The Irrigation Service Fee Waiver in Viet Nam
This policy brief aims to inform policy makers in the Government of Viet Nam and development partners involved in developing the water and irrigation subsector about the irrigation service fee waiver and related issues.
This policy brief aims to inform policy makers in the Government of Viet Nam and development partners involved in developing the water and irrigation subsector about the irrigation service fee waiver and related issues. This is intended to stimulate debate and plan for rational solutions to unintended impacts of government policy.
The policy brief is the summary of a larger study, Review of the Impact of the Viet Nam Government's Waiver of Irrigation Service Fees (31 August 2012), which was financed with a grant from the Water Financing Partnership Facility.
Decree 115, issued by the Government of Viet Nam in 2007, has a major impact on effective and efficient operations and maintenance of irrigation infrastructure. The policy initially helped stabilize irrigation management, resulting in increased agricultural productivity and farmers' incomes.
Recent research indicates that economic gains have declined because of inflation and the lack of commitment by provincial authorities to undertake the institutional reforms embodied in the policy, including irrigation management transfer and participatory irrigation management.
Updating the policy conditions and financial cost norms, and implementing systematic change in institutional arrangements for irrigation management will improve agricultural productivity and increase farmers' incomes to help achieve sustainable rural development in Viet Nam.
The centralization of irrigation management stabilized the organization of the irrigation and drainage management companies and the maintenance of irrigation systems improved the livelihood of the poorest farmers and created an enabling environment for the development of new policy directions. Options emerged for decision makers to develop long-term solutions for irrigation management. One option under discussion by policy makers is a return to full or almost full funding of irrigation system operation and maintenance by farmers. Government expenditure in the sector would focus on capital investment in irrigation infrastructure, including major rehabilitation. The high crop yields and cropping intensities achievable in the deltas and many other schemes suggest that user-funded operation and maintenance should be feasible.
To improve the decentralization of irrigation management, policy makers are promoting the development of participatory irrigation management involving stakeholders from national, provincial, and local levels, and especially farmers. This new approach includes the integration of participatory irrigation management into the government's annual planning and budgeting.
The irrigation service fees waiver can be viewed as the first phase of a long-term plan to renovate irrigation management. The government subsidy stabilized the irrigation and drainage management companies and the operation and maintenance of irrigation systems and improved the livelihoods of farmers.
Interviews and discussions with several elements indicated that the irrigation service fees subsidy had provided many benefits and they were confident that an effective and efficient model of irrigation management was emerging.
Some government stakeholders and international development partners agreed that the irrigation service fees subsidy should be replaced by a system in which the government is primarily focused on capital investment and the user-funded operation and maintenance. A systematic approach for the implementation of participatory irrigation management is integral to the new model.