Japanese Water Management Systems from an Economic Perspective: The Agricultural Sector - Water and Agriculture: Sustainability, Markets and Policies - page 43

Chapter 4.
Japanese Water Management Systems from an Economic Perspective:
The Agricultural Sector

Hiroaki Kobayashi 1

Japanese water management is characterised as that of a property rights regime. Several
instruments have had decisive roles in improving economic efficiencies, securing effective
and equitable cost recoveries, and abating conflicts between non-agricultural sectors,
under the legislative framework that prohibits explicit trading in water rights. Each LID
(voluntary farmers' group) is entitled with water rights and is responsible for the
management of its irrigation water. More than the marginal cost recovery is secured and
effective water use is expected at the same time. The area pricing commonly applied in
the LID management is supported, taking into considerations the technical aspects and
transaction costs. The LIDs, in some cases, conserve watershed areas for the purpose of
stable water flow to be extracted. Facing the occasions of serious water shortage the
government provides quasi-markets in water, realising intersectoral transfers between
non-agricultural sectors, and among LIDs, to improve economic efficiencies. Serious
water shortages take place only once every ten years on average, in limited areas and
during limited periods. The community-like decision making of water allocation in the
quasi-markets would help to abate the social conflicts. The permanent transfer of water
rights is also managed. The Japanese systems of agricultural water management could be
leading examples for developing countries in the monsoon climate, where small holdings
of paddy field agriculture dominate.

1. Introduction

Efficient water use is studied throughout the world for the purpose of expanding
agricultural productivity to cope with increasing population and for poverty alleviation.
The lack of environmental concerns in groundwater use, irrigation in arid/semi-arid areas
causing soil degradation such as salinity, inefficient uses of irrigation water, etc. all
require effective countermeasures for sustainable development. Conservation of
watershed areas and groundwater recharge enhancement are also important (Reddy,
2005). Particularly in the case of surface water use, conservation and proper management
of forests are essential for stable supply and better quality of water.

1. Faculty of Economics and Business, Wako University, Tokyo, Japan.