Water reforms in developing countries: Management transfers, private operators and water markets

This paper analyzes the irrigation management transfer (IMT) experience in four middle-income developing countries and explores the links for private sector participation in providing water service and irrigation management. The four countries considered in the analysis are Mexico, Morocco, South Africa and Tunisia. The IMT program was successful where farmers had their water rights established, farms are medium and large scale with good access to markets and the government had a strong political willingness to empower users. The IMT programs that focused mainly on farmers' participation and empowerment through Water User Associations (WUA) have not been very successful. Private sector management has proved a feasible alternative in a number of countries. Experiences from Australia, China, France and Mali show that the private sector can efficiently manage irrigation systems and collect water charges, even in the absence of formal WUAs. Two additional alternatives could be of interest for irrigation schemes; these are management contracts and lease contracts. Another alternative would be to reform public entities and create new models that can ensure efficiency and transparency. The establishment of water rights is key in many cases since it guarantees access to water. The water rights are most effective in improving water use when allocated to farmers rather than to the private/public operator. After the establishment of water rights, farmers will have an incentive to organize in order to obtain better service. The paper also provides an overview of different types of water markets where private operators may play the intermediate role between willing buyers and sellers of water based on information obtained through the management of the network.