Water Pricing in Bangladesh: A Pro-Poor Framework Based on Two Surface Water Irrigation Projects in

A shift from development to integrated management of water resources will be more supportive to the long-term goals for optimizing benefits of water use. Planners in Bangladesh have already expressed urgency and interest in developing some kind of regulation of water through economic means. The National Water Policy of Bangladesh (1999) declares: ‘A system of cost recovery, pricing, and economic incentives/disincentives is necessary to balance the demand and supply of water’. Direct methods are used to derive price of water under alternative pricing principle. Experiences of two Bangladeshi irrigation projects- Meghna-Dhanagoda and Pabna- have been used to compare the practice of recovery of irrigation cost from the farmers, with the derived economic cost of water per m3. In deriving the cost, only surface water for irrigation is considered, plus the poverty reduction objective, along with society’s preference for water – use. Partial equilibrium approach has been taken towards pricing of water, because Bangladesh has no well-functioning water market, no efficient water allocation by using multi-period, multi-location systems. The pricing frame is based on two major scenarios: * pricing for those who use critical volume of water under a production regim