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From Voice to Empowerment:

Rerouting Irrigation Reform in Indonesia

 

Bryan Bruns

Pre-Conference Version, November 29, 1999

Prepared for the International Researcher's Conference

The Long Road to Commitment:

A Socio-Political Perspective on the Process of Irrigation Reform

December 11-14, 1999 Hyderabad, Andhra Pradesh, India

 

Contents 

Context: Indonesia’s 1987 Irrigation Operation and Maintenance Policy *

  • Programs: Turnover, fees, and efficient O&M *

    Players and passengers: Institutions and resources *

    Projects: Vehicles for reform *

  • Misadventures on the Road from Policy to Practice *

  • Challenging the construction coalition *

    Detours: Construction before turnover *

    Shortcuts to nowhere: Targeting WUA establishment *

    Who steers? Projects and agencies *

    Fuel: Money by the hectare *

    Potholes: Maintenance neglected *

    Stuck in a rut: The construction machine *

  • Dynamics: Dead Ends and Alternatives *

  • Can farmers drive development? *

    Rerouting government aid *

    Rules for the road: Regulating irrigation *

  • Routes to Renewal *

  • Reformation and decentralization *

    New directions: Reform principles *

    How to get there? Moving from commitment to practice *

  • Conclusion: The Road from Voice to Choice *

     

    Notes *

     

    References *

     

    Appendices *

  • A. The Players: An Introduction to the Institutions *

    B. Irrigation Operation and Maintenance Policy Statement of 1987 *

    C. Principles from the Presidential Instruction Number 9 of 1999 on Renewal of Irrigation Management Policy *

    D. Irrigation Section from the Policy Matrix - Water Resources Sector Adjustment Loan of 1999 *

    E. Irrigation Chapter from the Letter of Sector Policy, - Water Resources Sector Adjustment Loan of 1999 *

     

     

  •  

    From Voice to Empowerment:

    Dynamics of Irrigation Reform in Indonesia

     

    Bryan Bruns

     

     

    Abstract: Indonesia’s 1987 Irrigation Operation and Maintenance Policy introduced a series of efforts to improve irrigation management. Small schemes were to be transferred to farmer organizations, irrigation service fees introduced through participatory institutions, and operation and maintenance made more efficient. In 1999, amidst dissatisfaction with the results of earlier efforts, the Indonesian government proclaimed a new irrigation reform policy. This paper explores the dynamics of reform over the twelve years between these policies. The paper argues that reforms which only offer farmers voice in agency-controlled projects are insufficient, and that the route to successful reform lies through empowering farmers to direct their own development.

    In Indonesia, as in many countries, irrigation development has been driven by the supply of government-funded projects implemented by centralized technical agencies. Reforms in the 1980s sought to increase benefits and improve sustainability of operation and maintenance through increasing the participation of farmers, organized into water user associations. Such reforms offered farmers a stronger voice in management, but no exit from the subsidized dynamics of agency-controlled projects (Repetto 1986, Hirschman 1970, Paul 1992,).

    The first section of this paper outlines Indonesia’s 1987 irrigation reforms, the institutions involved, and the series of projects through which the government, with support from international donors, sought to implement reforms. The discussion focuses on the case of irrigation management transfer under World Bank-funded projects. The reforms threatened the coalition of interests that supported and benefited from irrigation construction. The second section analyzes how these interests reshaped reform efforts, and the persistent dynamics of a supply-driven approach to irrigation. Sustainability of reforms was endangered by the one-sided emphasis on reducing old government roles, and inadequate attention to developing the dynamics necessary to sustain new institutions, as the third section discusses. Current efforts to reform irrigation and water resources management are being introduced in the context of ambitious efforts to restructure Indonesia’s governance institutions. The fourth section describes the key principles of current reforms and how they might escape the problems which derailed earlier reforms. The conclusion synthesizes lessons and challenges for reforming the dynamics of irrigation management.

     

    Context: Indonesia’s 1987 Irrigation Operation and Maintenance Policy

    Since the beginning of Indonesia’s New Order government in the mid-1960s, irrigation policy focused first on rehabilitation, and then on expansion and construction of new schemes. Oil revenues and international loans financed government intervention to accelerate increased agricultural production. Construction and rehabilitation projects controlled by the central government were the major vehicle for government intervention in irrigation. These efforts culminated in 1984 with the achievement of national rice self-sufficiency. From 1968-1993 about $10 billion was invested in irrigation, about 70% of which was financed by external loans, building and improving public schemes irrigating about 5 million hectares.

    By international standards most Indonesian irrigation schemes are relatively small, less than 5,000 hectares in size, with very few larger than 10,000 hectares. Figure 1 shows the breakdown of scheme size for public systems. Many designated "irrigation areas" are composed of multiple adjoining schemes with separate headworks, linked by complex networks of supplementary canals. "Village schemes," managed by farmers and village authorities cover one to 1.5 million hectares of small systems.

     

    Figure 1. Sizes of public irrigation areas

     

    Size

     

    Systems

     

     

    Area

     

     

    (number)

     

     

    (million ha.)

     

    Small <1,000 ha

    5,783

    86%

    1.65

    34%

    Medium 1,000-5,000 ha

    814

    12%

    1.57

    33%

    Large >5,000 ha

    133

    2%

    1.57

    33%

    Total

    6,730

     

    4.78

     

  • Source: CID 1998: Options for Sustainable Irrigation Development in Indonesia, Final Report (based on 1996 DGWRD Inventory)
  • Fiscal problems caused by the collapse of oil prices in the mid-1980s highlighted the unsustainability of construction oriented policies, strengthening the voice of those in government concerned with the need for increased attention to operation and maintenance (O&M). The cost of constructing new schemes was rising, the performance of schemes was often well below expectations, while degradation and premature rehabilitation signaled the inadequacy of operation and maintenance. The government’s fiscal crisis increased the leverage of the World Bank and Asian Development Bank in policy dialogue, which resulted in the government’s 1987 Irrigation Operation and Maintenance Policy (IOMP), issued as a precondition for further loan-funded projects. Preparation of projects, and the IOMP, was mostly a secret (confidential) process between government and major donors, without public consultation and with little publicity. Appendix A gives the full text of the IOMP. It was designed as an integrated package of reforms to ensure adequate funding for operation and maintenance and improved irrigation management. The government committed to increase budget allocations for O&M, strengthen land and property taxes, and mobilize more resources from beneficiaries. Figure 2 gives an overview of the principal initiatives carried out to implement the IOMP.

  •  

    Programs: Turnover, fees, and efficient O&M

  •  

    Turnover. The IOMP envisioned that all schemes smaller than 500 hectares would be turned over to water user associations, gradually over a period of about fifteen years. Initial emphasis was on schemes smaller than 150 hectares. WUA were formally established and registered with district government. A modest level of funding, initially about US $100 per hectare, was provided for repairs and improvements, with designs prepared in consultation with farmers.

     

    ISF. Irrigation service fees were introduced through a participatory approach, involving water user associations in identifying and prioritizing O&M needs and in collecting fees. In the approach developed at pilot sites, farmers had a voice in determining the O&M needs through joint walkthroughs and district-level consultative bodies composed of selected heads of WUA federations (Gerards 1995). Based on the scheme O&M budget, individual ISF charges were to be calculated by a formula based on the level of service received. Fees were paid into a bank account held by the district government, and used to pay for O&M done by the irrigation agency.

     

    EOM. Efficient operation and maintenance (EOM) was supposed to ensure effective water delivery and adequate preventive maintenance, breaking the cycle of neglect and premature rehabilitation. Maintenance budgets were to be based on field observation of needs. Projects funded "special maintenance" to improve scheme infrastructure and facilities to the level needed for EOM. Loan funds subsidized O&M budgets in EOM schemes during a five-year transitional period, and loan conditions required maintaining adequate funding levels after loan subsidies ended. Improved O&M procedures were developed and initially applied in schemes selected to be "Advanced Operation Units" (AOU). A large training program disseminated information about WUA and O&M to WUA leaders and government officials at all levels.

     

    Figure 2. project activities to implement the 1987 Irrigation Operation and Maintenance Policies

     

     

    Institutions

     

    Finance

     

    Construction

     

    Large schemes

    (>500 ha)

    1.  
    2. WUA formation and development
    3. Joint walk-throughs to assess O&M needs
    4. District consultative bodies approve use of fees for O&M
    5. Strengthening of agency O&M procedures (starting in "Advanced Operations Units")
    6. Water User Training Program for officials and farmer leaders
    1.  
    2. Central government subsidizes "special maintenance" (~$200/ha)
    3. Salaries of permanent staff in provincial budget
    4. Central government subsidies to provincial O&M budgets (~$20/ha)
    5. Irrigation service fee (~$20/ha expected)
    6. WUA still responsible for O&M of tertiaries
    7. Strengthening of land and property tax for local government revenue
    1.  
    2. Central government projects construct special maintenance to improve canals and headworks, and O&M facilities (transport, communications, and buildings)

     

    Small schemes

    (<500 ha)

    1.  
    2. WUA formation and development
    3. Consultation about design and construction of "special maintenance" works
    4. Training on O&M (in the field, and sometimes formal)
    5. Transfer of management
    1.  
    2. Central government subsidizes "special maintenance" (~$100/ha)
    3. WUA contributions to construction (mainly earthworks)
    4. WUA responsible for subsequent O&M.
    5. Possible government aid for later repairs if "beyond farmers’ capacity,"
    6. Strengthening of land and property tax for local government revenue
    1.  
    2. Central government projects construct special maintenance works to prepare schemes for turnover

  •  

    Players and passengers: Institutions and resources

  • The most important resources affecting the reform process were power within Indonesia’s centralized administrative hierarchy, and control over funds for project implementation. Funds from foreign loans and national revenues were channeled through centralized agencies that controlled functional project organizations. Irrigation development was embedded in a top-down, command-and-control approach to governance. Officials faced few pressures for external accountability to farmers, or the public. Within this dynamic, ideas, intellectual leadership and advocacy did have some room shape how programs were conceived and implemented. Figure 3 charts the agencies involved in irrigation projects at different levels of government. Appendix A outlines the institutions, their resources, and interests in more detail. Provincial and district officials had little discretion in implementing projects imposed from above. Farmers had little choice about whether to join project activities, their role was largely one of passengers conscripted on a journey scheduled by others.

     

    Figure 3. Administrative levels and agencies

     

    Level

     

    Executive

     

    Agencies handling turnover and EOM

     

    Agencies handling ISF

     

    Center

    President

    Directorate General of Water Resources Development (DGWRD), Ministry of Public Works

    Directorate General of Public Adminstration and Regional Autonomy (DGPARA), Ministry of Home Affairs

     

    Province

    Governor

    Provincial Water Resources Service / Provincial Irrigation Project

    Provincial Planning Board (BAPPEDA Tk. I)

     

    District

    District Chief

    (Regent)

     

    District Water Resource Service (currently being established under decentralization policy)

    District Planning Board (BAPPEDA Tl. II) & District Revenue Office (DISPENDA)

     

    Village

    Village Chief

    Water User Association / (village watermaster position officially abolished in 1979)

    Water User Association

     

  •  

    Projects: Vehicles for reform

  • Projects were the way in which donors organized their efforts, funded through loans and grants. These funds were channeled through central government agencies. Projects usually lasted 3-5 years. These represented packages of ideas as well as money. Donor agency staff played a major role in conceptualizing projects, guiding identification and preparation of projects, even where this was the formal responsibility of the government. Turnover, ISF, and EOM were programs in the sense that they were routine parts of government activities and budgets, implemented nationwide, funded from different sources in different places, and capable of outliving particular projects. Nevertheless, projects were the main vehicles for introducing and financing new approaches.

    In addition to the sequence of three projects discussed below, other World Bank projects also applied aspects of the IOMP policies. The Asian Development Bank (ADB) funded a series of projects, mainly outside of Java, which were supposed to apply the IOMP policies. As with the World Bank projects, the formal requirements were usually complied with, but the substance of institutional reform similarly tended to be neglected in favor of a continued emphasis on construction. Project documents, such as the IOMP shown in Appendix A, declared the government’s official commitment to reform. Specific conditions and targets were mostly achived on paper. The greatest challenges of putting reform into practice lay not in obtaining formal commitment or compliance with conditions agreed to as part of a loan, but in creating dynamics which could sustain new institutions for irrigation management.

     

    ISSP-I. The first Irrigation Subsector Project (ISSP I) covered pilot activities for turnover, ISF and AOU schemes. The bulk of the money went for "special maintenance," construction works to prepare small schemes for turnover and large schemes for EOM. Most project components were executed by the Directorate General of Water Resources (DGWRD) in the Ministry of Public Works (MPW). The Ministry of Agriculture was responsible for a water user association strengthening project, which was supposed to be coordinated with the water user training project under DGWRD. The consultants piloting the Irrigation Service Fee worked under the Ministry of Home Affairs. One NGO, the Institute for Social and Economic Research, Education and Information (LP3ES) helped formulate and institutionalize procures for turnover, funded by Ford Foundation co-financing. Initially the International Irrigation Management Institute carried out research concerning small scheme turnover and O&M in larger schemes, with funding from ADB and the Ford Foundation, but the government did not agree to extend their work beyond 1989, for reasons that were never fully clarified. In total ISSP had 23 components, each of which had associated consultants, usually an international consultant working in association with local consulting companies. ISSP I took a shotgun approach, trying out a variety of approaches to improve irrigation operation and maintenance.

     

    ISSP-II. The difficulties of expanding and institutionalizing reforms became clearer during the Second Irrigation Subsector Project (IISP-II) from 1991 to 1995. Among the concerns during the project were the relatively slow pace of turnover, limited coverage of ISF, and difficulty in expanding new O&M procedures beyond AOU pilot areas. Economic recovery had improved the government’s financial condition, and reduced the influence of the World Bank and ADB on irrigation investment policy even during the period the project was being formulated. Change in consultants disrupted the turnover program. Strong differences in views continued between the Ministry of Public Works and the Ministry of Home Affairs about ISF issues. ISF expansion was criticized as slow and expensive in comparison to Indonesia’s total irrigated area.

     

    JIWMP. Beginning in 1995, the Java Irrigation and Water Resource Management Project (JIWMP) sought to continue reforms in irrigation operation and maintenance. It focused on the four Java provinces rather than the 11 provinces which had been included in ISSP I and II. The terminology for construction work now made clear that the project would fund rehabilitation and upgrading. JIWMP tried to develop new approaches to basin water resource management, building on two basin pilots begun under ISSP II. In JIWMP areas, and nationally, there were problems including a growing backlog of small schemes with construction completed but not yet formally transferred to WUA, low and declining collection rates for ISF, and O&M budgets which, despite large allocations from the center, did not actually result in adequate resources available in the field. The following section analyzes several of these issues in more detail.

     

    Giving farmers a voice. Projects channeled funds through central government agencies. Control over funds was a source of power within a top-down, technocratic development process. Irrigation reforms sought to introduce greater participation and mobilize more resources from farmers. Farmers were given a voice in identifying needs for operation and maintenance to be paid for with their fees. Farmers were given a voice in the design of improvements to small schemes to prepare for management transfer. Initial efforts in both turnover and ISF demonstrated that giving voice to farmers was feasible, and yielded benefits in the form of improvements in irrigation management, more productive use of funds, and greater mobilization of local resources. Project officials controlled how funds were used, and as discussed in the next section, implementation tended to revert to a technical focus on the construction of civil works. Farmers did not gain any new choices for alternative service providers; these reforms offered voice, but no exit for dissatisfied users of services.

     

    Misadventures on the Road from Policy to Practice
  • Challenging the construction coalition
  • Robert Repetto’s 1986 paper "Skimming the Water analyzed how rent-seeking interests have dominated irrigation development in countries around the world. Farmers receive valuable water while paying little or nothing for it. These economic rents, the difference between the cost of water and its marginal value to farmers, become capitalized into land values, with farmers seeking to keep and expand the benefits of subsidized irrigation services. A coalition of irrigation agencies, politicians, farmers, and construction interests benefits from and seeks to expand subsidized construction. Underbudgeting of maintenance perpetuates a cycle of degradation and the need for projects for subsequent premature rehabilitation, reinforcing construction interests. Within irrigation agencies, power and money are concentrated in construction, offering the best opportunities for career advancement, and personal enrichment (Chambers 1988). If centralized technical agencies control infrastructure construction, then they have little incentive to carry out maintenance (Ostrom, Schroeder and Wynne 1993. International donors have funded centralized technocratic development of irrigation, in glaring contrast to the local control of irrigation which predominates in much of the U.S., Europe and Japan. Experience in Indonesia illustrates how construction interests reshaped the reform program, through a process of reinterpretation and selective implementation.

  •  

    Detours: Construction before turnover

  •  

    The disappearance of category A. The turnover program was designed to prepare for management transfer by carrying out design and construction of improvements in parallel with development of WUA. Minor construction works offered a way to interest farmers and give them meaningful participation in decisions. In the original formulation of the turnover program, schemes which had been included in the register of government irrigation schemes, were supposed to be gradually inventoried and classified into three categories:

  • A Schemes which had no government-built infrastructure. These could be "turned over" by just revising administrative records, or, at most, organizing a WUA to receive formal responsibility for the scheme

    B Schemes with government-built infrastructure that had recently been improved, and so would just need WUA organization but not physical improvements, before turnover

    C Schemes which had government-built infrastructure, and which needed physical improvements as well as WUA organization, before turnover

     

  • As the turnover procedures were developed in more detail in 1988 and 1999, DGWRD officials argued that all schemes should receive consideration as to whether they needed physical improvements before turnover. It was asserted that schemes which had never received assistance were often in worse condition than those which already had government-built infrastructure. Assessments of scheme "condition" emphasized physical hardware such as permanent dams and lined canals. Aiding schemes which already had more elaborate infrastructure, while not helping those with fewer permanent structures of stone and concrete, was portrayed as unfair.

    Turnover would reduce the flow of O&M subsidies, which in practice were mainly used for other schemes, or for occasional construction aid, not routine O&M. BAPPENAS had blocked DGWRD from involvement in project assistance to village irrigation schemes. Transferring category A schemes would thus also deprive DGWRD of any opportunity to be involved in future project assistance to these schemes.

    In the end, procedures were revised so that schemes were first assessed according to their need for improvement. In all cases of schemes without government-built infrastructure (the original category A), the conclusion was that improvements were needed. Even recently-improved schemes (the original category B) were almost always found to be inadequate or incomplete, so that construction was needed. The outcome was that all schemes were judged to require construction. World Bank officials supervising the project acquiesced in this decision, seeming to feel it was beyond their influence. The original design of the turnover process had involved a range of agencies, and donor organizations. However once implementation began, most decision-making was concentrated within DGWRD as the executing agency, and decisions came to reflect a narrower set of priorities. This redefinition to make all schemes eligible for construction was a fateful first step in transforming a program ostensibly directed at strengthening O&M into a construction program.

     

    Diversions. There was substantial contention about the appropriate level of improvement to be carried out before turnover. In many cases farmers had built and repaired temporary headworks on their own to divert water into canals. However, many engineers in DGWRD and provincial irrigation agencies felt that permanent headworks were needed before turnover. They felt that it would be excessively burdensome to turn over schemes which required frequent reconstruction of temporary weirs. Counter arguments were that usually farmers had been mobilizing to build and rebuild temporary weirs since the schemes were first built, in some cases generations ago. Arguments for building permanent weirs were framed in technical terms, usually with little attempt to compare costs and benefits. Farmers wanted permanent weirs, particularly since the choice they faced was between the possibility of getting a highly-subsidized permanent structure, or continuing to mobilize their own resources for frequent repair of temporary weirs. Farmers and agency staff could agree on the desirability of using project money, which neither had to repay, to build permanent weirs. After substantial debate, which diverted scarce attention from institutional issues, the conclusion was that the turnover program would generally not fund new permanent headworks, only repairs to existing structures or semi-permanent (gabion) structures. In part this was driven by budgetary constraints, since the project lacked the budget to fund new structures. Funding was still allocated according to a per hectare average , roughly $100 per hectare. Sites requiring more than this were either excluded, or required justification through an economic analysis.

     

    Construction before turnover. The evolution of the turnover program shows how construction interests came to dominate a program ostensibly intended to promote increased attention to O&M. Farmers did gain more voice in making their suggestions about priorities and design of improvements. Opportunities were increased for farmers to sell their labor and local materials during construction. WUA were set up that the government recognized as speaking for farmers. However the process was largely controlled by the agency, with little empowerment of farmers. The decision to carry out physical improvements before transfer constrained the pace and scope of turnover to the rate at which construction could be accomplished. It meant control of funds, and management of the design and construction process was in the hands of the agency, not farmers. Much of the time of senior government officials and World Bank staff supervising the project was focused on debating the need for permanent headworks, per hectare ceilings, and farmer contributions to construction, which reduced the time available to attend to institutional issues.

  •  

    Shortcuts to nowhere: Targeting WUA establishment

  • The turnover program worked out procedures for organizing water user associations, which were supposed to start from the level of quarternary blocks, groups of 10-30 farmers. Progress was measured by the steps of formulating the WUA constitution and by-laws (based on standard models), choosing a slate of officers, and formal recognition of the organization by village, subdistrict, and district level authorities. However development through village authorities often skipped bottom-up organization, with leaders instead appointed because of their relationship to village leaders. Project targets were met, in terms of organizations formed on paper. Constitutions and by-laws followed pre-printed forms, filling in a few blanks. WUA development was easily disconnected from substantive development of management capacity for irrigation operation and maintenance. Paper organizations quickly became inactive. Commonly the key tasks of pre-season maintenance and rotational water distribution during periods of shortage were still carried out by persons authorized by village officials, or informal mutual aid among farmers, rather than by the formal WUA.

    Experience in the ISF program was similar. Initially the consultants guiding the pilot projects recruited community organizers who worked in the field to facilitate a bottom-up process of forming WUA. There was a stress on identifying local management problems and developing solutions, which often could result in more equitable water distribution and better mobilization of fees. However as the project expanded, it focused on targets, particularly the number of WUA formally established. Success was measured in terms of payment rates for ISF, with little attention to whether there were improvements in irrigation performance. WUA federations were formed which sometimes played a role in joint walk-throughs, but mainly were just a means to channel fees to the district treasury. No forums were established at the scheme level for involving farmers in management. So, some formal arrangements for farmer voice were put into place, at least on paper. Over time even these tended to be neglected, with arguments that annual walkthroughs were unnecessary and with district level consultative bodies having little or no role in decisions.

    Despite rhetoric to the contrary, WUA were primarily instruments of government irrigation agencies, formed top-down for the benefit of government projects. Membership offered at best limited benefits for farmers. In some cases WUA development did encourage replacement of watermasters who farmers felt were unsatisfactory, better mobilization of money and labor, and more orderly water distribution by a block chief or watermaster. Mostly, it was a matter of fulfilling project targets. WUA had voice, but their consent was not a prerequisite for starting activities and they had little power to stop implementation.

  •  

    Who steers? Projects and agencies

  • Initially, the irrigation officials responsible for O&M were given responsibility for implementing the turnover program. This combined their regular structural position as part of the provincial irrigation service with functional project responsibilities as subproject managers. They had knowledge about O&M problems, and better incentives to seek lasting changes, since they would be around to deal with problems later on. By contrast, most project staff had no responsibility after construction was complete, and usually soon moved on to other positions.

    This policy changed during ISSP II, after a new Director General took charge and DGWRD was reorganized. Functional project responsibilities were split from structural positions, based on the principle that one person could only hold one position. This led to a situation where most project managers came out of backgrounds in managing large construction projects. The cadre of officials who had been involved in starting the turnover program were excluded or had much less authority over implementation. This exacerbated the tendency to focus on easily measured targets of financial and physical progress of construction works, rather than institutional development. Managers for the provincial irrigation projects were appointed by DGWRD and oriented towards the national level, rather than the provincial irrigation agency. Project managers were in the driver’s seat, not structural officials, and certainly not farmers.

  •  

    Fuel: Money by the hectare

  • Funding for special maintenance works was planned on a per hectare basis, initially averaging about US $200 per hectare for larger schemes being prepared for EOM, and $100 per hectare for turnover schemes. While some relatively simple estimate of costs was needed for project preparation, planning based on a per hectare rate was often carried through to the design process. It was usually not difficult to find ways to spend all the available funds within a scheme or package of several schemes. And there was a matching tendency not to prepare designs costing more than the average rate or ceiling. In theory more expensive works could be funded, long as an economic analysis was done and submitted to the World Bank for review. However, it was much simpler to keep under the limit, even if this meant parts of schemes were left incomplete or in poor condition.

    The term "special maintenance" itself had been created for ISSP I. Ostensibly there was only a need for relatively minor works to improve systems to be ready for efficient operation and maintenance. In practice the term avoided donor reluctance to fund rehabilitation, or to acknowledge that earlier construction had left many schemes unfinished and incomplete. As semantic manipulation this was quite successful. However the scope of activities was often little different from that covered by rehabilitation, just with less money. The package of IOMP reforms was even used to justify loan funding for O&M subsidies, albeit supposedly during a transition as ISF was phased in. However, ISF expansion was slow, and collection problematic. In practice, generous central government subsidies for O&M gave a perverse signal that there was little need to be serious about collecting ISF, undermining the urgency of reforms. Financial mechanisms reinforced old patterns of behavior, and did not create new choices for farmers.

  •  

    Potholes: Maintenance neglected

  • In combination, needs-based budgeting as part of EOM and the ISF program’s participatory planning for O&M might have transformed how maintenance was planned and financed. However the approach was still primarily one of giving greater voice for scheme level staff and farmers to express the needs they perceived. Control over expenditures was not shifted from the hands of irrigation project officials. While WUA representatives sat on the consultative bodies (Badan Musyawarah - Bamus) which authorized use of ISF funds for O&M, this was done at the district level, not for individual schemes, and did not include any authority over other parts of the O&M budget.

    Procedures were developed and implemented for needs-based budgeting, inventorying the condition of irrigation infrastructure and compiling estimates for maintenance and repair work. However, after budget requests were proposed, the center and provinces still allocated budgets on the old per-hectare basis. This discouraged those who had put in time and effort to prepare detailed estimates. After a few years of trying needs-based budgeting with no useful results, those responsible for preparing budget proposals usually reverted to the older, and much simpler per hectare basis. Provincial irrigation project officials basically retained their discretion over how to expend O&M budgets, including tendering construction contracts.

    During JIWMP, funding channels were changed so that O&M funding support was included in block grants provided to provinces, rather than going directly to provincial irrigation projects. The central funds intended for O&M were placed under a general budget item, which provinces formally had authority to allocate to whatever sector they chose. Provinces decided they had higher priorities in other sectors, so that actual O&M funding at the field level declined, even though on paper national budget allocations were being maintained. Maintenance was still treated as a "project" and frequently transformed into minor construction. More mundane needs for routine and periodic maintenance tended to be neglected in favor of adding canal lining, new division structures and other works that could be contracted out.

  •  

    Stuck in a rut: The construction machine

  • Turnover first turned into construction first and foremost. At the time the turnover program was originally designed it may have seemed reasonable to hope that construction could be done in parallel with institutional development. However in hindsight the process clearly became dominated by construction. Construction was the most familiar and easily managed component of the activities, with visible outputs. Similarly, the focus was on "establishing" WUA, as if they could be built like physical structures. Organizations were established on paper, but had little impact in the field. The decision to split functional project organization from the regular structure of the provincial irrigation agencies put control in the hands of managers familiar with civil works, unfamiliar with institutional reform, and motivated to achieve physical and financial targets. Arrangements were put in place which provided farmers with a voice in the design and construction of physical improvements in turnover, and in identifying and prioritizing maintenance needs to be funded through ISF. In terms of reducing the damage caused by misguided government intervention, efforts to improve participation might be judged as at least a partial success. However as programs expanded and continued, attention shifted increasingly to achieving targets for turnover construction and formal establishment of WUA, while the ISF program was judged according to collection rates. Basically, money flowed through the same channels as before, with some greater voice for farmers in how it might be spent. Farmers had little actual choice, let alone control over whether to be included in the turnover program or ISF, who would carry out construction, or in choosing among alternative programs or sources of finance.

     

    Dynamics: Dead Ends and Alternatives
  • Can farmers drive development?
  • Farmers had little incentive to join WUA, or invest their efforts to keep such organizations going. Without rights to water, and without governance institutions enabling them to effectively represent their interests as stakeholders in scheme and basin water management, local organizations lacked capabilities for improving water management. WUA received only a temporary concession to manage irrigation schemes. After 1992, districts gradually began to pass laws determining how WUA could receive legal status. However, even where such legislation was in place, legal status made little difference. Government’s subsidized credit programs were channeled exclusively through agricultural cooperatives, while no effort was made to enable WUA to obtain commercial credit. Until recently, WUA had little encouragement to get involved in business enterprises, such as fisheries or collective marketing and purchasing, (despite a variety of interesting local initiatives). Unwillingness to enforce sanctions for nonpayment of ISF was symptomatic of the reluctance to delegate any serious enforcement authority and responsibility to WUA. Overall, conditions did not exist which would sustain WUA, let alone encourage further autonomous development.

    Training tended to be a one-way process, indoctrinating farmers in government conceptions of what a WUA should be. Farmers usually had no choice about the type or content of training. At best their choice was again, either to accept a free good, or get nothing. Often even that choice was not available, as village leaders were pressured to mobilize trainees to fill courses.

    The top-down organization of WUA tended to disregard existing local organization, viewed as informal, ad hoc, or personalistic, in favoring of imposing bureaucratic forms, in the same way as indigenous irrigation irrigation was characterized as temporary or emergency (darurat) works, to be replaced by permanent "modern" structures. This neglected the social capital embodied in existing networks among farmers, their mutual trust, shared ideas, and histories of cooperation. Such organization often persisted silently at the most local level of hamlets, while village administrations put on a show of compliance with new organizational forms. The robustness of this local self-organization was fortunate, since otherwise imposed institutions might have made water management even worse. It also suggests the possibilities of different approaches, which could encourage farmers to organize themselves. Such dynamics had been responsible for the original construction of many small irrigation schemes, including areas later expanded or incorporated into larger irrigation schemes. Creating conditions that could again promote such local initiative, and allowing it to occur at a wider scale, seemed a promising alternative.

    The approach underlying most WUA development in the IOMP policy seemed to assume that initiative had to come from the government. Farmers would be organized to participate by having a voice in government activities. Reversing this approach would mean asking how government could participate in what farmers already did for O&M and irrigated agriculture. The language used in Indonesia by some NGO workers, academics and others was to ask whether farmers were the objects of development, passively acted upon, or could be the subjects, acting to make changes themselves. Rather than having to be organized by government, conditions might be created where farmers would have incentives and an enabling environment to organize themselves.

  •  

    Rerouting government aid

  • Efforts to implement the 1987 irrigation O&M policy reforms left in place a highly subsidized pattern of paternalistic government patronage in irrigation. Farmers acted as supplicants, asking for government help. Farmers’ incentives were to portray themselves as incapable, poor and needy. The system encouraged farmers to suggest that their own capacity was limited to mobilizing unpaid labor, and anything more expensive should be paid by government.

    Even the relatively modest levels of ISF payment, fifteen or twenty thousand rupiah per hectare per year, were said by many government officials to constitute a burden which it would be difficult or impossible for farmers to pay. Government regulation of rice prices and the tiny size of individual landholdings were pointed to as a further reasons why it would be hard to expect farmers to pay any significant share of irrigation costs. This ignored any comparison between farmers’ benefits from irrigation and ISF. It also disregarded evidence of farmer willingness and ability to invest in farmer-managed irrigation systems, in development of their own fields, and in other local infrastructure development, particularly village road construction.

    This can be viewed as a process of "co-dependency," where farmers depend on the irrigation bureaucracy, which in turn uses farmers’ need for assistance as its own means to obtain resources (Vermillion 1999). Essentially such views took for granted a highly-subsidized pattern of irrigation development, with no capital cost-recovery. In this context farmers and agency officials could benefit from the rents created by subsidized projects. In the absence of new options for financing civil works, subsidized patterns of patron-client interaction between farmers and the bureaucracy persisted.

    This pattern was self-reinforcing, attracting funding which brought more and more of the irrigation sector into its orbit. Agencies, officials and farmers could all see benefits for themselves, as long as farmers had no obligation to repay capital costs, and as long as the only channel for subsidies was through projects. In response to drought and rice shortages in 1994, the government started a village irrigation project, providing subsidized assistance to village schemes which had not previously been eligible for aid through DGWRD channels. For this program, the central government gave money to the provincial irrigation projects, which hired state-owned engineering companies to build improvements.

    Experience with the turnover program suggested that after transfer, farmers still expected government aid for major repairs and improvement. The policy was that government could provide aid for works "beyond the capacity of farmers." This criteria left much room for ambiguity, speculation and expectations of continuing government aid. The advent of the village irrigation project in 1994, paying farmers to work on their own schemes, further reinforced such expectations. Similarly, the plans for ending O&M budget subsidies did not seem to generate any urgency about mobilizing resources through ISF, but only attempts to perpetuate central government subsidies, and complacent acceptance of inadequate O&M funding. Trying to stop subsidies, and the expectation of subsidies, is difficult and politically unpalatable.

    Work in other sectors, including water supply and sanitation, has shown the possibility of shifting to more demand-driven patterns of development. Mechanisms such as block grants or infrastructure funds allocated in response to locally-initiated proposals can put decision-making into the hands of local communities. Technical review and administrative accountability for government funds can still be satisfied within a process which is controlled by beneficiaries. The end of the New Order regime has brought heightened awareness of the very high costs of channeling funding through multiple bureaucratic layers, and a greatly increased willingness to put money more directly into local hands. Agency officials themselves started to critique the ways in which government intervention encouraged farmers to be "lazy," passively waiting for government aid.

    Loan repayment responsibilities might even be shifted from the central government to local government and farmers. Economists thinking about irrigation policy often point out the benefits that could flow from enforcing cost-recovery. In theory this would produce much better incentive structures. However it is politically difficult, and cost-sharing requirements can easily be undermined or rolled back. The incentives for an implementing agency and for farmers are to subvert the cost sharing formula, watering down the requirements until they reach token levels or are eliminated. Rerouting subsidies through different channels may be much more feasible politically. Imposing cost-recovery and reducing or abolishing subsidies creates only losers, who will oppose change. Rerouting subsidies means there are also winners, who may support the process, creating a new coalition together with those officials, politicians and donors interested in more productive use of government funds.

    Rather than placing money into budgets where centralized technical agencies retain control all the way through implementation, other modalities can enable local decision-making, while still allowing technical and financial safeguards. As well as promoting greater efficiency and local resource mobilization, putting money into local hands can create new interests who will fight to protect their newfound power over irrigation investments. This does not mean that corruption would be eliminated, but might at least be shifted from wholesale to retail, and made more subject to local monitoring and control. Current conditions in Indonesia create a need and opportunity for restructuring the way irrigation is financed, replacing paternalistic patterns with decentralized financing which empowers farmers, and give them incentives to make the most productive use of government assistance.

    If subsidies are still provided, these might be channeled directly to WUA, rather than being delivered in the form of services from a government agency. This could be done by various means such as budget allocations based on some simple formula, or via competitive grants from a fund for irrigation or infrastructure development. In either case, farmers would have greater choice about where to obtain management or construction services.

    If repair and improvement of irrigation infrastructure is done incrementally, broken up into smaller and more manageable chunks spread over several years, then it becomes more feasible for WUA to play the major role in managing improvements (Bruns 1998). If government continues to subsidize repairs and improvement, then subsidies could be delivered in ways which stimulate an incremental approach, phased over a period of years, with requirements to stimulate local investment (cost-sharing). If WUA have access to credit for investing in their schemes, then this gives them an option besides waiting for government aid (Bruns 1999). Farmers with high value crops may well be willing to take commercial credit, if the institutional structure enables them to do so. If commercial finance can be available quickly and reliably, then this may be preferable to the delays and uncertainties accompanying subsidized government assistance. So the scope for rechanneling funds includes not just different means for delivering government subsidies, but recognizing the potential for private sector funding, and the resourcefulness of private institutions in identifying profitable opportunities for investment.

  •  

    Rules for the road: Regulating irrigation

  • Government withdrawal, without adequate availability of technical services, and with little or no regulatory oversight, invited inattention to irrigation management and neglect of maintenance. In some ways the turnover program seems to have been viewed in terms of a crude laissez-faire ideology of the less government intervention the better. Several of the DGWRD officials originally involved in formulating the turnover procedures were vehement that the program should not be seen as a way for government to save money by shifting burdens to farmers. Nevertheless this is how the program was widely perceived. This cynical interpretation reinforced the idea that the goal of the program was getting rid of government responsibility for small schemes, discouraging any attention to what kind of government role might still be necessary and appropriate after turnover.

    Attempted government withdrawal did not seem to stimulate any flourishing of local initiative. In general it appeared that the level of local O&M was not worse than that when it was the responsibility of government, but on average, neither did it appear to be substantially better. Instead anecdotes, observation and some systematic monitoring information suggested that in most cases maintenance was still neglected, with farmers still hoping for subsidized rehabilitation.

    Districts were supposed to be responsible for WUA guidance. This policy let project staff "pass the buck" for neglecting to follow up on what happened after turnover. Districts pleaded lack of budget. Turnover seemed to be viewed as finishing government’s role, rather than just one step in a transition to a different role for government as enabler or regulator.

    The Ministerial Instruction on Turnover stipulated that government would continue to provide guidance, and could assist with works beyond the capacity of farmers. How to put this into practice was largely left of to local interpretation, as opposed to the strong guidance provided about how to implement other components of the program such as design, construction, WUA development and formal turnover. No regulatory role was developed, for water allocation, conflict resolution, inspection of headworks or auditing WUA governance.

    In some cases, government gatekeepers and canal guards were withdrawn, and the responsibilities of irrigation inspectors redefined. Often, most or all staff were left in place, for which various justifications were offered. Government officials were very reluctant to withdraw weir operators where these were currently operating headworks. It was said that farmers lacked capacity, and failure of larger weirs would be expensive and dangerous. It was said that the agency had a moral obligation to keep employing staff who had been working for many years, even though officially they were only daily workers. Moving staff to other areas was often difficult, since often staff had had homes and fields in the areas they worked. As in other areas, the choice facing farmers was one of continuing to accept a free good, or taking on additional costs. Even though subsidies persisted, there was no alternative where farmers could gain choice or control over how O&M subsidies for staff and works would be used. It was said that irrigation inspectors and other staff would shift to extension roles, but little was done to facilitate this transformation.

    The IOMP reforms did not change the underlying dynamics of irrigation development. Government continued its role as an operator, directly implementing activities, not acting an enabler or regulator. Farmers gained some means for greater voice, but the system remained trapped in old patterns. Government sought to impose bureaucratic forms of WUA development, and was largely unable to tap the energies of local initiative. Construction was highly subsidized, with funds channeled through irrigation bureaucracies, without alternatives which could enable more self-reliant development. Technical, financial, legal and organizational services to aid WUA were largely absent, except for government’s own target oriented programs directly delivering conventional classroom based training. Under such conditions it was hard to expect WUA to survive, let alone thrive. Further change would depend on addressing the need to create an alternative environment, conducive to local initiative, encouraging local efforts while promoting the availability of suitable services.

     

    Routes to Renewal

    During the eighties and nineties various studies, workshops and seminars provided forums for discussing problems concerning WUA development. University academics and NGO workers helped suggest new approaches. The Ford Foundation supported many such activities. Other donor projects also helped introduce new approaches, such as Dutch-funded efforts in the Cidurian scheme, the Madura groundwater projects supported by the UK, and the Small-Scale Irrigation Management Project in eastern Indonesia, funded by USAID and OECF. In many cases, government officials understood new ideas, and in private were highly critical of their own programs. However they usually felt unable to voice ideas which might be criticized by superiors, though sometimes outsiders could function as a channel for raising criticisms and alternatives. Over time views evolved.

    By the time of the 1996 national seminar on participatory irrigation management there was substantial consensus among mid-level and many senior level officials about the shortcomings of current approaches, the need to effectively apply those principles which had been already been put into policy, and the importance of making more fundamental changes. At an intellectual level, many battles had been won, even though in practice implementation during this period was often retrogressing, with institutional changes neglected in favor of more narrowly technical and construction oriented approaches. Despite disappointing events on the ground, the conditions had been created for a more drastic reforms, if senior officials were willing to open up such changes for discussion. Changes in leadership of DGWRD and MPW in 1998 opened up the possibilities for discussing institutional reforms in ways which could go beyond lip service.

    Advocates of top-down approaches were on the defensive, and possibilities appeared for major changes in irrigation management. Over the period of a dozen years, farmer empowerment went from something which could only be whispered about privately to something which was to be embraced as a major goal of national policy.

  •  

    Reformation and decentralization

  • The end of the New Order regime in 1998 expanded the possibilities for institutional change. Passage of laws on regional autonomy in April 1999 laid the foundation for a major shift in power and money from the central government to districts. Criticism of previous waste, corruption and abuse of power has brought wide acceptance of the need for greatly increasing transparency and accountability in the implementation of government programs. There is much more willingness to put money and decision-making into local hands, though efforts to put this into practice have also brought awareness of the risks of local corruption and abuse of power.

    In 1997-1998 the Asian Development Bank had funded a technical assistance study on Options for Sustainable Irrigation Development in Indonesia. This clearly signaled the concern of this major donor for reviewing the direction of irrigation sector activities. Beginning in mid-1998, the World Bank began increased dialog about the need for major reforms in the irrigation and water resources policy and institutions, as a prerequisite for any future lending in the sector. These efforts helped to draw high level attention from BAPPENAS, the Minister of Public Works and other senior officials. The economic crisis and pro-reform atmosphere brought an increased sense of urgency to many of those involved. The economic crisis also increased the leverage of the World Bank’s offer to provide a sector adjustment loan to support reforms. In late 1999 and early 1999, an inter-agency working group led the formulation of ideas for reforms in irrigation and water resources policy. These drew on many ideas from earlier discussions and studies, notably a series of seminars organized by Bappenas. The working group also carried out public consultation meetings in Jakarta and several provinces. University experts helped the working group to synthesize and clarify key principles for irrigation reforms. The outcome of this process was agreement on a major program of reforms. In April 1999, a Presidential Instruction, and speech laid out the key principles of an irrigation reform program.

  •  

    New directions: Reform principles

  • Presidential Instruction Number 3 of 1999, issued on April 26, lays out five principles for irrigation reform including redefining irrigation institutions, empowering WUA, transfer and joint management, farmer-managed fees, and irrigation sustainability. These are described below and Appendix C provides a translation of the key points of the decree. These points were spelled out in more detail in a longer document in Indonesian, which had been used as a basis for reform discussions including officials from various agencies, universities, NGOs and donors. It was expected that this document would be incorporated as part of a decree issued to implement the reforms, though this had not yet occurred as of late 1999. Reforms are also described in the formal agreement for the Water Sector Adjustment Loan, between the Government of Indonesia and the World Bank, intended to support these policy changes, which was agreed in April 1999. Appendix D presents the relevant section from the WATSAL Policy Matrix and Appendix E includes the key pages of the Government’s Letter of Sector Policy, further describing the proposed reforms. The rest of this section discusses the five principles, corresponding elements of WATSAL, and some of the challenges to putting such reforms into practice.

     

    Enabling institutions. The first principle of the Presidential Decree emphasizes the need to rearrange the government agencies and farmer organization involved in irrigation management, so that farmers become decision-makers. Broader discussions about government reformation have emphasized the shift in government’s role from provider to enabler, "from rowing to steering." The Policy Matrix indicates that change would occur at all levels, with agency roles focused on water delivery and WUA support services. This would address one of the shortcomings of the previous reforms, the lack of a supportive environment for WUA after turnover, including availability of specific support services and suitable regulation of water resources.

     

    Empowering WUA. The Presidential Instruction outlines principles for a paradigm shift toward WUA which are not imposed instruments of government, but instead autonomous, self-reliant and based in the local community. The Policy Matrix emphasizes autonomous governance and financial authority for management. Subsequent points spell out the transfer of management authority and new financial arrangements. This empowerment includes formal legal status, the ability to enter into contracts and open bank accounts. Water rights would enable WUA to have a clear claim to water, and a basis to negotiate over water allocation, within schemes and at the basin level.

     

    Management transfer and joint governance. The proposed reforms cover all schemes, not just those under 500 hectares in size. Management transfer is supposed to be "selective, phased and democratic." Not all structures would necessarily be transferred, e.g. major headworks might stay under government management, secondary canal areas might be turned over before the main system, different districts might move at different speeds, and the transfer should be chosen by the community of irrigators, not imposed. This is not a "big bang" policy. However, areas not yet transferred would be put under joint governance, not left for "business as usual." Scheme management forums for joint management would enable WUA representatives to make decisions about activities still implemented by agency staff. The reforms would cover all schemes, not just a subset singled out for special attention.

     

    Fees from, by, and for farmers. The core of the new approach to ISF is to empower farmers to set, collect and manage fees themselves. This is intended to enhance legitimacy, make collective action more effective, and improve efficiency in the use of funds. Irrigation fees would be determined by WUA in each scheme, collected and managed by WUA. Payment would be obligatory nationwide, with enforcement supported by appropriate legislation at the national and district level. As discussed in the Letter of Sector Policy, further incentives for payment would be created by making eligibility for government aid conditional on satisfactory levels of local resource mobilization through ISF. Rather than just giving farmers a voice in a program still dominated by government, this approach puts choices, and responsibilities in the hands of farmers.

    Farmers responsibility for financing irrigation would include not just operation and maintenance, but also construction, rehabilitation and improvement. In discussions it was recognized that confining farmers’ responsibilities to O&M would discourage preventive maintenance and discourage farmer investment in improving irrigation. As the earlier section discussed, reform is unlikely to be successful without fundamental changes in how funding is provided for irrigation development. However, ideas about how to do this are perhaps the least well development aspect of the current reforms. The laws on regional autonomy passed in April 1999 envision radical fiscal decentralization. The challenge is to institute new mechanisms for financing irrigation infrastructure, rather than just reproducing current project dynamics at a lower level.

     

    Irrigation sustainability. This point links the irrigation reforms with other efforts to improve basin water resource management, improving institutions for managing water quantity and quality, including user participation in basin water management, water rights, control of water pollution from urban areas, and other changes. Rapid conversion of agricultural land to urban and residential use is reducing the area available for growing rice. Currently, there are no requirements or mechanisms for developers to compensate government for the value of irrigation infrastructure which is taken out of use by land-use conversion. Water is being transferred from agriculture to urban and industrial users, without effective means for consultation or compensation of the affected farmers. WATSAL includes commitments to establish a system of water rights covering irrigation and other agricultural water use, and improved regulation of water quality.

  •  

    How to get there? Moving from commitment to practice

  • New approaches to development of WUA and WUA federations, joint management forums, and irrigation service fees are being introduced within the ongoing JIWMP project. Terms of reference have been formulated and consultants will be recruited to help draft regulations and guidelines for putting reform principles into practice. It is expected that future projects from international donors may support the government’s activities in capacity building, establishment of irrigation improvement funds, and other activities needed to finish carrying out the reforms.

    Implementation will take time, and require learning. Officials in DGWRD and provincial irrigation agencies have a strong interest in these issues, and are likely to strive to direct reforms in ways that reflect their views. The Ministry of Home Affairs has been closely involved in the formulation of the current reforms, and may continue to emphasize how they can support decentralization approaches to strengthening local governance. It is unclear how much influence other actors, such as farmers, planning and budget agencies, NGOs, universities and others will have on the formulation and implementation of reforms. International donors can push for reforms and weigh in on particular issues, but lack the capacity to micromanage the crucial details which shape how reforms are put into practice. The new Parliament may well wish to have a say in the reforms.

    There are major questions about how government will carry out decentralization for regional autonomy. This will shape how reforms in irrigation are developed, as well as enabling diverse approaches customized to local conditions. Rivers flow across administrative boundaries, and there are still diverse views about which responsibilities can be devolved to the district level, and what roles basin management committees, corporatized water service entities, provinces, and the central government should play in water resources management. District chiefs and district legislators will have a large scope to decide how they use the authority and resources which are being devolved to them.

    The challenge is not just one of creating commitment, but of designing for new dynamics, which strengthen incentives for better irrigation management. The outcomes are likely to be shaped by the same diverse and dynamic constellation of actors who influenced earlier reform efforts, but within a framework which gives greater opportunity to go beyond increasing farmers’ voice to empowering farmers to direct decisions about the irrigation schemes which are crucial for their livelihoods.

     

    Conclusion: The Road from Voice to Choice

    Indonesia’s 1987 Irrigation Operation and Maintenance Policy introduced a series of efforts to transfer management of small schemes to water user associations, and to institute irrigation service fees and improve the efficiency of irrigation operation and maintenance in larger schemes. The first Irrigation Subsector Project formulated and successfully implemented participatory procedures for turnover of management to water user associations in small schemes. For larger schemes, the project piloted participatory collection and use of irrigation service fees, and introduced procedures for more efficient operation and maintenance. Farmers gained a voice in the design and construction of improvements made to prepare for turnover of small schemes. In larger schemes they were involved in identifying priorities for maintenance to be funded from irrigation service fees. The difficulties of expanding and institutionalizing reforms became clearer during the Second Irrigation Subsector Project. The Java Irrigation Improvement and Water Resource Management Project sought to continue the earlier reforms in irrigation operation and maintenance, amidst increasing concern about the need for more fundamental changes.

    The 1987 reforms threatened the coalition of interests which supported and benefited from irrigation construction. These interests reshaped reform efforts, revealing the persistent dynamics of a supply-driven approach to government activity in irrigation development, as rent-seeking interests redirected reform. Donor-funded projects were susceptible to a continuing bias towards construction. The decision to carry out physical improvements before turnover constrained the pace and scope of turnover. Institutional development tended to focus on easily measurable targets, in ways which often undermined the more fundamental objectives of reform. Project organization and agency career paths kept control in the hands of project managers oriented towards construction. Mechanistic development of water user associations produced paper organizations that quickly became inactive.

    Sustainability of reforms was endangered by the one-sided emphasis on reducing old government roles, and fixing up schemes as a prerequisite for further changes. Without rights and power, irrigators’ organizations lacked incentives and capabilities to organize themselves for better irrigation management. In the absence of new arrangements for financing civil works, subsidized patterns of rent-seeking and patron-client interaction between farmers and the bureaucracy persisted. Government withdrawal, without adequate availability of technical services, and with little regulatory oversight, invited neglect and declining performance.

    In 1999, amidst dissatisfaction with the results of earlier efforts, the Indonesian government proclaimed a new irrigation reform policy, initiating major changes in strategy. These efforts to reform irrigation and water resources management are being formulated in the context of ambitious efforts to restructure Indonesia’s governance institutions. Reforms which empower farmers with genuine choices, not just a voice in centralized projects, can open new routes for effective reform. The Indonesian government has committed itself to strategic reform principles for redefining agency roles; empowering WUA; joint governance and management transfer; fees from, by and for farmers; and new approaches to financing irrigation.

    In terms of the road transport metaphor used in this paper, the earlier approach to irrigation reform can be compared to the top-down construction of a centralized railroad system, monopolized by a single operator, powerful but restricted to a few destinations, dependent on detailed planning, and all too easily derailed. Reforms to empower farmers could be analogous to developing a road network, flexible with many routes to reach diverse destinations, and a variety of vehicles; creating a process which can be driven by farmers, with far more choices for directing their own development.

     

     

    Notes

     [links from the text not included in this online draft.]

    1 The paper draws on the author's experience as a consultant on various irrigation projects in Indonesia since 1988, as well as reports and publications listed in the references. Among other assignments, the author worked on the turnover program from 1988 to 1991 as Institutional Advisor funded by the Ford Foundation, undertook short-term assignments during the preparation and implementation of the Java Irrigation and Water Resources Management Project, and participated in World Bank missions for JIWMP project supervision and preparation of the Water Sector Adjustment Loan, The ideas presented here benefit from discussions with many people concerned with irrigation reform in Indonesia, including farmers, government officials at national, provincial and district levels, and many others, including Helmi, Sigid Supadmo, Ganjar Kurnia, Sudar Dwi Atmanto, Saleh Ali, Bambang Adinugroho, Douglas Vermillion, Scott Guggenheim, Robert Varley. and last, but certainly not least, Theodore Herman, the World Bank task manager who has played a crucial role in the formulation of the 1999 reforms. Views expressed in the paper are the responsibility of the author and do not represent those of any institution with which he is or has been affiliated. Comments are invited to: BryanBruns@BryanBruns.com

    2 See Varley (1989) for an overview and analysis of irrigation investment policies through the 1980s.

    3 Statistics on investment from Varley 1999, which cites, Hvidt, Martin (1996). Facing the Future: Are Irrigation Agencies Ready for the 21st Century? Draft Paper Prepared for the World Bank, Washington, D.C.

    4 This was part of a broader shift in views in the irrigation community towards greater attention to operation and maintenance, and at least the beginnings of increased recognition of the importance of institutional issues. Issuance of the IOMP was a condition for the first Irrigation Subsector Project. The formal commitment was only arranged at the last minute during negotiations at the World Bank , in Washington, D.C.. In principle this reflected the agreement of the government, including the National Planning Board, and the Ministries of Public Works, Agriculture and Home Affairs. However advance discussion seems to have been restricted to a fairly small group of officials, without formulation of any broad consensus.

    Major disagreements existed between the Ministry of Public Works, including the Directorate General of Water Resources Development, and the Ministry of Home Affairs, particularly about how irrigation service fees would be introduced and who would be responsible. It was later suggested that the Minister of Home Affairs never agreed to the IOMP, one of several ways in which the legitimacy of the IOMP was questioned

    5 WUAs were supposed to have been organized by the Water User Association Strengthening component of the project, led by the Ministry of Agriculture. Due to delays in startup and the momentum of the older WUA training program under DGWRD this linkage did not occur and this component was not included in the second Irrigation Subsector Project.

    6 Authoritarian government does not preclude participatory reforms. The widely heralded innovations in irrigation participation in the Philippines were carried out during the period of Marcos dictatorship, and lost momentum under the subsequent democratic governments.

    7 Substantial variability between provinces showed the scope for differences in implementation, even within centralized programs. Some officials were more ready than others to make use of the discretion they had to adapt programs.

    8 For ISSP-II, Bappenas insisted that consultants for the turnover program be recruited by open tender, which LP3ES chose not to enter. The Ford Foundation provided some funding for LP3ES to keep working with DGWRD on monitoring of the turnover program, but this was a less influential role. The consultants who were recruited to provide technical assistance to the turnover program started out knowing almost nothing about the program, so during the initial period the government staff had to educate the consultants about the goals and procedures for the program. The ISF consultant was still directly appointed, leading to more continuity and a bigger role for the consultant during ISSP-II.

    9 Conflicts concerning the recruitment of consultants for ISF in JIWMP meant that in the end no international consultants were recruited. Because of various concerns about lack of progress, loan support for the ISF program was halted in 1996, but in 1998 was reactivated to support a revised approach.

    10 These problems are reviewed in the report from the ADB-funded study on Options for Sustainable Irrigation Development in Indonesia (CID 1998).

    11 Levine (1986) offers a similar analysis of the dynamics of deferring maintenance and focusing on project-subsidized construction and rehabilitation, though decisions are portrayed as a pragmatic response to circumstance, rather than strategic rent-seeking.

    12 Corruption. Rent-seeking as discussed by Repetto could proceed even without corruption, in the context of bureaucratic empire-building and farmers seeking government aid. However in Indonesia, as elsewhere, corruption helped create and reinforce the patterns of project-subsidized irrigation development. Corruption was considered to be a part of life in projects and the bureaucracy during this period. Few details are available, but a widely mentioned figure was that about a third of budgets went into corrupt payments. Corruption was said to be routinized and hard to escape for any of those involved in the system, with the proceeds widely distributed among all levels of officials. Given the weakness of politics, political pressures for promotion of particular officials and location of projects in particular areas were not so prevalent. Nor does extraction of bribes for water distribution seem to have been pervasive. Instead most corruption seems to have been linked to construction and other ways in which money could be extracted from government budgets. During the nineties, nepotism became more blatant in the awarding of tenders to consortia which included companies associated with the families of senior officials. Amounts and percentages demanded were also said to have risen. The incentives created by corruption ran parallel with the more conventional incentives of bureaucratic aggrandizement, the pursuit of power over bigger budgets and more staff. There were few obvious tensions or conflicts caused by corruption, due to the lack of internal and external accountability and to the extent to which institutions were organized along lines which enabled it to proceed smoothly. Disgust with corruption, collusion and nepotism was one of the forces which drove the change in regime. However there have been few subsequent prosecutions, and few details have come to light. There have been significant attempts to make the tendering process more open and transparent, and acknowledgement of the high costs of moving funds through the bureaucracy has encouraged willingness to consider channeling funds directly to local groups, such as water users associations.

    13 See Bruns and Dwi Atmano(1995) for a more detailed discussion of the process and reasoning behind some of the program design decisions. This and other papers are available at www.BryanBruns.com

    14 Many schemes appeared to fall into category A as initially defined. Often farmers were unaware that the government considered them to be "government schemes." In principle, if there had been any government investment, then legally this made a scheme a "government" scheme. Since O&M budgets were based on the area of "government schemes," irrigation agencies had had a strong incentive to record as much area as possible as government schemes. Many areas were included which had never received government investment. In other cases, although government had funded construction works at some time in the past, the schemes were otherwise fully farmer-managed. All these schemes could have been rapidly "taken off the books," formally recognizing what was already true in practice, that they were de facto managed by farmers.

    15 For a detailed analysis of this topic see the IIMI report, Murray-Rust and Vermillion 1989.

    16 Farmer cost-sharing was a point of debate during the World Bank's supervision missions for ISSP-I. The program did not offer to match local contributions or otherwise provide positive incentives for local resource mobilization. Inclusion in the program was basically a unilateral decision by government, not something which could be negotiated based on farmers' readiness to contribute. A common view was that assistance was like a bribe to persuade farmers to accept turnover. Agency officials felt requirements for local contributions would be difficult to implement and impose an unfair burden on farmers, who were already being "burdened" with future responsibility for O&M. The final outcome was that farmers were expected to do earthworks, and the level of local contributions was monitored, though attention to this issue dwindled over time.

    17 WUA development was often done mechanistically, as if it were like building a physical structure. The assumption seemed to be that if the elements were properly put into place, including proper understanding on the part of farmers, then the structures would function well. And like physical structures, the need for any continuing maintenance was often neglected, or assumed to be someone else's job. An analogy could also be made to cultivating crops, WUA as social institutions need good conditions to survive. Planting the seed is only the beginning of a long process, which needs continuing attention. For a more general discussion of these international experience with WUA development, and the point that WUA sustainability does not mean that WUA must be self-sustaining, see Meinzen-Dick et al. 1997.

    18 Second-hand accounts suggested that there was significant opposition within government to the idea of "community organizers" and deliberate avoidance of any approach which might foster self-governing organizations, such as that of Dutch polder management districts, or otherwise allow significant organization above the village level.

    19 In a few cases WUA were so dissatisfied with poor quality or inappropriateness of construction works that they said they would not accept turnover until problems were solved, but these seemed to be occasional exceptions in cases where abuses were so blatant that local officials were unwilling to force farmers to comply, and may well have implicitly supported farmers' complaints.

    20 Needs-based budgeting was done separately from ISF introduction, not as part of an integrated package of reforms. The definition of needs makes "needs-based budgeting" problematic. There were no clear standards for saying how much maintenance was adequate, or how to optimize maintenance expenditures in economic terms. Attention tended to focus on apparent needs for repair, and improvement, such as canal lining, rather than the more mundane tasks of routine and periodic maintenance. "Needs-based" estimates included the backlog of neglected maintenance, not just routine annual and periodic maintenance. This sometimes resulted in estimates of 150,000 rupiah or more per hectare, far in excess of available O&M funds. Even though schemes were already supposed to be in suitable condition for EOM, canal networks were often incomplete, many gates were in poor condition, and schemes often lacked equipment, such as motorcycles for transport, radios for communications, and other facilities.

    O&M budgets were not controlled at the scheme level. Neither farmers nor scheme staff had power to choose what would be done. O&M staff at this level could make proposals, but the usage of O&M funds was managed through the provincial "Projects." Sometimes the first time that scheme O&M staff knew that works had been approved was when contractors showed up to begin work. What was built often did not match priorities as perceived by staff within schemes. Often funds seem to be concentrated into minor construction works, while more routine maintenance activities were ignored.

    21 Permanent asset transfer was outlined in the regulations for turnover, but never implemented until many years later for a few schemes in ADB projects outside of Java.

    22 Training programs for WUA made little or no use of farmers as trainers or experts, even though such methods had been used effectively in the Agriculture Ministry's integrated pest management programs.

    23 Useful material on such approaches is available from the website of the United Nations Development Program-World Bank Water Supply and Sanitation Program, www.wsp.org

    24 The irrigation reforms in Andhra Pradesh are particularly interesting in having been conceived, and supported by the state legislature, as "populist" reforms which would make farmers better off. Organizing WUA through the administrative lines of the civil service made it possible to by-pass the irrigation bureaucracy, which might have otherwise have blocked transfer of management authority to local organizations. This contrasts sharply with the top-down reforms in Mexico, imposed during a fiscal crisis with strong backing from the President's office, and the more technocratic process of internal reform within Turkey's irrigation bureaucracy.

    25 The relevant comparison would be which approach delivers more real benefits to the intended village beneficiaries, not against an ideal standard of technocratic perfection.

    26 What little budget districts allocated was often concentrated on a few WUA entered into WUA contests. There was little evidence to support the idea that other WUA would emulate contest sites, which usually received unreplicable and unsustainable levels of special attention.

    27 Funds from sector adjustment loans are used for general budgetary support, but tied to specific sector reforms. The Water Resources Sector Adjustment Loan is for a total of $300 million dollars, in three tranches tied to the completion of agreed reforms.

    28 One of the main issues in the discussion about this point concerned the need for a continuing government role in technical audit.

    29 At the practical level, efforts are being made under current projects, particularly JIWMP, to introduce principles from participatory rural appraisal and similar approaches, to facilitate farmers in identifying their problem, priorities and plans. For bureaucrats accustomed to instructing farmers, this requires a major cultural transformation, but initial efforts suggest that change can happen, in ways that both farmers and agency staff find better than what was done before.

    30 Transferring governance of irrigation schemes could create the possibility of a choice among service providers. While the irrigation network itself may be a natural monopoly, the management services to deliver water and maintain facilities can be delivered by a government agency, farmer-governed organization, or a private corporation. Management transfer thus could move beyond voice to empower farmers to control the services, and gain a choice about whether they may wish to continue to obtain the services from a government agency, hire their own manager and staff, or contract for management services from a private concessionaire.

     

    References
  •  

    Bruns, Bryan. 1999. Making Irrigator's Organizations Creditworthy. Paper presented at workshop on "Government Actions Towards Effective Irrigators’ Organisations," Vientiane, Laos: German Foundation for International Agricultural Development. Proceedings forthcoming.

    Bruns, Bryan. 1998. "Incremental Rehabilitation: Restructuring Incentives for Irrigation Maintenance." Denpasar, Bali: Paper presented at the Fourth International Seminar on Participatory Irrigation Management.

    Bruns, Bryan, and Sudar Dwi Atmanto. 1995. How to Turn Over Irrigation Systems to Farmer? Questions and Decisions in Indonesia. In Irrigation Management Transfer: Selected Papers from the International Conference on Irrigation Management Transfer, edited by S. H. Johnson, D. L. Vermillion and J. A. Sagardoy. Wuhan, China: International Irrigation Management Institute

    Chambers, Robert. 1988. Managing Canal Irrigation: Practical Analysis from South Asia. New Delhi: Oxford and IBH.

    CID-Consortium for International Development. 1998. Options for Sustainable Irrigation Development in Indonesia. Jakarta: Asian Development Bank.

    Gerards, Jan L. M. H. 1995. Irrigation Service Fee in Indonesia: Towards Irrigation Comanagement with Water Users' Associations Through Contributions, Voice, Accountability, Discipline and Hard Word. In Irrigation Management Transfer: Selected Papers from the International Conference on Irrigation Management Transfer, edited by S. H. Johnson, D. L. Vermillion and J. A. Sagardoy. Rome: International Irrigation Management Institute and the Food and Agriculture Organization of the United Nations.

    Hirschman, Albert O. 1970. Exit, Voice, and Loyalty. Cambridge, MA: Harvard University Press.

    Korten, Frances F., and Robert Y. Siy, Jr. 1988. Transforming a Bureaucracy: The Experience of the Philippine National Irrigation Administration. West Hartford, Connecticut: Kumarian.

    Meinzen-Dick, Ruth, Meyra Mendoza, Loic Sadoulet, Ghada Abiad-Shields, and Ashok Subramanian. 1997. Sustainable Water User Associations: Lessons From a Literature Review. In User Organizations for Sustainable Water Services, edited by A. Subramanian, N. V. Jagannathan and R. Meinzen-Dick. Washington, D.C.: The World Bank.

    Murray-Rust, Hammond, and Douglas Vermillion. 1989. Efficient Irrigation Management and System Turnover. Volumes I-III. Colombo, Sri Lanka: International Irrigation Management Institute.

    Ostrom, Elinor, Larry Schroeder, and Susan Wynne. 1993. Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective. Boulder: Westview Press.

    Paul, Samuel. 1992. Accountability in Public Services. World Development 21 (7):1047-1060.

    Repetto, Robert. 1986. Skimming the Water: Rent-Seeking and the Performance of Public Irrigation Systems. Washington D.C.: World Resources Institute.

    Soelaiman, Irchamni, et al. 1998. Farmers' Futures and Participatory Strategies for Irrigation in Indonesia: An Assessment. Jakarta: Ford Foundation and ARTAMA-LP3ES.

    Turral, Hugh. 1995. Devolution of Management in Public Irrigation Systems: Cost Shedding, Empowerment and Performance. London: Overseas Development Institute.

    Varley, R.C.G. 1989. Irrigation Issues and Policy in Indonesia, 1968-88. Cambridge, MA: Harvard Institute for International Development.

    Vermillion, Douglas L.. 1999. Property Rights and Collective Action in the Devolution of Irrigation System Management. Paper presented at the Workshop on Devolution of Natural Resource Management, Puerto Azul, Philippines, 21-25 June 1999.

    Vermillion, Douglas L. and Juan A. Sagardoy. 1999. Transfer of Irrigation Management Services: Guidelines. FAO Irrigation and Drainage Paper 58. International Water Management Institute (IWMI), Deutsche Gesellschaft Fur Technische Zusammenarbeit (GTZ) and Food and Agriculture Organization (FAO) of the UN.

    Varley, R.C.G. 1999. "Performance Audit Report for Indonesia: Central and West Java Irrigation Project (L2649-IND) and Irrigation Subsector II

    Project (L3392-IND"), Sector and Thematics Evaluation Group, OED, World Bank, June 1999.

    Varley, R.C.G. "Irrigation Issues in Indonesia - The Next 25 Years," Visi-Irigasi Indonesia, University of Andalas. Padang, West Sumatra, Indonesia, 1997 13 (7): 59-86

  •  

    Appendices
  • A. The Players: An Introduction to the Institutions
  •  

    Public Works. During this period, central government agencies controlled the flow of budgets for project implementation. They approved project and subproject managers who controlled implementation in the provinces. The Directorate General of Water Resources Development (DGWRD) in the Ministry of Public Works was the main executing agency for irrigation projects. During most of this period, irrigation budgets were reviewed and revised in detail by DGWRD. Most consulting contracts for technical assistance were awarded through DGWRD. Within DGWRD, the Directorate of Irrigation I (DOI-I), and its Operation and Maintenance Subdirectorate, handled the turnover and EOM programs. In 1993 DGWRD was reorganized, with project implementation responsibilities assigned to three regional directorates.

     

    Home Affairs. ISF was handled by the Regional Finance Directorate, Directorate General of Public Administration and Regional Autonomy (PUOD), Ministry of Home Affairs. While Public Works had long experience with loan-funded projects, Home Affairs officials were unfamiliar with this, and relied heavily on advice from their consultants. Implementation of ISF, particularly during the pilot periods, was concentrated at the district (kabupaten) level, working closely with District Chiefs and Regional Planning Boards (Bappeda).

     

    Planners. The National Planning Board (Bappenas) had a strategic role in preparing and overseeing projects funded by international donors, including the preparation of the Irrigation Subsector Project, which resulted in the issuance of the IOMP. Bappenas screened annual agency budget proposals, enabling it to delay or delete budgets to which it objected. Through formulating five-year plans and related activities, Bappenas helped to identify priorities and conceptualize directions for development policy. Bappenas had a mandate and technocratic interest in trying to ensure that funds were spent productively, but was very much part of a centralized, project-dominated approach to governance and development

     

    Finance. Projects funded by international loans required approval by the Ministry of Finance (MOF). It was involved in negotiating loan agreements with international donors, and oversaw the flow of funds to projects. It tended not to get involved in the substance of implementation. However the fiscal objectives of the IOMP, to make farmers pay more towards O&M and reduce government O&M expenditures, were designed to offer budget savings. Borrowing and repayment of loans were the responsibility of the national government. Provinces, districts and farmers had no obligations for capital cost repayment. Audit agencies existed at the national and regional levels, but did not have a strong influence on project implementation.

     

    Parliament. During the New Order period, the national parliament initiated no legislation. Discussion of legislation drafted by government was usually pro forma. Parliament had little influence on irrigation policy or projects, though committees did review agency budgets and activities. Provincial and district assemblies were also elected, but had even less influence. Most regulatory changes affecting IOMP, including the regulatory frameworks for turnover and ISF, did not occur through legislation, but were promulgated by decrees, from the President, ministers, directors-general, provincial governors, and district chiefs. Political parties had been forced to consolidate into three parties. Civil servants were required to support the government-backed Golkar party, which played the dominant role in formal political activities. Much effort was exerted to obtain large electoral majorities for Golkar, as a demonstration of government legitimacy. Providing projects such as roads, irrigation, schools, etc., was seen as a major means of gaining support in rural areas. One of the questions facing the new irrigation reforms concerns what role the newly elected national legislature may play in influencing policies and programs.

     

    Regional government. Provinces and districts are separate levels of government within Indonesia’s unitary state. During this period they were highly dependent on budget flows from the central government and had little choice about how budgets could be spent. Government activities were usually carried out in a top-down fashion, based on instructions from the center. This was further reinforced by the dwifungsi (dual-function) policy, whereby many governors, district chiefs and other senior officials were military officers who held senior posts in the administrative bureaucracy, while retaining their commands in the military hierarchy. In theory, districts and provinces nominated candidates for district chief and governor. However, central government had the final authority to approve candidates. Similarly, central approval was required for legislation passed by provincial and district assemblies. However substantial diversity between provinces revealed the limits on apparent uniformity imposed from above. For example, provinces differed significantly in their bureaucratic cultures, responding to instructions with different strategies such as diligently but slowly applying new policies, conservatively selecting which changes to implement (while ignoring or delaying others), or appearing to comply on the surface while doing things very differently in practice. In 1999, Parliament passed legislation for regional autonomy, created the framework for decentralization authority and finance for most matters, including irrigation, to districts, potentially drastically limiting the role of the central government.

     

    Irrigation agencies. Irrigation operation and maintenance was supposed to be a responsibility of irrigation agencies under the provincial government. Branch offices, which managed irrigation schemes, were organized along hydrological units of irrigation schemes and river territories, which often did not match district administrative boundaries. Recurrent budgets for the salaries of permanent irrigation staff were included in provincial agency budgets. Centrally-funded projects had separate functional organizations in each province, which controlled subsidized O&M and construction. These provincial irrigation projects contracted for design and construction work, much of which was tendered to state-owned or private engineering companies. Provincial officials had little involvement in the planning of projects, and limited influence over their implementation. As a consequence they tended to treat various projects, such as ISSP, mainly as additional sources of funds for construction, often paying little attention to the formal project objectives. Many schemes continued to be managed by central government "projects" long after most or all construction was complete. During the early nineties increasing numbers of these schemes were formally transferred to provincial government responsibility. Under limited initiatives for decentralization which began during the 1990s, greater powers were being given to districts, including the establishment of district irrigation services which are supposed to manage irrigation systems lying within their districts.

     

    Villages. A 1979 law on village government had reinforced the control of the government over local affairs. Village heads were paid by, and answerable to, officials above them. This law extended to the whole nation a version of the administrative structure earlier used on Java. The law abolished the role of village watermaster, ulu-ulu (though many communities responded by appointing the same person to be the head of village infrastructure activities). Villages had substantial capability to mobilize local resources, backed by local social sanctions, support from higher authorities, and by the ability of village officials to give or withhold authorization for various documents required by villagers. The New Order regime had worked deliberately to depoliticize rural communities, imposing a monolithic centralized government administration, and building the dominance of the government’s Golkar party. Farmers had few channels for voicing their views outside of government-controlled institutions. Village officials were expected to dutifully support project implementation, but there were few effective means for local communities to obtain support for their own initiatives.

     

    Donors. Irrigation development was highly dependent on loan-funded projects. Within donor agencies, criticism of the poor performance and neglect of maintenance had brought increasing impetus during the eighties to improve operation and maintenance. The World Bank and the Asian Development Bank were the largest international donors concerned with irrigation policy. While their goals were to reduce poverty and promote economic development, nevertheless their more immediate incentives as banks were to approve projects and disburse loans. Supervision missions sought to ensure that implementation followed project plans or responded appropriately to problems, but faced severe limitations in terms of time, information, and cross-cultural communication. During the nineties, both the World Bank and ADB went through self-assessments which were highly critical of the pressures of an "approval culture" to move money and neglect project quality (including inadequate attention to social and environmental sustainability). However changes to respond to these critiques took time to become apparent in irrigation projects. Bilateral donors, such as Japan , the Netherlands, United States, and Britain supported irrigation projects that helped to develop various new ideas and procedures, but were not as concerned with broader sector reforms. The Ford Foundation, the only major non-government donor in the sector, funded action research to improve community participation and link universities and NGOs with government agencies.

     

    Consultants. Consulting companies played a major role in the design and implementation of projects. International companies led consortia which included government-owned engineering companies and some private companies. Companies brought not only technical expertise but also helped to prepare reports and explain project activities to donors in English (or Japanese). Their role as intermediaries with donors gave consultants some power, but also put them under pressure from both sides. Companies were motivated to satisfy government officials in order to obtain future contracts. In the event of disputes, government officials were not reluctant to wield the threat of barring companies from future projects. These companies drew on a group of experts who often had long experience in Indonesia, moving from one project to another. While most of the bureaucrats in DGWRD had engineering training, they tended to focus on their administrative roles, leaving most of the technical and implementation responsibilities to companies providing design or construction services. However, construction supervision was usually done directly by government staff, and not contracted out.

     

    NGOs. Indonesian non-government organizations (NGOs) had limited scope for activity during this period. During the 1980s and 1990s, the Ford Foundation funded several pilot projects and studies in which a few NGOs and several regional universities worked with government agencies, studying and demonstrating ways to increase farmer participation in irrigation. The Ford Foundation was involved in the policy dialogue leading up to the IOMP, particularly the conceptualization of the turnover program, and provided co-financing for research and NGO consultancy to support its implementation. For a review of experience with the Ford Foundation’s experience, see Soelaiman 1998.

     

     

  • B. Irrigation Operation and Maintenance Policy Statement of 1987
  •  

    [Annex 1, World Bank Staff Appraisal Report 9201-IND. Irrigation Subsector II (O&M) Project, Jan. 25, 1991]

     

    INDONESIA

     

    IRRIGATION SUBSECTOR II (O&M) PROJECT

     

    GOVERNMENT OF INDONESIA

     

    Statement of Policies 1/ for Irrigation Operation and Maintenance

    A. Background

  • 1. Rice is the staple diet of the Indonesian population, and a large proportion of the country’s production of rice comes from irrigated sawah areas. With a population growth rate of 2 percent per annum and increasing per capita incomes, the demand for rice as a primary food crop is expected to rise in the future.

    2. Concerted efforts have been made on a continuous basis from the beginning of the first five year plan (Pelita I) to meet the increasing national requirements of food. Since 1985, these efforts have decreased the dependency on food crop imports, especially rice.

    The nation’s production of rice comes from 5 million hectares of irrigated fields, which grow two crops per year on average, and from 2 million hectares of rainfed land, on which rice is generally planted once each year.

    The increase in production has been achieved as a result of investments in agriculture such as the adoption of modern varieties: use of fertilizers; weed and pest control: adoption of appropriate cropping calendars: and investments in irrigation such as rehabilitation of existing irrigation systems and construction of new schemes.

    3. Water resources development by the Government, especially in the field of irrigation, both new construction and rehabilitation, within the context of increasing food production, has already been carried out with satisfactory results. Such investments have primarily been financed from the Government’s rupiah budget and foreign assistance.

    The completion of construction is followed by the next stage of management and care of the irrigation systems through what is commonly known as operation and maintenance (O&M).

     

    Operation consists of activities to optimize the utilization of the irrigation infrastructure.

     

    Maintenance consists of activities to care for the infrastructure, so that it can function as designed, thereby sustaining the effectiveness of the irrigation systems.

  • 1/ Issued in 1987.

     

  • Both activities should be carried out continuously, and supported by an adequate budget, skilled personnel, appropriate procedures for planning and implementation and proper facilities for their efficient implementation, as well as to aim for increased quality of intensified agricultural food production.

    Irrigation development during Pelitas I to IV concentrated on rehabilitation (repairs and improvements) of existing systems and construction of new schemes.

    During this latter part of Pelita IV and approaching the beginning of Repelita V. the time has come to give greater emphasis to O&M activities.

    4. According to Water Law No, 11/1974, Section 12 and Government Regulation (PP) No. 23/1982, Section 35, para. (2), the budget for O&M of irrigation networks and related structures and facilities should be borne by the Provincial Government. These laws also set out the intention of asking beneficiary farmers to participate in O&M for main systems and have overall responsibility for tertiary systems.

    Recognizing that Provincial Governments were still unable to provide the required budget for O&M, the Central Government has, since the fiscal year 1974/75 provided subsidies for irrigation O&M through INPRES DATI I (APBD):

    since 1984/85 such subsidies have been increased through project funding for O&M (APBN). Maintenance of O&M budget levels in the last two years, despite major cuts in total investment expenditures, reflects the Government’s new policy approach and recognition of the importance of O&H, and its commitment to increased expenditures on efficient and adequate levels of O&M in the future. Nevertheless, the average allocation per annum is well below actual requirements.

    The inadequate O&M Budget, personnel, equipment and facilities will lead to rapid deterioration of the condition of the irrigation systems and affect their performance thus reducing food production, especially rice, and this is of increasing concern to the Government.

    5. The problem which is now encountered is how to provide an adequate O&M budget in accordance with actual needs of each irrigation system; this will necessitate an increase in the budget to be provided for O&M.

    It is necessary to mobilize new sources other than the present Central Government allocation, in the efforts to increase the O&M budget and eventually to reduce dependence upon Central Government budgetary support, namely:

  • 5.1 From Land and Building Tax (PBB). This may not be a dependable source, because the revenues from PBS are required for regional and local development, especially in Daerah Tingkat II (level of Kabupaten).

     

    5.2 From the beneficiaries of irrigation development in the form of an "Irrigation Service Fee," which should be related to the quality of service provided. The imposition of such a fee is in keeping with Water Law No. 11/1974, Section 12 And Government Regulation No. 23/1982, Section 35, para. (3). This is a more appropriate and dependable source since it will be collected solely for meeting the O&M budget.

  • 6. Besides mobilizing the sources mentioned in Section 5 above, especially for smaller systems with an area of less than 500 ha, the responsibility for O&M will be entrusted to the Water User’s Association.

    This is possible, because there are already a large number of such schemes managed by the villagers, designated as village irrigation or communal irrigation systems (INPRES 1/1969). In this way, the responsibility assumed by the beneficiaries can be further developed, while reducing the number of schemes managed by the Government and more attention can be paid to large and medium scale systems which cannot be managed by the beneficiaries.

    7. The Government has formulated a set of policies which address six fundamental issues related to the financing of O&M and other expenditure in the irrigation subsector, under the following topics:

  • 1. Funding of Operation and Maintenance

    2. Cost Recovery

    3. Irrigation Service Fee

    4. Institutional Development

    5. Programming and Budgeting for O&M

    6. Rationalization of Investment Expenditure

    1.  

       

    2. Statement of Policies

     

    Policy I: Funding of operation and Maintenance

     

    After completing irrigation systems, Government recognizes that in order to realize the full potential of irrigation systems and to maximize the contribution of existing investments to agricultural production goals, future policy should ensure expenditure on O&M that should be applied in line with the actual needs of irrigation systems.

  •  

    Objectives

    1. To provide adequate and timely funding of O&M on all government controlled schemes throughout Indonesia at a level sufficient to ensure efficient O&M, and the introduction of efficient operation and maintenance on the entire Public Works irrigation system within about 15 years. In order to accomplish this, the Central Government will initiate a gradual increase in O&M funding through more allocation from the INPRES and DGWRD development budget. This increase in funding is required during the early years but will decline as Provincial Government revenues and irrigation service fees assume a larger percentage of the total O&M costs.

       

      1.2 To establish an agreed mechanism for ensuring that Provincial Governments take a gradually increasing financial responsibility for the O&M budget of main irrigation systems from their own revenues.

      1.3 To ensure that adequate funding is applied in line with the actual needs of the systems In areas which have already been upgraded and efficient O&M has been introduced, an increase of the present levels of O&M funding would be required. Also, that funds currently expended on areas on which efficient O&M has not been introduced will have their present allocations at least maintained in real terms

       

      1.4 To give Water Users Association (WUAs) maximum responsibilities for O&M subject to the constraints imposed by their institutional capacities and the technical characteristics, size and administrative boundaries in which irrigation systems are located.

      1.5 Within about 15 years, to gradually turn over the Government irrigation systems of less than 500 ha each to the WUAs. As a first step, over the period of Repelita V, most of the Government irrigation systems less than 150 ha in size would be turned over to WUAs. This figure is in line with the size of tertiary units which, according to Government Regulation No. 23/1982, is now legally the -responsibility of the WUAs.

       

      Policy 2: Cost Recovery for Irrigation O&M

      The Government policy is that the beneficiaries will eventually finance O&M costs of main irrigation systems.

       

      Objectives

      2.1 To implement a cost recovery system which will eventually finance all costs of efficient O&M of irrigation systems through increased contributions from irrigation beneficiaries’.

      2.2 To improve indirect cost recovery and increase local government revenue generation and their capacity for O&M funding, through a long-term program to raise PBB revenues on irrigated areas in all provinces.

      2.3 To expedite the conversion of the Land Tax (IPEDA) system to the new PBB system through reclassification and reassessment of the market value of irrigated properties, and to ensure that the system is implemented effectively and yields the expected revenues.

       

      Policy 3: Irrigation Service Fees

      In order to directly recover the costs from irrigation beneficiaries in relation to the benefits they receive from a regular and assured Supply of water, Government will extend the Collection of irrigation service fees from the beneficiaries in other areas after the Pilot Scheme period. Since PBB may not be a dependable source, the implementation of

      direct cost recovery system, which eventually finances all costs of efficient O&M of irrigation systems, should apply irrigation service fee. These fees are expected to gradually reduce the need for Government funding subsidies and become the main source of efficient O&M budget for main irrigation systems.

       

      Objectives

      3.1 Starting from fiscal year 1988/89, to introduce an irrigation service fee (ISF) related to cropping patterns/systems in several selected pilot scheme areas being taken up for efficient O&M. The implementation of the pilot scheme will also enable the establishment and refinement of the necessary administrative and judicial arrangements as well as’ institutional aspects, collection mechanism and level of fees to be collected.

      3.2 Based on the results of the pilot scheme, to gradually extend
      ISF to all provinces for irrigation systems where efficient O&M has already been introduced.

       

      Policy 4: Institutional Development

      Government recognizes the critical importance of effectively carrying out irrigation O&M, and will implement effective measures and reforms to strengthen O&M institutions at all levels. This will be done to create adequate institutional capacity fur improving the performance of the existing irrigation infrastructure and efficient utilization of increased O&M allocations, in order to continue to provide adequate irrigation service and reliable water supplies to farmers.

       

      0bjectives

       

      4.1 To strengthen and where necessary to restructure the organizational set-up of Provincial Irrigation Services (PRIS) dealing with O&M of irrigation systems, down to Ranting Dinas for uniformity, efficiency and effectiveness

      4.2 To clarify the roles and responsibilities of institutions dealing with O&M by the end of fiscal year 1988/89. This would include the redefinition of roles of DGWRD and PRIS in planning, organization, directing and controlling O&M activities, and defining the organizational structure and staffing needs at various levels.

      4.3 To design and Implement a manpower development and training program for provincial O&M staff and other agencies’ staff at various levels involved in implementing O&M policies and programs. It is anticipated that this activity will be implemented by the end of fiscal year 1989/90.

      4.4 To strengthen the function of PRIS with regard to the management of O&M through improved personnel management, and the development of appropriate management information systems (MIS) and monitoring and evaluation (M&E) systems.

       

      4.3 To further develop and execute an integrated policy for the functioning and strengthening of WUAs following guidelines established in INPRES No. 2/1984, and functioning of Irrigation Committees in line with PP. No. 23/1982.

       

      Policy 5: Budgeting and Programming for O&M

       

      Government will simplify and rationalize the present budget mechanisms for O&M funding by reducing the number of funding channels and improving O&H budget planning administration.

       

      Objectives

      5.1 To introduce improved systems and procedures for O&M programming, monitoring and budget planning. by simplifying the present system of allocations through both INPRES DATI I and DGWRD development budget, changing to a needs-based system of allocation of O&M funds.

      5.2 To establish sound criteria and procedures for allocation and monitoring of funds to meet the actual needs for O&M of each irrigation system, starting at each Ranting Dinas level.

       

      Policy 6: Rationalization of Investment Expenditures

      Government will rationalize expenditure programs in the irrigation subsector, and formulate and implement a more realistic irrigation investment strategy for Repelita V.

       

      Objectives

      6.1 To improve project selection criteria to be used and review the technical and economic viability, in the assessment of the total existing and proposed irrigation investment programs, with a view to rationalize investments.

    2. To improve the formulation of priorities for irrigation investments and finalize preparation of a more realistic irrigation subsector strategy and Investment program for Repelita V by the end of fiscal year 1988/89, taking into account the likely availability of funds from different sources as well as implementation capacity.

     

  •  

    C. Principles from the Presidential Instruction Number 9 of 1999 on Renewal of Irrigation Management Policy

     

  • Author’s translation

     

    [After citing relevant considerations, laws and regulations, the President instructs the Minister of Public Works, in his capacity as the Head of the Policy Coordinating Team on River Utilization and Watershed Conservation Maintenance, to:]

  •  

    FIRSTLY: Coordinate preparation of laws and regulations and necessary steps to carry out the renewal of irrigation management policy.

    SECONDLY: Renewal of irrigation management policy as stated in the first item includes:

    1. Rearrange duties and responsibilities of irrigation management institutions, giving a larger role to the farming community as decisionmakers in management of irrigation systems which are their responsibility.
    2. Empowering the farmer community of water managers through development of Water User Association institutions which are autonomous, self-reliant and rooted in the community, with socio-cultural characteristics and environmentally aware, and facilitating and providing opportunities for the farming community to democratically form economic and business units with legal status at the level of farming enterprises.
    3. Arranging the transfer of irrigation management, in a phased, selective, and democratic manner, to Water User Associations according to the principle of one irrigation system, only one management, and for irrigation systems which are not yet transferred to Water User Associations, management and funding will be carried out jointly between the government and Water User Associations by means of joint management until management and funding can be fully transferred to Water User Associations.
    4. Mobilization of sources of income to fund operation and maintenance, rehabilitation and development of irrigation infrastructure which are collected, managed and with their use determined by the concerned Water User Association through putting into effect irrigation service fees at the same time for all irrigation systems in Indonesia.
    5. Determination of general policies concerning the conservation of water resources and prevention of conversion of the use of irrigated land, so that the sustainability of irrigation systems can be protected.

     

  •  

    D. Irrigation Section from the Policy Matrix - Water Resources Sector Adjustment Loan of 1999

     

  •  
    Objective 4: Improve Irrigation Management Policy, Institutions and Regulations
  •  

    Sub- Objective

  •  

    Proposed Reform

  •  

    Monitorable Indicator

  •  

    4.1 Improve irrigation governance, transparency, and accountability through farmer empowerment and management transfer.

  •  

    a . Establish a participatory framework for management transfer and joint management based on an Irrigation Management Policy Reform (IMPR).

    b. Strengthen framework to establish democratic Water User Associations (WUA) & WUA Federations (WUAF) with autonomous governance and financial authority to manage irrigation networks transferred to their control.

    1.  
    2. Irrigation Management Policy Reform (IMPR) announced by the President of Indonesia on April 13, 1999 and Presidential Instruction on ‘Irrigation Management Policy Reform" issued in April 1999.
    3. Issuance of a Decree by the Minister of Public Works-- in his capacity as Chairman of Tim Koordinasi-- to implement the IMPR.
    4. Issuance of a Minister of Home Affairs Regulation based on the IMPR and issue national guidelines (Pedoman ).

     

    4.2 Improve Regional Government Irrigation Services

     

    a. Redefine roles, duties and responsibilities of central, provincial and district- level irrigation institutions to focus on reliable water delivery and post- management transfer services to WUA/ WUAF.

  • Issuance of a revised PP 23/ 82 on Irrigation and revised MPW Regulation 42/ PRT/ 89 to be compatible with proposed regional autonomy legislation and the IMP.

    Issuance of administrative and technical guidelines (Pedoman ) for reorganization of irrigation agencies for compatibility with proposed regional administration legislation and IMP.

    Establish, as necessary, Scheme Level Management Fora in medium and large irrigation schemes in a phased manner.

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    4.3 Ensure Fiscal Sustainability and Efficiency of O& M and Rehabilitation of Irrigation Schemes.

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    a. Revise framework for financing of irrigation operation and maintenance by WUA/ WUAF, with full authority to collect irrigation service fees in all schemes.

    b. Create framework for government- financed Irrigation Improvement Funds for prioritized phased rehabilitation of irrigation infrastructure directly under WUA/ WUAF management control

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    (i) Issuance of revised regulations (Kepmen/ joint ministerial decree) and guidelines.

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    E. Irrigation Chapter from the Letter of Sector Policy, - Water Resources Sector Adjustment Loan of 1999

     

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    [The full text of the letter of sector policy is available on the World Bank website: http://www.worldbank.org/html/extdr/offrep/eap/projects/watsal/watsalexecsum.htm]

     

    Participatory Irrigation Management

    Farmer Irrigation Organization Empowerment Policy

    To improve public irrigation network sustainability, the government will establish an institutional and fiscal framework to enable effective and sustainable O&M of public irrigation network through revision of the 1987 Irrigation O&M Policy and Irrigation Service Fee (ISF) regulations. To this end, the President of Indonesia has issued a public Declaration of Irrigation Management Policy Reform (DIMPR) on April 13, 1999 signaling our intention to implement an effective policy of participatory irrigation management. This declaration will be formalized through a Presidential Instruction.

    The new irrigation management policy will focus on incentives and arrangements for participation and empowerment at all levels of irrigation management which:

    1.  
    2. Establish autonomous, self-reliant and self-governing water user associations (WUAs) with management jurisdiction over part or all of a irrigation network based primarily on canal network boundaries and related operation considerations;

       

    3. Provide for democratic election of WUA leaders in a manner which represents the interests of all potential WUA members;

       

    4. Allows flexible WUA governance procedures to suit local irrigation and village management customs;

       

    5. Vests WUAs with authority to discharge their responsibilities including developing and enforcing their own rules, levying fees, operating a bank account and undertaking financial obligations;

       

    6. Allows voluntary federations of WUAs into higher level organizations up to the scheme level that resolve water disputes and engage in management of operations and maintenance;

       

    7. Allows transfer of irrigation management to WUAs or Water User Association Federations (WUAFs) above the level of tertiary canals;

       

    8. Facilitates public-private partnership and administrative transparency through joint management of large irrigation schemes by providing WUA or WUAF representatives with a scheme-level forum for access to information as well as a right to "voice" and "choice" about government provision of budgets and irrigation services for their irrigation network; and

       

    9. Ensures government guidance and support for irrigation infrastructure placed under farmer organization management control by commitment to a program of monitoring, evaluation and follow-up activities including financial and technical government support.

    We will create legally-recognized water users associations which are federated up to the governing fora at the level of entire irrigation systems in at least eight provinces. Relevant government agencies will be represented on such fora but the WUA representatives will have the majority voice in matters of O&M objectives and plans, irrigation service fees, management rules and sanctions, and so on. During the WATSAL period, the existing legal instruments and administrative modalities for establishing and supporting WUAs will be reviewed and amended to reflect this new irrigation management policy and issued as a consolidated Government Regulation and/or Joint Ministerial Decree of the Ministry of Home Affairs and the Ministry of Public Works (MPW). Appropriate amendments will also be made to UU 11/74, PP 23/92 on Irrigation and PP 27/91 on Swamps, as well as to any related MPW regulations to ensure functional and implementation consistency.

     

    Reorganization of Irrigation Agencies

    The new irrigation management policy requires the reorganization of irrigation agencies and their financial and logistic resources to deliver the WUA/WUAF support programs. We have identified the principal legal instruments needed to implement the Declaration of Irrigation Management Policy Reform (DIMPR), along with the redefinition of the roles and responsibilities of central, provincial and district-level irrigation institutions to reflect our new policy and the proposed services to be provided to WUAs. The DIMPR includes an action plan indicating the key steps needed for revision of irrigation agency organization and management to support the DIMPR framework. This action plan also outlines a framework for revising the roles and responsibilities of central and regional government agencies to support and implement the DIMPR. The operational details of a central and regional government irrigation management reorganization program (including reorganization, model operational procedures, staff deployment, capacity building activities, etc.) will be furnished by the Ministry of Public Works and Ministry of Home Affairs (MOHA) after consultation with regional governments prior to the completion of the WATSAL period.

     

    Financing of WUA Activities

    We have taken an initial step through the September 12, 1998 Circular of the Director General, Public Administration and Regional Autonomy (PUOD) to revise the existing Irrigation Service Fee (ISF) procedures to allow WUAs to collect and retain ISF in their bank accounts for maintenance of their scheme. We will also be undertaking a simplification of procedures to determine the level of ISF for each scheme and seek transparent modalities by which ISF will be paid by all farmers in a public irrigation scheme. Such modalities include linking of government O&M subsidies to levels of ISF collection. As implied by the DIMPR and aforementioned Presidential Instruction, we will implement ISF payment as a national requirement for all water users in public irrigation schemes.

    We will correct the irrigation network sustainability problem through reforming the way in which irrigation infrastructure is maintained and developed. We will fundamentally change the institutional framework and financing mechanisms for irrigation infrastructure maintenance and rehabilitation. System-level WUA federations will have the right to request, prioritize and control the quality of all infrastructure repair and development activities as part of the empowerment policy. In addition to the technical services and training to be made available by regional irrigation agencies, government-financed Irrigation Improvement Funds will be established for demand-based rehabilitation and/or improvement of irrigation infrastructure under WUA/WUAF management at the district and/or provincial level as needed.

    The operational modalities of the Irrigation Improvement Fund will be similar to those of the Bank-supported Kecamatan Development Project and similar demand-based funding programs. WUAs will only be eligible for Irrigation Improvement Funds if they have established and contributed to their own capital reserve account, preferably as part of their ISF payment. Funding eligibility will also be subject to periodic irrigation scheme technical audits by district irrigation agencies to ascertain that WUAs are satisfactorily operating and maintaining any network placed under their management.

     

    Financing of Government Irrigation O&M

    Improvement of government support services to WUAs under the DIMPR requires that district irrigation agencies are accountable to WUAs. The full transfer of irrigation responsibilities to regional governments will also require allocation of adequate O&M funding for the irrigation headworks, main canals and large secondary canals of schemes which remain a government responsibility, albeit that such schemes may be jointly managed by District Government and WUAs.

    The estimation of government O&M budgets will no longer be based on a per hectare of command area formula. The O&M budget to be made available by a district government for each irrigation scheme will be matched or linked to the total ISF payments collected by scheme WUAs. Thus, a direct linkage will be created between District irrigation agency funding and WUA satisfaction with irrigation supply and support services and their consequent willingness to pay the ISF. This linkage will foster irrigation agency accountability for services to WUAs.

    To encourage regional government responsibility to ensure efficient maintenance for works under its responsibility and prevent premature costly rehabilitation investments, we will seek viable modalities for establishment of district and/or provincial level Irrigation Improvement Funds. This would establish a matching reciprocity for WUA contributions to their own capital reserve funds. The O&M funding concepts will be incorporated into the guidelines for Regional and District Government irrigation regulations.