Business environment hurdles
can prevent new technologies being adopted.For example: high customs duties on imported micro irrigation products, businessenvironment difficulties for entrepreneurs to offer contracting services to farmers,or fertilizer subsidies which make non-chemical fertilizer inputs less attractive forfarmers.The
availability of finance
for soft and hard investments may or may not be aconstraint. Development partners can provide catalytic finance, however financeshould become self-sustaining from a within country basis. While higher risk inagriculture results in high interest rates, high interest rates from both formal andinformal finance sources also results in high risk for agriculture, and is a cause ofunmanageable indebtedness for many Indian small farmers.
Fortunately there are many opportunities to bring solutions for improved watermanagement and WP. I will focus on opportunities where ADB can add value.
Through technical assistance operations, ADB, with otherdevelopment partners, can provide support to governments to examine existingpolicy, legislative and regulatory arrangements and sensible ways forward. Tworecent examples include “Preparation of the Nepal Agricultural DevelopmentStrategy” and “The Report of the Water Sector Task Force of the Friends of DemocraticPakistan: Infrastructure and Institutions for a Productive and water-secure Pakistan.”The highest economic and financial return on effort and investment comes fromhaving the correct policy, regulatory and legislative settings. Governments andADB need to recognize that developing and implementing a water reform agenda isa long term process, and real commitment from both sides is essential.
Land tenure and business environment
issues and challenges are largelypolicy, regulatory and legislative in nature, however also require investment whenthe direction has been set. ADB provides both advisory assistance and investmentto developing member countries (DMCs).
Many irrigation farmers and irrigation districts in Asia face issuesrelating to irrigation reliability—timeliness of delivery, water shortages, variableand often decreasing annual allocations, absence of property rights, ground waterover-extraction and declining water tables. While some of these issues are policyrelated, at the operational level most Asian irrigation schemes are still governmentowned and managed. Corporatization of electricity and urban water and sanitationservices has worked well in many DMCs, and of bulk water in many developedcountries, so why can’t corporatization of state run irrigation systems work wellin DMCs as a first step to improved performance (as demonstrated in Viet Nam)?Passing management and financial responsibility to the irrigators is also a sensibleand viable step. More sophisticated ownership and management arrangements