Modern Irrigation Water Systems and Rural Poverty: Chile and Argentina

A Comparative Study of Modern Irrigation Water Systems and Rural Poverty in the Limarí Basin,Chile and the Tunuyán Basin, Argentina: Institutional and Socio-Economic Aspects

1. Project Manager

Position: Assistant Professor, Department Chair, Member of the “Group of Experts” of the United Nations Convention to Combat Desertification (UNCCD)

Postal address: Departamento de Ciencias Ambientales y Recursos Naturales

Facultad de Ciencias Agronómicas

Universidad de Chile. Santa Rosa 11,315 – La Pintana. Santiago de Chile

Email: aleon-a@uchile.cl

2. Principal Investigators

Position: Professor

Postal address: Departamento de Ciencias Ambientales y Recursos Naturales

Facultad de Ciencias Agronómicas

Universidad de Chile. Santa Rosa 11,315 – La Pintana. Santiago de Chile

Email: rogaray@uchile.cl

Position: Instructor

Postal address: Departamento de Ciencias Ambientales y Recursos Naturales

Facultad de Ciencias Agronómicas

Universidad de Chile. Santa Rosa 11,315 – La Pintana. Santiago de Chile

Email: rfuster@uchile.cl

3. COLLABORATORS & PARTNERS (listed alphabetically)

Position: Assistant Professor

Postal address: School of Natural Resources and Environment--SNRE

University of Michigan

Dana Building

430 E. University. Ann Arbor, MI 48109-1115

Email: lemos@umich.edu

Dr. Lemos has long-term experience researching on policy- and decision-making aspects in relation to water management and drought planning in water-scarce areas such as northeast Brazil and northern Chile. As MIT alumni, she has contributed in a highly significant fashion to documenting the political process around the “drought business” in northeast Brazil, and is also well acquainted with the political process in Chile.

Position: Head, Department of Natural Resources and Environment

Postal address: Centro Regional de Investigacion Intihuasi, National Institute for Agrarian Research

INIA

PO. Box 36-B La Serena, Chile

Email: lmartine@intihuasi.inia.cl

Dr. Martínez has long-term practical experience with irrigation technology transfer schemes. As he resides in the study area, he knows the technology transfer programs and who their beneficiaries are, and has lead high-impact projects in the study area that have to do with technical improvements to irrigation efficiency at the farm level. The role of this NARES, represented by Dr. Martínez, has been key to the development of the fruit exporting business in the study area. Agriculture oriented to foreign markets explains a significant portion of the study area’s Gross Product. Hence, his participation contributes to this project as this NARES is well known by key stakeholders in the Chilean study area, hence it contributes to dissemination of key findings, so that the relevant stakeholders in the area could more easily adopt our findings. Moreover, access to key informants and households in which to apply in-depth interviews and questionnaire will be smoother through the NARES network in the study area.

Position: Researcher at Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET), member of the Laboratorio de Desertificación y Ordenamiento Territorial (LADyOT), Instituto Argentino de Zonas Áridas (IADIZA)

Postal address:Instituto Argentino de Investigaciones de las Zonas Àridas

Laboratorio de Desertificación y Ordenamiento Territorial

Ruiz Leal s/n, (5500) Mendoza, Argentina

Mendoza, Argentina

Email: emontana@lab.cricyt.edu.ar

Expertise: Dr. Montaña has a long-term experience in applied research on desertification issues in the semi-arid area of Mendoza in Argentina. Member of an interdisciplinary group that has contributed to the understanding of the social, economic, and physical drivers of desertification in the study area. Her research group will be a key addition to the proposed project because they have compiled relevant data over the years. Their participation will include capacity building, as graduate students will participate in this research initiative.

4.ABSTRACT

5. TOTAL COST OF THE PROJECT

Participants’ contribution: US$ 76,100

7. LOCATION OF PROJECT

8. BACKGROUND

Two Andean basins have been selected for this study: The Limarí basin is located in the semi-arid Region of Coquimbo, Chile and the Tunuyán Basin in the semi-arid province of Mendoza, Argentina. This Limarí Basin has an interconnected system of reservoirs for irrigation (namely, the Recoleta, Cogotí, and La Paloma reservoirs) and the construction of this system was initiated back in the 1920s as a means to increase agricultural output. The Tunuyán Basin is regulated by the El Carrizal reservoir for irrigation, in operation since the 1960`s.

In the Limarí Basin, two different types of agriculture regimes may be found 1) communal lands, where dwellers own a small proportion of irrigated lands, and practice subsistence agriculture and only few agricultural communities have water rights; 2) private holdings, mainly oriented to the production of fresh fruits and vegetables for international markets comprising the majority of the irrigated lands and part of the drylands. This type of agriculture usually requires high amounts of capital for irrigation technology, cold storage, and transportation and present high economic returns. Water supply for irrigated agriculture is obtained, primarily, from an interconnected three-reservoir system; the system irrigates an approximate area of 65,000 hectares. The system was built to ensure water availability for agriculture in this drought-prone area and works started with the Recoleta Reservoir in 1927, when the first voices on regional development were heard. A second reservoir, Cogotí, was built in 1939. The increasing demand from the agricultural sector on greater quantities of water for irrigation led the users to organize and demand the construction of the third reservoir, Paloma, completed in 1964. The Agrarian Reform of 1967 created the Dirección General de Aguas (General Directorate of Water) and the Empresa Nacional de Riego (National Irrigation Enterprise) thus providing the institutional and operative frameworks that allowed for maximum utility of the resource. The adoption of the neo-liberal economic model in Chile in the early 1980`s, which included a package of fiscal, political, trade, and market reforms was key in introducing major changes in the land and water property rights regimes in the country. Today, water users in the basin are organized in six private Irrigation Associations that manage their allocated water independently.

Besides the public investment in irrigation infrastructure described above, there is a system of direct subsidies to purchase irrigation technology and to build farm-level reservoirs in the study area. Projects are funded by the National Irrigation Commission (Law 18,450), the National Innovation Fund, and the National Corporation for Economic Development (CORFO, in Spanish). Technology transfer programs are implemented by different organizations depending on the size of the property. Subsistence-level farmers are assisted by the Program for the Development of Poor Municipalities (Prodecop). The programs include the acquisition of mechanized irrigation systems and trains beneficiaries in irrigation techniques. The National Institute assists small-scale farmers (1-5 irrigated hectares) for Agricultural Development (INDAP). Technical assistance includes production- and irrigation- related issues. Medium- to large-scale farmers can either hire technical assistance directly or obtain it through funding provided by the state Technical Assistance Fund (FAT). The National Institute (INIA, the NARES participating in this proposal) has implemented some of these projects for Agricultural Research.

The province of Mendoza’s surface area is of 151,000 km² of which only 2.5% is irrigated (i.e. 377,000 ha). The Tunuyán Basin is regulated by the El Carrizal reservoir and divides the Tunuyán River in two. The reservoir not only divides the river in two, but also draws up the boundaries of two water management systems. Upstream there is a non-regulated one whilst downstream water resources are regulated. The upstream farmers tend to enjoy higher incomes while the downstream sector is characterized by the prevalence of poor households (Torres, 2003). Upstream, irrigation of the so-called Central Oases of the province of Mendoza is obtained through a system of dykes and canals. Downstream, irrigation with water drawn from the reservoir allows water regulation, thus ensuring the irrigation of the North Oases, the province’s most important. The system was built to ensure water availability for agriculture in this drought-prone area and first studies date back to the 1940`s. Works were completed in the 1960`s. Construction plans were to be funded through private investment (i.e., Irrigation Co-operative members); in the end, the system was entirely funded by the State (Torres et. al., 2003). The Tunuyán Basin is located over the northern Mendoza underground reservoir (Torres, 2000), with an extension of 22.800 km² and a total water reserve of 228.000 hm³. This water is used where superficial water resources are not available

This proposal comes as a result of past and on-going research by the investigators/collaborators in Chile and Argentina that mainly relate to a) subsistence agriculture household’s vulnerability to drought, b) differential access to key resources like land and water in both countries, and c) our knowledge of the policy making process in drought-prone areas of Argentina, Brazil, and Chile. These studies have required historical analysis, in-depth interviews with different stakeholders (e. g., the reservoir management staff, public officials), and surveys applied to large- to small-scale farmers, and wageworkers. Preliminary results indicate that rural poverty indices have not evolved significantly after the 1980s in either country, after key amendments to the water systems in both countries.

The proposed study is deemed relevant because different stakeholders have discussed modifications to the current Water Code in Chile, whereas in Argentina decisions about this matter are taken at the federal state level and the current situation can be modified if enough relevant evidence can be provided. These changes demand a better understanding of the pitfalls of the water markets, water use, and distribution of water rights and tenure patterns in relation to equity issues. This research comes in a timely manner to illustrate stakeholders and policy and decision makers on ways in which water markets and the subsidy system could be improved as an instrument to alleviate poverty

State of the Art

Gazmuri (1992) claims that the water policy applied in Chile, resulting from the adoption of the neo-liberal economic model during the early1980, has fostered efficient agricultural use of water mostly because of adequate pricing and uncoupled transferability of water and land. In particular, the Limarí Basin became an important producer of different varieties of wine and table grapes aimed at off-season markets in the northern hemisphere thanks to its southern hemisphere climate³. Nevertheless, studies on the impact of agricultural export growth on the area’s land and labor markets conclude that the adoption of agro-export crops by small-scale producers is controlled by the access to capital, technology, and international marketing and that asymmetrical contracts with large-scale international fruit companies have led to a non-competitiveness among the small-scale producers (Gwynne, 1998). The policy has also expanded the agricultural frontier, since more land can be irrigated with the same amount of water as a consequence of correct pricing. While acknowledging the increase in agricultural output and rates, we challenge Gazmuri´s belief that “perhaps the most important achievements of the Chilean water policy are social benefits through redistribution of wealth and eradication of poverty” in light of the levels of poverty registered for the region (Bahre 1979, CIREN 1978, MIDEPLAN 1998, León 2003, Romano and Leporati 2001, Schneider 1982). After twenty years of utilization of the current water code, poor peasants may have not seen any improvement in their livelihoods. There is no doubt that an important drawback of this type of market-oriented scheme is its incapacity to resolve poverty issues.

Studies in Argentina show that the agrarian frontier has expanded (Montaña et al., 2003) to higher altitudes of the Central and North Oases. Large-scale private producers—located in higher altitudes—have benefited from State subsidies and credits and the demand for water resources has increased accordingly. Small size producers, already into debt and getting low revenues from their old agricultural exploitations cannot afford taking credits. Because of limitations in surface water volumes, water supply to higher altitudes results in a decrease in the supply of lower altitudes, areas where the small- and medium-scale producers are found. Consequently, the latter dwellers tend to be deprived of water for irrigation. Public economic and agrarian development policies, in particular those related to the construction of irrigation infrastructure and the organization of water management systems only consider those dwellers and activities located in irrigated oases (Abraham, 2000; Montaña et al., 2003). The Administration Council of the General Irrigation Department, responsible for water management in the province of Mendoza, represents both agrarian and non-agrarian users of irrigated lands, thus neglecting and ignoring the population inhabiting 97% of the non-irrigated lands located in the plains and the mountains. The expanding agrarian frontier and the increasing demands over water is steadily depriving the resource from the lower lands and its equally increasing poor population.

Numerous studies concerning irrigation water management have been carried out in Mendoza. They tend to focus, however, on efficiency issues and agricultural productivity factors. On the other hand, poverty and life quality in rural areas has been analyzed from the social development field, but they have never addressed the impact of the irrigation system, and its implications in social and economic relationship structuring in irrigated zones of arid regions⁴.

It appears that the costs of building infrastructure and subsidizing technology transfer have been funded by the State, i.e., the entire society in both countries, whereas the benefit of access to water resources, irrigation facilities, and related funds have been enjoyed primarily by those who have purchasing power. There is an essential need (especially after the conclusions of the Johannesburg Earth Summit) to examine the issues of equity and wealth distribution within the selected water basins; there is an urgent need to address the issue of who bears the costs of improved economic efficiency in light of an increasing and rapid movement to adopting neo-liberal reforms in the Andean area, where rural poverty has been consistently considered as “extreme” and water regulations appear as efficient and successful. The lack of comparative studies on water systems and their role on poverty alleviation in the southern Andean Region motivates our research. Our study will contribute with two well-documented case studies for policy and decision makers in other less developed countries who plan to implement decentralized water allocation systems in rural areas.
Three major questions guide our proposed research:

1. What has been the role of large modern irrigation water systems in agricultural development in both basins?

2. Have the benefits derived from public investment in large modern irrigation water systems accrued to the rural poor? Have they enhanced quality of life among poor dwellers?

3. What mechanisms should be implemented to ensure sufficient rural income and improved production conditions of poor dwellers under present modern irrigation water systems?

9. GOAL

10. PROJECT PURPOSE

11. EXPECTED OUTPUTS

1. 
   Inventory of public expenditures in water for irrigation infrastructure, and subsidies.
   
2. 
   Description and synthesis of the evolution of: a) economically active population; b) poverty indexes; c) distribution of water rights; d) government policies on water resources and agricultural development.
   
3. 
   Capacity building: undergraduate and graduate students training in field work and qualitative research techniques, undergraduate and graduate student theses, NARES collaboration.
   
4. 
   1 research articles published in a peer-reviewed journal (at least).
   
5. 
   Working papers: Guidelines and recommendations aimed at policy- and decision-makers for improving public policy on irrigation water systems and rural poverty alleviation, and economic incentives utilization.
   
6. 
   International workshops (with Argentinean, Chilean, and other countries participants), that will bring together relevant stakeholders to disseminate findings and thus initiate basin level dialogues
   
7. 
   International collaboration among researchers enhanced
   

12. KEY ACTIVITIES

1. Project meeting in Chile. Inception report.

2. Archival research to a) assess public expenditures to build irrigation infrastructure, and that of subsidies transferred to local farmers, at the catchment level; b) policy evolution and history;

3. In-depth interviews with local stakeholders.

4. Design and apply a survey to sample of rural dwellers.

5. Data processing.

6. Application of methodology for spatial regression analysis between irrigation schemes and poverty indicators at the household level.

7. Integrate information. Progress reports.

8. Organize two final workshops (one in Chile, one in Argentina) with relevant policy makers, investors, and stakeholders to disseminate findings and initiate a basin level dialogue.

9. International congress/scientific meetings participation.

10. Hire one undergraduate and one graduate students (M. Sc. and/or Ph. D.) in Argentina and Chile as Research Assistants.

11. Publish one article in an indexed journals (e.g., Environmental Economics, Society and Natural Resources).

12. Working papers, and

13. Final report to funding agency.

13. METHODOLOGY

2. Historical analysis of public expenditures in a) modern irrigation water systems in the selected basins in Chile and Argentina; b) expenditures in technology transfer done by the National Institute for Agrarian Research (INIA) since the 1980s in the basin; in Argentina’s case, the Institute for Rural development (IDR); and c) direct irrigation subsidies to farmers.

3. Historical analysis and characterization of changes in issues such as a) production patterns (e. g., change in crops and surface area); b) the economic value of agricultural production within the selected basins; c) population; and d) agricultural employment, e) wages.

For 1, 2, and 3 we will use secondary data sources from archives, governmental, and non-governmental reports and working papers, census data. Possible sources are the Water Directorate, the Hydraulic Works Directorate, the National Institute for Agrarian Development, and the National Institute for Statistics of both countries. An estimation of the annual expenditures in irrigation technology transfer will be done directly from INIA´s data in Chile and the IDR in Argentina.

4. Spatial regression techniques between indicators derived from irrigation schemes and poverty indicators at the household level between the 1980s and 2000 (Leclerc et al. 2000, Oyana et al. 1998). A basic assumption is that areas that are highly sensitive to the impact of irrigation introduction have experienced significant changes at the measured poverty levels according to indicators. We will have to characterize in detail the introduced irrigation schemes especially after the construction of the irrigation districts as well as the impact over variables such as changes in crop surface, changes in crop type and crop production, productivity, household/family income, etc. These variables will be analyzed with external ones such as climatic stress, market crop production, land tenure, water rights, income, gender, etc. Indicators at the household level will be obtained from available population and housing censuses; crop and land tenure indicators will be obtained from agrarian censuses. Our methods include the identification of indexes where different variables will be given different weights. This methodology derives from the one used in the definition of unsatisfied needs that has been used in 11 Latin American countries (UNDP 1992, Boltvinik 1996).

5. Regarding policy outcome, this study seeks to a) conduct a historical analysis of the policies related to water irrigation systems (reservoirs, technology transfer, irrigation projects, etc.); b) assess the role of irrigation water systems in alleviating rural poverty in Limarí, that is, we will assess if the rural dwellers are better off economically and less vulnerable both to climate variability and market fluctuations and why. To accomplish this goal we will apply a survey to a sample of rural dwellers (e.g., farmers, wage workers, irrigation project beneficiaries, etc.) on irrigated areas in both municipalities. The survey will be aimed at identifying the benefits and costs related to the reforms of the 1980s; c) what and how other institutional factors contribute to or can enhance these dwellers´ ability to take full advantage from the irrigated systems. To accomplish this goal, we will carry out extensive in-depth interviews with relevant actors (e.g. members of some of the local irrigation associations, decision makers, policy makers, subsidy beneficiaries) in order to determine the limitations and potential improvements to the current institutional framework. This will allow for recommendations on how to better make future investments in irrigation systems in Chile and Argentina, as well as in other developing countries of the region.

14. BENEFICIARIES AND IMPACT

15. IMPLEMENTATION AND MANAGEMENT

16. DISSEMINATION STRATEGY

a) Academic sector: Publication in relevant specialized journals, i.e., Environmental Economics, Society and Natural Resources. Participation in International Congresses/Scientific meetings. Undergraduate and Graduate Theses: Research. Research findings and recommendation will be integrated to courses syllabi such as Environmental Economics, Environmental Sociology, and Integrated Water Management.

b) Non academic sector: Workshops with relevant actors at the end of our project to present our results and initiate basin-level dialogue. Publication of an Inventory of Agricultural Water-Use Programs during 1980-2000 in the Limarí Basin and the Tunuyán Basin. We also plan to distribute a working paper (guidelines and recommendations) aimed at policy- and decision-makers for improving public policy on irrigation water systems and rural poverty alleviation. Local press releases. Publication in web pages of collaborating institutions.

17. MONITORING

References

Bahre, C. 1979. Destruction of Natural Vegetation of Northern-Central Chile. Geography, Vol. 23. University of California Press

Boltvinik, J. 1996. Poverty in Latin America: A critical analysis of three studies. Int. Soc. Sci. J. (GB) 148:245-260

Briscoe, J. 1996. Water as an Economic Good: The idea and what it means in practice. Paper presented at the World Congress of the International Commission on Irrigation and Drainage. Cairo. September.

Briscoe, J., P. Anguita, and H. Pefia. 1998. Managing Water as an Economic Resource: Reflection on the Chilean Experience. Toward Environmentally and Socially Sustainable Development, Environmental Economics Series. Paper No. 62. The World Bank.

CIREN (Centro de Información sobre Recursos Naturales). 1978. Estudio sobre las Comunidades Agrícolas de la IV Región. Final Report

Cristi, Óscar, Luiz Gabriel T. De Azevedo, Alexander Baltar and Sebastián Vicuña,. 2000. Markets for Water used for Irrigation: an application to the Paloma System of the Limarí Water Basin, Chile. Draft version prepared for the World Bank Training Seminar on Water Rights, March 27-28.

Dirección Regional de Riego, Región de Coquimbo. 1997. Embalses en Operación IV Región Coquimbo. Ministerio de Obras Públicas

Dourojeanni, A. and A. Jouravlev. 2001. Governance crisis in water management. Natural Resources and Infrastructure Series, No. 35, LC/L.1660-P. Economic Commission for Latin America and the Caribbean (ECLAC)

Economic Commission for Latin America and the Caribbean (ECLAC). 1995. Water Rights market: legal framework. LC/R.1485

Gazmuri, R. 1992. Chile’s Market-oriented Water Policy: Institutional Aspects and Achievements, in Le Moigne, G., K.W. Easter, W.J. Ochs, and S. Giltner (Eds.). 1992. Water Policy and Water Markets. Selected Papers and Proceedings from the World Bank’s Ninth Annual Irrigation and Drainage Seminar, Annapolis, Maryland.

Gazmuri, R. and M. Rosegrant. 1994. Chilean Water Policy: The Role of Water rights, Institutions, and Markets. Paper prepared for the Irrigation Support Project of Asia amd the Near East (ISPAN), International Food Policy Research Institute, Washington, DC.

Gwynne, Robert N. 1997?. Neoliberalism and Regional Development in Latin America.

Hearne, R.R. and K.W. Easter. 1995. Water Allocation and Water Markets in Chile: An Analysis of Gains-from-trade in Chile. World Bank Technical paper 315.

Le Moigne, G., K.W. Easter, W.J. Ochs, and S. Giltner (Eds.). 1992. Water Policy and Water Markets. Selected Papers and Proceedings from the World Bank’s Ninth Annual Irrigation and Drainage Seminar, Annapolis, Maryland.

Leclerc, G., A. Nelson, et al. 2000. The use of unit-level census data for research on poverty: A multi-scale approach. International Workshop Assessing the Impact of Agricultural Research on Poverty Alleviation. Centro Internacional de Agricultura Tropical. San Jose, Costa Rica.

León, A. 2003. Characterization of the precipitation regime in the Limarí River basin. Unpublished Doctoral Dissertation. Arid Lands Resources Sciences Ph.D. Program, The University of Arizona

MIDEPLAN. 1998. Encuesta CASEN. Departamento de Información Social

Montaña, Elma, Laura M. Torres, Elena M. Abraham, Eduardo Torres and Gabriela Pastor. 2003. “Los espacios invisibles. Subordinación, marginalidad y exclusión de los territorios no irrigados en las tierras secas de Mendoza, Argentina”; enviado a la revista Región y Sociedad de El Colegio de Sonora, Hermosillo, Sonora, México.

Oyana, T., P. Couillaud, G. Leclerc, R. Knapp, and W. Bell et al. (1998). Processing social indicators at individual, household level and their aggregation at different scales. Cali, Colombia: Centro Internacional de Agricultura Tropical.

Rios, M. and J. Quiroz. 1995. The Market for Water Rights in Chile: Major Issues. World Bank Technical Paper No. 285

Romano, D. and M. Leporati. 2001. The Distributive impact of the Water Market in Chile: A Case Study in Limarí Province, 1981- 1997.Unpublished report.

Schneider, H.J. 1982. Drought, demography and destitution: Crisis in the Norte Chico. Geojournal 6(2): 111-119

UNDP (United Nations Environment Program). 1992. Proyecto regional para reducción de la pobreza en América Latina, 1990 y 1992. Desarrollo sin pobreza. 2nd Rev. Ed. Bogotá, Colombia.

18. BUDGET SHEET

Name of project: A Comparative Study of the Modern Irrigation Water Systems and Rural Poverty in the Limarí Basin, Chile and the Tunuyán Basin, Argentina:

Institutional and Socio-Economic Aspects