Economics of water: policy derivatives

Water projects always generate benefits for wealthy and large farmers

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By Dr. Abdul Saboor

Pakistan is confronting the dilemma of water amidst dangerous climatic changes and increasing demand of population. Like other economic resources, quantity demanded for water for domestic and irrigation uses has been substantially surpassed the quantity supplied as gauged from natural sources and artificial arrangements like that of dams and canals. Such water shortages present the greatest future threat to the viability of the country as a state. To add to this, there is neither significant research on the issue in hand nor reasonable political will emerging along the policy lines. A UNDP study shows that water scarcity is attributed to physical scarcity, economic scarcity, managerial scarcity, institutional scarcity and political scarcity and thus a determinant of food security more than land scarcity. So, water crisis is actually a part of governance crisis as water bureaucracy is notoriously corrupt in the country. Such complexity of water economy of Pakistan calls for some bold political decisions and policy options highly workable for the vulnerable segments of population.

We have 5 dams, 23 barrages/headworks/siphons, 12 inter-river links, 3 mega canals, 5 hydropower facilities, 2 drainage projects, and 45 canal commands extending for about 60,800 km to serve over 140,000 farmer operated watercourses. Per capita water availability was 5000 cubic meter in 1950 which declined to 1200 cubic meter today. We will be witnessing severe water scarcity as per world standards by 2020 (merely 1000 cubic meter availability of water or even less than that). We also understand that the mean annual flow of water in the Indus Basin Irrigation System (IBIS) is around 142 million acre feet (MAF) one fifth of which is thrown into the Arabian Sea annually. Almost 104 MAF is diverted for irrigation purposes. Less than 10 percent of water is utilized for drinking and sanitation purposes while 82 percent is used for agricultural purposes. Around 55 million people in the country do not have access to safe drinking water. Ground water is contaminated with arsenic contents beyond the permissible level as revealed in many of the randomly selected places. Some regions showed fall of water table by 1-2 feet per year. Moreover, there is thinning of glaciers at the rate of one meter per year thereby further disturbing the regular stock of environmental flow of water in the country.

Climate change is leaving impacts on the availability and distribution of water. One the one hand we are observing drought like situations as that of Thar in some years while on the other hand, there is erratic pattern of rainfall in the country particularly in arid region which constitute 52 million hectare of land. In addition to that, there is ample fluctuation in the minimum and maximum temperature of the day which severely increases water requirements of various crops, fruits and vegetables. The fluctuation in night temperature is also changing the configuration of seepage and evapo-transpiration.  The extent of solar radiation is problematic for the farming community. Besides increase in water requirement of crops and livestock, yield is severely affected particularly in case of wheat thereby raising the concerns for food security.

Given the water shortage and water scarcity, there is a skewed pattern of agricultural lands in the country which leads to skewed allocation of water which establishes entitlements for the few. Water projects always generate benefits for wealthy and large farmers. As for instance, Punjab and Sindh governments are providing substantial subsidies in drip and sprinkler irrigation schemes the fruit of which is exclusively transmitted to large farmers. Similarly, there have been intensive irrigation schemes and drainage practices in the country in past which even caused water logging and salinity. We have witnessed excessive cultivation of water thirsty crops- as for instance sugarcane crop consumes 7 times more water than wheat, and various studies show that we have neither competitive nor comparative advantage in the production and export of sugarcane crop. Moreover, the large scale farming schemes and intensive agriculture are being promoted in 2.5 million hectares of land. From where water would come? Intuitively, most of the burden would have to be borne by the small and medium range farmers who are otherwise facing negative impacts of climate change and policy biases going against them and favouring the large land lords who are political influential and economically resilient to any kind of shocks.

Keeping such facts and narratives in view, we need to design a policy framework which is reorienting water demand and improving its management and that could ensure economic efficiency, environmental sustainability and equity. We can conserve 76 MAF water from loss of poor transmission and seepage by repairing and maintaining the existing canal structures. We are to switch over from the techno-centric paradigm of water management to socio-centric paradigm through ecologically balanced approach. We should make greater reliance on indigenous physical and human resource management instead of capital and technology intensive and environmentally degrading solutions. Heavy installation without motivating the key stake holders would bring results not better than that of the past and that too at the cost of national exchequer.

A strong political lobby is required to advocate the distribution of water to the urban and rural communities for their consumption and economic uses. Since rich are enjoying clean drinking water for having economic access, so no lobbying is emerged from their side. Some accountability must be determined on the part of ruling elites for the failure of provision of clean drinking water to the public. Domestic water conservation strategies must be launched through public awareness campaigns. Rain water harvesting can be an effective tool to meet the emerging demands at household level. A competitive price system can guarantee judicious use of water as we have witnessed to some extent in case of natural gas. There is always an economic cost of low productivity and inefficiency. Simple input-output analysis reveals that raising water use efficiency and water productivity is a socially viable and economically feasible policy initiative rather than looking for installation of big structures. It has become an established fact that bigger is not always better. It is not a viable strategy to put up dam structures when the downstream distribution structure is highly inefficient and only affluent could turn the table to themselves.

In agriculture sector, institutional arrangements need to be strengthened to mitigate evasions and exploitation of Warabandi. Best practices in the world reflect the fact that community participation and decentralized decision making if promoted can create good results. In this regard, more attention should be given to water provision and distribution on local and individual levels. There should be involvement of women in water governance and to reduce water vulnerabilities. A good level of water conserving strategies is required to be launched. This may include judicious use of water, rain water harvesting, reuse of wash water and energy conserving water system. Private sector can be involved in such management and conservation of water. All out efforts should be made to constitute a regulatory framework dealing with water use. Legislation should also be made to define water rights of various communities.

Last but not the least; a holistic policy approach is better than isolated policy treatment as it happens traditionally in policy formulations. An integrated approach in water policy should be followed in which the allied policies like that of price and subsidy policies, food security and climate change policies and even taxation policies must be in line with it. Policy actions defined in water policy must be research based. For that matter, R & D should be promoted at provincial and sub-administrative levels. Consistency of policies is the hall mark of any public policy. Our fundamental concern should be to take care of small farmers and vulnerable communities rather than elitist-driven policies. Policies creating vertical inequality could impair economic growth and those creating horizontal inequality may boost violent conflict. We have the best geographic position and remarkable irrigation system in the world. A great deal of commitment and serious efforts are required; otherwise————

Little Willy was a Chemist

Little Willy is no more

For what he thought was H2O

Was H2SO4

Dr. Abdul Saboor is a Professor of Economics Dean and Faculty of Social Sciences at PMAS Arid Agriculture University