How Do Irrigation Districts Charge Users For Repairs

Annex 1
Water charging for irrigation - data from the literature

NOTES ON WATER PRICING DATA

Many factors in water charging practices change rapidly over time, e.g. prices charged, recovery rates and price structures. The data presented in Table A1.1 reflect the information provided by the cited source but there is no certainty that the information is still current.

Where the source has provided price information in a local currency this is expressed in Table A1.1 in US dollars using an average exchange rate for the year the source was published or the year cited in the text.

General trends: Because of the factors noted above, it may be misleading to apply too rigorous an analysis to the figures and other information presented in Table 1. Nonetheless, the following general observations can be made.

Country/region

There can be important differences in water charges within a single country. Such differences may reflect different objectives, different water sources, different degrees of water scarcity and irrigation schemes with different technologies, farm types or socioeconomic objectives. Therefore, it is often not possible to make a simple statement describing irrigation water charging at a national level.

Charging basis

Many different formulations for charging are reported. These include:

irrigated area: may vary with crop or season;
water volume delivered: constant rate per cubic metre, and rising block tariff;
two-part tariffs: fixed per area + volume.

Price per 1 000 m³

The range in volumetric price is very great. Very high prices are reported for the following countries:

Country	US$/1 000 m³	Notes
Israel	180 - 290	Prices rise through this range according to what fraction of a water allocation is consumed.
Netherlands	1 330	Price for water drawn from municipal supply network.
Spain	160	This high price paid only where water is pumped from groundwater.
Tanzania	420	Tariff applied for municipal supply used for irrigation.

Leaving these few very high prices aside, there is still no neat and narrow band in which volumetric prices fall. Canada and Romania report prices below US$1/1 000 m³but this represents the lowest extreme. A price of about US$20/1 000 m³is probably indicative of the "average"volumetric price charged for irrigation water.

Price per hectare

Where irrigated area is used as the charging basis, there is again a very great range in the prices reported. Here comparisons are more difficult as it is not always clear in the literature whether the figures quoted are seasonal or annual. The highest prices are reported for:

Country	US$/ha	Notes
Bangladesh	150	Value in a proposed strategy - may not be applied in practice.
China	50-150	Johnson (1999)
Greece	92-210	National average, cited by OECD (1999)
Japan	246	National average, cited by OECD (1999)
Niger	124/season
Tunisia	124-538

US$40-50/ha/year is closer to an "average" price in more developed countries but in India many states charge no more that US$10/ha/year, and Mohtadullah (1997) says that the Revenue Department in Pakistan receives approximately US$0.33/year.

Collection efficiency

Many sources give no information on this aspect of water charging. Where information is provided, it again indicates huge variation both within and between countries. Thus, on the surface irrigation schemes of Bangladesh, collection rates are no more than 10 percent of the billed revenue, but on deep tubewells there is "almost full collection of revenues due". Of the countries where information on collection efficiency is reported, Mexico achieves the highest level with a national figure of 92 percent reported by Svendsen et al. (1997).

Proportion of costs recovered

There is more information available on this than on collection efficiency. The wealthier member countries of the OECD stand out as the few entries in Table 1 where there is reported to be full recovery of annual O&M costs and some recovery of capital costs. These include Japan, France, Australia, Spain and the Netherlands. However, in the overwhelming number of cases, water charging does not cover annual O&M costs.

TABLE A1.1

Water pricing for irrigation - data from the literature

Country/region (year)	Charging basis	Price per 1 000 m³ (US$)	Price per ha (US$)	Collection efficiency (%)	Notes on collection (type/timing of payment. Fee retaining body, etc.)	Actual recovery	Reference
Algeria
National average (1995)¹ (1995 US$)	Two-part tariff (fixed charge + volume)	20-30 (vol. charge)	4-8 (fixed charge)			Not clear. "Govt. pays many of costs, particularly for capital equip."	Salem (1997)
Argentina
National average (1997)	Area		"70/year"	70%	Govt. and irrigation associations (IAs)²	12% O&M	Svendsen et al. (1997)
Australia
N.S. Wales, Queensland (1995)	Volume	1.2-7.39	-			100% O&M (+CD³ in some cases)	Musgrave (1997); cited in OECD (1999)
Southern Murray Darling (1991-92)⁴	Volume	10.16	-			60% O&M⁵	Musgrave (1997); cited in OECD (1999)
Victoria (1995)	Volume	4.36	-			Nearly all O&M	Musgrave (1997); cited in OECD (1999)
Bangladesh
Six major surface water schemes (Bangladesh Water Development Board - BWDB) (1998 US$)⁶	Fixed rate per cropping season	-	0.43-3.01	3-10% (1994-98)⁷		"Inadequate"	Govt. of the People's Republic of Bangladesh (2000a and 2000b)
Meghna-Dhonagoda and Pabna (BWDB) (assuming 1998 US$)		-	7.65-21.25			Schemes involve pumping; price covers 12-25% of full O&M costs	Govt. of the People's Republic of Bangladesh (2000a and 2000b)
Average price farmers pay Shallow Tube Well (STW) water sellers for boro irrigation⁸ (assuming 1998 US$)		-	148.77- 191.29⁹				Govt. of the People's Republic of Bangladesh (2000a and 2000b)
Barind Multipurpose Development Authority (BMDA) Deep Tube Wells (DTW) (electric) (assuming 1998 US$)	Per hour of pumping	1.59 per pumping hour	-	"Almost full collection of revenues due"		Full O&M costs; admin. overheads not covered, nor replacement costs.	Govt. of the People's Republic of Bangladesh (2000a and 2000b)
Barind Multipurpose Development Authority (BMDA) DTWs (diesel) (1999)¹⁰	Well leased to farmer groups on yearly basis¹¹	206-274 (per year) (+ farmers pay pumping costs)	-				Govt. of the People's Republic of Bangladesh (2000a and 2000b)
North Bengal DTW Project(BWDB) (1998)	Crop/season	-	63/ha			Approx. 65% of O&M costs; no replacement costs.	Govt. of the People's Republic of Bangladesh(2000a and 2000b)
Brazil
Selected state irrigation projects¹²(1995)	Two-part¹³	3.08-33.84	3.69 (per ha per month)				Azevedo (1997)
Bulgaria
National average (assuming 2001 US$)	(Mainly) volume¹⁴	-	45.54 per ha (maize) for two irrigations¹⁵	85% for volumetric water charges (1994) 32% for irrigation tax (1994)	Branches of Irrigation Systems Company (ISC).¹⁶		Halcrow (2001)
National and Regional Irrigation Systems(average) (1996-98)¹⁷	Area or volume (varies according to crops) + water abstraction fee (state revenue)¹⁸	10-85	5.88¹⁹ (permanent maximum price)	40% for Regional Irrigation Systems (State) 70-100% for Irrigation Water Users' Associations	Branches of Irrigation Systems Company (ISC)	Varies from <60% O&M to full O&M (+part of CC)²⁰ Average annual costs per 1 000 m³ for irrigation water from the Regional Irrigation Systems vary from 120-170 US$ (1996-1998).²¹	Bardarska and Hadjieva(2000); European Commission-DG Environment (2000); Öko Inc. (2001)
(ISCs (Irrigation Systems Companies) or WUAs use differing methods to calculate the irrigation water price)
Canada
British Columbia (1988)	Area	-	90			<100% O&M	Cited in OECD (1999)
British Columbia (1988)	Volume	0.16-0.2	-			<100% O&M	Cited in OECD(1999)
National average(1996)²² (1996 US$)	Two-part	1.7-1.9	6.62-36.65			100% O&M	Dinar and Subramanian (1997); cited in OECD (1999)
China
Guanzhong Plain, Shaanxi Province (no year given)	Complex. Volume and crop (also includes national & local management fee)	27-49.5	50-150	90+	75% to Irrigation Depts. 25% for local management.		Johnson (1999)
Colombia
5 irrigation districts (1995)	Area + volume	1.3-17.5 (volume)	12.6-65.7 (area)	67-95%	WUA²³	Financial self-sufficiency²⁴: 53%-115%	Vermillion and Garcés-Restrepo (1998)
National average (1996)	Area/crop (fixed + volumetric fee in pump schemes)	-	52/year	76%	"Financial burden of O&M has been shifted to users"	52% O&M No clear govt. policy on responsibility for rehabilitation	Svendsen et al. (1997)
Croatia
	No charges²⁵						Ostojic Z and Lukšic M (2001)
Egypt
	No charges					Some cost recovery for infra. improvements 60-75% subsidy on capital investments	Perry (1995); cited in Ahmad (2000);
France
Adour-Garon W.A. (1997)	Volume	5.27	-			100% O&M	Cited in OECD (1999)
Adour-Garon W.A. (1997)	Fixed (equiv. prices)	4.6	-			100% O&M	Cited in OECD (1999)
Rhôn-Med. Cor. W.A. (1994)	Fixed (equiv. prices)	3.1 Surface water 6.5 Groundwater	-			100% O&M	Cited in OECD (1999)
Greece
Crete (OADYK) (1997)	Surface	21-82	-			100% O&M	Cited in OECD (1999)
National average (1997)	Surface	-	92-210			60-75% O&M	Cited in OECD (1999)
Hungary
National²⁶ (assuming 2000 US$)²⁷ (no year specified)	Area and/or vol. (+ water abstraction fee)	3.67-31.19 (variable fee)	5.19-31.19 (fixed fee)			O&M + part or all of CC²⁸. 20% of all costs. Farmers also have to invest in and maintain some infra.	Öko Inc. (2001)
Eastern Hungarian River Basin Authority²⁹ (1999 US$)³⁰ Water authority selling directly from rivers (or without "main objects")	As above	3.16	No fixed charge	Lack of mechanisms for collecting financial data			European Commission-DG Environment (2000); Fucskó and Hermann (2000)
India
Water canal rates vary by state³¹: (US$ 1989- 1990)³²	33		"Inadequate"		In nearly all states, actual receipts fall short of full O&M costs		Saleth (1997)
Bihar	Area + crop	-	1.80-9.49				Saleth (1997)
Gujarat			2.40-49.85
Maharashtra			3.90-60.06
Madya Pradesh			0.90-17.84
Rajasthan			1.20-8.59
Andra Pradesh	Area + crop	-	5.95-22.22		Revenue dept. (RD) collects fees		Saleth (1997)
Haryana			1.02-5.95
Karnataka			2.22-33.39
Orissa			0.36-11.11
Punjab			0.84-4.86
Tamil Nadu			0.36-3.90
Utter Pradesh			0.42-19.64
West Bengal	Fees vary by season	-	4.44-35.62		RD collects fees		Saleth (1997)
India national (2001)	Area (varies by crop)	0.4-1.6 (vol. equiv.) 1.5 (vol. equiv.)	2-8 30 (sugar cane)				Perry (2001)
Israel
Mekorot (Israel's Water Company) (assuming 2002 US$)	Multitiered³⁴	Per 1 000 m³: US$180 first 50% of water quota; US$220 for next 30%; US$290 for final 20%³⁵			Average cost of water supply per 1 000 m³ for agri. use is US$290. Marginal cost of supplying 1 000 m³ may be US$500.		Yaron (1997); Becker and Lavee (2002)
Italy
Nurra-Serdegna (1994)	Two-part (citrus)	-	250		Not available		Cited in OECD (1999)
Nurra-Serdegna (1994)	Two-part (drip)	-	62.4		Not available		Cited in OECD (1999)
Nurra-Serdegna (1994)	Two-part (melon)	-	125		Not available		Cited in OECD (1999)
National average (1996 US$)	Area	-	20.98- 78.16				Dinar and Subramanian (1997)
Japan
National average (1997)³⁶	Surface (rice)	-	246		100% O&M + part of CC		Cited in OECD (1999)
Jordan
National (1999)³⁷	Volume³⁸	21.13			Approx. 50% of O&M costs³⁹		Huppert and Urban (1999)
National (1997)	Varying tariff	8.5-49					Cited in Ahmad(2000)
Kazakhstan
National average (1997) (1997 US$)⁴⁰		0.4⁴¹		28% (1995-96 from rural water district committees)	Farmers pay a monthly bill	Rates specified in Final Resolution below levels needed to recover basic operating costs. No link between water charges and costs.	Burger (1998)
Lebanon
	No charges						Cited in Ahmad (2000)
Mexico
National average(1997)	Surface	-	60			68-80% O&M	Cited in OECD (1999)
Cortazar (1997)	Surface	-	33			73% O&M	Cited in OECD (1999)
Irrigation District:					In most modules, users pay before they receive water⁴²	100% O&M costs of Water Users and CNA (National Water Commission) staff. Districts normally have no reserve fund.	Johnson (1997)
Bajo Río Bravo (1993-1994) (1993 US$)	Area	-	42.09	Approx. 100%	See above WUAs/CNA retain fees		Johnson (1997)
Various IDs	Volume⁴³	2.25-7.79		Approx. 100%	See above WUAs/CNA		Johnson (1997)
Alto Río Lerma District (1995-1996) (1994 US$)	Area	-	7.31-11.96 (per season)	Most modules had a fee collection rate higher than 100%⁴⁴			Kloezen et al. (1997)
National	Area/crop	-	40/ha/year (average for 1996)	92% (1997)	Irrigation Associations/ Govt. retain fee	85% O&M costs (1997)	Svendsen et al. (1997)
Morocco
		20 surface	-				N.L. Haouari (personal comm., 2002)
		30-40 G/ water
Namibia
(no year specified)	Fixed levy per ha per year + fee per area irrigated + charge rising with consumption	Unit charge of between 4-32.7⁴⁵	15.6 per ha per year(board levy) + 40.4 per ha per year for first 15 000m³ of water		Fixed levy used to support the irrigation boards		Heyns (1997)
Netherlands
National average (1998)	Surface + groundwater	1440	-			> 100% O&M	Cited in OECD (1999)
New Zealand
Lower Waitaki (1997)	Area	-	11-27.5		Irrigation companies⁴⁶	100% O&M (running costs) + emergency capital expenditures	Scrimgeour (1997)
Niger
Niger Valley Irrigation Schemes (Jan.- June 1995 US$)	Area - price - adjusted each season		124 per ha per season(rice)⁴⁷	90-100	Mainly crop, some cash. Payment at end of season - can be delayed. Cooperative retains fee.	Not clear. ⁴⁸ Coops unable to generate savings	Abernethy et al. (2000)
Pakistan
National (1986-1991) (1995 US$)	1. Vol. 2. Irrigation output + class of land (most common) 3. Flat rate (area)	-	0.3-0.36⁴⁹ (revenue per ha)			20-22% O&M for canals, tubewells and others	Mohtadullah (1997)
Rechna Doab (July 1995 US$)		19 (average selling or buying price) (diesel) 9 (electric)	-				Cited in Perry and al Hassan (2001)
Purchased groundwater (July 1995 US$)		17	-				Cited in Perry and al Hassan (2001)
Chishtian pump (2000 US$)		13 (diesel) 11.8 (electric)	-				Cited in Perry and al Hassan (2001)
Philippines
National	Area/crop/ source	-	77/year (average 1997)	58% (1995)	National Irrigation Agency	46% O&M (1995) "Govt. no longer subsidises maintenance"	Svendsen et al. (1997)
Poland
	No charges from 2000			Lack of mechanisms for collection of financial data			European Commission-DG Environment (2000); Lorek (2000)
Portugal
Sorraia (1991) (Public system)⁵⁰	Volume (rice)	9.89	-			Charges rarely cover O&M costs⁵¹	Cited in Castro Caldas (1997)
Sorraia (1991) (Public system)	Vol. + area + crop (maize)	12.31	-			As above	Cited in Castro Caldas (1997)
Sorraia (1991) (Public system)	Vol. + area + crop (tomatoes)	15.63	-			As above	Cited in Castro Caldas (1997)
Romania
National (assuming 2000 US$)^{52, 53}	Volume	0.37	-		National Company Apele Romane	"Costs covered by State"⁵⁴, "Romanian prices are established irrespective of costs"	Öko Inc. (2001)
National (1999)⁵⁵	Price for raw water (for fisheries and irrigation)	0.65	-			WUAs can set tariffs for water supply (based on volume and area, O&M, drainage and an annual contribution)	Popovici (2000)
National (1997)⁵⁶	Water abstraction fee for irrigation and fisheries	0.11 (inland rivers) 0.02 (Danube) 0.39 (g/w) -		Lack of mechanisms for collection of financial data	National Company Apele Romane		Popovici (2000)
Saudi Arabia
National (1997)	No charges						Cited in Ahmad (2000)
Slovakia
National (1999) (1999 US$)⁵⁷	Volume (surface water)	0-48.94 (incl. 10% VAT) 32.98 (without VAT) (average)	-	Lack of mechanisms for collection of financial data	River Basin Administrator - branches of the Slovakian Water Management Enterprise retain fee	25-30% of costs. Ministry of Soil Management subsidizes agri. coops - up to 70% of irrigated water and electricity (or fuel)	Öko Inc. (2001); Thalmeierova-Jassikova (2000)
Spain
Andalucia. Gen- Cab, Valencia Novelda, Genil- Cabra (Córdoba) (WA - Water Association), San Martin de Rubiales (Burgos) (WA) (1995)	Two-part	27-133	90-129			100% O&M(+ CC in some cases) (+ energy costs in Córdoba)	Cited in Maestu (1997); cited in OECD (1999)
Andalucia. Viar (1995)	Surface	-	90-142.92			100% O&M	Cited in OECD (1999)
Valencia Ac. Real (1995) Castille. Retencion (1995)
Castille. Villalar (1995)	Volume (+energy)	70	-			100% O&M	Cited in OECD (1999)
42 irrigated areas (1995)	Varies	-	8.3-266 (per ha per year) 84.7 (average per ha per year)				Cited in Maestu (1997)
Water Associations (WA)	Varies	8 - 160⁵⁸	60-1 200 (equivalent price in per ha per year)				Cited in Maestu (1997)
Sudan
Irrigation schemes (1995-96):⁵⁹, ⁶⁰	Area + crop		15.8-28.1 (cotton) 11.8-21.1 (other)⁶¹		Farmers tend to pay charges after each season. Irrigation Water Corporation (IWC) retains fee.	Each scheme sets its charges to cover actual O&M costs.	Adam (1997)
Syrian Arab Republic
National (1997)	Fixed (sometimes with crop component)		50 (per year)				Cited in Ahmad (2000)
Large-scale water users (Al Hoss Mountains- AHM) (1995)⁶²	Fixed + crop (wheat)	16 (cost per1 000 m³ if at least 4 000 m³ delivered)	65.93 (cost)			O&M costs could exceed US$110 per ha	Cited in Waughray and Rodríguez (1998)
Small-scale water users (AHM) (1995)		20 and 30⁶³					Cited in Waughray and Rodríguez (1998)
Taiwan Province of China
National (1997)	No charges since 1992					Govt. subsidizes irrigation	Hsiao and Luo (1997)
Tanzania, United Republic of
National Urban Water Authority's tariff structure for Dar es Salaam (Irrigation) (1996)⁶⁴	Unclear	420.13					Mujwahuzi (1997)
Thailand
	No charges						Molle (2001)
Tunisia
Groundwater (1993)	1. Fixed per ha (annual) 2. Hourly charge						Slim et al. (1997)
Kebili, Gueliada and Souk el Biaz oases (1993)			124-538 per year			21-44% O&M costs + depreciation costs	Slim et al. (1997)
Selected governorates (1994)⁶⁵		20-78				54-183% O&M	Slim et al. (1997)
Turkey
Mediterranean (1998)	Area (cotton)	-	49.5 (surface) 96.5 (pumped)			70% O&M	Cited in OECD (1999)
SE and Central Anatolia (1998)	Area (wheat)	-	19.8 (surface) 44.0 (pumped)			70% O&M	Cited in OECD (1999)
National average (1995)	Area/crop		25/year	72%+ (1995)		Most O&M - govt. subsidizes maintenance	Svendsen et al. (1997)
United Kingdom
Wales and Northumbria (1997)	Volumetric	13-28	-			100% costs	Cited in OECD (1999)
United States of America
N. Sacramento River (CA) (1997)	Volume	4.9 + 11 (vol. up to 80%) + 14 (vol. up to 80-90%) + 16 (vol. up to 90-100%)	-			100% O&M 100% O&M 100% O&M + CC	Cited in OECD (1999)
Tehama. Col. Cl (CA) (1997)	Volume	4.9 + 25 (vol. up to 80%) + 48 (vol. up to 80-90%) + 71 (vol. up to 90-100%)	-			100% O&M 100% O&M 100% O&M + CC	Cited in OECD (1999)
Pacific North West
		13.4 (average)	-	17% of total costs.			Cited in OECD (1999)
Yemen
National (1998)		20-40 (Farmer to farmer price)	-			"Price would have to be increased to US$50-100 per 1 000 m³ to cover economic costs of extracting and delivering water"	Ward (2000)
Spate irrigation	Law allowing water charges to be levied has been passed					Govt. considering involving user groups in O&M - with a view to handing over schemes to users	Ward (2000)
National (1998)	Varying tariff	20-1450⁶⁶					Cited in Ahmad (2000)
Zimbabwe
Large-scale water users (Chivi District, Masvingo Province, SE Zimbabwe) (1996 US$)		22.3⁶⁷				In an agreement with govt., sugar estates' capital contributions will ensure access to a defined share of dam water for first 40 years at O&M only.	Cited in Waughray and Rodríguez (1998)
Small-scale water users (Chivi and Zaka Districts, Masvingo Province, SE Zimbabwe) (1996)	Annual community fee US$50- 205 per year (+ one-off lump sum of US$477) towards O&M of the schemes⁶⁸				Payment system on seven pilot schemes (one water point per scheme)		Cited in Waughray and Rodríguez (1998)

Notes:

1. Irrigation water prices are expected to rise further to ensure the financial viability of irrigation water suppliers.

2. IAs are public NGOs with full legal authority, including the power to tax.

3. Cost of delivery.

4. Since 1992, real changes have risen by 11 percent.

5. Estimated that charges would have to increase by 80 percent to cover all costs.

6. Exchange rates in 1998, US$ = 47.05 Bangladeshi Taka.

7. As of 1997-98, water rates were charged in only 6 of the 15 schemes (GK, Chandpur, Karnaphuli, Manu River, DND and Buri Teesta), although proposals exist to extend the system by another 6 and raise existing rates substantially.

8. Boro is the main irrigated crop under normal crop sharing conditions.

9. This value appears high - in 2002, farmers were paying TK 1250 per acre (+ fuel costs at approximately US$7 per acre) (J. Skutsch, personal communication, 2002). This equates to approximately US$8 per ha (+ US$3 per ha fuel costs) (based on exchange rates for Jan.-April 2002, US$ = 59.48 Bangladeshi Taka).

10. In 1999, US$ = 49.19 Bangladeshi Taka.

11. As part of this arrangement, BMDA pays up to one-third of the DTW repairs and maintenance, up to an annual limit of one-third of the rental amount.

12. The current water charging system for public irrigation projects is inconsistent. Tariffs are allocated to the sponsoring agency and distributed to the irrigation districts.

13. K1 reflects capital costs and is paid per ha; K2 is designed to cover O&M costs - and is estimated as a function of the volume of water used and is paid per 1 000 m³.

14. Does not include annual tax for irrigation and drainage (collection of irrigation and drainage taxes reportedly suspended since 1999).

15. Exchange rate in 2001 (no year specified), US$ = 1.12 Euros.

16. Income of ISC changes from year to year owing to changing demands for irrigation water.

17. Less than 10 m³/day inside "proper land" (landowners) is free of charge (for groundwater and surface water). For individual farms with 0.2 ha arable area outside the "proper land", free (surface water) is allowed for irrigation up to 3 000 m³/ha/month. All other users have to pay a fee for water abstraction by surface water or groundwater by January 2001.

18. By January 2001, the water abstraction fee should be US$0.46/1 000 m³ for surface water and US$2.3/1 000 m³ for groundwater (Bardarska and Hadjieva, 2000).

19. Based on 1996-98 exchange rate, US$ = 0.85 Euros.

20. No subsidy for private sector, state subsidies for Irrigation Systems Company.

21. Difference in price/costs covered by subsidies and other activities of the Regional Irrigation Systems.

22. According to OECD (1999), this is the most representative figure.

23. Districts have gained almost complete control over management.

24. Of the five districts, only RUT established an equipment replacement fund. No district has set up a capital replacement fund for basic infrastructure.

25. In view of the poor condition of the agriculture sector, the low percent of irrigated land and the very low collection efficiency in the past, the State Water Directorate decided not to levy water user fees on irrigation water (Ostojic and Lukšic, 2001).

26. In 1999, irrigation water use decreased to one-third of the 1998 amount; but climate (high precipitation) was more responsible than a price increase.

27. In 2000, US$ = 1.09 Euros.

28. Capital costs.

29. Prices of a sample of suppliers under supervision of an Eastern Hungarian River Basin Authority were obtained - prices as such are not available in any public material. Agricultural water prices are unregulated; it is a free price system. Control over prices is exerted via a process of tender (if supply is put to tender). There is no official requirement to collect price data and any information collected is confidential.

30. In 1999, US$ = 237.4 Hungarian Forint.

31. Most states impose other levies on canal water in addition to water charges (cited in Saleth, 1997).

32. In 1989-1990, US$ = Rs16.65 (Saleth, 1997).

33. In West Bengal, water rates vary only by season and in Kerala, rates are based only on irrigated area. In all other states, the area-based water rates are highly differentiated, not only by crop and season but also by category of project, irrigation type (flow or lift), category of user (private parties, cooperatives, government lift schemes) and other factors (cited in Saleth, 1997).

34. Israel is now working on recommendations whereby water charges vary according to water quality (depending on salt content). Also being discussed is pricing "reclaimed" wastewater and pricing to reflect the quantity and quality of water in aquifers, as well as the location of an aquifer (Yaron, 1997).

35. Farmers using more water than the quota provides pay much more for the excess (Yaron, 1997).

36. According to OECD (1999), this is the most representative figure.

37. In 1999, US$ = 0.71 Jordanian Dinar.

38. The Jordan Valley Authority have stopped their programme of repairing water meters.

39. Water prices would have to be tripled to achieve full cost recovery (cited in Huppert and Urban, 1999).

40. In 1997, US$ = 75 Tenge.

41. This is the water charge set for agricultural users by the Govt. Resolution of Aug. 1997. In addition to the water charge, farmers also pay a service charge for the release and delivery of irrigation water by local water management authorities - US$6.67-66.67 per 1 000 m³.

42. Where users pay a flat rate for water per season per hectare - in some cases, users are allowed to irrigate prior to payment, or they pay part of fee with an agreement to pay the rest of the fee after the end of the season.

43. Idea of charging the districts on a volumetric basis seems logical, but it assumes that the districts will always have water.

44. his was possible because modules could often provide more irrigation sessions over and above the amount upon which the planned collection target was based.

45. US$4 per 1 000 m³ for consumption between 15 000 and 20 000m³/ha; US$10.7 per 1 000 m³ between 20 000 and 25 000m³/ha; US$21.8 per 1 000 m³ between 25 000 and 30 000m³/ha, and US$32.7 above 30 000m³/ha.

46. Irrigation companies do not receive subsidies from the government and must collect sufficient revenues from users to at least cover operating costs.

47. Derived from a value of PPP US$425 in text, using PPP exchange rate for Jan.-June 1995, 1FCFA = 0.68 US cents, 1FCFA = 0.01French francs, and US$ = 5.04 French francs for same period.

48. Government aim - cooperatives should be responsible for O&M costs, part of initial capital cost, some of costs of government's supervisory agency and savings towards repair and renewal.

49. Revenue per hectare - includes water rates, drainage and miscellaneous receipts.

50. In 1991, US$ = 144.58 Portuguese Escudo.

51. Historically, in Portugal prices of irrigation water have been set to provide subsidies for the cultivation of particular crops or to support agricultural prices.

52. Introduced in 1991, water charges in Romania are imposed on direct consumption or use, as well as on discharges according to their quantity and quality. Crops may be grown in cases where their value is less than the real cost of water used to irrigate them. Economic difficulties have decreased farm prices and consequently the demand for irrigation water (which has also benefited from the absence of recent droughts).

53. In 2000, US$ = 1.09 Euros.

54. Costs of electricity for pumping from high-pressure pumping stations to hydrants or rice fields and the costs of maintenance and repairs under land reclamation arrangements will be taken over by the newly established Irrigation Water Users Associations, and will be supported by the state for five years after their formation.

55. In 1999, US$ = 15383.69 Romanian Leu.

56. In 1997, US$ = 7187.75 Romanian Leu.

57. In 1999, US$ = 0.94 Euros.

58. The higher charges are paid by associations obtaining water from groundwater sources that need pumping or from major water transfers. Observations show that farmers in some associations pay nothing. Others may pay US$500/1 000 m³ in times of drought or for occasional or emergency water.

59. In 1995-96, the government founded the Irrigation Water Corporation and reduced subsidies significantly.

60. In 1995-96, US$ = LS 900 (Adam, 1997).

61. Other crops are sorghum, groundnuts, wheat and sunflowers.

62. Using exchange rate in 1995, US$ = SL 45.5 (cited in Waughray and Rodríguez, 1998).

63. Financial costs of extracting groundwater from a shallow and deep well, respectively. Farmers also recycle domestic wastewater through simple splash irrigation techniques.

64. In May 1996, US$ = Tsh606 (Mujwahuzi, 1997).

65. The Commissariats Regionaux de Développement Agricole use three types of water charges: a lump sum per hectare where metering is not available, a per-cubic-metre tariff for perimétres publiques irriguées with meters, and a two-part tariff with a fixed per-hectare component and a volumetric component.

66. Price in water markets.

67. Implied price of water from the Tokwe-Mukorsi Dam that producers will face.

68. A conventional rural water supply project in Zimbabwe estimated recurrent O&M costs to donor agency to be US$90 per water point per year.

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Annex 2
Analysis of irrigation charging objectives and their realization in the case studies

A full description of the cases studies is included in Cornish & Perry (2003).

Table A2.1 summarizes the analysis of the six case studies. The left-hand side of the table considers cost recovery and the 'means' that contribute to it, i.e. whether the level of charge and the level of fee collection are sufficient to achieve the specified degree of cost recovery. The right-hand side of the table reviews whether demand management is also being pursued through volumetric pricing or the use of water allocation or rationing. This second approach is a non-monetary instrument that avoids some of the implementation problems associated with demand management through price. The table summarizes whether selected preconditions, specific to that tool and objective, are in place in the country concerned. The table does not consider more general preconditions, such as the need for political will, the development of enforcement mechanisms or the allocation of sufficient resources, which are required for any water charging mechanism to succeed.

The following example shows how to interpret Table A2.1. In Haryana, it is government policy to recover O&M costs. This aim is achieved, but capital costs are not recovered. The level of current irrigation charges is adequate to meet the objective, and the collection of charges is satisfactory. Volumetric pricing is not practised; the infrastructure does not allow volumetric supply to individuals. Current water charges (if converted to a volumetric equivalent) would have minimal effect on demand. A formal system of water allocation is established, based on proportional distribution.

TABLE A2.1

Case study summary

Country	Cost recovery					Demand management
	Objective/ achieved		Means		Tool Volumetric price	Precondition		Tool Allocation	Precondition
	O&M	Capital	Charge level	Level of collection		Infra-structure	Price level	Tool Allocation	Water right	Measurement
India - Haryana	Y/Y¹	N	Y	Y	N	N	N	Y²	Y	N²
India - Gujarat, private wells	Y/Y³	Y/Y	N	Y	N⁴	Y	N⁵	N⁶	N	N
Former Yugoslav Republic of Macedonia	Y/N⁷	Y/N	Y	N	N/A⁸
Morocco	Y/Y	Y/N⁹	N¹⁰	Y	Y11	Y	N¹²	Y¹³	Y	Y
Nepal - canal	Y/N	N	N	N	N	N	N	N	N	N
Pakistan	Y/N	N	N	N	N	N	N	N	N	N

Notes:

Y means:

· an objective is currently part of policy/achieved;

· a means is currently effective;

· a tool is currently used;

· a precondition is met (should the tool be applied).

1. Haryana achieves full recovery of O&M costs by allocating costs differentially among users (so that industrial users, for example, pay much higher charges per unit of water delivered than agricultural users). Such an approach depends upon an agency having a variety of non-agricultural customers.

2. The irrigation service in Haryana is achieved through fixed, proportional distribution of available water among farmer groups, with individuals entitled to a specified period of time each week. The water right is for a fixed proportion of the volume available and measurement is of the duration of delivery rather than of volume. Area and crop successfully irrigated are taken as proxy indicators of service, and are the basis for billing.

3. Electricity charges to agriculture in Gujarat (and India generally) are based on a flat charge per month based on motor capacity, which results in substantial subsidy. This charge is fully paid by the farmers.

4. The farmers base their payments to the group on the electricity meter reading, which is a close proxy for water delivered. (Thus, the state charges a flat rate for electricity, but the farmers in the group charge "volumetrically").

5. If electricity prices were set at levels required for financial sustainability of the power companies, irrigation of fodder crops (the highest value crop) would be unprofitable at present water table depths.

6. Under the Indian Constitution, land owners own the water resources beneath their land - so that control of overdraft is not generally possible.

7. Former Yugoslav Republic of Macedonia aims for full cost recovery (O&M plus capital, including past debts of irrigation projects). The projected budget for Tikvesko Pole Kavardaci Water Management Organization (WMO) sets out a total income in excess of the O&M component of total costs. However, actual income is well below this, as fee collection rates are very low.

8. The decline in irrigated area in Former Yugoslav Republic of Macedonia means that the water available currently exceeds demand.

9. Moroccan policy is to recover all O&M costs plus a proportion (40 percent) of index-linked capital charges.

10. The authorities use a combination of volumetric charges (to discourage waste and encourage productive use) and fixed allocations to ensure that surface water use matches the available supply.

11. Current charges cover O&M costs, but do not fully fulfil the aim of recovering a significant capital element. The Haouz scheme does not levy fees on farmers in "traditional" irrigated areas and so has a budget shortfall.

12. Farmers are advised at the beginning of the season how much water is available per hectare. Deliveries are rationed to that level, and charges are based on quantity delivered. The farmer can take either the full volumetric quota, or a lesser amount.

13. Indications are that the current, very high, charges for water (and the shortage of canal water) are impelling farmers to use groundwater. Aquifers are already substantially overdrafted, focus is needed on establishing groundwater rights. The result of high pricing is to cause farmers to change their source of water, though probably not their overall consumption.