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close this bookAgricultural and rural development policy in Latin America. New directions and new challenges. (FAO Agricultural Policy and Economic Development Series - 2) (1997)
close this folderIII. The Evolution of Agricultural Policy
close this folder6. Irrigation
View the document6.1. Policy Reforms
View the document6.2. Transitional Issues
View the document6.3. New Market Compatible Polices

6.3. New Market Compatible Polices

Private investment. Positive externalities may justify public investment in irrigation systems. Private investment can be encouraged via financial incentives and by constructing complementary infrastructure, such as roads and electricity. In most countries, particularly those emerging recently from stabilization policies, interest rates are extremely high and long term credit is not available. Until such credit is available, it is unrealistic to expect that private investment can substitute for the traditional role of governments in investing in irrigation projects.

Environment. Many feasibility studies and evaluations of irrigation projects fail to adequately account for the actual or potential environmental degradation resulting from irrigation, including salinization and alkalization of soils. In addition, watershed management to control soil erosion and the siltage of reservoirs must be an integral component of the management of irrigation schemes to achieve sustainability. This requires integrating the upstream and downstream interests under a single authority (such as the Cauca Valley authority in Colombia) or giving irrigated land to upstream households to create private incentives for soil conservation by upstream users, typically slash-and-burn subsistence farmers or extensive herders (Haiti).

Many international lending agencies have decided to add the constraint of sustainability to the requirements that new construction projects must satisfy. There is no accepted single definition of sustainability, but in general the concept refers to constraining resource use by the present generation so it does not imply lower welfare levels for future generations compared to the present generation (Brundtland, 1987). Sustainability is thus equivalent to inter-generational equity in resource use. In general, satisfying this criterion will imply resource transfers (tax-subsidies) from the present to future generations (for example by taxing part of the rent derived from use of a natural resource by present users and investing it into conservation or technological change). This raises a host of important issues for the management and the credible implementation of these transfers. In general, the institutions necessary to implement these tasks are missing or, if they exist, they do not have the instruments to commit that the transfers necessary to achieve sustainability will effectively be implemented (see de Janvry, Sadoulet, and Santos, 1995).

Producers organizations. The successful decentralization of the management of irrigation systems or the devolution of ownership of the system to the users requires well functioning producers organizations. There is a role for government and NGOs in promoting these producers organizations and assisting them achieve effective cooperative behavior in the management of irrigation systems and other common property resources (Ostrom, 1993).