In its annual report, ‘The State of Economy: Agriculture and Water’, Shahid Javed Burki Institute of Public Policy explains how water constraints and its management issues have impacted, are impacting and would continue to impact the agricultural growth in the country.

Setting the context, the report tells that the River Indus and its tributaries carry just over 150m acre feet (MAF) of water: three western rivers contributing 142MAF and three eastern river chipping in with 8.4MAF.

About 104MAF is diverted for irrigation and the rest flows to the sea. Three reservoirs, 80 small dams, 19 barrages, 12 inter river link canals, 45 canals systems and more than 107,000 water-courses manage and carry the supplies.

The World Bank has estimated the replacement cost of this infrastructure at $60bn. The system also avails an estimated 41.60MAF of groundwater pumped through over 600,000 tubewells, mostly private.

The report counts five challenges for Pakistan on the supply side, which are: greater scarcity resulting from higher demand and the diminishing capacity of reservoirs, excessive (nearly 60pc) conveyance losses, deteriorating infrastructure, high operation costs and an excessive ground water use.

On the demand side, it says that productive and allocative efficiency are key concepts. The first concept is captured by the idea of ‘more crop per drop’ and second by the idea of ‘more value per drop’. The first one applies to choices of crops. And the second one focuses on competing water uses regardless of the product.

Pakistan thus has to rationalise it water pricing system for not only making its use rational but also for raising money for operation and maintenance

Tracing challenges to demand side management, the report claims that flood irrigation is the method used by most farmers and it is generally accepted that its efficiency in this case is only 50pc.

That is why, there is a lag in water efficiency and regional averages in almost entire range of crops. In wheat, water efficiency in Pakistan is 24pc lower than the world average. In rice, it is 55pc lower than Asian average. In cereals, it is even lower than India.

One way to deter this kind of wastage is rationalising water pricing. With more investment, management of irrigation infrastructure can also improve. In its current settings, the canal irrigation system is unsustainable as it recovers only 24pc of the operation and maintenance cost.

In absolute terms, the government has provided Rs38bn in the last seven years, at an average of Rs5.4bn annually) to fill the gap between O&M cost and abiana (service charges) recovery.

The farmers have to pay a higher cost for water which is evident from the groundwater market, where they pay Rs300/hour — or only one-inch per acre — for private tubewell operations.

To the government, they don’t pay even one hour water costs for the entire season of water guzzlers like, rice and sugarcane. Pakistan thus has to rationalise it water pricing system for not only making its use rational but also to raise money for operation and maintenance.

About ground water, the report, quoting a USAID study, says that the excessive use of ground water has pushed the levels down by 12 metres in the last 50 years. The increasing salt concentration of groundwater reduces 1.25pc agricultural benefits annually.

“The study reveals that that as a result of declining water table and slat concentration, net benefits fall by Rs50bn. This shows the high cost of institutional failure in regulating groundwater use.”

The report stresses that ‘enhancing storage capacity, improving governance and management of water institution and effective water use are the most critical areas for action’.

About the institutional chaos, the report says that at present “too many institutions (estimated at 18) have been created to manage and develop water. For this reason, recent efforts to formulate water policy have largely failed as different institutions look at the policy issues from their own vantage point.”

For example, there is hardly any connect between two critical institutions; the ministries in-charge of agriculture and water.

“The irrigation institutions have not made the transition from the era of development and construction to the era of where management of resources and service becomes the primary challenge.

Pakistan has a large but inefficient and poorly managed irrigation system. The system loses about 60pc of water during conveyance from canal head works to farm gates. Maintenance is inadequate and no asset management plan is in place.

A sustainable financing plan is not available either and the system continues to rely on budgetary transfers from various levels of the government.”

Suggesting the way forward, the report concludes “if there is little scope for enhancing water supply, there is considerable policy space to save it. Since 95pc water is used for agriculture, it is where the biggest saving can occur. Better pricing mechanism for water and energy could help rationalise use of these inputs among different crops and promote sustainability. Rationalisation of water usage in agriculture (beginning with rice and sugarcane) is the key factor.”

“Climate change is already affecting water and agriculture in Pakistan. As water needs for agriculture and domestic use are largely met with groundwater, the connection between water, energy and the food nexus is becoming more important.

In this context, mainstreaming climate change concerns should help achieve sustainable development, including eco-system preservation and rational management and utilisation of water.”

Published in Dawn, The Business and Finance Weekly, July 3rd, 2017