HDR 2006 Chapter 5: Water competition in agriculture

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Human Development Report 2006 - Beyond Scarcity: Power, Poverty and the Global Water Crisis
Report Overview | Chapter 1: Ending the Crisis in Water and Sanitation | Chapter 2: Water for human consumption | Chapter 3: The vast deficit in sanitation | Chapter 4: Water scarcity, risk and vulnerability | Chapter 5: Water competition in agriculture| | Chapter 6: Managing transboundary waters | Links to the Millennium Development Goals | Notes and Bibliography | UNDP Fast Facts
Background and issues papers:

(Link to full list of Papers for download)

Related WaterWiki articles:

Water Rights and Wrongs | Summary of Live Forum: HDR 2006 - From the Report to Action on the Ground

External Links:

HDR 2006 Homepage |

Key Downloadables:

 HDR2006 English Summary.pdf
 Hdr2006 - errata 27nov06.doc
 Hdr 2006 presskit en.pdf

Managing competition for water in agriculture

One hundred years ago William Mulholland, superintendent of the Los Angeles Water Department, resolved the city’s water shortage problem through a brutally effective innovation: a “water grab”. By forcibly transferring water used by farmers in the Owens Valley, more than 200 miles away, he made it possible for Los Angeles to become one of the fastest growing cities in the United States.

Times have changed. These days Californians resolve water disputes in courts of law. But across much of the developing world competition over water is intensifying at an alarming rate, giving rise to intense—and sometimes violent—conflict. The danger is that the Mulholland model will resurface in a new guise, with power, rather than a concern for poverty and human development, dictating outcomes.

Competition patterns vary across countries. But two broad trends are discernable. First, as urban centres and industry increase their demand for water, agriculture is losing out—and will continue to do so. Second, within agriculture, competition for water is intensifying. On both fronts, there is a danger that agriculture in general and poor rural households in particular will suffer in the adjustment.

Such an outcome could have grave implications for global poverty reduction efforts. Despite rapid urbanization, most of the world’s extreme poor still live in rural areas—and small farmers and agricultural labourers account for the bulk of global malnutrition. As the single biggest user of water in most countries, irrigated agriculture will come under acute pressure.

Given the role of these systems in increasing agricultural productivity, feeding a growing population and reducing poverty, this presents a major human development challenge.


Mediating through economic and political structures

With demands on water resources increasing, some reallocation among users and sectors is inevitable. In any process of competition for scarce resources, rival claims are mediated through economic and political structures and through systems of rights and entitlements. As competition for water intensifies, future access will increasingly reflect the strength of claims from different actors. Outcomes for the poorest, most vulnerable people in society will be determined by the way institutions mediate and manage rival claims—and by whether governments put equity concerns at the centre of national policies.

See also Water governance

Balancing efficiency and equity

Adjustment processes are already taking place. Cities and industries are extending their hydrological reach into rural areas, giving rise to disputes and occasionally violent protests. Parallel conflicts between different parts of the same country and different users are increasingly evident.

The development of trade in water rights through private markets is seen by some as the solution to balancing efficiency and equity in the adjustments to water reallocation. By enabling agricultural producers to sell water, so the argument runs, governments can create the conditions for directing a scarce resource to more productive outlets, while compensating and generating an income for farmers.

Private water markets offer a questionable solution to a systemic problem. Even in the United States, where they are underpinned by highly developed rules and institutions, it has often been difficult to protect the interests of the poor. In Chile the introduction of private water markets in the 1970s enhanced efficiency but led to high levels of inequity and market distortions caused by concentrations of power and imperfect information. For developing countries, with weaker institutional capacity, there are distinct limits to the market.

Managing allocations and licencing

Looking beyond water markets, many governments are seeking to manage adjustment pressures through quantitative allocations and licences. This approach holds out more promise. Even here, however, formal and informal power imbalances often undermine the position of the poor. In West Java, Indonesia, textile factories have usurped the water rights of smallholder farmers. And in the Philippines farmers in irrigation schemes have lost out to municipal users. The absence or nonenforcement of regulations is another potent threat. In India unregulated groundwater extraction on the Bhavani River has meant less water and more poverty in irrigation systems.

Water rights are critical for human security in agricultural areas. The sudden loss or erosion of entitlements to water can undermine livelihoods, increase vulnerability and intensify poverty on a large scale. Far more than to the wealthy, water rights matter to the poor for an obvious reason: poor people lack the financial resources and political voice to protect their interests outside a rules-based system. Water rights count for little if, in implementation, they skew advantages to those with power.

Balancing formal and customary rights

Sub-Saharan Africa faces distinctive challenges. Governments there are seeking, with donor support, to expand the irrigation frontier and to establish formal systems of rights as a supplement— or replacement—for customary rights. What will this mean for human development?

Outcomes will depend on public policies. Expanding irrigation capacity is important because it has the potential to raise productivity and reduce risk. The region is overwhelmingly dependent on rainfed agriculture. But irrigation infrastructure is a scarce and contested resource. Evidence from the Sahel region of West Africa shows that smallholders can often lose out in competition for irrigation to larger scale, commercial producers.

Management of customary rights poses further problems. Contrary to some perceptions, customary rights to water incorporate detailed management and use provisions to maintain ecological sustainability. But they often disadvantage poorer households and women. Introducing formal rules and laws does not automatically change this picture. In the Senegal River Valley customary rights holders have used their power to maintain social exclusion from water. Meanwhile, in Tanzania the introduction of formal water rights has benefited commercial farmers on the Pangani River to the disadvantage of small farmers downstream.

See also FAQ: The Right to Water

Giving more attention to equity

One lesson from water reforms is that far more weight needs to be attached to equity. In contrast to land reform, for example, distributional concerns have not figured prominently on the integrated water resources management agenda. There are some exceptions—as in South Africa—but even here it has proven difficult to achieve redistributive outcomes.

Irrigation systems are at the centre of the adjustment. Infrastructure for irrigation has an important bearing on poverty. Cross-country research suggests that poverty prevalence is typically 20%–40% lower inside irrigation networks than outside, but with very large variations. Irrigation appears to be a far more powerful motor for poverty reduction in some countries than in others. Land inequality is a major factor. Highly unequal countries (India, Pakistan and the Philippines) do worse in efficiency and equity than more equal countries (China and Viet Nam).

This finding suggests that there is no inherent tradeoff between increasing productivity and reducing poverty in irrigation. There is considerable scope for managing adjustment pressures in agriculture through measures that enhance both efficiency and equity in a mutually reinforcing virtuous cycle. Equitable costsharing, pro-poor public investments and the participation of producers in management hold the key to successful reform.

Addressing deep-seated gender inequalities

Real empowerment in irrigation systems requires measures to address deep-rooted gender inequalities. Women are doubly disadvantaged in irrigation systems. Lacking formal rights to land in many countries, they are excluded from irrigation system management. At the same time, informal inequalities—including the household division of labour, norms on women speaking in public and other factors— militate against women having a real voice in decision-making.

Breaking down these structures has proven difficult even in the most ambitious schemes for transferring management authority from government agencies to users. In Andhra Pradesh, India, poor farmers now have a far greater say in management—but poor women farmers are still silent. Change is possible, however. In Uganda legislation requiring female representation in water user associations is making a difference.

See also Women and Water - Gender Dimension in Water Governance

Reaching the poor

Looking to the future, one of the greatest challenges is to ensure that strategies for enhancing water productivity extend to the poor. Technology is not neutral in its distributional effects— and the danger is that efforts to get more crop per drop from water resources will bypass poor households.

This does not have to be the case. The revival of small-scale water harvesting programmes in India in response to the groundwater crisis has shown the potential to generate large returns to investment and at the same time to reduce risk and vulnerability. Similarly, micro-irrigation technologies do not have to be geared solely to large capital- intensive producers. Innovative new designs and low-cost technologies for drip irrigation have been taken up extensively. Here, too, the social and economic returns are large. On one estimate the extension of low-cost irrigation technologies to 100 million smallholders could generate net benefits in excess of $100 billion, with strong multiplier effects in income and employment generation.

The way developing country governments address the challenge of balancing equity and efficiency goals in water management will have an important bearing on human development. Putting the interests of the poor at the centre of integrated water resources management policies is an organizing principle. But that principle has to be backed by practical pro-poor policies. Among the most important:

  • Strengthening the water and land rights of poor households.
  • Respecting customary rights and integrating these rights into formal legal systems.
  • Enhancing the capacity of poor people to claim and defend water rights through legal empowerment and accountable institutions.
  • Increasing national investments in irrigation and reversing aid cuts for the irrigation sector, with development assistance doubling to about $4 billion annually over the next 20 years.
  • Enhancing equity within irrigation systems to support poverty reduction and efficiency objectives through sustainable and equitable cost-sharing mechanisms.
  • Decentralizing the management and financing of irrigation systems to empower users.
  • Integrating irrigation development into wider rural development programmes to make agriculture more profitable for smallholders.
  • Putting gender rights to water at the centre of national development, and implementing policies to increase the voice of women in water management decisions.
  • Developing integrated water-harvesting and groundwater policies extending from small-scale to large-scale infrastructure.
  • Promoting the development, distribution and adoption of pro-poor technologies.

See also Capacity development in irrigation and drainage: Issues, challenges and the way ahead

Further Resources

Read the Full Chapter  Hdr 2006 chapter 5.pdf

Capacity Building

Capacity development in irrigation and drainage: Issues, challenges and the way ahead

FAQ: The Right to Water


Women and Water - Gender Dimension in Water Governance

Water for Food, Water for Life: A Comprehensive Assessment of Water Management in Agriculture

Water governance


This article is based on the HDR 2006 Summary Report.  HDR2006 English Summary.pdf

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