SECTION 1: OPENING SESSION

OPENING ADDRESS

Yu Youjun
The Governor of Shanxi Provincial People's Government, China

I would like to welcome all forum delegates on behalf of Shanxi Province People's Government. My sincere thanks to FAO's regional office for its contribution to water resource management and irrigation modernization in Shanxi, to the Ministry of Water Resources for supporting the development of water conservancy in the province and to the many experts who are involved in water conservancy research and practice.

Governments worldwide and international communities share strategies to: (i) Support sustainable socio-economic development through the sustainable utilization of water resources, (ii) improve integrated agricultural productivity through the modernization of agricultural irrigation and (iii) ensure adequate supply and safety of food. I will now provide a brief introduction on the status and challenges for water resource utilization in Shanxi and our corresponding thoughts on action to be implemented. I look forward to advice and suggestions from leaders and experts present at this forum.

Water resources in Shanxi: Status and challenges

Shanxi Province has ample coal deposits but is disadvantaged by water supply. This is a good summary of Shanxi's natural resources. Annual drought and topography contribute to water resource depletion in Shanxi. In the administrative area, except for the Fenhe River Basin in the centre, all rivers flow outwards from the watersheds on both sides. Utilization of rainfall and recharge of groundwater are poor owing to steep slopes and rapid runoff.

From the early 1970s to the mid-1990s, socio-economic development was slow; thus conflict between demand for and supply of water resources was not prominent and the implementation of water conservancy measures was minimal. With the central government's strategy to boost the development of Middle China and Shanxi Province's strategy to industrialize, Shanxi is stepping into an era of rapid socio-economic development and the concomitant demand for water in general will peak. According to preliminary estimates, in the coming ten years, the total demand for water will rise from the current 6.5 billion m ³ to 7.5 billion m³. The gap between demand and supply will become more and more striking for the following reasons:

1. Limited water resources are continuously diminishing and the state of surface water loss is severe. Shanxi is one of China's poorest provinces with respect to water supplies. According to the results of the Second Water Resources Evaluation in 2003, Shanxi's water resources, on average, amounted to 12.38 billion m³, which is only 4 percent of China's 2 800 billion m³. The per capita volume was 381 m³, only 17 percent of China's 2 200 m³ and 1 200 m³ less than the six dry northwest provinces. Since 2000, water resources have continued to decrease. Gross supplies from 2001 to 2004 were 6.971 billion, 7.871 billion, 12.15 billion and 9.247 billion m³ respectively, all below average. Moreover, the average amount of surface water in the last 20 years has been 7.2 billion m³ while the average amount of water flowing out of Shanxi exceeds 4.8 billion m³ — 66 percent of the surface water gross.
2. The water supply structure is not equitable and the overexploitation of groundwater is severe. On average, Shanxi's annual gross water use is 6.5 billion m³; 60 percent is groundwater (4 billion m³) and 40 percent is surface water (2.5 billion m³). For the groundwater figure, 0.7 billion m³ is the result of overexploitation, which occurs in the five basins of Datong, Xinding, Taiyuan, Linfen and Yuncheng. The overexploited area covers 46 percent of Yuncheng Basin (230 million m³ of groundwater annually). Among 19 karst springs in Shanxi, three are dry, two are almost dry and 12 have a vastly impeded flow rate. In some areas, well depths have reached between 600 and 1 000 meters.
3. Water resources are degraded by coal mining. The coexistence of water and coal is a feature of the coal mines in Shanxi. Coal mining directly results in damage to aquifers, seepage of or pollution to groundwater. As surveyed in the Research on Coal Mining's Impact upon Water Resources, completed in 2002, the price of mining of coal/tonne was 2.48 m³ of water. On the assumption that 600 million tonnes of coal are mined every year in Shanxi, this would result in the loss or degradation of 1.5 billion m³ of water. For severe damage to aquifers caused by coal mining, seepage directly results in ground collapse, groundwater level recession and death of wells and springs.

The severe lack of water resources and the increasing gap between demand and supply have become a heavy burden on sustainable socio-economic development in Shanxi. How to alleviate this burden by harnessing technology and finding radical solutions to water loss, how to deal successfully with the water issue for the citizens of Shanxi and how to support sustainable socio-economic development through the sustainable use of water resources are all difficult issues currently.

Addressing the situation

The long history of water treatment in Shanxi can be traced back to the origins of irrigation and flood prevention in China. With thousands of years of practice, we have a wealth of experience and a series of effective solutions to water resource management. In the context of changes in socio-economic conditions, water resources can be managed by applying indigenous knowledge and modern technology.

In the fourth quarter of this year I joined leaders of related departments to investigate the status of water resource demand and supply, the construction of related infrastucture as well as the protection, development and economic use of water resources. We conclude that the water problem in Shanxi is attributable to both the natural environment and the impact of human activities, inadequate development of water conservancy schemes, weak economic structure and development modes and limited knowledge about the market economy. Therefore, we have developed ideas to enhance water conservancy infrastructure and resolve the problem of diminishing water resources. We will employ scientific knowledge for guidance and strive for harmonized development of the economy, society, environment and water conservancy. We will balance all concerned factors, address both symptoms and root causes and consolidate management. Further, we will establish policies, laws, mechanisms and institutions for the conservation, protection, development and optimized distribution of water resources. Lastly we will try to realize the sustainable use of water resources to safeguard sustainable socio-economic development through the use of available technology and the active participation of the public. The critical tasks will be:

(i) Continue the reform of investment and financing systems and expedite water-related projects according to open and market economy principles

During the 11^th Five-year Plan, we will try to strengthen water infrastructure. We will develop and utilize water from rainfall, small springs and rivers; we will strive to increase the supply of surface water by conserving, diverting, lifting, allocating and optimizing water resource distribution throughout the province to increase the utilization rate of surface water from 30 to 40 percent. Currently, the lack of reform in investment and financing systems is the primary reason for sluggish water conservancy, especially in the context of developing water infrastructure. From henceforth, we will develop a new vision for water conservancy that does not depend on national investment. We will encourage everyone to participate in water projects and adhere to the principles of the market economy. That is to say, financing shall be diversified through different levels and channels and enthusiasm among governments, enterprises, society and individuals shall be encouraged. Major water users shall be encouraged to construct WI and implement water supply projects. For the construction of large- and medium-scale water conservancy projects, all levels of governments shall invest seed funding and promote government investment opportunities to attract funding from major water users and other private or foreign sources. Stock companies shall be established and shall be operated and managed commercially. The reform of the ownership system for small water conservancy projects shall be deepened with new tenure modes to activate water assets and exploit project benefits.

(ii) Strictly control the exploitation of groundwater and continue to improve the natural water environment

The current mandate is to carry out strong measures to strictly control the exploitation of groundwater and to optimize the distribution of water resources. The primary measure is to strictly control the volume of groundwater exploitation and to increase the price of extracted groundwater when surface water supply is of good quality. During the 11^th Five-year Plan, the general objective of Shanxi's groundwater control plan is to decrease the volume of exploited groundwater from 4 to 3 billion m³ (60 percent reduction in overexploited groundwater). By 2020 the amount of groundwater pumped and recharged will be balanced.

(iii) Advance the development of a water-saving society and promote water use efficiency and water resource benefits

A water-saving society is distinguished by a water resource management system that is based on water rights and the water market. Establishing a water-saving society in Shanxi will be implemented in two stages. The objective of the first stage is to have a main system, mechanisms and institutions in place by 2008; stage 2 will target a fuctional water-saving society by 2015. The primary measures will be: (1) Ensuring sufficient water supply for living; regulating and controlling water for industry; stabilizing water for agriculture; maintaining enough water for ecosystems; and establishing water resource plans for basins and regions; (2) Determining macrocontrol and microquota indices for water resources; fixing water use rights for all regions, industries, departments and units; determining scientific water use quotas for life, production and services; and clarifying initial water use rights; (3) Establishing water use computation and control systems and groundwater change monitoring systems for pumping wells and irrigation districts; (4) Ensuring the realization of a water use control index (integrating factors related to law, administration, engineering, the economy and science and technology); (5) Establishing a standard and legal water rights market and a system for water use rights transfer.

At the same time, to conserve natural resources in general, we will align the economy structure and transform the mode of economic growth. During the 11^th Five-year Plan, we will try to limit the increase of water use within 10 percent throughout Shanxi Province, decrease water use per 10 000 yuan in the GDP from 155 to 100 m³ and enhance the recycling rate of industrial water to 85 percent.

(iv) Underscore irrigation and water conservancy for rural development

According to the central government and our provincial administration, promoting rural development and accomplishing a harmonized urban–rural relationship is the strategic thrust for the future development of Shanxi. Water conservancy infrastructure is essential for this achieving this goal. We will improve conditions for agricultural production with emphasis on water conservancy, improve comprehensive agricultural productivity and ensure domestic water supply and hygiene in rural areas. We will also take the following action:

Firstly, implement irrigation modernization rigorously. We will develop agricultural irrigation and disseminate the latest techniques. We will focus on the major food production areas of the province, continue water-saving projects in major irrigation areas (e.g. Fenhe, Xiaohe, Fenxi and Zuncun) and in medium-scale irrigation areas; we will increase the premium water-saving arable area to 800 000 ha and irrigated area to one million ha — a further 200 000 ha. We will also start work on the northern extension of the Jiamakou irrigated area and the Beizhao irrigated area as soon as possible (to increase the area of 66 667 ha of irrigated farmland), implement rainwater harvesting and utilization projects such as dry wells and herringbone gates in the eastern and western mountains to provide 30 million m³ of water supply and prepare 100 000 ha for extended irrigation in times of drought. By 2010, the irrigation water utilization coefficient of the whole province will be elevated from 0.46 to 0.56. By 2015, agricultural water utilization will be transmuted from the traditional crude irrigation system to modern water-saving technologies and high-efficiency irrigation. The modernization of agricultural irrigation will have been effected.

Secondly, the construction of a soil and water conservation warping dams will be undertaken vigourously. Constructing a warping dam in the soil- and water-deficient area of the Loess Plateau is a multipurpose and effective measure to prevent siltation in rivers, to help farmers increase production and income, to promote the conversion of slopes from crop to forest land and to recharge groundwater. During the 11^th Five-year Plan, Shanxi intends to build 10 000 warping dams; they can prevent the siltation of 1 500 million m³ of waterbodies, increase 26 667 ha of land, return 160 000 ha of sloping land to forests and realize 0.02 ha of furrow land per capita in loess hilly and mountain areas, even 0.03 ha in areas under better condition.

Thirdly, steadily improve the safety of drinking water in rural areas. In 2010 we will provide potable water for ten million rural inhabitants and supply tap water in every village. This will be done by vigorously developing a centralized water supply project and implementing a small water diversion project so the public can have hygienic and convenient water supply.

Fourthly, vigorously develop hydropower and the aquaculture industry. The "Small Hydropower for Firewood" (SHPFF) project in rural areas is an important feature of the 11^th Five-year Plan. We will have 11 hydropowered counties or villages, 34 hydropower plants, 70 SHPFF projects, annual increase of 175 million kW and 340 000 SHPFF families. We will make every effort to develop aquaculture. At the end of the 11^th Five-year Plan, we will attempt to produce 75 000 tonnes of aquatic products, establish 20 000 ha of aquaculture area and increase the yearly income of each fisher to 7 000 yuan.

To resolve the problem of water shortages in Shanxi requires great effort by the whole province and the support and help of the general public. There is also a need to strengthen multilateral communication and cooperation and collaboration with international organizations. Shanxi has maintained long-term and good cooperation with FAO in many aspects. In the 1990s, the "3932" project was a successful cooperation with regard to soil and water conservation and harnessing the resources of the Luliang mountain area. This International Forum on Water Resources Management and Irrigation Modernization in Shanxi lays a solid foundation for our latest venture.

OPENING ADDRESS

Victoria Sekitoleko

FAO Representative in China, DPR Korea and Mongolia

On behalf of FAO I warmly welcome you to this International Forum on Water Resources Management and Irrigation Modernization. I would like to express our appreciation to Shanxi Provincial Government for generously hosting and co-organizing this activity.

Water is the source of life. In many places worldwide, water is the most crucial determinant not only for food and animal production but also for human livelihoods. Water scarcity is one of the major constraints to socio-economic development in Shanxi Province. Many worthwhile practices have been piloted in Shanxi in the past years, especially high productivity irrigation, water conservancy projects and management improvement in large irrigation schemes, such as the Jiamakou Irrigation Scheme. With rapid economic development, increasing and migrating populations, agricultural and economic restructuring, water use is competing among different sectors, so multiple challenges exist and need to be addressed further.

Considering the large irrigation scale and intensive irrigation upgrading in China in the past and coming years, FAO has targeted China as its major work area for water resource management and irrigation modernization in this biennium. Recent cooperation includes training and capacity building on irrigation modernization with the Ministry of Water Resources and the Chinese National Committee on Irrigation and Drainage (CNCID) as well as introduction and testing of the Rapid Appraisal Procedure for Performance Evaluation of Irrigation Systems in Shanxi and Hubei Provinces.

The FAO Regional Office for Asia and Pacific has recently signed a Letter of Agreement with Shanxi Water Resources Development (SWRD) and CNCID on further cooperation for irrigation modernization and water environment study. We can assure you that FAO will further strengthen cooperation with Shanxi and other parts of China. FAO not only has the interest but also the technical capacity needed in this cooperation.

Recently, FAO has been developing a GEF regional project, covering Bangladesh and China, on the risks of using arsenic-contaminated groundwater for irrigation in crop production and subsequent hazards to food safety. Hopefully project implementation will be approved soon. We expect wide and active participation among various stakeholders.

The water problems faced by Shanxi are representative of North China and other arid and semi-arid areas in the region and the world. Options and solutions developed and practised in Shanxi will provide valuable references for relevant areas in other countries. FAO is willing to cooperate in this context with the Shanxi Government and institutions involved in the agenda.

Under FAO's South–South Cooperation programme, China has sent almost 700 specialists to other developing countries to assist with the implementation of the Special Programme for Food Security, in which water control is the first component. This May in Jakarta, FAO and China signed a strategic alliance to bring 3 000 Chinese experts and technicians to other developing countries. The strategic alliance has been once again confirmed during the participation of FAO's Director-General at the Beijing Summit on China–Africa Cooperation early this month. I hope Shanxi Province will continue to share its practical technical experience with other developing countries in the world.

To conclude, I would like to thank you all on behalf of FAO for participating at this forum. I also hope that your deliberations will be successful and I can assure you of FAO and FAO China's full support to further national socio-economic development.

KEYNOTE ADDRESS

Hu Siyi
Vice-Minister of the Ministry of Water Resources, China

Establishing a holistic water-saving society to promote the sustainable development of Shanxi Province

I am greatly honoured to be here today. On behalf of the Ministry of Water Resources of China, I'd like to offer my congratulations on the opening of this forum. Also, I would like to express sincere thanks to FAO and other related organizations, to specialists and scholars for your inputs with regard to water resource governance in China.

Water and food security is critical for the existence and development of human life worldwide. Most nations worldwide have mandates to ensure food production quotas and socio-economic development through the sustainable use of water resources. China has a huge population and scarce cultivated land per capita; moreover floods and droughts occur frequently. Promoting water benefits and mitigating water disasters is a major issue for stable governance in China. In recent years, according to the national development strategy, China has re-aligned water management concepts and policy and has made the transition from engineering-oriented water conservancy to resource-oriented water conservancy and from traditional water conservancy to water conservancy through sustainable development; the core theme being harmonized coexistence between humans and the environment. During the 11^th Five-year Plan, we will develop our activities in five ways: (1) Adapt to water resource capacity and promote the establishment of a water-saving society; (2) address flood risks and make every effort to balance water use; (3) re-inforce the management of water zones and safeguard supplies according to the natural bearing capacity; (4) strengthen water conservancy in rural areas; (5) protect and maintain river health.

Shanxi Province is an important new energy and chemicals' base in China and will play a critical role in the strategy for national energy distribution and in the strategy for the central region of China. The central government and the provincial government have always paid considerable attention to water resource issues in Shanxi as elaborated hereunder.

1. The water resource issue in Shanxi with a strategic perspective on sustainable development

Shanxi has vast supplies of coal; its reserves, outputs and exports are ranked first in China. But Shanxi is an inland province and has comparatively lower precipitation; thus droughts are common and water resources are scant. The lack of water resources constrains socio-economic development.

In the long term, the Shanxi Provincial Committee of the Chinese Communist Party and the Shanxi Provincial People's Government have always paid considerable attention to water conservancy and made laudable contributions in the initial liberalization period. Shanxi has had many "firsts" in China: The first to carry out a provincial evaluation of water resources, the first to issue regulations on water resource management (to adopt integrated water resource management), the first to implement (contracted) family-based harnessing of small watersheds and the first to develop sand-thorn resources to conserve water and soil and to manage gorges and gullies in the Loess Plateau. The development of water c onservancy in Shanxi has not only safeguarded and supported socio-economic development in Shanxi but also created many references for the development of national water conservancy and boosted the healthy development of national water conservancy.

In recent years, under the direction of the central government, the establishment of water conservancy in Shanxi has developed rapidly; however today it faces new questions and new challenges:

The accelerating depletion of water resources. According to the early results of integrated water resource planning survey, between 2000 and 1980, the runoff volume of rivers in Shanxi was reduced by 24 percent and average recharged groundwater volume was reduced by 12 percent. At the same time, the gap between the demand for and supply of water has been widening.

Serious ecological degradation. Increased seepage of polluted water, reduced natural runoff and the diminishing self-purification capacity of rivers has resulted in the chronic pollution of major rivers and a low percentage of quality water in functional areas. Coal mining has severely affected water resources, caused loss of water and soil, jeopardized the safety of drinking water, impacted on food and crop production and induced major economic losses in other sectors.

Unfair distribution of water resources. Groundwater has been heavily overexploitated, while the great Water Diversion Project from the Yellow River to Shanxi Province has not exerted its expected effect.

Weak water conservancy infrastructure. Water conservancy engineering projects in the 1950s and 1960s ended with low standards and inadequate infrastructure. They were dated and worked at low efficiency. The construction of water conservancy infrastructure has not kept pace with other developments and agricultural production is not protected properly.

Slow water law legislation. The water issue needs to be administrated systematically and obstacles in institutions and mechanisms need to be removed.

Thus it is necessary to consider water resource issues in Shanxi strategically. The relationship between economic development and water use, development and protection and supporting and safeguarding sustainable socio-economic development through the sustainable use of water resources need to be addressed.

2. Innovating development modes and constructing a holistic water-saving society

The only solution for Shanxi's water shortage problems is the development of a holistic water-saving society juxtaposed by harmony in the human–water–technology nexus.

(i) Conform to the bearing capacity of water resources and the environment and coordinate economic development and water resource distribution

The bearing capacity of water resources and ecology in a particular area is limited in the context of socio-economic development. Once the threshold is breached, water resources and ecology will degrade and development will become unsustainable. When water resources in Shanxi are used to satisfy socio-economic development, the economy needs to adjust its development mode to adapt to the natural bearing capacity. First, socio-economic development objectives will be determined and fair distribution among main industries will be made. A strict industry entry policy will be stipulated to prohibit industries with high water consumption, low efficiency and heavy pollution; it will support high efficiency and environmentally friendly industries and develop a recycling economy. Second, traditional industries will be upgraded by introducing water-saving technology to increase water-use efficiency and productivity. Third, water resource plans will integrate socio-economic water demands and scale water demands in different sectors scientifically to reserve water for future development and for the environment.

(ii) Make every effort to develop an institutional system for a water-saving society

Problems regarding incentives and water-saving mechanisms will be resolved institutionally for the establishment of a water-saving society. Water management institutions, based on theories related to water ownership and the water market will be consolidated to shape the water-saving society according to financial principles. A water control index will be initiated based on water basin resource planning and initial water distribution. Index systems for total macrocontrol of water resources and microquota management will be established for an explicit water resource use index of different areas, industries, units, businesses and irrigation schemes to realize regional development and accommodate natural bearing capacity. Instruments relating to law, engineering, economy, administration and science will be implemented comprehensively to govern the water control index. Economic instruments will receive greater attention. Heavy water use will be priced more highly, while saving will be rewarded and transfer compensated. Water users will participate in management and water users' associations (WUAs) will be established and promoted. The public will be encouraged to participate in the distribution, management and supervision of water rights, water volume and water pricing. A water rights' market will be initiated. Water rights can be transferred with compensation and the market will serve as an instrument for resource distribution.

(iii) Develop water resources fairly and optimize water resource distribution

It will be mandatory to use water in an optimal and sustainable way and to distribute water resources fairly. Groundwater shall be used for domestic purposes; other water sources and recycled water will be used mainly for industry and agriculture. Water distribution will be strictly managed. Paying careful attention to natural bearing capacity, the level of industrial water consumption and the level of environmental protection in Shanxi, a water resource distribution policy and a water use quota standard will be established to encourage, restrain or prohibit the development of different industries. These tools will also support and encourage the development of high efficiency industries that conserve water and are environmentally friendly. A water distribution project will be effected soon. Based on integrated river basin planning and water allocation plans or protocols, surface water distribution projects will be initiated in appropriate areas. We will build small water conservancy projects (e.g. rainwater conservancy in mountain areas), develop various water resources and assist water-deficient areas.

(iv) Safeguard drinking water and the environment; strengthen water resource protection

The first thrust will be to safeguard potable water for the general public and ensure clean drinking water supply. In rural areas, this will be done by implementing potable water safety projects in rural areas. The next agenda item will be to strengthen groundwater protection. Prohibited and restricted areas for groundwater pumping will be determined soon. We will institute strict groundwater protection policies, raise the water-pricing standards and ensure the sustainable use of groundwater. Lastly in this context, we will strengthen water resource protection. Environmental impacts will be considered when developing and utilizing water flowing from Shanxi. The relationship between the upper reaches and the lower reaches as well as that between left and right banks will also be addressed. We will re-inforce the management of rivers and reservoirs, enhance water pollution prevention, invigorate sewage treatment and recycling, improve the water environment, protect drinking water sources and intensify potable water safety in urban and rural areas.

(v) Establish and fine-tune the systems and mechanisms for establishing a water-saving society

There is a need to upgrade water resource management regulations and intensify water management by law. Pursuant to national water laws, we will accelerate the revision of local water rules and regulations that are in effect; institute the strictest water resource management system; specify the objectives of water resource management, conservancy and protection, as well as management responsibilities and measures; implement a governmental management target and responsibility system; and strengthen governmental macrocontrol of the resource. We will also promote the construction of infrastructure to resolve disputes related to water resources, water intake permission, water metering, monitoring and surveillance with the ultimate aim of improving water resource management. We will vigorously carry out consolidated management of water resources, refer to foreign experience, reform the water management system and integrate water resource administrative functions. We will establish a long-term mechanism for investment in constructing a water-saving society. We will make the fullest use of relevant policies concerning prosperity in China's central area, increase local investment in water conservancy and establish an eco-environmental compensation system (e.g. a compensation system for coal mining's destructive effect on water resources), institute preferential policies and develop capital investment.

The new Shanxi Provincial Committee and the Shanxi Provincial Government attach great importance to the water resource issue. This year the Shanxi Provincial Government organized a special investigation on water resources. During the 11^th Five-year Plan, the Ministry of Water Resources will continue to support water conservancy in Shanxi, implement plans such as sustainable utilization of water resources in the capital and try to advance sustainable socio-economic development in the basin and the sustainable utilization of water resources.

KEYNOTE ADDRESS

Jean-Marc Faurès

Senior Water Resources Management Officer, FAO Land and Water Development Division

Figure 1. World Bank lending (bars) for irrigation and drainage and world food prices (line) (of 1990 constant US$)

The volumes of water used for irrigation consequently increased, making irrigation by far the main water use sector, both in terms of freshwater appropriation and consumption. Irrigation growth rates have decreased since then, following a progressive reduction in the price of most staple food commodities. Asia has over 60 percent of the world's irrigation area and it plays a particularly crucial role in sustaining agriculture across the "dry belt" that extends from the Middle East to Northern China and Central America (Map 1).

1.2 Technological development

Technological developments of the last 50 years for system management include automated and downstream water control mechanisms, laser land levelling, telemetry systems for water measurement and control, pressurized distribution networks and information and data management systems. Over the last two decades,

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¹ This paper relies extensively on work made in preparation for the irrigation chapter of the comprehensive assessment of water management in agriculture by Jean-Marc Faurès, Mark Svendsen and Hugh Turral. The Comprehensive Assessment is a five-year multistakeholder assessment process aimed at guiding investments in water management in agriculture in the forthcoming decades. More information can be found at http://www.iwmi.cgiar.org/Assessment/index.htm

Map 1. Irrigation in percentage of cultivated area (2003)

advances in theory and technology have allowed much more precise determination of crop water needs and irrigation schedules. However, the application of both system management technologies and improved crop water requirement calculation methodologies remains limited in developing countries that are hampered by low managerial capacities and correspondingly poor responses in capacity building, a systematic underestimation of maintenance requirements and inflexible and unresponsive irrigation infrastructure.

The advent of affordable drilling and pumping technologies in countries like India and Pakistan in the mid-1980s changed the nature of irrigation investment, leading to the rapid development of shallow tubewells and conjunctive use of surface and groundwater. The direct control of the source of water by farmers, either through groundwater pumping, drainage re-use, or direct pumping from canals and rivers, brought the flexibility and reliability in water delivery that farmers did not get from most large-scale surface distribution systems. It also brought new challenges related to management of irrigation schemes under conjunctive use, falling groundwater tables and massive public subsidies through cheap or free electricity from public distribution systems.

1.3 Current state of irrigation in the world

Table 1. Typology of irrigation systems

Large-scale public irrigation systems in dry areas are mostly run by public management agencies and for the last ten to fifteen years have been the focus of irrigation management transfer programmes. In these schemes, water service is usually inadequate and inflexible and inequities between head and tail ends of the schemes are marked. In response to poor service, farmers typically seek to improve the reliability of supply through water theft, pumping from drains or use of shallow groundwater in conjunction with canal water. These schemes were built to provide many people with either full or partial irrigation to stabilize and augment staple foodgrain production and were usually not expected to pay their own operating expenses. Today, they face the challenge of economic and financial viability, and of the technical and managerial upgrading that would allow them to respond to the new needs of their farmers.

The analysis of irrigation systems and implication in political terms must also take into account the economic environment. This typology is thus further refined by defining three stages of economic development of a particular region or country:

Stage 1: Countries or regions within countries where agriculture accounts for a substantial share of the economy and employs a large proportion of the population (including most of sub-Saharan Africa; Diao et al. 2005).

Stage 2: Countries or regions in transition to more market-based and industrial economies where the relative importance of agriculture is falling in economic terms but where most of the population still derives its livelihood from it (including most of Southeast Asia and the Middle East).

Stage 3: Countries or regions where agriculture contributes only a small share of the economy and further large-scale investment is unlikely (Republic of Korea and Malaysia).

The farming sector in these countries may follow divergent paths: From a competitive international market orientation (such as Australia or Brazil) to redefining the role of farmers as "guardians of the landscape," as in Europe, Japan and Republic of Korea (Hung and Shih 1994). In large countries all of these outcomes can occur and national policies must account for regional specificities.

Evolution within and between categories of irrigation farmers are shaped not only by agricultural policies but also by the capacity to ensure allocations of water in all three stages, by wider financial restrictions and by local capacity to overcome pollution and environmental damage in countries moving through stages 2 and 3.

1.4 Evolution of public irrigation

Table 2. Evolution of public irrigation since the 1960s

Source: Adapted from Barker and Molle 2004.

2.1 Drivers of change for the irrigation sector

Figure 2. World price for rice, wheat, maize and urea (Barker and Molle 2005)

Figure 3. Evolution of population growth rates 1950-2030 (percentage p.a.; Source: UN)

Figure 4. Agriculture in percentage of GDP for different countries (1965-2004). (World Bank, 2005)

Figure 5. Rural population in percentage of total population 1950-2030

Rural landscapes of the future will be determined by many factors. The rate of rural outmigration is mostly a result of the perceived urban–rural differential in living conditions and employment opportunities. The extent to which rates of rural migration can or should be reduced is a function of livelihood opportunities in rural areas, but it is also related to globalization and overall changes in productivity in agriculture worldwide. The consequences of urban migration, changing aspirations among the young and the ageing of populations (as growth rates decline) will have important effects on the remaining rural farming population.

Many outcomes are possible, but it is expected that the active rural farming population will decline in size, farms will increase in size and the income derived by those left in farming will increase. Most developing countries in Asia will face the transition problem now being tackled in China, where there will be constant tension between "industrial and service" opportunities and the pool of unskilled and semi-skilled rural labour for the next 20 years. The net trend in farm employment will follow that of agriculture in industrialized countries due to economic pressure and a quest for a better quality of life.

Agricultural productivity is expected to continue to grow for most crops, although at slower rates than from 1950 to 2000. Combined with reduced population growth, it will continue to contribute to reductions in farmgate prices of major agricultural commodities, putting more farmers out of business and further encouraging migration to cities. Commercial and high value agriculture will become increasingly important in irrigated areas, subject to the security and flexibility of water supply. More commercial and high value agriculture will provide new opportunities but the intensification they imply may present an increasing challenge for health and the environment. However, it is reasonable to expect that the quality of farm management, farmer education and the adoption of more environmentally sound practices such as integrated pest management (IPM) will counteract or even negate this possibility.

Biotechnologies are expected to have an important impact on agriculture, boosting yields and reducing the need for pesticides, but such improvement has so far concentrated on a few crops that are controlled by the private sector. Fears that genetically modified organisms (GMOs) will only be available via the private sector and impose higher costs on poor farmers may be allayed by state-sponsored development of yield- and nutrition-enhancing varieties in countries such as China and India: Locally developed Bt cotton in China is already making a major impact. The impacts on farmers in developing countries will be mixed, depending on their capacity to access these technologies.

Technologies for water control are not expected to develop much further and the rate of adoption of existing irrigation technologies will depend much more on farming conditions than on their availability. There are plenty of existing technologies available that are awaiting favourable conditions to become widespread in irrigation.

Competition for resources (land, water, energy and finance) will always be at the expense of agriculture in developing countries. Increased competition over water will put increasing strain on irrigation and in most cases will reduce the volumes of water allocated to agriculture. Cities and industries at the global scale will impose relatively small stresses on water supply for agriculture, but it will be important locally around cities and may even change the location of irrigated agriculture (from upstream to downstream of large conurbations) and increase the areas of (untreated) wastewater use. Environmental allocation will have a much greater impact on agriculture, as it is generally a consumptive use, and it will become larger as public awareness increases and better valuation techniques are developed. Investments in new hydraulic infrastructure (water control, storage and transfer) will still take place where the potential exists but under much more scrutiny over possible environmental impacts.

Climate change is expected to have significant impacts on agriculture and food production patterns over the next century. Effects will be manifested through spatial, temporal and magnitude changes in daily and seasonal temperature ranges and precipitation patterns. The impacts on crop yields will vary considerably across regions and among species. While yields may rise in some cases, interannual variation in yields may also increase. Dry continental areas, such as central Asia and the Sahel, are expected to experience drier and hotter climates, while longer growing seasons and increased rains may boost productivity in temperate regions. Shifts in diurnal temperature ranges have been shown to decrease yields; an International Rice Research Institute (IRRI) study indicates decreased rice yields from increased night-time temperature (Peng et al. 2004). Higher temperatures will also influence production patterns, shifting production ranges of specific crops towards the poles. A similar expansion of the range of pests increases the risk of crop losses.

In drought-prone areas, the number and duration of dry spells are expected to increase, affecting crop production. Those who are the most vulnerable to climate variability and change are the poor, landless and marginal farmers in rural areas dependent on isolated rain-fed agricultural systems in semi-arid and arid regions. Many of these vulnerable populations live in sub-Saharan Africa, Asia, tropical areas of Latin America and some Pacific island countries. The Intergovernmental Panel on Climate Change (IPCC) finds that the greatest adverse impacts are expected on areas where resource endowments are poorest and the ability of farmers to respond and adapt is most limited. Thus, changes in production and management activities will be important measures for mitigating climate change impacts.

2.2 Projections for the future expansion of irrigation

Farmers around the world will continue to integrate into a global market that will increasingly dictate their choices and behaviour. While irrigated grain production will remain important, a variety of niche markets will emerge, creating opportunities for innovative entrepreneurial farmers where suitable national policies are in place.

Projections of developing country irrigation expansion predict much lower rates of expansion of irrigated land over the next twenty to thirty years. FAO (2003) predicts an average increase of 0.6 percent per year between 1997/1999 and 2030 in developing countries, substantially lower than the 1.6 percent per year from 1960 to 1990. Such projections are systematically lower than those given by most national irrigation departments, which generally rely more on past trends than on a careful analysis of demand for agricultural outputs. Nevertheless, irrigation's contribution to total agricultural production is expected to exceed 45 percent by 2030 as yields continue to increase and cropping patterns shift to higher value crops (FAO 2003). This means 12 to 17 percent more water will be withdrawn for irrigation.

Countries with a legacy of ageing irrigation infrastructure will need to invest more in technical and managerial upgrading and less in new development, progressively improving the performance of irrigation in response to growing demand for more reliable water service. Investment in drainage will continue at relatively modest levels, although regional waterlogging and salinization problems resulting from past development will continue to require remediation. Thus there will be considerable tension arising from these financial needs compared with government willingness and ability to finance them.

2.3 Rationale for future investments in irrigation

There are five principal reasons to invest in irrigation over the next three to five decades. First is to preserve and modernize the present stock of irrigation infrastructure. Continuing investment will be required to preserve the safety and improve the functionality of existing irrigation. Different elements have different lifetimes. Large dams may last hundreds of years with proper maintenance and attention to safety (unless rapid siltation reduces their lifespan), while pumps and other equipment may last only a decade.

Second, irrigation can be a path out of poverty for the rural poor. Where pockets of rural poverty exist within an irrigated agricultural context, intensification and shifts to higher value crops will create new employment opportunities, as will value-added postharvest processing and water-dependent off-farm rural employment in handicrafts, livestock raising, and similar activities (Bakker et al. 1999). Where rural poverty is widespread, other employment options are absent and climate variability impacts production; soil moisture control, along with complementary investments in rural infrastructure (such as roads and stronger local institutions) provide new farming opportunities. However, the extent to which irrigation contributes to poverty alleviation remains a contentious issue, with alternative vigorous arguments about ways to address rural poverty (Lipton et al. 2003; Bhattarai and Narayanamoorthy 2003; Berkoff 2003).

Figure 6. Evolution of harvested area for major crop groups in China, 1980-2004

water directly away from agriculture, requiring compensating investment in new supplies or increased water productivity. Re-using urban and industrial wastewater in agriculture will require new investment in water treatment and conveyance.

Table 3. Focus for investment by type of irrigation system

Table 4. Main conditions of success and reasons for failure of institutional reforms

of reliability and flexibility are sufficient. A substantial difference exists in irrigation requirements and scheduling between staple crop and high income production. If farmers require greater flexibility and better service, it is important to ensure their backing and support for the necessary investment.

The historical bias towards infrastructure investment to the neglect of training, capacity building and institutional strengthening interventions is one cause of poor irrigation performance. A more balanced approach will characterize future interventions as the synergies are recognized and the cost effectiveness of an integrated approach is demonstrated.

3.2 Cost recovery, water charging and sustainability

Cost recovery and associated water charges have been the subject of intense debate and controversy. As financial resources become scarcer, the issue is becoming critical and will have a major impact on the sector in the near future. Evidence confirms that most governments in developing countries already face a serious funding crisis with broad consequences for rural services, including irrigation. Funding for housing, infrastructure, education and social services in urban centres competes with requirements in rural areas. Given these conditions, a drastic reduction of government funding can be expected for irrigation programmes in many countries. The irrigation landscape will undoubtedly change in response to this pressure, but in ways that are hard to predict, ranging from gradual disuse and disbandment to dynamic self-financing.

Source: Adapted from ICID 2004; Rogers, Bhatia, and Huber 1998; FAO 2004b.

Figure 7. Components of costs associated with irrigation

Contention usually focuses on whether and what to charge: Service, operation and maintenance only, or these factors plus the full cost of capital investment, either in the past or as a future replacement annuity. The answer varies widely according to the role irrigation plays in the country's economy: While some advanced economies may seek full cost recovery from irrigation, others may consider subsidies in irrigation as part of wider rural development strategies. In both cases the concept of sustainable cost recovery, which is gaining increasing attention, remains valid and deserves decision-makers' attention: Ensuring the sustainability of existing irrigation infrastructure requires that operation, maintenance, administrative and renewal costs be covered adequately.

Modes of charging for water service vary widely and must be adapted to the level of development of the irrigation scheme. While volumetric water charging may epitomize the service-payment concept and allow for possible demand management, the transaction costs associated with volumetric measurement are rarely justified. Semi-volumetric measurement methods, or area-based water charges, which are often added to other land taxes, may be appropriate as long as transparency and equity are guaranteed.

3.3 Regulation and oversight

Because water is generally regarded as a public good, the state has a duty to sustain its availability and quality. Users often easily enjoy the benefits of water use while passing on environmental and social costs to others, leading to problems of equity, groundwater mining, pollution of drainage water, poor health of farm workers and contamination of consumer products. The state should play an increasingly important role in regulating these externalities. Moreover, water will increasingly become a commodity, quantified and governed by agreements among users and between public authorities and users. Governments will play important roles in sanctioning and regulating these agreements.

Most governments will need to adapt their water-related agencies in carrying out these new responsibilities. There will be a tendency to separate regulatory agencies from water management and supply agencies to avoid conflicts of interest within the government. Private or client-controlled organizations are likely to be responsible for water supply to users in an increasing number of cases. Adjudication mechanisms will be developed to resolve disputes among parties over water allocation, quality and use. These mechanisms may be a part of the national legal system or a separate set of institutions that rely more heavily on mediation and consensus. In all cases, institutional development should be shaped by context and the existing laws, regulations and approaches to water rights and priorities.

Assessing and collecting fees and taxes has been a key role for many agencies in the past. With increased devolution of irrigation system management, there is a corresponding need to change financing structures to allow those who actually collect or generate sufficient funds to sustain their operations: Therefore, there will be increasingly complicated cost-recovery mechanisms in large irrigation systems involving local service charges as well as bulk water supply costs.

Governments will continue to play the role of water wholesaler by operating (or contracting to private service providers) large and strategic facilities such as dams (in particular multipurpose dams) and main irrigation infrastructure such as main canals and pumping stations.

4. Adapting to sectoral competition

Source: Molle (2003).

Figure 8. Types of response to water scarcity

4.1 Water saving and water use efficiency in irrigation

The concept of water use efficiency (the ratio between effective water consumption by crops and water abstracted from its source for the purpose of irrigation) is subject to controversies and misinterpretation. Because only 30 to 50 percent of the water withdrawn from its source is actually transpired by crops in a typical irrigation system, many conclude that substantial gains in water volumes can be obtained by increasing water use efficiency in irrigation.

However, investments aiming primarily at increasing water use efficiency (in particular through canal lining), in most cases result in few changes in terms of water savings, especially when there is minimal water quality degradation: Large surface irrigation systems circulate massive volumes of water through canals and drains. Because a substantial portion of these flows is recaptured downstream, water-saving technologies on farms may make only minor contributions to savings at larger scales, such as the irrigation system or river basin (Seckler et al. 2003). This is most evident where irrigation efficiencies are low in a fully allocated basin, such as the Yellow River, and there is little outflow to the sea.

Nevertheless, the concept of water use efficiency is site-, scale- and purpose-specific (Lankford 2006). Efficiencies matter locally, in terms of irrigation design, for the satisfactory operation and monitoring of existing systems (Bos et al. 2005) to ensure equitable access to water within the irrigation schemes and for energy saving and control of waterlogging and salinization.

4.2 Tools for demand management in irrigation

Many economists argue that the low prices paid for irrigation water are a disincentive to efficient use and that a water-pricing policy could save water and increase productivity. But there are almost no examples of pricing as a primary mechanism for efficiency gains in irrigation.

There are two reasons for this. First, water pricing must be based on measured deliveries. In the vast majority of irrigation schemes, delivered volumes of water are not measured, making volumetric water pricing impossible; measuring them would involve huge investments. It is now more widely recognized that the applicability of volumetric water pricing to individual farms is limited to a small subset of technologically and managerially advanced irrigation schemes. Second, the water charges currently levied in most irrigation schemes have rarely reached even a fraction of those needed to constrain demand (Perry et al. 1997). In these systems the political consequences of increasing water charges to the point that the demand elasticity becomes significant can be expected to be severe and constraining. In countries where water rights exist and are separate from land rights, markets can, in theory, lead to efficient re-allocation of water among sectors. In practice, water trading has so far re-allocated only small volumes of the resource (less than 1 percent per year of permanent entitlements in Australia and the western United States) (Turral et al. 2005). It is unlikely that water markets will affect irrigation water use and re-allocation in most countries of Asia or sub-Saharan Africa in the coming 20 to 30 years because of the time lag in the development of suitable water rights and allocation frameworks and the marginal nature of markets once established. Water markets will also need to adopt more comprehensive water valuation approaches that encompass the broad range of benefits and costs of water management in agriculture — and this includes payment for environmental services. In the interim, consultative and participatory arrangements for water allocation will be required. Consultation is a key process in water allocation — along with data collection, analysis and promulgation, and negotiation — to find optimal sharing of benefits. The challenge over the next 20 years is to develop cost-effective arrangements for doing this and to provide a functional framework of facilitating laws and regulations. As the water allocation process is inherently political, effective representation is crucial. A major challenge for the coming decades is to develop strong and effective representative voices on behalf of those stakeholders who are currently under-represented, including small-scale farmers, women and the environment (Ostrom et al. 1993; Blomquist 1992).

Figure 9. China – Zhanghe water use and rice production 1965-2005

country. In future, the magnitude of environmental re-allocations and their impact on agriculture will be greater than incremental demands rising from cities and industry, as is already the case in many higher income countries such as Australia and the United States because environmental uses are essentially consumptive.

Water conservation in irrigation systems can be achieved through better technology (that minimizes losses, leakages and unrequired deliveries) and through better matching of demand with supply via better management systems and control technology. Better service and flexibility in supply is also implied. Such system-level technologies are "expensive" and can be funded as part of a re-allocation process. More professional irrigation management will also prove to be more expensive than at present.

At the farm level, the adoption of water-saving technology implies capital investment that is out of reach for smallholder irrigators. The ability to generate real and transferable savings at the farm level will depend on the development of different combinations of technological investment, accompanied by definition and management of water rights (through better measurement and monitoring) that allows savings to be quantified. Investment may be made through subsidy or through likely increases in farm size, improved economies of scale and greater "private" investment.

At the landscape level, it is possible that some re-orientation between irrigated and rain-fed agriculture may allow more crops to be grown whilst diverting or storing less water for irrigation. However, current forecasts predict the need for increases in the productivity of both irrigated and rain-fed agriculture to meet future food demand at national and basin levels in many Asian countries. Such arguments are also tempered by the fact that increased rain-fed development is not hydrologically neutral and wherever agriculture uses water, it is lost directly to evapotranspiration, which also occurs with natural vegetation.

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KEYNOTE ADDRESS

Suo Lisheng
Former Vice-Minister, Ministry of Water Resources, China

Water projects and ecological protection

1. Prospects and constraints for water conservancy development

Physiographic conditions and essential water availability determine the need for major water conservancy development. The next 15 to 20 years will be an important period for such development and are likely to witness the following prospects and constraints.

1.1 Prospects

1. There will be urgent requirements for water-saving infrastructure, flood control, drought relief, grain safety, urban and rural water supply as well as environmental protection.
2. A more affluent society is going to need improved electrical power supply; this should be juxtaposed by a reduction in the discharge of greenhouse gases.
3. Construction of water-saving infrastructure will lead to a greater influx of western technology and conversion of resource assets into economic benefits.

1.2 Constraints

1. Hydropower projects are at different stages so some areas are likely to benefit earlier than others.
2. Skilled technician availability.
3. Economic challenges.
4. Market restriction.
5. Ecological problems.
6. In-migration (the increasing number of immigrants, for instance around Yangliu Lake, Lu River, Yuanming Palace, Pubu Valley, Baise, Nierji).

2. Functions

Water projects have the following important functions:

• They promote socio-economic development and help to resolve the issues of "population, poverty, environment (PPE)".
• They can provide hydropower and help to decrease greenhouse gase emissions.

For example, the South-to-North Water Diversion will help to prevent the exploitation of groundwater. Diminishing fuel resources can be substituted by small hydropower projects, which in turn will play a role in protecting forests and vegetation.

3. Water conservancy development

3.1 The main elements of a water project

• Harmonize human and environmental coexistence. Devise a good strategy.
• Water resource development should be adapted to carrying capacity and coordinated with socio-economic development and ecological protection.
• Project construction should conform with the strategic plan.
• Participatory management among stakeholders, including farmers, is needed.
• Expedite appropriate legislation, observe water rights, make fees equitable.
• Promote investment by different sectors and stakeholders.
• Quality control monitoring (operation and maintenance)
• Disseminate project benefits (e.g. disaster mitigation, improved livelihoods).

4. Conclusion

Physiographic conditions and scarce water resources dictate that water conservancy will be making considerable strides in China. The next 15 to 20 years will be a significant period for water development. Stakeholders and other concerned parties should ensure that the construction of water projects is carried out responsibly, especially with regard to ecological protection.