Groundwater Sales Promote Equity
In Pakistan, as in other countries in South
Asia, farmers who can afford it are investing in private tubewells
to assure a supply of irrigation water when they need it. When
these farmers have more water than they can use, they sometimes
sell the excess to nearby relatives and neighbors. Until now,
these informal water markets have received little research attention.
But, as water becomes more scarce and degraded, countries need
information to formulate policies that improve access to water
resources, particularly for tenants and smallholders. "Groundwater
Markets in Pakistan: Participation and Productivity," Research
Report 105 by Ruth Meinzen-Dick, looks at how water markets operate,
who participates, the nature of the transactions, and the effects
of the markets on agricultural productivity and incomes. Its findings
are relevant throughout South Asia.
Private tubewells boost production by increasing
farmers' control over the amount and timing of irrigation applications,
which not only improves yields but allows farmers to switch to
higher-value crops, thus increasing income. In Pakistan, farmers
with more than 25 acres are most likely to own a tubewell, whereas
farmers with less than 10 acres are usually the buyers of groundwater.
In Punjab and North-West Frontier Province, the study area, 15
percent of the farmers owned tubewells. About one-third of the
owners (5 percent of the total sample) sold water, at least occasionally,
and 30 percent bought water. The report finds, however, that policies
to encourage those with middle-sized farms (10 to 25 acres) to
invest in tubewells might improve equity, because such farmers
may not use all of the water on their own acreage, as large farmers
often do, and they are more likely to be able to finance a well
than small farmers. Policies to assist poor farmers with credit
to purchase tubewells would be beneficial, especially policies
that encourage farmers to join together to purchase, install,
and operate tubewells as shared enterprises. Farmers, whether
they are building a private well or sharing in a jointly owned
one, would benefit from technical assistance in locating pockets
of fresh water, the report concludes.
The report indicates that owning a tubewell
contributes more to increased productivity than purchasing water,
largely because purchased water is not reliable: farmers cannot
count on being able to purchase adequate supplies of water at
just the time they need it. Farmers who owned their own tubewells
had gross margins of Rs. 5,000, more than twice as high as farmers
who only purchased water; farmers who had access to both canal
water and their own tubewells had gross margins of Rs. 18,000.
At present, farmers must sell groundwater
to those who live nearby because the cost of pumping it long distances
is prohibitive. Where possible, farmers should be permitted to
run water through canal courses as long as they do not interfere
with canal operations. Although private tubewells increase
farmers' control over water and hence increase productivity, they
are a viable option only in areas where good quality water is
abundant. In Punjab as a whole, 25 percent more groundwater is
already being pumped out of the ground than is being recharged.
Where good groundwater is limited, efforts to share water supplies
equitably through development of water markets and joint ownership
of wells must take high priority.
International Food Policy Research Institute (IFPRI)