WATER P-NOTES ISSUE 32 APRIL 2009 47931 Competition or Cooperation? A New Era for Agricultural Water Management R eliable supplies of water for agriculture have But the spread of irrigation is slowing. The pace helped meet rapidly rising demand for food of expansion dropped from around 2 percent a year in developing countries, making farms more in the 1960s and 1970s to less than 1 percent a profitable, reducing poverty, and helping vast year in the 1990s. Many countries now face serious regions of the world develop more dynamic and constraints to further expansion, often because of diversified economies. Can these successes be social and environmental concerns or because less sustained with demand for food rising and water water is available for irrigation. resources waning? That is the challenge now facing policy makers, planners, and practitioners in With the rapid development of irrigated agri- agricultural water management (AWM), as well as culture over the last four decades, water withdraw- their allies in the World Bank and other develop- als for irrigation more than doubled. At the same ment organizations. time, demand for other uses increased even faster, as populations, urbanization, and industrialization grew. The result of these converging demands has been a steady decline in per capita water avail- Achievements and Challenges ability in developing countries (Figure 1). In many basins, groundwater is now being mined at unsus- AWM is part of a process of resource management tainable rates. that provides a key input to agricultural produc- tion and farm incomes. With strong links to other sectors and to the broader economy, AWM encom- Figure 1. Declining water availability passes irrigation and drainage, rainfed agriculture, in the developing world reuse of recycled water, water and land conserva- tion, and watershed management. It is also closely 100 (%) related to broader aspects of macroeconomic 80 growth policy. 1950 60 availability During the past four decades, irrigated agricul- with 40 ture has been the key to improving nutrition in the capita 20 developing world. Demand for food tripled over the per compared period, rising much faster than populations. Food 0 production in the developing world almost kept pace with demand, with production up two and a 1950 1960 1970 1980 1990 2000 2010 2020 2030 half times during this period (the gap has been filled Developing Developing Developing countries countries, humid countries, arid with imports). Source: World Bank 2002a. This note summarizes key messages from Reengaging in Agricultural Water Management: Challenges and Options by Christopher Ward, Salah Darghouth, Gayane Minasyan, and Gretel Gambarelli (Washington, DC: World Bank, 2006). Readers may download the complete paper from www.worldbank.org/water. WATER P-NOTES The increase in water productivity from 1961 The efficiency of irrigation depends on incentives to 2003 was spectacular, as large-scale irriga- provided by markets. Some nations have begun to tion schemes led by governments brought rapid move wholesale toward market-driven policies for increases in food production. But the institutions AWM that focus on productivity and incomes; how- erected to manage those schemes have since ever, trade barriers, domestic restrictions on market proven inefficient and unresponsive, lacking incen- development, infrastructure constraints, and poorly tives to improve management or to respond to organized supply chains (particularly for smallhold- farmers' changing needs. In many basins, water ers) dampen the power of market incentives. productivity remains low and take-up of modern technology is slow. At the same time, the environmental and social aspects of AWM no longer lurk at the fringes of In general, the Green Revolution and public stakeholders' thought and action--they are now investment in enhanced water management did not fully in the mainstream. The practices of water specifically target the poor. AWM has helped reduce resources management must change to reflect our poverty in irrigated agriculture, but the improve- broadened understanding of how human activity, ments have largely bypassed farmers in rainfed water resources, and ecosystems interact. Mirror- areas, where poverty rates have stagnated. ing the new consciousness are integrated and basin management approaches and campaigns to man- The environmental and social impacts of irri- age demand. gation have been mixed, but stresses are grow- ing. Farmers face increasing difficulty in fulfilling The roles of various stakeholders are chang- their role as trustees of land and water, as many ing as well. There are tentative moves toward a countries approach the limits of water and land greater role for water users, as a movement that resources. The environmental costs and risks of emphasizes participatory irrigation management irrigated agriculture have grown steadily in the face (accompanied by some decentralization) has caught of shrinking water flows, overexploitation of ground- on in more than 50 countries. Few public irrigation water, pollution, waterborne diseases, and destruc- schemes have ever become financially self-sus- tion of natural habitats and livelihoods (following taining, but recently private investments in smaller the draining of wetlands, for example). schemes, often by farmers, have been substantial. Public-private partnerships for large-scale irrigation Overall, worldwide advances in AWM have have showed promise in a few cases, but the future been significant, providing clear evidence of the of the PPP model in irrigation is not yet clear. potential for advancement through concerted action--but the remaining challenges are great, especially in Sub-Saharan Africa. Future Stresses and Risks The Changing Global and The population of the developing world is projected National Contexts to increase by half over the period 1999­2030. The generic trend toward urbanization, too, is expected to continue. At the same time, self-sufficiency in A global debate over water resources manage- food production is expected to decline, resulting in ment and food security is sharpening the agenda a growing imbalance in food trade. Nations with for AWM. International research now reflects the fast-growing economies will import a growing share growing importance accorded to water productiv- of their food, increasing the importance of interna- ity, with major recent publications on the water- tional trade terms and trends--and of macroeco- for-food challenge from the International Food nomic stability at the national level. Poorer nations Policy Research Institute (IFPRI), the International that are less able to pay for imports will need to Water Management Institute (IWMI), and the United develop irrigated agriculture and improve crop pro- Nations Food and Agriculture Organization (FAO). duction. The global trade environment and national The FAO estimates that to meet projected marketing strategies will be critical determinants of demand crop production in developing countries the action agenda that emerges from that debate. will have to increase at about 1.6 percent per year 2 ISSUE 32 · APRIL 2009 over the next three decades. Irrigated areas will modernization, user participation, water rights, and have to provide more than half of the increment demand-driven investment. Priorities for agricultural through improvements in water productivity--which policies that promote profitable farming include will require major programs of modernization of market development (through better cooperatives, large-scale irrigation, improved productivity in the supply chains, and infrastructure), research, and use of groundwater, and diversified production of technology transfer. higher-valued irrigated crops. At the regional level there are several ways to But most of the rest of the additional food that improve AWM. These include modernizing large- will be needed by 2025 will have to come from scale irrigation, ensuring efficient least-cost water intensified rainfed farming, according to estimates service delivery to meet farmers' needs, changing by IFPRI/IWMI. That means that farmers will have to institutions to create a demand-responsive system do a better job of managing water. The productivity of water service, involving water user associations challenge in rainfed farming is to introduce acces- and federations in modernization, improving the sible technical solutions without increasing risks. profitability of small- and medium-scale irrigation In irrigated and rainfed areas alike, growing schemes through community-driven approaches, water scarcity will have to be managed. In most accelerating the development of sustainable ground- parts of the world, the water available to irrigation water irrigation schemes, and enhancing water pro- is likely to be further constrained, and irrigation ductivity in rainfed agriculture through market-driven consumption will grow much more slowly than con- approaches that involve community participation. sumption for municipal and industrial uses. Water At the sectoral level, policies for water resources stress will create a strong push to improve water management, agriculture, rural development, and productivity and to strengthen the use of demand the environment need to mesh to support sustain- management. With modernization and greater able, market-driven growth in rural incomes. efficiency, some potential exists for expansion of irrigated area, especially in Sub-Saharan Africa Nationally, the integration of policies into a and Latin America. The FAO estimates that the irri- broader framework of macroeconomic policy for gated area in developing countries could increase growth is the key to productivity and profitability. by almost 20 percent (40 million hectors) between Governments should be responsible for core public 1997 and 2030. sector tasks related to AWM--among them inte- grated water resources management, environmental But greater water scarcity means greater risks protection, research and technology transfer; and for the environment and for society. It will be rural infrastructure. Governments should correct essential to manage increased environmental risks market failures through interventions in poverty from additional irrigation and from draw-downs of reduction, water pricing, and the development of groundwater. The keys to successful risk manage- product and financial markets. Governments should ment are the technical, managerial and economic also seek broader engagement of other stakehold- instruments that have been developed progressively ers in decentralization and inclusion. in recent years. At the global level, AWM will be affected by trade reform, climate change, and international Better Policies, Institutions, and research. Trade reform policies will strongly influ- Investments ence water productivity and profitability in agricul- ture by opening up external markets. But impacts To improve AWM, it will be necessary to consider can be negative as well as positive, so vigilance is options and trade-offs at multiple levels--the farm, warranted. the region, the sector, the nation, and the globe. For the farmer, access to assured water supplies is an essential prerequisite for stimulating saving Toward an AWM Action Plan and investment, for increasing income and assets sustainably, and for reducing vulnerability. Farm- AWM lies at the crossroads of four areas of public ers' interests in AWM reform include irrigation policy for sustainable growth: water resource man- 3 WATER P-NOTES agement, agriculture, rural development, and the As the AWM components of the corporate environment. The World Bank's corporate strate- strategies are implemented, the World Bank must gies in these areas all call for a reengagement in keep at least two objectives in view. First, it must AWM. According to those strategies, most growth identify options for reform of policy, institutions, and should come from improvements in the productivity incentives that will accelerate productivity improve- of agricultural water. Institutional improvements are ments and pro-poor growth; and, second, it must needed to increase the efficiency of resource use, articulate priorities for investment in AWM (Table 1). and water for agriculture has to be used sustain- Achieving those objectives will require consensus on ably within an integrated framework. Sustainable the role of the public sector and other stakehold- increases in farmers' incomes are essential, as well, ers--to be reached through a vigorous program of with a focus on the poor global discussions. Table 1. Investment in AWM--today and tomorrow Expected future Accompanying Present investment emphasis measures needed Large-scale Large public command Modernization, conjunctive Large-scale irrigation governance irrigation areas producing low- use, market development changes (more decentralization, financial value staple crops using autonomy, user participation) surface irrigation Small-scale Farmer-financed Water productivity Demand management measures; irrigation schemes, based on run- investments technology transfer and cost sharing of-the-river, small dams, arrangements for on-farm investment and so on Groundwater Irrigation from tube Drip, fertigation, protected Correct incentive structure; develop wells, privately financed agriculture, market garden groundwater governance systems for crops sustainability Rainfed Low-yield farming, Water harvesting, Major research and technology transfer improvements vulnerable to risk supplementary irrigation, agenda; incentive structure adjustments; no-till agriculture targeted cost-sharing programs The Water Sector Board Practitioner Notes (P-Notes) series is published by the Water Sector Board of the Sustainable Development Network of the World Bank Group. P-Notes are available online at www.worldbank.org/water. P-Notes are a synopsis of larger World Bank documents in the water sector. 4 THE WORLD BANK | 1818 H Street, NW | Washington, DC 20433 www.worldbank.org/water | whelpdesk@worldbank.org