Water – CDPR

By Hina Shaikh and Ijaz Nabi

Safe drinking water is a central plank of a country’s health strategy as it affects nutrition intake and therefore infant mortality, child growth, and the ability of adults to be productive. Exposure to unsafe water also leads to skin-related disease. For these reasons, access to safe drinking water is a right enshrined in the constitution and is a critical Sustainable Development Goal.

The Consortium for Development Policy Research (CDPR) recently brought together a panel of experts to discuss the current status of drinking water in Pakistan and what is being done to ensure that citizens enjoy this constitutional right.

Pakistan’s “water stress”

The panel distinguished between “water scarcity” and “water stress”. With the world’s fourth highest rate of water use, Pakistan’s economy is one of the most water-intensive in terms of cubic meters consumed per unit of GDP. Subsequently, water availability per capita has shrunk to under one thousand cubic meters by 2017 from over five thousand in 1951. Pakistan crossed the “water scarcity line’” in 2005, indicating a shortage of overall supply. With higher than expected population growth, this is likely to get worse.

The focus of the discussion was primarily on “water stress”, or the prevalence of polluted water that is unsafe to drink. Panelist Syed Hasan, Assistant Professor of Economics at the Lahore University of Management Sciences, noted that Pakistan became a water-stressed country in 1990 and is expected to be among the most water-stressed countries in the world by 2040.

Panelist Hammad Khan, Director General of World Wild Fund for Nature (WWF) Pakistan, pointed out that the level of arsenic in the water supply far exceeds the government’s own thresholds for contamination, which are in fact less conservative the World Health Organization’s (WHO) standards. A 2015-16 nation-wide survey by the Pakistan Council of Research in Water Resources (PCRWR) found that only a third of the 369 samples tested for water quality were safe for consumption. A separate PCRWR study conducted in 2011 found 100 percent of water samples in Lahore were polluted with arsenic. A study led by Joel Podgorski, a scientist at the Swiss Federal Institute of Aquatic Science and Technology, found that water in two-thirds of the 1200 wells sampled across Pakistan exceeded the WHO-recommended threshold of arsenic. Based on this data, nearly 60 million citizens are estimated to be consuming toxic ground water.

Microbial pollution is also common. In cities, water becomes contaminated due to improper disposal of solid waste and continued usage of outdated water and sewage networks. Chemical pollutants from industrial waste also infect water. In rural areas, open defecation and animal waste are the leading sources of contamination.

Poor quality of water burdens the health sector, increases missed days of work, and reduces labor productivity. High levels of arsenic in water contributes to underweight birth, skin defects and miscarriages. Syed Hasan mentioned the burden of poor health outcomes in the form of waterborne diseases costs Pakistan 1.6 million disability-adjusted life years – and almost four percent of GDP.

Poor governance

Pakistan has been unable to incentivize conservation and efficient usage of water. Syed Hasan commented on the pricing mechanism and its failure to reflect the true market value of this critical resource. The tariff for water used for household consumption in urban Pakistan was last revised in 2004. Operation and maintenance costs incurred by water authorities continue to exceed the revenue they collect, while water metering covers only eight percent of the households.

Hammad Khan explained that if sources of water remain unprotected, the availability of drinking water will keep dwindling. Ground water once contaminated cannot be treated. The installation of filtration plants by Punjab’s Saaf Pani Company (see below), meant to cover all union councils in Punjab, are remedial measures – not sustainable solutions. The unrelenting adulteration of water sources despite decades of several dedicated water authorities in operation reflects a serious governance failure.

The government response in Punjab

Following devolution, water became a purely provincial subject. Punjab set up the Saaf Pani Company three years ago to ensure provision of drinking water in rural Punjab. The company’s progress is personally overseen by the chief minister.

Panelist Tahir Majid, Chief Technical Officer, Punjab Saaf Pani Company, agreed that despite being the Punjab government’s flagship initiative and substantial public expenditure, progress has been slow. A third of the water schemes in the province remain non-functional while 79 percent provide water that is unsafe for consumption.

The problem with Saaf Pani Company reflects a deeper problem of governance pervasive across several other sectors. When parallel governance structures are set up in the presence of existing departments, such as the Punjab Health and Engineering Department, inefficiencies slide in. The company saw several quick changes in senior management (some resulting in criminal inquires) and frequent changes in the operational design. This has resulted in delays and has not encouraged strong private sector engagement in the delivery of safe drinking water to the citizens.

After being heavily scrutinized for its performance, the company is now restructuring itself to improve delivery and remains committed to providing clean drinking water to Punjab’s entire unserved population of 60 million by 2025.

What can be done?

It is encouraging that “water-stress” can be overcome. Singapore’s example, cited by Syed Hasan, shows how the risk of extreme water stress can be countered by efficient regulation and management. Inaction, however, may result in a crisis similar to the one in Cape Town, a city that is now on the verge of rationing clean drinking water.

The panel suggested immediate steps Pakistan can take to tackle the water crisis and avoid the Cape Town outcome:

Set the right priorities: An over-arching water policy framework is critical. The National Water Policy, in circulation since 2004, should be updated in light of changes and approved.

Set water classification standards: Every country (including India, Bangladesh, and China) has water classification standards where all the water bodies are categorized according to their usage. This should also be done in Pakistan. WWF has offered to use remote sensing and GIS mapping to help government conduct this exercise. Authorities will then be able to ensure more effectively that water bodies classified for drinking purposes are kept clean and used for that purpose alone. Water classification will also help avoid disputes between different stakeholders (agriculture vs. industrial vs. household consumption).

Let prices work: Even though water is a basic right, it is a limited resource and hence water pricing is important. The fact that people pay for bottled water indicates that there is willingness to pay.

Mobilize community ownership: Community ownership is key to ensuring that water schemes remain functional and well-maintained. The WWF for example signs a legal contract with the community for joint ownership of the filtration plants it has provided.

Hina Shaikh is a Pakistan country economist at the International Growth Centre.

By Agha Ali Akram

How inefficient is Pakistan’s water irrigation system? If you were to use traditional methods to measure that problem, you would find no issues with water allocation. But in recent research I conducted with Robert Mendelsohn,^[1] we used more precise measures and found that farmers lose 13 percent of potential net revenue because of inefficiency in irrigation water allocation.^[2] This has important policy implications for maximizing the value of Pakistan’s canal irrigation networks.

Context: Pakistan’s canal system

The bulk of the canal system in present-day Pakistan was originally built by the British colonial administration and land irrigated by these irrigation canals was originally allocated in the late 19th Century.^[3] The canal system has a three-level design – primary, secondary, and tertiary canals (Figure 1). A primary canal is a major trunk from which secondary canals are branched. Tertiary canals branch off from secondary canals and are the level at which farmers withdraw water into their farmland.

Figure 1: Simplified schematic of the Hakra Branch Canal

A simplified schematic of the Hakra Branch Canal, with its three levels of canals: primary, secondary, and tertiary.

The system of water allocation at the farm level is called warabandi, which literally translates as “turns” (wahr) which are fixed (bandi). Each farmer gets a fixed time each cycle where they can open the gate to their farm and tap the water flowing in the tertiary canal.^[4]

The canal in our study – the Hakra Branch Canal – is part of the Indus Basin Irrigation System (IBIS) in Pakistan. IBIS is a continuous-flow, fixed-rotation system with two major multi-purpose storage reservoirs, 45 major irrigation canal commands, and over 120,000 watercourses delivering water to farms.^[5]

The difficulty of knowing the allocative inefficiency of irrigation water

Water allocation models throughout the world offer a common insight on what constitutes efficiency: If the value generated by an additional unit of water consumed is equal for all users within a basin, society can maximize the value of its water supply (in other words, the marginal value of water must be equated across users). ^[6] This basic insight applies to water allocations across farmers within a canal irrigation system as well.

For a long time, we did not know if Pakistan’s canal system lived up to this model because of poor data: Traditional surveys of agricultural production omit important farmer water consumption data. While traditional surveys often tell us how many irrigations farmers make, the amount of water per irrigation is often assumed to be the same across farmers or is measured crudely. For example, rather than measure it, farmers are asked the perceived depth of each irrigation they apply on their farms. This is a problematic measurement, partly because fields are not perfectly level so that depth would depend on where the farmer made their estimate of applied depth. And while there is every reason to believe that both the number of turns and the length of each turn may be the same along the canal, it is not clear whether the flow is the same at each farm-gate. Thus, it is very likely that these traditional measures are not accurate.

What we did differently

Through better measurement, we provide a more accurate calculation of water use within canals, allowing us to rigorously demonstrate the inefficiency of irrigation water allocation and quantify the loss. Specifically, we coupled in-season water measurement with a post-season production survey.

We collected actual physical measurements of surface water from a sample of farms spread across the Hakra Branch Canal. The canal water discharge was measured using a flow meter and standard stream measurement protocols during the 2012 summer growing season. GPS tracking captured the precise location of the measurements made along the canal system, making it possible to calculate the distance from the head of the canal system to the measurement sites along with expected conveyance losses. These in-season water measurements were followed by a full agricultural production survey of the farmers at each canal location once the summer growing season was over.

Our results

Armed with better measurements of water delivered to farmers, we could determine the efficiency of water allocation by testing whether the value of each additional unit of water consumed was equal across farmers.

We found that farmers who use more water (located at the head and middle of the canal) receive less value for each additional unit of water they consume (Figure 2). The marginal value of water is much higher for farmers at the tail of the canal. This suggests that the allocation of water is inefficient. If some water could be reallocated from head to tail farmers, water would move from lower to higher value use and the canal would generate more net revenue.

Figure 2: Estimated marginal farmer net revenues
Estimated farmer marginal net revenues (y-axis, in Pakistani rupees per acre) as a function of water delivered (x-axis, in acre-inches). The dots-and-dash line represents average water delivery to farmers closer to the source of the canal (the head segment), solid line represents average water delivery to those further along the canal (the middle segment) and dashed line represents average water delivery to farmers at the end of the canal (the tail segment).

Using these estimates, we calculate how much farmers would gain financially if water allocation was optimized, meaning surface water supply for all farmers was made equal. We found a potential 13 percent increase in farmer revenues from reallocation.

For comparison, we used traditional, less accurate measurements from the farmer agricultural production survey and found no difference in water allocations within the canal. We also found that traditional measures of water consumed could not predict net revenues for our sample of farmers. If relied on, traditional measures of water use lead us to incorrectly conclude that water allocation within the canal network is efficient, that there is no allocative problem.

Policy implications

That there is a substantial 13 percent welfare gain from reallocation makes a strong case for moving toward some kind of water trading system. Pakistan’s irrigation sector has, in the past, seen attempts at introducing an irrigation water market, but with little success. However, this doesn’t mean we shouldn’t keep trying. As I argue in other work^[7], a water market is physically feasible in Pakistan’s irrigation system.

Moving toward a market-based trading system will require political will and a lot of time. There is institutional inertia and those responsible for the large and complex canal infrastructure cannot be expected to move toward a market-based trading system overnight. But certainly, small steps toward this goal can and must be taken – a lot of value is being lost to misallocation.

The first step toward a water market would likely entail better measurement. Irrigation water is incredibly valuable (as we show), yet the existing canal measurement system is unable to specify the amount that a farmer receives (like a utility that has no sense of what each customer is consuming). The institutional machinery for measurement work exists – every length of a secondary canal has an officer assigned to it. Moreover, the physical hardware to measure flow is relatively low-cost and easy to maintain. Therefore, a first step in moving toward better allocation could involve generating finer, farmer-level water data.

Agha Ali Akram is a visiting fellow at Yale University.

[1] Professor of Economics, Yale University.

[2] “Agricultural Water Allocation Efficiency in a Developing Country Canal Irrigation System”, (forthcoming) revised and re-submitted to Environment and Development Economics.

[3] Ali, 1988.

[4] Bandaragoda, 1998.

[5] Yu et al., 2013.

[6] Tsur, 1997; Chakravorty and Roumasset, 1991.

[7] Akram 2013

References

Ali, I. (1988), The Punjab under imperialism 1885-1947, Princeton, NJ: Princeton University Press.

Akram, Agha Ali (2013), “Is a surface-water market physically feasible in Pakistan’s Indus Basin Irrigation System?” Water International, Vol. 38, Issue 5.

Bandaragoda, D.J. (1998), ‘Design and practice of water allocation rules: lessons from warabandi in Pakistan’s Punjab’, IIMI Research Report 17, International Irrigation Management Institute, Colombo, Sri Lanka.

Booker J.F. and R.A.Young (1994), ‘Modeling Intrastate and Interstate Markets for Colorado River Water Resources’, Journal of Environmental Economics and Management 26: 66-87.

Chakravorty, U. and J. Roumasset (1991), ‘Efficient Spatial Allocation of Irrigation Water’, American Journal of Agricultural Economics, 73(1): 165-173.

Hurd, B.H., J.M. Calloway, J.B.Smith, and P.Kirshen (1999), ‘Economic Effects of Climate Change on US Water Resources’, in R. Mendelsohn and J. Neumann (eds.), The Impact of Climate Change on the United States Economy, Cambridge University Press, Cambridge, UK, pp. 133-177.

Hurd, B.H and M. Harrod (2001), ‘Water Resources; Economic Analysis’, in R. Mendelsohn (ed), Global Warming and the American Economy: A Regional Analysis, Edward Elgar Publishing, England pp. 106-131.

Lund, J.R., T. Zhu, S.K. Tanaka, and M.J. Jenkins (2006), ‘Water Resources Impact’, in J. Smith and R. Mendelsohn (eds.), The Impact of Climate Change on Regional Systems: A Comprehensive Analysis of California, Edward Elgar Publishing, Northampton, MA, pp.165-187.

Tsur Y. (1997), The Economics of Conjunctive Ground and Surface Water Irrigation Systems: Basic Principles and Empirical Evidence from Southern California, in Parker D. and Tsur Y. (eds.), Decentralization and Coordination of Water Resource Management, Kluwer Academic Publishers, Boston, pp. 339–361.

Yu, W., Y. C. E. Yang, A. Savitsky, D. Alford, C. Brown, J. Wescoat, D. Debowicz, and S. Robinson (2013), The Indus Basin of Pakistan: The Impacts of Climate Risks on Water and Agriculture. Washington, DC: World Bank.

Category: Water

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