Irrigation system requires annual subsidy: Report

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Irrigation system requires annual subsidy: Report

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Irrigation system of the country needs an annual financial subsidy of Rs 5.4 billion.

11 July,2012 05:27 pm

Financially unsustainable irrigation system of the country has required an annual subsidy of Rs. 5.4 billion to meet its operations and maintenance (O&M) cost, said Report on Canal Water pricing for irrigation in Pakistan.The report said ultimately, the irrigation service to farmers will be negatively affected in terms of timeliness, reliability and adequacy. This is the most critical policy issue confronting the world’s largest integrated irrigation system for decades.“Canal water is grossly undervalued for irrigation purposes in Pakistan. The same water when percolates down to groundwater aquifers is used at a several times higher cost by the same farmer in the same field,” said the Report, adding that in the changing hydrological, economic and social environment, pricing canal water for agriculture to accrue maximum benefits for the society as a whole remains one of the priority policy issues in Pakistan, especially at times when pressure from demographic and climate change factors is escalating.Report suggests that inadequate collection of Abiana is one reason behind poor financial performance of irrigation system in Pakistan. Country-wise, Abiana recovery is merely 60 per cent of the assessed amount. More importantly the declining trend in both Abiana assessment and recovery, where canal irrigated area remains almost same with little variations during the period under discussion, is another issue requiring serious policy consideration. Improving collection rate of Abiana should be the priority area for provincial governments to take immediate measures to reduce the gap between recovery and assessment.According to the report poor cost recovery was another critical issue for policy consideration because revenue from Abiana collection meets only one-fourth of the O&M cost. The irrigation system remains dependent upon government funding for the remaining 75 per cent of its operational and maintenance costs.Report further said low pricing of canal water remains to be the hot spot issue in times when prices of all other goods and services increased many fold over the years Comparing the prevailing fixed Abiana rates in Punjab Rs.135 per acre per year for two cropping seasons reveals that it is 15 to 20 times lower than the cost of tube well irrigation water per acre per year in the same vicinity.