Participatory irrigation management by farmers - local incentives for self-financing irrigation and drainage districts in China

45324 Participatory Irrigation Management By Farmers --Local Incentives for Self-Financing Irrigation and Drainage Districts in China Zong-cheng Lin The Environment and Social Development Unit, WBOB December 2002  I. Introduction1 Participatory Irrigation Management (PIM) is internationally well known as a principle management concept with which reform of the agricultural water sector and transfer of irrigation management to farmers are undertaken. Over the past fifty years, expansion of irrigated agriculture has made an enormous contribution to feeding the world's expanding population. Yet in the meantime, the underfinancing and rapid deterioration of irrigation system have become a serious threat to the imperative of sustained increases in the productivity of irrigation systems in developing counties. Revenue shortfalls, together with perverse bureaucratic disincentives, has resulted in poor management of water deliveries, waterlogging, shrinking service areas, and deteriorating canals, drains, and structure. To counter the deteriorating situation, one development strategy after another has swept over the irrigation sectors for the last decades; and a common understanding among all the strategies is the need of institutional reform in light of participatory irrigation management. In China, one of the main reforms is the Self- Financing Irrigation and Drainage Districts (SIDD)2 supporting farmer participation in local irrigation management. In rural China as an agrarian society, irrigation is very important for agricultural production. Although irrigation accounts for less than forty percent of cultivated area in this country, the agricultural output of irrigation districts amounts to two thirds of that of the whole nation. For this reason, the Chinese government and farmers have invested immense resources in irrigation especially in the recent several decades. However, there still are many constraints and problems with irrigation systems, such as especially low system efficiencies averaging thirty-forty percent, massive waste of water, and low productivity of water used, that center round both lack of funds for irrigation maintenance and overhaul and poor irrigation operation and management. For decades, the irrigation systems/ districts in many places have become degraded not too long after their establishment, causing local irrigation conditions to deteriorate and farmers to suffer from shortage of water again. To counter this irrigation deterioration, the SIDD model was developed in China in order to create and maintain a "virtuous cycle" of water delivery in irrigation districts, and to achieve sustainable use of water resources for agricultural development. As an irrigation management system, SIDD is structured mainly in two integrated parts: a water 1This paper is an empirical study of the participatory reform in China rural water sector, on which the Bank's rural development projects have exerted great influences by playing the important pioneering roles in it. Thoutful insights and helpful comments were given on an earlier draft of this paper from Richard Reidinger, Dan Gibson, Susan Shen, Liping Jiang, and Xiaokai Li for which many thanks are due. 2SIDD stands for Self-Financing Irrigation and Drainage Districts as originally set forth. In practice, it is found that "self-financing" is more suitable as a target for many places in the long than short run. For the practical reason, therefore, "self-managing" is put forward in the initial stage of the transfer process, as the first step towards self-financing. So, SIDD thus stands for Self-Managing Irrigation and Drainage Districts for now. 2  supply corporation (WSC) or organization (WSO)3 serving as water supplier from the main headwork and the water user associations (WUAs) operating as the farmers' own water use organizations taking care of the lower distribution network on the ground. Water is treated as economic good to play the role of a commodity between the two parts, reflecting the buy- and-sale nature of a market. In this case, however, neither WSC nor WUA is profit-oriented entity but functions as a non-profit social/productive service for farmers as end users of irrigation water. By nature, the SIDD model is characterized by two meaningful transfer processes, namely, transfer of local irrigation management from government to farmers themselves, and transfer of the economic foundation of local irrigation system from a command economy to a market-oriented one. The SIDD model was first introduced and studied in 1993, and established in Hubei and Hunan Provinces in 1995, under the World Bank assisted Yangtze River Basin Water Resources Project. Since then, more than 500 WUAs and 40 WSCs/WSOs have been established with charters and regulations in ten provinces on a pilot basis, supported under several World Bank assisted agricultural and rural development projects. Most WUAs have proven to be successful in terms of enhanced efficiency of local system operation and maintenance (O&M) and increased benefits to farmers. In Hubei, for instance, water delivery efficiency through branch and lateral canals has been enhanced by 50-100% under WUAs' management; and paddy yields have increased about 25-40kg per mu (equivalent to 1/15 ha.) on average. Because of both unit grain yield increase and irrigation water decrease, the grain output value per cubic meter of water has been enhanced from Y 0.47 to Y 1.70. Farmers are happy with the benefits and the participatory approach. In addition, since WSC charter requires that farmers from WUAs sit on WSC's board of directors, water users have voice even in WSC management. This has enhanced bottom-up participation in decision-making. Influenced by the positive results of the SIDD pilots, many other places beyond the World Bank supported projects have adopted similar approach in improvement of local irrigation management--especially the participatory methods of WUA--to enhance efficiency and effectiveness of local irrigation system. Calling for the PIM reform in the water sector, Ministry of Water Resources of China (MWR) has been promoting the dissemination and extension of SIDD/WUA as a good example to use throughout the country. As a result, there now roughly are 2,000 WUAs in total spreading over most provinces in China. II. Emergence of the SIDD Concept Alongside unfolding of the economic reform in rural China in the 1980s, constraints and problems in irrigation systems were increasingly recognized. In 1990, in order to resolve degradation problems of the irrigation systems, a study on the prospects 3WSC as a legal person is chartered under the national Company Law. In the course of the water sectoral reform, however, in most cases the existed administrative water supply units would change to the restructured water supply organizations (WSO) in the first place in accordance with local socio-economic conditions, which will continuously develop to be the corporations alongwith growth of the market- oriented economy in rural China. 3  for a "virtuous cycle" of the hydro-economy was initiated by MWR nation-wide. It was then explicitly realized in the water sector that, on the basis of a command economy controlled by the central government, management of irrigation systems was often fragmented between the various levels of government administration, rather than being unified on the basis of hydraulic units which was necessary for high system delivery efficiencies. Under this administrative management, first of all, water prices were decided as too low and too arbitrary to cover the costs of water or there might be no water charge at all in some places. As a result, each newly established irrigation system became another burden added to the government administration, while government had no more funds for the O&M of any of them. Secondly, there often appeared to be "gray water charges" which were collected in the name of water charge but used for other purposes than irrigation, which contributed to inadequate maintenance and worsened the situations of both water supplier and user. Moreover, water charges actually paid by farmers were generally levied on an area basis per mu (not on the volumetric basis), which discouraged efficient water use by farmers and led to much waste of water. What is more, while all the irrigation systems were the government property under the administrative control of government, farmers actually had no say about them though they had invested large labor and capital inputs. This situation made farmers less care for, as well as less interested in, system maintenance, but merely care about water delivery in a pragmatic manner. Lack of farmers' feeling of ownership and inadequate farmer participation thus contributed to low irrigation management efficiency, low system maintenance incentives, low water charge collections, and high level of conflict among water users in the peak irrigation season. On the whole, when analyzing all the difficulties and problems, it became apparent that although the design and condition of the physical systems play an important part in irrigation inefficiency, the more fundamental and difficult issue was irrigation management. The SIDD concept was initiated to address many of these management issues comprehensively during the preparation of the Bank supported Yangtze Basin Water Resources Project in Hubei and Hunan provinces in the early 1993. The project included improvement of four large-scale irrigation systems in Hubei, and construction of two new large-scale systems in Hunan. Under the efforts of the Bank task team together with its Chinese counterparts, project preparation was guided not only to deal with physical system, but also to address institutional improvement for a sustainable development of local irrigation. As the task team leader wrote in a paper, "Participatory Irrigation Management Reform: SIDD in China,"4 detailed field preparation work indicated that there were significant management weaknesses in the irrigation systems, such as fragmentation of management among different administrative units, lack of overall responsibility and authority for efficient irrigation system performance, inadequate collection of water charges directly from farmers, "disappearance" of water charges collected into the general government financial system, and poor or non-existent management of local irrigation networks. The poor performance of the system followed by the "vicious cycle" of system deterioration was fully evident. The problem was to 4The Bank task team leader Mr. Reidinger's paper was written for the conference of Water Users' Participation in Irrigation Management and SIDD Reform, held in Tieshan, Hunan, in July 2000 (as mentioned later). The first two parts of the present paper mostly summarize from that paper. 4  design and develop an institutional system to strengthen management at both the lower distribution network level and the main system level. The task team found an answer from Hubei for improving management at the lower end of the systems. There in fact were some experimental cases managed by the farmers themselves for years in which farmer "water user groups" were organized and given responsibility for the local irrigation distribution networks. These experiments had produced quite good results in water delivery and lateral canal maintenance, and showed the high potential for farmer group management at the distribution network level. Their main weaknesses were that the farmer groups were not permanent organizations and had to be re-established each year, and the group leaders were appointed by local officials rather than being elected so as to be responsible to the farmers themselves. Nevertheless, what was significant by the groups is the tendency of farmers' participation in local irrigation management and the management was thus being handed over to an organization which they saw as their own. With elective institutional development and support, such groups could become formal Water User Associations (WUAs) which were farmer-managed, and permanent legal persons. The WUAs, however, did not deal with the serious problems identified in main system management and operation. Hunan provided the solution to the problem of main system. The situation in Hunan were quite different from Hubei because the irrigation systems were to be newly constructed; and at Tieshan Irrigation District the government had already decided to establish a "Tieshan Water Supply Corporation" or Tieshan WSC, to take unified management for the main system by which the WSC would exert multiple functions to provide water for both rural and urban areas. However, a serious question was how the WSC could deliver and sell water efficiently to thousands of individual small farmers, given the fact that local administrative villages were usually not an irrigation-effective institution to deal with.5 The answer was the WUAs from the Hubei experiments. The SIDD concept was thus born in China, provided by combining Hubei's WUAs for operation of the distribution network with the Hunan's WSC for the main system, and supported and developed as a component under the Yangtze Basin project. In the SIDD areas, WUAs purchase water from the WSC according to the number of cubic meters used, and the WSC measures water deliveries at the WUA headgate, usually at the branch/lateral head, in the presence of WUA representatives. Water deliveries to the WUAs by the WSC are governed by water sales agreements between the parties which specify the rights and responsibilities of both. Because water deliveries are charged volumetrically, WUA farmers have a strong incentive to use water more efficiently and reduce waste. WUAs collect water charges from their member farmers, and buy water from the WSC on behalf of their members based on water demand. WUAs are registered as legal persons with the support of the local government, and WSCs are chartered under the national Company Law. Because WUAs are registered as legal persons, they can also 5Villages as the mass social organization usually have to deal with all the community matters comprehensively and not specifically. Especially, the villages are not necessarily formed on the hydraulic basis (some may be while most are not), it is quite difficult for them to coordinate irrigation matters beyond the village boundaries but within one water distribution network. 5  contract, lease, or auction the operation and maintenance of their canals and facilities if necessary. III. Farmers' Participation through WUAs WUAs Initiate Local Mobilization The first WUA was established in June 1995 at Hongmiao branch canal in Zhanghe No. 3 Main Canal Irrigation District, Hubei Province. In the following couple of years, 12 WUA pilots were established in this district, and some more also in the other project districts including those in Hunan. As a project component, intensive preparation work had been done for WUA initiation including a socio-economic survey for each of the pilots, village meetings and household interviews for project information dissemination and farmer consultation, and local water and land resources mapping for contrasting the hydraulic boundaries with existing township/village irrigation management. Farmers warmly welcomed the project incentives for improvement of both canal system and its management. On the hydraulic basis, they grouped themselves Participatory Mapping and Design to take responsibility for their own irrigation matters. The water user groups (WUGs) were demarcated upon lateral canals as the first step. Each of these groups then elected its head as their representatives (some large groups may have two for each) in the water users' conference held on the branch level for a WUA's establishment. Farmers were mobilized in their groups to discuss local irrigation needs and their expectations for changes, and to review and finalize the WUA charter and regulations in the conference. In accordance with the WUA charter, a WUA executive committee was elected among farmers by the water users' conference, including Chairman, vice-chairmen, and another one to three committee members. The committee presented its ideas and working plan for the first year to the conference for discussion and approval; and thus the WUA was formally established. Chart 1 shows the basic institutional structure of a typical WUA. As the WUAs were initiated by the Yangtze Basin Project in Hubei and Hunan, their extension later on in other provinces went through the similar process under local farmers' enthusiasm and mobilization. The WUAs were farmer water users' organization specifically focusing agricultural irrigation and drainage. Farmers were mobilized through WUAs for their own sake. Moreover, their such mobilization also brought about new impetus and fresh air to local village routine works. Villages felt happy with WUAs as an "organized hand" helping deal with irrigation matters and local system maintenance. In many cases, villages voluntarily offered their material resources to WUA establishment, either lending or renting offices, or providing the working space with some furniture. Villages also often 6  helped mobilize the community human resources for both the WUA conference and the executive committee election. In most cases, both as mass social organizations, WUAs and villages held different matters in rural folk lives, and they were hence not in a competitive situation but actually in cooperation with each other. In fact, they shared the work for the same interests of rural communities. This condition helped farmer participation and Election of the Executive Committee of WUA WUA operation. WUA Operation While WUAs were established to take over the O&M of the branch system, their skills for irrigation management needed to be strengthened. The project authorities and local water bureaus constantly held training programs for farmers on water delivery, facility maintenance, and financial management, which helped enhance the WUAs' operational capacities in the transfer process of local irrigation systems. Each year the WUA committee made plans and reported them to the water users' conference, regarding the amount of water needed, irrigation schedule, facility building or repairing, and the related labor and finance arrangement. It then signed a contract with the water supplier (either WSC/WSO wherever established or local water supply unit) for water buying, and coordinated the water supplier in the irrigation seasons in water delivering, measuring, as well as water charge submitting. When irrigating, the WUA coordinated water delivery among the lower, middle, and upper reaches, and the committee members organized water guards from the WUGs for a unified water-taking control along the canals. The amount of water sale to the WUA was calculated on the basis of volumetric measuring at the in-take of the branch; and wherever the measurement capacity was available on the lateral level, WUA internal water delivery was also calculated volumetrically to the WUGs. Within the groups, in most cases farmers calculated water use according to the farm area of individual households, because of the lack of water measurement at the on-farm level. In turn, water charges were collected by the WUA based on the water use at the Irrigation Training Course of WUA members 7  household, group, to association levels; and then were directly submitted to the water supplier according to the contract.6 Both the water and money flows became efficient, transparent, and satisfactory to both water users and suppliers. The normal WUA operation and the related financial conditions can be exemplified from tables 1 and 2 that show the records of 11 WUAs' operation in Tieshan District monitored by an evaluation team from the Wuhan University. Water charges per se, however, could not be changed too much or too soon though in most cases water charges were still far below the water costs. In Hubei, for example, the water charges were Y 0.022-0.0385 per cubic meter for now while the water costs would be Y 0.106-0.133 varying in different areas. Hunan was more or less similar, where the water charges were Y 0.032 per cubic meter and the estimated water costs would be Y 0.10-0.15. In Xinjiang, the water prices were even lower, such as Y 0.01 to 0.02 per cubic meter at present; and the water costs were calculated to be about Y 0.04- 0.058 under local conditions. The reason for the discrepancy between the current water charges and water costs was apparent. On the one hand, both the national and provincial policies on agricultural production restrained irrigation water from becoming a commodity just overnight. On the other hand, farmers also did not really like the idea to raise water charges, because they already suffer from the heavy burdens of taxes, fees, and compulsory labor sharing.7 Nevertheless, the water charges at this time were able to be formally acknowledged as necessary to be classified separately from other fees and taxes;8 and this in fact was a fundamental step for treating water as a commodity later, as well as for helping straighten out the current irrigation management with more self-governing and self-financing concerns. As analyzed earlier, management of irrigation systems was too much fragmented into government administration on various levels, which made both water control and water charges complicated and beyond the pure economic term. Although the pilot SIDDs normally did the cost-recovery studies under different circumstances, in the overall situation it was still restricted to have the water charges based on the full water costs for the moment. In most cases, therefore, the WUA-collected water charges could not really cover any overhaul and depreciation but O&M of a branch system at most. 6In many places submission of water charges is separated to be twice a year. The first time submission is normally before irrigation, about 40-50% of the estimated total; and the second is after harvest when farmers become more capable of paying. 7In fact, in some cases to make water price based on unit water costs does not necessarily mean increase of the total water charges for the amount of water farmers have used. If irrigation operation becomes efficient and water is saved under good management, the overall amount of water used will be reduced and the total water charges may not necessarily exceed the previous level. Especially if the "gray parts" of water charges can be cut off, water charges per se actually take only quite low percentage in farm productive costs as a whole. Bared to WUA operation, what farmers really like is the transparent water charges. 8Water charges in lots of cases were levied in kind with the agricultural taxes or other fees together, through the village and township. It is therefore quite difficult in many cases to figure out what charges are actually collected under the name of water charges. The SIDD model tries to clarify water charges independently only on two levels: the water supplier (WSC/WSO) and the water user (WUA), cutting off all the administrative interference. 8  When collecting water charges, however, most WUAs decided to add 5-10% to the water charges required by the water supplier in order to meet some of their own operation expenses, as discussed and agreed by the WUA conference.9 As for canal/facility maintenance, repairing, or building, WUAs then sometimes called for additional voluntary funds collection or labor input among their members, if their conferences agreed. These exercises reflect WUAs' proactive attitudes in confronting constraints, and their spontaneous initiatives in paving the way for better irrigation management as well as for their own existence. IV. WUAs' Beneficial Results Farmers' participation in irrigation management through WUAs has changed the degraded situation of local systems in many aspects. In turn, farmers themselves also directly benefit from the changes, and these arouse their further incentives for involvement in a sustainable development of the local system in the long run. Reduced Irrigation Costs WUA control of local irrigation saved both water and labor, as well as shortened irrigation time cycle. In the irrigation season, water was delivered in proper order and on time under WUA arrangement in coordination with individual users on the one hand and with the water supplier on the other. It is also for sure that the WUAs helped system improvement in both the main canals and lower distribution networks, because farmers also invested labor inputs and funds in building and maintaining the system which they viewed as their own matters now. Furthermore, because water was volumetrically calculated and charged, farmers themselves began to use water in a more cautious manner. As a result, irrigation costs were reduced in multiple ways. For instance, in Zhanghe No. 3 Main Canal and Dongfeng Irrigation Districts, two of the major subproject areas in Hubei under the Yangtze Basin Project, water delivery efficiency and capacity through branch and lateral canals was enhanced by 50-100% in Zhanghe and 30- 50% in Dongfeng on average. The average time in one irrigation rotational term (usually more than four terms per year) was thus shortened from previous 12-15 days to 5-7 days in Zhanghe, and in Dongfeng, it was shortened by 5 days or so, and in the best case by 10 days. For example, in the Baihe East Branch WUA area, the irrigation delivery rotational 9Under helps from some research institutions like Wuhan and Hehai universities and the Water Resources Bureaus, the pilot SIDD/WUAs in different provinces were able to have primary water cost analysis at the WUA level so as to have some basic idea about their O&M costs that might be added by themselves to the current water charges. The formula provided by Hehai to calculate water costs at the WUA level is as follows: Cnk = Cn + Unk/(Wnk