Agriculture Reference
In-Depth Information
beyond their scope as well. In the real world, the government or some other public
agencies in many countries often fail to charge even marginal (O&M) costs, which are
visible to farmers (Tsur et al., 2004). The last problem is that of sustainable governance
of irrigation water managements.
In the context of Japanese history, the centralised supply of water by the government
would imply a drastic change in the institution. Confiscation of existing water rights
formally issued or even those based on traditions and customs would be politically
difficult and cause serious questions as to social equity. As a basic framework, the current
property rights regime operated by users' associations and associated with capital
investments would be the correct solution.
Actually, the property rights regime, by and large, is common in many other
countries. The important question is how it works in terms of the criteria listed above.
The following parts are some examples of such consideration in the Japanese case.
4.2 Normal years of normal precipitations
By virtue of higher precipitations and depending on the capital investment to stabilise
water flows, water is rarely scarce in years of normal precipitation. Economic costs of
water consist mainly of actual payments for service rendered, operation, repair and
maintenance of facilities, and sunk costs of infrastructures. In a normal year water use in
agriculture is not seriously restricted under the water rights bounds, and the allocation
between non-agricultural sectors and even among neighbouring LIDs need not be taken
into consideration.
The LID that is entitled to the water rights is totally responsible for managing all
facilities ranging from dams and head works to lateral canals. LIDs as farmers'
organisations are in the best position to efficiently carry out these activities, since they
have the most knowledge of local and specific conditions (the fourth criterion above).
On-farm watercourses are maintained by farmers or village communities.
All farmers eligible for obtaining irrigation water through the facilities operated by an
LID should have a membership in the LID, and they should bear the related costs.
According to the classification by the World Bank (2004, pp. 22-25), farmers in Japan are
considered to pay all of the O&M costs because LIDs are in principle autonomous as far
as O&M costs are concerned. In addition, LIDs bear most of the costs for repairing
equipment as well as some portion of the investment costs (Figure 2). This implies that
the farmers are sharing a substantial part of the average costs. LIDs usually collect fees
from member farmers for repaying loans payments required for initial investments
(Table 2). Scarcity rents, which originated mainly from the capital investments, are
incorporated in the entitled water rights.
LIDs do not allocate water rights for each member or each field under the current
legal framework of the River Law. The LID acts as an authorised supplier of water in the
corresponding irrigation unit and flat rates per cultivated area are charged to member
farmers to recover O&M costs and part of the investments costs (area pricing by flat
rates). The basic principle of this charging system lies in preserving equity among
members (Nakashima, 1998). How about the economic efficiencies, which mainly reflect
the first, second and third criteria above, of the allocation or pricing by the LID (Tsur &
Dinar, 1997, Shobayashi, 1988)? To answer this question, we have to reconsider the
characteristics of cost components for supplying water and the technical conditions in the
paddy field irrigation:
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