The impact of water users' associations on the productivity of irrigated agriculture in Pakistani Punjab

The government of Pakistan has been involved in the transfer of irrigation management to farmers' organizations at different levels of irrigation networks. Khal Panchayats or water users' associations are mandated to mediate water distribution conflicts, maintain watercourses, report on tampering of outlets and shortage of water supply in the outlet to minor or distributary-level farmer organizations, collect water charges, and provide timely information about rotational running of channels to the farmers. As such, irrigators on watercourses with Khal Panchayats can potentially perform better than those without such institutions. This study explores whether or not the presence of Khal Panchayats on a watercourse and farmer organizations on the canal improves farmers' productivity and the returns to land as was envisioned during the Irrigation Management Transfer.The study utilizes the Pakistan Rural Household Panel Survey (Round 1.5) that has detailed plot level information with highly disaggregated data on irrigation type, methods, and institutions. We used the Hausman-Taylor model to regress the value of output per acre on agricultural inputs, soil and water conservation practices, plot characteristics, household demographics, and the presence of institutions such as Khal Panchayats and farmer organizations. We find that households whose plots are located on watercourses with Khal Panchayats are likely to earn 27 percent more value per acre as compared to farmers on watercourses without such institutions. The effect of the presence of Khal Panchayats is more pronounced in Kharif (the main rainy season) than in the Rabi season. Khal Panchayats lead to improved water management mainly through reducing water theft and conflicts around water, as well as improving maintenance of the watercourse and timing of water arrival. This suggests that while the Irrigation Management Transfer (IMT) progress has been slow in Punjab province, largely due to resistance to change by the vested interests embedded in the Punjab Irrigation Department, even the limited implementation of the IMT has already yielded substantial benefits. The presence of farmers' organization (FO) on the minor or distributary as well as the interaction of the presence of a KP and an FO, are statistically insignificant, though they have the the expected positive signs