Programme  OS7a Financing water development  abstract 593

A Simulation and Scenario Testing of Canal Irrigation Cooperatives in India for Financial Viability and Sustainability

Author(s): G.G.Koppa, D.P. Mishra
G.G.Koppa Doctoral Scholar, Institute of Rural Management Anand, 388001, Gujarat, India , Phone- +91-02692- 260391, +91-9228805484, Fax: 02692-260188 D.P Mishra (Co Author) Professor, Institute of Rural Management Anand, 388001, Guja


Article: abs593_article.pdf
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Session: OS7a Financing water development
Many countries including India have cautiously embarked

on a process to transfer the management of irrigation systems from government agencies to local management entities

like Water Users’ Associations/ Irrigation Cooperatives (Vermillion, 1997), with the stated objectives of providing

sustainable and adequate financing for operation and maintenance and of facilitating investment in the required

rehabilitation of irrigation and drainage systems. It is the social processes and the dynamics between the various

stakeholders, which ensure a sound initiation of any institution. However, as the institutions start functioning they need

money to cover their running cost and the financial working issue gains much importance along with the social

dimension. Though most of the canal Irrigation Cooperatives in India are still in their early stages, it is likely that most

of the failed co-operatives are weak in their financial position. It thus becomes imperative to find out the various

critical factors that ensure financial strength of the ICs, and the various steps taken by the co-operatives to increase

their revenue and control costs for better financial management (Svendsen, 1997).
The broad objective of this

study is to use a new approach to help investigating on the sustainability of irrigation cooperatives with special

reference to small holding and ability of the farmers to pay the water fees determined by Irrigation cooperatives. The

study tries to identify and analyze the critical factors for financial success/ failure of canal irrigation co-operatives,

assess the capacity of the farmers to pay and elicit the conscious steps taken by the government and farmers for

ensuring the financial strength of ICs
The paper refers to a multi-disciplinary, action-research approach that has

been proposed by Perret, et al (2004) to address such issues. Its main features involve simulations and scenario-

testing, acknowledging that there are costs incurred by supplying water and water-related services to farmers. The

farmers tap into their monetary resources to pay these water service fees. For identifying the critical success factors,

detailed study dealing with financial aspect, ten strong and weak co-operatives of each of two big states in Dharoi

irrigation project in Gujarat and Malaprabha irrigation project in Karnataka were studied. A scenario testing with the

agro climatic conditions, choice of cropping pattern, size of land holding, cost of cultivation, gross margin and

income generating capacity of the farmers through well structured questionnaire was done. The financial data

available with irrigation Cooperatives was used for the study for assessing the trend of revenue generated, operation

& maintenance costs, and reserves & surpluses.
The study has brought out factors affecting financial viability

which can be grouped into two major categories factors which cannot be altered (command area per unit length of

canal, water availability,) and those which can be altered (lined and unlined canals, additional water charges

gained/ha, etc). The outcome of the research study suggests that voluntary labour should be institutionalized as it is an

effective cost-cutting measure. Better management of irrigation system should be ensured to increase the command

area irrigated.

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