One of the revenue measures in Punjab’s recent budget is an increase in abiana (canal water charges) for farmers, along with a shift from crop-specific rates to a uniform flat rate regime.

Over the years, the Punjab government has repeatedly oscillated between these two regimes. In 2003, crop-specific charges were replaced with a uniform flat rate. Two decades later, in 2023, the government reverted to crop-specific rates, only to switch back to a flat rate system again just three years later in 2026. Such frequent policy reversals reflect a lack of consistency in the government’s approach to canal water pricing.

Farmers, however, have largely welcomed the latest move to restore a uniform flat rate. The crop-specific system was widely criticised as illogical and irrational. Under it, rice farmers paid Rs2,000 per acre, while sugarcane and maize were charged Rs1,600 and Rs1,200, respectively. Wheat, oilseeds, fodder, and other crops were charged only Rs400 per acre. The anomaly was striking: for the same land and same water allocation, a rice farmer had to pay five times more than a fodder grower.

This system led to widespread corruption. Since charges depended on declared crops, irrigation officials (patwaris) could alter classifications on paper. That encouraged collusion and rent-seeking, benefiting both the farmer and the official at the expense of the public exchequer. On the other hand, a uniform per-acre rate (flat rate) eliminates distortion, discretion, and revenue leakage.

Addressing the intertwined challenges of water scarcity, inequitable distribution, and declining irrigation-system efficiency requires far more than piecemeal interventions

However, some proponents of the crop-specific regime argued that it discouraged the cultivation of water-intensive crops such as rice, sugarcane and hybrid maize. However, the government never formally stated this objective.

Moreover, three of Pakistan’s five major crops fall into the category of relatively water-intensive crops, making such a pricing approach economically questionable. Rice, in particular, is Pakistan’s largest agricultural export. Any policy that indirectly discourages its cultivation risks undermining export earnings and the livelihoods of millions tied to the rice value chain.

However, this does not mean that concerns about water scarcity are misplaced. Pakistan is currently facing declining river flows, over-extraction of groundwater, and ever-increasing water demand. To address these challenges, targeted water-management reforms are required rather than arbitrary crop-based levies.

Instead of penalising certain crops, the government should expand groundwater recharge initiatives, modernise irrigation infrastructure, and encourage farmers to shift from inefficient flood irrigation to high-efficiency irrigation solutions. At the same time, crop diversification towards high-value and less water-intensive crops — preferably exportable — should form an integral part of the country’s long-term agricultural strategy.

The second dimension of the abiana policy concerns the increase in abiana rates announced in the recent Punjab budget. The Irrigation Department faces rising operational costs and a chronic shortage of funds for the repair, maintenance and modernisation of irrigation infrastructure. For decades, canal water charges have remained too low to cover even a fraction of operation and maintenance (O&M) expenditures of one of the world’s largest irrigation networks. In this context, the increase in abiana rates to Rs1,650 per acre for Kharif and Rs850 for Rabi is understandable.

Nevertheless, the timing of this revenue-enhancing measure is far from ideal. It comes at a time when farmers are already grappling with rising production costs, due to higher prices of diesel, electricity, fertilisers and pesticides. At the same time, climate change has increased the frequency and intensity of extreme weather events, which are severely affecting crop yields and farm incomes. Under such circumstances, imposing additional financial burdens may further undermine the viability of crop production.

More importantly, farmers are already struggling with declining canal water availability. Several canals operate below their authorised allocations, while poor bhal safai (removal of silt) has increased conveyance losses that prevent water from reaching tail-end farmers. In addition, incidents of water theft have increased considerably over the last three years as higher electricity and diesel prices have increased the cost of groundwater pumping.

Against this backdrop, it is the prime responsibility of the Irrigation Department to ensure that tail-end farmers receive their rightful share. One crucial point often overlooked is that ensuring reliable canal supplies is important not only from a water availability perspective but also from an economic one.

Canal water contains potash and several micro-nutrients that contribute to soil fertility and crop growth. At a time when fertiliser prices continue to rise, greater access to canal water can help reduce farmers’ fertiliser requirements, which in turn lowers production costs. This is why the government should allocate a major share of the incremental abiana collection to bhal safai to restore the water-carrying capacity of canals, distributaries, and minors to their designed levels.

Ultimately, the debate must go beyond abiana rates. Punjab’s decades-old irrigation system requires comprehensive modernisation and a long-term water management strategy. Addressing the intertwined challenges of water scarcity, inequitable distribution, and declining irrigation-system efficiency requires far more than piecemeal interventions.

In this regard, policymakers may draw lessons from the Indian state of Punjab, where the provincial government has been making concerted efforts to expand canal water use, reduce dependence on groundwater extraction, and improve irrigation efficiency.

Khalid Wattoo is a development professional and a farmer. Chaudhary Mohammad Ashraff is a former Director General (On-Farm Water Management) of the Punjab Agriculture Department.

Published in Dawn, The Business and Finance Weekly, June 29th, 2026