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Irrigation Policies in India

Irrigation Policies in India . Ashok Gulati Director in Asia, IFPRI IWMI-FAO wksp on “Trends and transitions in Asian Irrigation: What are the prospects for future?” 19 th January 2009 Bangkok, January 19-21, 2009. India: Growing water scarcity (IWMI, IFPRI…).

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Irrigation Policies in India

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  1. Irrigation Policies in India Ashok Gulati Director in Asia, IFPRI IWMI-FAO wksp on “Trends and transitions in Asian Irrigation: What are the prospects for future?” 19th January 2009 Bangkok, January 19-21, 2009

  2. India: Growing water scarcity (IWMI, IFPRI…) Page 2

  3. Impending danger…and current practices • Research tells us that India is on the thresh hold of major water scarcity… • some pockets already experiencing it… • Wake up time, else… “water wars” may follow… • But existing reality is somewhat “puzzling” Page 3

  4. Provocation, and policy change • India is a net exporter of “virtual water” (Between 2002-05, India exported 28 m.t of wheat and rice; in 2006-07 India exported 4.7 m.t of rice and 2 m.t of sugar, but imported 5.5 m.t of wheat) • In 2007-08, India exported 6.5 million tons of rice, perhaps highest ever in its history (1 kg. of rice requires 5000 litres of water…implies exporting more than 30K billion litres of water) • Is India really short of water or mismanaging water use? Page 4

  5. Three key questions… • What influences irrigation investments? • How well are we managing irrigated agriculture? • What are the emerging challenges in irrigation sector? Page 5

  6. Irrigation Investment Policies • Public investments in surface irrigation (large and medium schemes) • High period 1960s…1970s..till mid 1980s • Intertwined with food security situation • Low period 1985 to 2005…environment and rehabilitation issues in forefront • but subsidies on water, power, and fertilizer increased Page 6

  7. Private investments in irrigation • Largely in groundwater (GW) irrigation • “Tube well explosion” in 1970s in the wake of green revolution in search for getting better control on water supplies and higher profits; • Continued investments in 1980s and 1990s and beyond…partly to fill the vacuum created by low public investments • Emerging “anarchy” in certain pockets (over-exploitation of GW) Page 7

  8. How “well” are we managing our irrigated agriculture? • Brings to the fore the issues of efficiency, equity and sustainability, both financial and environmental • To answer this question, we need to know • focal crops of irrigated agriculture; • their input and output policies, • and their implications • What are the policy options and the way forward? Page 8

  9. Irrigated Agriculture in India: Broad contours • Ultimate Irrigation Potential: 140 m.ha. • Groundwater contribution: 64.05 m.ha. • Minor surface irrigation: 17.4 m.ha. • Major and medium: 58.5 With inter-basin transfers the UIP can go up to 175 m.ha. Page 9

  10. Broad contours of Indian irrigation…. Cumulative irr. potential created: 102.8 m.ha (till 2006-07) • Major and medium: 42.4 m.ha. • Minor (GW plus minor surface): 60.4 Cumulative potential utilized is only 87.2 m.ha. (about 85%) (2005) Gross sown area about 190 m.ha. Net sown area about 140 m.ha. Cropping intensity around 1.36 Page 10

  11. Focal crops of irrigated agriculture Page 11

  12. But irrigation water requirements of each crop are very different across agro-climatic zones • Wheat: standard 4-5 irrigations of 7.5 cms each • Rice: 3 to 7 times the wheat irrigation water requirement • Sugarcane: 3 to 10 times wheat irrigation water requirements Page 12

  13. Rice, Wheat & Sugarcane • Use much of irrigation water in the country; • Use much of power for pumping water; • Use much of fertilizers • And all the three inputs are highly subsidized Page 13

  14. Subsidy syndrome in Indian agriculture(Gulati and Narayanan, 2003, OUP; Hoda and Gulati,2008, JHUP/OUP) • Subsidies on fertilizers, canal irrigation, and power could add up to Rs 100K to Rs150K crores in 2008-09 ($20-30 billion or about 12-16% of agl. Output), depending upon how one defines subsidy. • This is 4-5 times the investment in agriculture • Fertilizer subsidy alone was in the range of Rs 80K to 100K crores. • Irrigation (canals) subsidy between Rs 10K to 20K crores (excluding any charge for Capital cost), • And power subsidy….depends heavily on the definition.. (Rs 10K to 30K crores) Page 14

  15. Returns on investments and subsidies…in terms of growth of agl. GDP (Fan, Gulati, Thorat, 2008) Page 15

  16. Is it equitable? • Who gets more subsidies on per hectare or per farm basis? (Punjab leads). • Irrigated farmers get way more subsidies than rainfed farmers. • In Maharashtra, sugarcane farmers with less than 5% of cropped area use more than 60% of irrigation water Page 16

  17. Is it sustainable? • Financially, a huge drag (canal irrigation rev. does not cover even 20% of O&M costs. It deteriorated gradually since 1950s) • Almost all SEB are sick primarily due to power subsidy • Environmentally, a disaster (Punjab 75% blocks are dark) Page 17

  18. But looking at input subsidies alone is looking at only one side of the coin • Govt. intervention on the output side • RICE: MSP; Levy; Buffer stocking; PDS; MEP; Future mkts • Wheat: MSP; Procurement; buffer stocking; PDS; Export ban; Future mkts • Sugarcane: MSP (SAP); Levy; Controlled releases; Stoking; PDS; Future mkts; Export subsidy (incentives) (earlier Licensing of mills) Page 18

  19. How safe is our Food Security? Buffer norm Source: Economic Survey, various issues Page 19

  20. Policy Change… • imports of wheat in 2006-7, and high food prices during 2007-08, triggered a few important policy changes • National Food Security Mission set up in 2007 (10mt rice; 8 mt wheat, and 2mt maize by 2011-12); • Allocation for irrigation raised by 80% in 2008 Page 20

  21. Emerging Challenges • Continuous pressure to feed an ever growing population…how far diversification away from cereals will help • Increasing volatility in food production due to climate change… • India may be the destination of biggest investments in public irrigation in the coming 10-20 years; Page 21

  22. Emerging challenges…of reforming Irrigation sector • “Unbundling” canal irrigation : reservoirs, main canals and distribution network on the lines of power sector reforms; and infusing institutional and pricing reforms in each of these segments; • Greater transparency in “construction phase” (governance reforms); • Regulatory reforms in GW Page 22

  23. Learning from Best practices??? • India is too big to have one solution for all; • Research need to learn the “best practices” within India and within Asia • Ultimate objective should be to get higher productivity per unit of water, on sustainable basis Page 23

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