WATER USE EFFICIENCY MANAGEMENT IN AGRICULTURE & IRRIGATION SECTOR: RESEARCH AND INNOVATION FOR INCREASING WATER USE EFFICIENCY
WATER MARKETS FOR EFFICIENT MANAGEMENT OF WATER: POTENTIAL AND INSTITUTIONAL CONDITIONS IN INDIA PIYUSH TIWARI/PAVAN KUMAR ANKINAPALLI INDIA WATER WEEK 2013 8-12 April, 2013 Vigyan Bhawan, New Delhi “Efficient Water Management: Challenges and Opportunities”
Complexity of water problem in India India – a water stressed state (FAO) water balances in India are precarious and unsustainable Declining water availability - 5177 cu.m/year/capita in 1951 to 1588 cu.m/year/capita in 2010. Over exploitation of ground water – sea level ingression and groundwater pollution (Gaur et al, 2011) Current practices of designing water management systems do not fully account for the implications of climate change (Majumdar, 2011) Increasing demands from agriculture, urban and industry sectors Irrigation – largest consumer of water, gridlocked between perception of policy makers and ground realities No concrete legislations or regulatory mechanisms to ensure efficient water trade 2
Existence of Informal Markets in India No explicit policy on water markets in India (Shah, 1993; Mohanty and Shah, 2002) Existing regulations are ineffective 30-million groundwater extraction structures - serious crisis of groundwater overuse and groundwater contamination (Planning Commission, 2012) Water markets - limited to ground water, are typically spontaneous, informal, unregulated, localized , fragmented and seasonal Driven by excess supply - surplus capacity of Water Extraction Mechanisms (WEM) Strongly biased towards sellers; monopoly power; influenced by social factors Varying types of transaction - crop, volume, area and season Excessive and competitive ground-water extraction
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Evolution of water markets in Australia
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Australian water market structure Nature of entitlements – ‘bundled’ and ‘unbundled’ entitlements ‘carry over’ water – if users do not use/sell their entitlement Water Registers – to record water access entitlements; water allocations, ownership, location, interests and trading activity Risk Allocation - risks are shared between government and entitlement holders Interstate allocation and entitlement trading - Council of Australian Governments (COAG) agreement of 1994; Interstate Entitlement Trading Pilot Project in MDB Regulation of water markets - regulatory procedures to address hydrological realities and environmental concerns; restrictions on volume of water entitlements trade; arrangement for trading entitlements between regions to address the conversion of the entitlement Water registration and titling system for water licences Water accounting systems - to track accumulation of allocations, trades, and to monitor the compliance with the MDB cap Development of trading platforms - electronic water trading platforms Institutional capacity and governance arrangements
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Challenges in Australia Limited water supplies – and competing agricultural, environmental, industrial, and municipal interests Over regulation of the markets - regulation capacity of 35000 GL; irrigators complains against government’s buying water Over allocation of water - environment is a legitimate user of water; once the environment is considered, the system is over allocated Conveying allocations in the rivers – rivers are dry when they should be wet and are wet when they should be dry; the environmental problem is not only with the quantity but also with of timing Governance of Water – water is state subject yet the Federal government intervenes with the MDBA; reform fatigue in the community; mining operations are not fully integrated into water markets; lack of comprehensive water registers at national level; Phased approach to implementing reforms - resultant differing governance, institutional and administrative arrangements for entitlements, trading rules and processing trades
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Lessons for India from Australian Case Lesson1: Manage surface water on a river basin basis Draft National Water Policy (2012) and the Draft National Water Framework (2012) recommend this Cross government agreements formed as part of COAG are basis for water reforms since 1990s. Willingness from the states has been critical in implementation process Lesson2: Separation of land rights from groundwater rights National Water Policy (2012) has attempted to address this issue states separated water rights from land rights and have established centralized systems for allocating water in Australia water rights include high reliability entitlements – with proper risk sharing between government and entitlement holders Lesson 3: broadening of water markets Irrigation infrastructure and distribution networks to be developed to provide more choice to both sellers and buyers Flexible Institutional structures to accommodate this (Mohanty and Gupta, 2002) 7
Lessons for India from Australian Case (2) Lesson 4: need for adaptive institutions and administrative capacity Water Act of 2007 allocated responsibilities to all levels of governments agreed by them with bi – partisan support. While the capacity existed at the state level, capacity at federal level was developed in the context of changes in legal governance of the Murray – Darling basin. Institutions dealing with water at all levels should follow the route of Australia, if the recommendations of the Draft National Water Policy (2012) are to be realized. Lesson5: Conflict resolution Institutional arrangements for resolving conflicts over water rights. The Draft National Water Policy (2012) largely vests this responsibility with the state and central governments. As the experience of Australia suggests, conflict resolution powers should vests with both states/basin authorities and catchment level authorities. Water User Associations (WUAs) to be given the power and responsibility to deal with conflicts at the grassroots level. 8
Lessons for India from Australian Case (3) Lesson 6: Initial allocation of rights Initial allocations can also be contentious, if the users are provided with lower shares than they had historically. water allotments are defined by a gradual negotiation process that recognizes the slow maturation of institutional capacity building Australian government had purchased water rights from willing sellers through general tax revenues A separate arm of the federal government is vested with the power to address the potential issues of market power and to ensure competitive water markets. Lesson 7: Registration/Title of Water Rights registration of water titles - a necessary step to ensure comprehensive water trading Australia has the most complete system of registration of water rights and titles at the state level Lesson 8: Protection of third party rights Water rights into consumptive and non-consumptive portions to protect the third party rights 9
Conclusion Informal markets in India have ensured equitable access to irrigation; but led to groundwater depletion As scarcity grows, Entitlements and trades become important as the scarcity grows However, as experience suggests, without effective regulation this leads to catastrophe Need institutions for monitoring the withdrawal of groundwater; need for a ‘nexus’ of water and energy economies Well defined water rights is the key – for trading and transfer of water allocations; to address social equity and ecological sustainability. Many of these measures are politically sensitive matters; but this cannot be an excuse for inaction, as this can only increase inequities and impose a price that should be borne by the future generations.
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Thank you Piyush Tiwari/Pavan Kumar Ankinapalli Email: piyush.tiwari@unimelb.edu.au/pavan.ankinapalli@idfc.com
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