GLOBAL SUBSIDIES INITIATIVE

Download: Towards a Common Methodology for Measuring Irrigation Subsidies

This discussion paper on the quantification of water subsidization marks the first step in a major research effort in the area of irrigation subsidies. Irrigation subsidies can form a significant portion of a country’s budgetary expenditure. Badly directed subsidies may also contribute to the depletion of limited water supplies, distort decisions over which crops are produced, and artificially increase the volume of agricultural output. Also, for many horticultural products, subsidized, irrigated production in wealthier countries may potentially be competing unfairly with products grown in developing countries—economies without the financial resources to match the levels of investment achieved by their competitors.

The GSI's initial research effort focuses on the development of a methodology, which will provide researchers with a concise and defined set of parameters to follow when quantifying irrigation subsidies and developing nationally comparable estimates. As part of this process, a discussion paper was prepared by Dr. Ravinder Malik, an irrigation subsidy expert working with the University of New Delhi, India. Dr. Ravinder’s paper, “Towards a Common Methodology for Measuring Irrigation Subsidies”, provides a detailed overview and discussion of a number of methods available to researchers, when quantifying irrigation subsidies at a project, regional or national level. The paper was not intended to favour any particular approach over another, but rather act as an aid in helping to define the final methodology to be adopted by the GSI and associated research partners.

The findings from Dr. Ravinder’s discussion paper were presented at a joint workshop with the International Water Management Institute (IWMI) held on the 26-27 March 2008, in Addis Ababa, Ethiopia. The workshop was attended by national experts from the International Commission on Irrigation and Drainage (ICID), the International Water Management Institute (IWMI), the Malawi Polytechnic, the New Mexico State University,  Middle East Technical University, Turkey, and the World Bank. 

The discussion during the workshop was directed at agreeing a single recommended methodology for measuring irrigation subsidies to be captured in a subsequent paper, the development of which is underway. The methodology will draw on the best aspects of existing frameworks, and merge them to develop a consistent and internationally accepted method for measuring irrigation subsidy intensities. The methodology will recommend a common approach in tackling irrigation subsidy estimates across countries. The draft will be peer reviewed prior to being published on the GSI website for public comment.

Following the publication of the methodology, the GSI will commission two country case studies, examining irrigation subsidies in one developed (Spain) and one developing country (Pakistan). They have been selected for their aptness for testing out the methodology and, the importance of irrigation subsidies to their agricultural industries. These case studies are hopefully the prelude to an expanded initiative when further case studies of both OECD and non-OECD countries would be undertaken.