Articles from the Bangkok Post

The coming XXI century is doomed to undergo "a water crisis", experts unanimously report. The "blue gold" is to become scarcer and scarcer, conflicts for its appropriation and use will increase ; thus, an improved management and water saving policies must be implemented in order to avert the crisis. As water becomes a rare resource, macro-economists are concerned about allocating it to the most profitable uses, those which produce a higher added value per cubic meter of water input. To achieve this goal, they have little doubt that the invisible hand of the market is the best way to get the job done. Who can pay the most for a cubic meter of water is the one who will eventually produce more added value out of it. A corollary is that, having to pay for water, users will inevitably be encouraged to reducing their consumption, resulting in the much desired water savings.

Whether this axiomatic is valid in general is a much debated question. Whether it is sound, in particular, for Thailand will be briefly addressed here. The issue has recently come in the limelight further to the discovery that the granting of ADB funds to the country would be conditional on its subscribing to, and applying, the overall principle of water pricing. While officers of the Royal Irrigation Department are known to be in general little sympathetic to the idea and have in the last years engaged in some foot-dragging, it seems that some Thai officials, reluctantly or not, have recently adhered to the principle and heralded it. As the issue swings between economists and politicians, notoriously a bit distant from the fields, where things happen, it may not be inopportune to provide here a few more technical arguments.

A first strangeness for the layman is to see Thailand, a monsoonal tropical country, coming under the category of countries with water shortage problems. It must be understood that while a - rather attenuated - monsoon provides water (often) in excess during , say for the sake of simplification, half of the year, during the other half users are supplied with water released by the storage dams. This water not only feeds Bangkok and other main cities, together with part of the industrial park, but also allows irrigated areas to achieve double rice cropping or to grow perennial crops. The main irrigated area in the dry-season is the Chao Phraya delta, which makes up 75 % of the total area although, on the average, only half of its potential irrigable area is cropped, due to a lack of water resources in the dams.

Water-pricing makes little sense in the rainy season, when water inflow is mostly coming from rainfall or uncontrolled natural sideflows in the river basin. Rather than supplying water, water management is often geared towards limiting excess flows and flooding. In other words water saving is not an issue. During the dry-season, on the other hand, the question of water allocation (when, where and how much water is to be supplied) is a critical one, as available resources do not catch up with demand. It stands to reason that if a rice crop can be grown with only 50 % of the usual average amount of water, then the cropping area will be able to be doubled or, alternatively, the water available for other uses will be increased. According to common wisdom, farmers "guzzle water", because it comes to them as a free good and because they have no incentive to save it. They are quickly turned into villains when we learn that they use 85 % of the available water. In brief, they squander water, use the bulk of it and insist in producing rice, a water-thirsty commodity with little added value (a situation recently compounded by the depressed rice market). Faced with such an imbalance and abuse, the society is well founded to endeavour restoring some equity and to request "guzzlers" to pay for their privilege. Establishing a water-fee may indeed appear, from a Bangkokian office, as an attractive panacea : a) it is expected to produce water savings, b) it takes advantage of the balancing virtue of the market to reallocate water towards more productive water uses, and c) it is a "cost-recovery" operation for the government. Unfortunately, both the analysis of the problem and the recipe are at odds with the Thai reality, at least that of the Central Plain.

1. 1. Let us first turn to the evidence that farmers are getting the lion's share of Thailand's water resources and pitifully squander it. What comes to the fore, when one looks at the process of water allocation, is that farmers actually use what is left. Priority in water allocation is, rather consistently, given to the domestic supply of urban areas, industries, and to controlling salt water intrusion at the mouth of the rivers. EGAT also enjoys some flexibility in releasing water in excess of demand in order to generate hydropower for peak energy demands. Last comes the agricultural sector, which uses the remaining water, coping with an obvious year-to-year fluctuation and uncertainty in water supply. For the Central Plain, this amount of water commonly varies between 2 and 8 billion m3 for a dry-season of six months (January-June).

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3. 2. A second point is that, in contravention to official declarations, farmers do not get water free. This is true for the numerous small and medium scale irrigation projects, often developed under the DEP (Department of Energy Promotion), which rely on a collective pump to get access to water and where operational costs are shared between users. But it is also true for an approximate 85 % of the farmers in the Central Plain (and probably many of other large scale schemes). Although these schemes were designed to supply water by gravity, RID experienced severe difficulties in managing reduced flows in the dry season. To offset this constraint, farmers have, along the years, developed an impressive individual pumping capacity allowing them to tap whatever little flow might appear in the canal. It goes without saying that these investments in pumps, motors and gazoline are not negligible. Incredibly enough, pumping costs may even be as high as discouraging sugar-cane growers to apply the adequate amount of water, despite water being available in the adjacent ditch. It must therefore be acknowledged that farmers do pay to use water in the dry-season, in consequence of the failure to supply them with gravity water.

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5. 3. The smart reader will already have startled : so what ? how come farmers are wasting water if they pay to pump it onto their fields ? The point is that, in fact, efficiency of water use at the farm or plot levels is rather high. To put it another way, little water is lost in the process, except unavoidable losses affixed to the distribution system itself : loss by evaporation in rivers and canals, loss by infiltration in canals and farm plots. It follows that any water fee will in all likelihood have little effect on water saving.

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7. 4. Even if ones feels reluctant to agree that losses from the system are negligible, two definitive arguments can be raised to settle the question of water loss and efficiency. The first is that most of the return flow from fields is reused downstream. One should consider the efficiency of irrigation not (only) at the plot level but, rather, at the macro level. The waste water is the water which eventually flows out of the delta system, that is to say flows to the sea. As this flow is hardly sufficient to control salinity intrusion, it can be deduced that no water is lost. The second component of water loss is the infiltration. It occurs that such a loss is channelled either to shallow aquifers, and soon returns to the drainage system where it is reused, or to deep aquifers : these aquifers flow to the Bangkok area where they are notoriously over-exploited, resulting in land subsidence and horrendous costs in upgrading flood protection. To some extend, it could be ventured that infiltration losses in the delta are not sufficient to avoid the depletion of the aquifers.

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9. 5. We must now address the applicability of the water fee itself. The main question is whether the fee is to be charged per cubic meter used or per rai. The first solution must be readily discarded on account of the impossibility to measure flows of water in the ditches and plot inlets of the millions of plots concerned. The easiest solution is to charge a fee in accordance with the area cultivated. Such a taxation system, however, does not embody any incentive to use less water and, therefore, is in contradiction with the assumed initial objective.

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11. 6. Should we consider reducing water-pricing to its mere cost-recovery function, other obstacles would still be met. Urban users agree to pay for the service of water supply to their house because they know that when opening their tap they will be able to withdraw the amount of water they need or desire. The certainty of being served implicitly embodies a nuance of right. In addition, all users are served more or less with the same reliability and pressure, so that everyone consider natural to pay a similar, if not equal, water fee. Irrigation systems are very different from domestic water distribution networks. Farmers located at the head of the canals are in a much more desirable position than those located at the tail end. Farmers whose plots are along the main canal can access water whenever it flows in it, whereas, in contrast, those who farm plots located at the end of a 2 km long ditch will only get a very unreliable water supply (and often have to develop their own water sources, such as tube wells). It follows that the quality of the access to water is so varied that there is no way to define a single fee per rai under such circumstances.

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13. 7. Those who would still have the courage to attempt grading the different plots, one by one, according to some possible qualitative assessment of their access to water, will be surprised to discover that this assessment should be carried out every year, as the access to water will depend upon the overall amount of water distributed in the different canals, itself a yearly vagary. A fee per area would obviously entail injustice, inequity, widespread disputes on the level of taxation attached to each plot. Overall, given the symbolic amount to which such a fee could be raised, on account of the actual low profitability of rice, there is little doubt that the system would not only be inefficient in saving water, but would also cost more money to be implemented than it would yield to the government's coffers.

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These few points contribute to show that there might be a significant gap between an economic theory (ideology ?) and its application in a particular case. The current and puzzling insistence of international agencies and donors to argue the case for the enforcement of market based mechanisms is worrying. It shows that the facility of having a one-way-solution to solving problems is still pretty attractive, in place of reckoning that reality is complex and that solutions must be devised accordingly. Water pricing, as a fixed tax, is consistent with a context of relative stability of income (rice prices) and production (reliability of water supply). It must therefore be addressed within a wider perspective including most particularly rice pricing and marketing, water planning and allocation, farmers' participation.

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1. Dr. François Molle is an expert in irrigation systems, with 6 years of experience in Thailand. He is co-ordinator of the DELTA Project at Kasetsart University (www.ku.ac.th/delta). aaaaaaBeginning of the article