undertake other activities. However, the
legal framework should be flexible enough to allow members to adapt their
organizations to local circumstances. It should also balance rights with
responsibilities for WUAs in order to ensure that members have sufficient
incentive to participate. Clear assignment of property rights over water and over
the physical infrastructure of irrigation systems to WUAs can be a potent tool for
strengthening the organizations, and should be given greater attention,
particularly in programs which aim to transfer responsibilities and costs of
irrigation system management from the state to users.

There is a changed but essential continuing role for the state in ensuring long-
run sustainability of WUAs. Particularly important roles for the state are
establishing and adjudicating water rights, monitoring and regulating
externalities and third party effects of irrigation, maintaining a supportive legal
 framework, providing technical and organizational training and support to
WUAs, and occasionally providing design, construction, or financial support for
major rehabilitation.

However, turning over management of public irrigation schemes is not merely a

matter of consultation and forming WUAs, with government continuing to act as the
prime mover. Power struggles, collusion and corruption may not always be eliminated
by user participation and the creation of WUAs. Not too much should be expected
from them, especially in the short term. Their creation requires a re-orientation of
irrigation bureaucracies towards providing a service and creating an environment that
facilitates the formation, by the users themselves, of sustainable WUAs. Sound social
engineering is as necessary as good technical engineering. The ease with which
sustainable WUAs will form, and successful transfer of responsibilities will then take
place, will vary according to different physical, social and financial circumstances.
There is no magic solution, no one set of rules can be applied, and considerable time
and resources will have to be invested in learning how best to approach the process
in each case. Investment project designs which provide flexibility and a progressive or
pilot-led approach to transfer are more likely to lead to eventual success (23).

7. SOCIAL AND ENVIRONMENTAL ASPECTS

Adverse social and environmental impacts of irrigation investments have been many
and varied. They include health impacts (malaria and schistosomiasis), and
waterlogging and induced salinization (24). Displacement of people from dam sites with
inadequate consultation and compensation has also been a major source of
problems. Land acquisition and resettlement requirements have often caused delays
to implementation or even cancellation of loan agreements. Although some would
argue that on the whole the social and environmental disbenefits of irrigation are far
outweighed by the benefits, there are a number of irrigation projects around the world
that possibly would not have been built had the full negative effects been foreseen,
costed and entered into a cost benefit analysis.

Box I-7. Some Social and Environmental Issues in World Bank-Financed Irrigation Project Planning

The 1994 World Bank review of its irrigation experience commented as follows on the coverage of gender issues in its
sector work:

"Irrigation affects men and women differently. Even if they have equal roles in agriculture, which they
usually do not, women almost always have primary responsibility for such household tasks as food
preparation, washing and providing drinking water. However, except for the most recent studies on
Mexico and India, none of those (sector reports) analyzed was found to have addressed the subject."

and on organization and management:

"Coverage of management and organization was broad but generally superficial. It focused on
management and organization of government institutions, occasionally on their relations with irrigators'
organizations, and never on the irrigators' organizations themselves."

and on broader environmental issues:

"Coverage of special areas of environmental impact has been poor and is still quite weak. This is the
case for drainage, an important source of environmental troubles in numerous countries, and especially
so for aquifer management, and the various dimensions of catchment management: deforestation,
overgrazing, inappropriate farming, soil degradation, erosion, and silting."

Source: Report No 13676: A Review of World Bank Experience in Irrigation. Operations Evaluation Department, World
Bank, Washington DC (1994).
Despite the years of experience and the lessons learned - and despite the existence
of clear operational guidelines for dealing with social and environmental issues -
governments, financing institutions, project planners and implementers have in the
past often paid only lip service to the need for systematic problem identification,
assessment and mitigation. In the past one of the reasons for this was that promoters
and implementers of irrigation projects found that addressing such issues was an
inconvenience, as well as a likely source of project delays or cancellations. And even
though environmental legislation existed, environmental agencies generally did not
have the teeth to implement regulations; if planners wished to strengthen these
agencies in parallel with the formulation of irrigation investment proposals, it was
already too late.

The approaches and attitudes of governments and financial institutions have changed
more recently. The consensus now is that social and environmental impact
assessment is essential and as important as economic analysis in influencing the
design of projects.

8. CHOICE OF TECHNOLOGY

Common sense dictates that the choice of technology for irrigation should be based
on its appropriateness for the cropping patterns intended and should also consider
cost-effectiveness. Irrigation engineers have in the past tended to overlook an
additional need: for the technology also to be matched to the level of sophistication or
operational capacity of the users. It has become increasingly obvious that the design
process must start from a consideration of how the users will operate the system; this
should then be designed to provide the optimum combination of efficiency in water
use and cost effective operation and maintenance. Equally important, the designer
must consider how the user will cultivate his land, and the implications that this may
have for scheme layout. Thus it may be that the design which involves the lowest
investment cost per hectare may not be the most cost effective solution if it also
involves large numbers of staff for its operation, or if, because of operational difficulty,
it cannot be utilized to capacity. On the other hand, a design to improve water use
efficiency on a traditional irrigation system by the introduction of "modern" water
control structures may not result in overall efficiency gains if the users reject the
modern controls in favour of their traditional proportional dividers.

The choice of technology, whether for new development or rehabilitation of existing

schemes, has been the subject of much debate over the years. While most irrigation
engineers would now agree that the starting point for design must be ease of
operation, they still tend to polarize into two camps. One sees the problem largely as
overcoming the hydraulic instability of extensively-gated manually operated systems;
it sees the solution as the modernization of these systems, adding automatic
downstream control structures and other feedback mechanisms designed to achieve
hydraulic stability. The other accepts the reality of farmer damage in wet season
drought and so favours designs based on cruder and more robust structures; the
possibility of just-on-time, demand-based, delivery of water to crops is foregone, in
the hope of preserving the civil works from interference (25).

Discussion of this issue is well covered elsewhere (26) and need not be continued here
except to note the conclusion of the World Bank in its 1994 review of its experience in
irrigation, that there is inconclusive evidence to favour one camp or the other. Both
would agree on the need to eliminate anarchy and on the importance of flexibility of
operation.

9. THE DRAINAGE DILEMMA

The world is faced with a huge backlog in drainage requirements. Over the last
quarter of a century water usage for irrigation has more or less doubled without a
comparable increase in drainage capacity. In the longer run poor drainage is one of
the most significant causes of reduced yields and of irrigated land going out of
production, as shown, for instance, by the extent of saline and waterlogged areas in
Pakistan. The stage has now been reached when it is necessary to correct the
drainage omissions of the past. At the same time there is a need to improve water
use efficiency to reduce the drainage demands of the future.

It is necessary however to consider why, even where provision for drainage has been
made in the past, it has often survived for only the first few years of a project's life. In
most cases of poor scheme maintenance it is the drains that are allowed to
deteriorate first. One of the main reasons is that within a year or two of construction
tertiary drains are often cultivated over by the irrigators who are theoretically
responsible for them. Secondary drains, which are usually the responsibility of the
irrigation agency, are often also partially filled in by farmers to provide crossings or to
pond water for other purposes. The main drains are therefore quickly rendered
redundant.

To improve the sustainability of drainage systems, channels should be limited to those

which are essential; but these should be adequately maintained and defended against
encroachment. Provision of crossings, each with adequate culvert capacity, is
essential or obstruction by informal cultivator-constructed crossings will inevitably
result(27). The challenge is to persuade farmers to accept the importance of drainage
and to take responsibility for its maintenance. This further reinforces the need to
promote participation and ownership by the users.

10. IMPLICATIONS FOR THE PLANNING PROCESS

To summarize, there is growing recognition that:

Water is a scarce and valuable finite resource with many competing demands
for its use. Where such competing demands exist, charges for irrigation use
should at least reflect its scarcity value. International funding is unlikely to be
made available for irrigation if the use of water for this purpose prejudices other
more profitable uses.

There are more important issues in irrigation than that of scale - for example the
degree of users' demand and commitment to subsequent O&M. The issue of
scale should be approached with an open mind, in each case considering the
circumstances of the country and project opportunities concerned.

Although world food supply will depend even more on irrigation in the next
century than it has in the past, the per hectare capital costs of typical new
irrigation development may be difficult to justify by the returns from basic food
crops alone. Unless low cost solutions can be found, or demand forces the price
of basic food crops up, irrigation investment to achieve incremental food
production (other than rice) may be limited to upgrading existing formal and
traditional irrigation systems.

Apart from the obvious technical and financial conditions, the key condition for
sustainable development impact from an irrigation investment project is its
implementability. This requires that the institutional demands of the project are
matched to local institutional capacity, and that stakeholders are genuinely
committed to the project through participation and local ownership. The
conventional project identification/preparation approach of the past, which has
left little room to participative approaches to project design, has militated
against these requirements being met.
Economic efficiency and fiscal sustainability demand that the O&M costs and at
least a part of the capital costs of irrigation should be recovered from the users.
However, in practice this is rarely achieved. Fiscal crises in many developing
countries are now forcing governments to devolve responsibility for existing
schemes to the users or private companies, and to ensure that users of new
schemes accept responsibility for O&M from the outset. This often requires
institutional reorientation of irrigation bureaucracies, the formation of users'
groups or WUAs, and an even greater need for participation and local
ownership.

Adverse social and environmental impacts are significant contributors to project

failures. Despite past mistakes, governments, financing institutions, planners
and implementers all too often continue to pay only lip service to the need for
impact assessment and to internalizing the findings in project design. The
consensus now is that social and environmental impact assessment is as
essential and important a tool as economic analysis in planning successful
projects and programmes.

Drainage should be given much more prominence than in the past, in both
strategy formulation and the planning of individual projects.

The implications of these lessons for the planning process are that:

Project planning needs to center more on the users, and less on the
requirements of the lender, and to emphasize participation and capacity-building
features. Whilst project planning has always been a government responsibility,
there needs to be even greater insistence that international project planning
teams, such as those provided by the Investment Centre, facilitate and assist in
the planning process by complementing and supporting local preparation
groups, rather than assume direct responsibility for the tasks involved.
Increasingly, therefore, external technical support should involve providing
inputs and support to a process that is driven nationally and involves
contributions from many, diverse local stakeholders.

Given this diversity of contributors, the planning process will continue to evolve
away from conventional identification and preparation to one that is less
compartmentalized. Analysis and reporting are more likely to build up a dossier
of reports, working papers and other documentation, that may not necessarily
be neatly a wrapped and packaged document that can be presented as an
"identification" or "preparation" report.

Instead of producing comprehensive stand-alone preparation reports,

international project planning teams will be required to produce working papers
that can be used to support a project proposal or appraisal, or they may simply
be required to review such papers produced by national preparation groups.

Due to the importance now attached to social and environmental impacts the
evaluation of these must be given as much prominence as economic evaluation
in influencing project design.

In some cases the planning process may become as important an end as the
ultimate project plan, since it will be the main means of building local
commitment and capacity. When successfully executed, this approach should
be exploited to reduce the time spent in bringing about readiness for
implementation, and to ensure smooth start-up, rapid implementation and
ultimately sustainable development impact from investments.

Given the importance now paid to increasing implementation capacity,

multilateral lending for irrigation and drainage is likely to continue to favour
sectoral loans for this purpose, most often linked to upgrading of schemes and
 facilitating greater involvement of irrigators themselves, NGOs and the private
sector in project implementation. Long-term technical assistance will be financed
only as a last resort, with specialized short-term inputs that will focus particularly
on institutional, environmental, social or organizational issues.

Further Reading

[Editor’s Note: This publication is planned for revision in the near future. For an
update on the World Bank’s current perspective on some of the issues raised above,
the Investment Centre suggests readers look at these recent references:

Ashok Subramanian, N. Vijay Jagannathan and Ruth Meinzen-Dick, "User

Organizations for Sustainable Water Services", World Bank Technical Paper
No. 354, April 1997.

Salman M. A. Salman, "The Legal Framework for Water Users’ Associations, A

Comparative Study", World Bank Technical Paper No. 360, March 1997
(English and Russian versions).

Ariel Dinar and Ashok Subramanian (Editors), "Water Pricing Experiences, An

International Perspective", World Bank Technical Paper No. 386, October 1997.

Salman M. A. Salman and Lawrence Boisson de Chazournes (Editors),

"International Watercourses, Enhancing Cooperation and Managing Conflict,
Proceedings of a World Bank Seminar", World Bank Technical Paper No. 414,
July 1998.]

Footnotes
1. The background to this is described, for example, in the World Bank Policy Paper Water
Resources Management, World Bank, Washington DC (1993) and in Land and Water
Bulletin 3 Water Sector Policy Review and Strategy Formulation: A General Framework
(prepared jointly by the World Bank, UNDP and FAO), FAO, Rome (1995).

2. See for example: Land and Water Bulletin 3, Water Sector Policy Review and Strategy
Formulation: A General Framework (prepared jointly by the World Bank, UNDP and FAO),
FAO, Rome (1995); Water Report 6 Methodology for Water Policy Review and Reform
(Proceedings of the Expert Consultation on Water Policy and Reform - Rome, January
1995), FAO, Rome (1995); Irrigation and Drainage Paper 52 Reforming Water Resources
Policy: A Guide to Methods, Processes and Practices, FAO, Rome (1995).

3. Rice schemes nevertheless require adequate surface drainage, as total inundation of the
crop leads to significant yield losses.

4. e.g. drip or micro-jet.

5. Report No 13676: A Review of World Bank Experience in Irrigation. Operations and

Evaluation Department, World Bank, Washington DC (1994).

6. The term stakeholders includes all individuals who may be positively or adversely affected
by the project: government planning agencies (planning units, senior decision-makers,
Ministers); government implementing and operating agencies (senior and middle level
management of line ministries) who may be subsequently responsible for project
implementation, operation and management; community-based organisations, including
water users' associations (WUAs) or other farmers' organisations; individual farmers; public
interest groups; non-governmental organisations; (NGOs) and private sector companies;
financing institutions; and international project planning teams such as those provided by
the Investment Centre.

7. See Soils Bulletin 57: Soil and Water Conservation in Semi Arid Areas, Land and Water
 Division, FAO, Rome (1987); Investment Centre Technical Paper 10: Agricultural
Investment to Promote Improved Capture and Use of Rainfall in Dryland Farming, FAO,
Rome (1995); also Technical Paper 221: Conserving Soil Moisture and Fertility in the
Warm Seasonally Dry Tropics, World Bank, Washington DC (1993).

8. Paradoxically perhaps, the expansion of irrigation over the last 50 years has been a major
factor in the decline in prices, since it has caused relatively strong growth in supply of rice
and wheat compared with growth in demand.

9. Investment Centre Technical Paper 5, Irrigation in Africa South of the Sahara, FAO, Rome
(1986).

10. Doubts over the use of World Bank price forecasts for food and fibre crops have often
been expressed. However, in the absence of any better alternatives, the analyst can do no
more than attempt best guesses based on the Bank's forecasts, or explore possible future
differences between forecast and actual prices through sensitivity analysis.

11. There are exceptions to this rule: one such system has been satisfactorily demonstrated for
the irrigation of cassava in some Sahelian countries.

12. This is the basis of genuine demand-driven development. Soliciting or orchestrating

requests from farmers for government investments in irrigation is not - even if the
prospective users promise or agree to make a contribution at some later date. Often
farmers are driven by other motives in these circumstances, such as temporary wage
employment on scheme construction, and they later lose interest in the irrigation scheme.

13. For example, the National Irrigation Administration in the Philippines. See An Evaluation of
NIA's Participatory Communal Programme, Public Intervention in Farmer-Managed
Irrigation Systems, IIMI, Colombo (1987).

14. e.g. village or district councils.

15. e.g. water users' associations.

16. Bell, Clive, Peter Hazell and Roger Slade, Project Evaluation in Regional Perspective.
Johns Hopkins University Press (1982).

17. See Vollrath T.L., The Role of Agriculture and its Prerequisites in Economic Development:
A Vision for Foreign Development Assistance. In: Food Policy 1994 19 (5) 469-478.

18. Drawn from Irrigation and Drainage Cluster - Module: The Role of Water User’s
Associations, IFAD, Rome (Draft 20/10/94).

19. Evaluation of the Special Programme for African Countries Affected by Drought and
Desertification: Thematic Study on Small-Scale Irrigation and Water Control Activities (Main
Report No. 98/073 IFAD-SSA), IFAD 1998
20. From An Evaluation of NIA’s Participatory Communal Programme : Public Intervention in
Farmer-Managed Irrigation Irrigation Systems, IIMI, Colombo (1987). Other experiences
from different countries are summarised in Robert Yoder and Juanita Thurston (eds),
Design Issues in Farmer-Managed Irrigation Systems, IIMI, Colombo (1990).
21. Kerry J Byrnes, World Bank Technical Paper Number 173, Water Users’Associations in
World Bank-Assisted Irrigation Projects in Pakistan, World Bank, Washington DC, 1992.
22. Meinzen-Dick R. et al., Sustainable Water User Associations: Lessons from a Literature
Review. Paper prepared for World Bank Water Resources Seminar, 1994.
23. Practitioners are referred to Orstrom, E., Crafting Institutions - Self-Governing Irrigation
Systems, ICS Press, San Francisco, California (1992) which covers some practical
planning principles which can be applied in most cases. Also Yoder, R., Locally Managed
Irrigation Systems - Essential Tasks for Assistance, Management Transfer and Turnover
Programmes, IIMI, Colombo, Sri Lanka (1994).
24. According to the 1990 FAO report An International Action Programme for Water and
Sustainable Agricultural Development: A Strategy for the Implementation of the Mar del
Plata Action Plan of the 1990s, 20 to 30 million hectares (or about 10 percent of the
world's irrigation) is severely affected by salinity and an additional 60-80 million hectares
 are affected to some extent.
25. Burns R., Irrigated Rice Culture in Monsoon Asia: The Search for an Effective Water
Control Technology, World Development XXI, (May 1993), pp771-789.
26. e.g. in World Bank Technical Paper 246, Modern Water Control in Irrigation(1994) by
Plusqullec et al., World Bank Technical Paper 256, Design and Operation of Smallholder
Irrigation in South Asia (1995) by Donald Campbell, and numerous IIMI publications.
27. Campbell D., Design and Operation of Smallholder Irrigation in South Asia, World Bank
Technical Paper 256, World Bank, Washington DC (1995).