Report No. 9221-VE Ve,nezuela Irrigation Subsector Review Public Disclosure Authorized
November19, 1991 AgricultureOperations Division CountryDepartment I LatinAmerica andi the CaribbeanRegion
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ABBREVIATIONS
ADAGRO Almacenes de Dep6sitosAgropecuarios AgriculturalStorage Company
BANDAGRO Banco de Desarrollo Agropecuario AgriculturalDevelopment Bank
BCV Banco Central de Venezuela Central Bank of Venezuela
CASA Corporaci6nAe Abastecimientosy Servicios Agr1colas AgriculturalSupply and Services Corporation
CAVIDEA Cimara Venezolana de la Industria de Alimentos Venezuelan Chamber of Industry and Food
'1NIAP Centro Nacional de InvestigacionesAgropecuarias National Center for Agriculturaland Livestock Research
CIARA Fundaci6n para la Capacitac46nc Investigaci6n Aplicada a la Reforma Agraria Foundation for Training and Applied Research for the Agrarian Reform
CIDTAT Centro Interamericanode Desarrollo Integral de Aguas y Tierras InteramericanCenter for the Integrated Development of Water and Land
CORDIPLAN Oficina Central de Coordinaci6ny Planificaci6n de la Presidencia Central Coordinatingand Planning Office of the Presidency
CORPOANDES Corporaci6nde Desarrollo de los Andes Andes DevelopmentCorporation
This documc.nt has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii -
ABBREVIATIONS (Continued)
CORPOCCIDENTE Corporaci6nde Desarrollo del Occidente Corporation for the Development of the West
CORPORIENTE Corporaci6nde Desarrollo del.Oriente Corporationfor the Developmentof the East
CORPOZULIA Corporaci6nde Desarrollo de Zi§4a Zulia DevelopmentCorporation
CVG Corporaci6nVenezolona de Guyana Venezuelan Corporationof Guyana
FCA Fondo de Cr6dito Agropecuario Agriculturaland Livestock Credit Fund
FONAIAP Fondo Nacional de InvestigacionesAgropecuarias National Fund for Agriculturaland Livestock Research
FONDEFRU Fondo de Desarrollo Fruticola Fruit DevelopmentFund
FUDECO Fundaci6n para el Desarrollo de la Regi6n Centro Occidental Foundation for the Development of the Centre-West Region
FUSAGRI Fundaci6n para el Servicio a la Agricultura Foundation for Service to Agriculture
IAN InstitutoAgrario Nacional National Agrarian Institute
ICAP Instituto de Cr6dito Agropecuario Agriculturaland Livestock Credit Institute
ICE Instituto de Comercio Exterior Institute of External Trade
INAGRO Instituto de Capacitaci6nAgricola Institute of AgriculturalTraining
INCE Instituto Nacional de Cooperaci6nEducativa National Institute of CooperativeEducation
INOS InstitutoNacional de Obras Sanitarias National Institute of Sanitary Works - iii -
ABBREVIATIONS (Continued)
MAC Ministerio de Agriculturay Cria Ministry of Agriculture and Livestock Production
MARNR Ministerio del Ambiente y Recursos Naturales Renovables Ministry of the Environment and Renewable Natural Resources
PALMAVEN Filial de Petr6leos de Venezuela,para Fertilizantesy Desarrollode Cultivos Subsidiaryof the VenezuelanPetroleum Company for Fertilizersand Crops Development
SINIFA Sistema Nacional Integrado de Financiamiento National IntegratedFinancing System
UEDA Unidad Estatal de DesarrolloAgropecuario State AgriculturalDevelopment Unit - iv -
VENEZUELA
IRRIGATIONSUBSECTOR REVIEW
Table of Contents
Paa
Currencv Equivalents . .*...... i
Abbreviations ...... i
Table of Contents ...... iv
Executive Summary ...... vii
I. INTRODUCTION ...... 1
II. COUNTRY BACKGROUND ...... 2
A. Resource Base and Climate ...... 2 B. Agricultural Importance and Potential for Growth . . . . 3 C. Potential of Irrigation ...... 4 D. Sector Issues and Recommendation ...... 4
III. EXISTING IRRIGATION DEVELOPMENT ...... 5
A. Irrigation Systems ...... 5 B. Irrigated Crops . .*...... 7 Table 3.1: Areas of Main Crops Grown in Public Sector Irrigation Projects 1988-1989 ...... 7 Table 3.2: Yield Estimates of Main Irrigated Crops 1988-89 ...... 8 C. Irrigation Methods . . . 9 ...... 9 D. Financial and Economic Viability of Irrigation . . . . . 10 (a) Financial An^'ysis of Crop Production ...... 11 (b) Economic Analysis of Crop Production ...... 11 (c) Financial Analysis of On-Farm Investments . . . . . 12 Table 3.3: Typical Cropping Patterns . * * . * * * *. 13 (d) Economic Analysis of Returns to On-Farm Irrigation Investments . . a ...... 14 (e) Sensitivity Analysis ...... 14
IV. MANAGEMENT OF IRRIGATION AND SUPPORT SERVICES ...... 15
A. Managementof Irrigation ...... a . . . . o . 15 B. Planning and Design of Public Irrigation Projects . . . 17 C. Operation and Maintenance of Public Projects ...... 18 - v -
D. Research, Extension and Credit ...... 19 E. Land Tenure &nd Legal Framework ...... 20 F. Control of Water Resources ...... 21 G. Management and Control of Environmental Impact . . . . . 21
V. RECOMMENDATIONSTOWARDS A FUTURE STRATEGY FOR IRRIGATION DEVELOPMENT ...... 22
A. Introduction ...... 22 B. Recommirnded Strategy for IrrigationDevelopment . . . . 23 C. Support to Private Sector Irrigation Development . . . . 24 D. Support to Existing Public Sector Schemes ...... 25 E. Current Government Irrigation Development Program . . . 26 F. Recommended Pace of Irrigation Development ...... 27 G. Management and Control of Water Resources ...... 27 H. Environmental Safeguards ...... 28 I. Conclusion ...... * . . . 28
ANNEXES:
1. Tables 1 through 12 ...... * ...... 30-49 2. Physical Development of Irrigation ...... 50-63 3. Estimate of Investment and O&M Cc.atsfor Irrigation and Drainage ...... 64-67 Tables1-5...... 68-76 4. Financial and Economic Viability of Irrigation ...... 77-85 5,.Bibliography . . . . . , ...... 86-89
FIGURES:
1. Ministry of Agricultureand Livestock Production Organizational Structure (1989) ...... 90
2. Ministry of the Environmentand Renewable Natural Resources Organizational Structure (1989) ...... 91
MAPS:
1. Main Types of Weather . . . 92 2. Location of Natural Areas and Hydrographical Basins . . . . 93 3. Location of Irrigation Projects ...... 94 4. Hydraulic Advantages ...... 95 - vi -
WORKING PAPERS*s
1. Table 1 - Resumen de CaracteristicasClimaticas, Table 2 - Descargas Medias Mensuales de Rios que Abastecen los Subprojectosde Riego; Table 3 - CaracteristicasGenerales de Acuiferos; and, Table 4 - Balances Hidricos Mensuales para Diversos Proyootos de Riego.
2. Mercado y Mercadeo de los ProductosAgricolas (Tables 1-15).
3. Tenencia de la Tierra con sue Apectos Legales en los Sistemas Publicos de Riego.
e Not attched to this repot (ent to LAC InformationCenter). - vii -
EXECTJTIVESUMMARY
1. In spite of considerablepublic investmentsin irrigation in Venezuela during theipast 30 years, there has been no commensuraterise in agriculturalo-tput. This, suggests a need for a careful review of experience,policies and approaches to irrigation developmentprior to the commitment of additional resources. The World Bank -- as part of its ongoing agriculturalsector work -- has agreed to assist the government in this and, as a first step, requested the FAO/World Bank CooperativeProgram (CP) to carry out the present irrigationsubsector review on its behalf.
2. The objectives of the review are to: (a) review the performance, potential and constraintsfaced by the irrigation subsector; (b) propose the policy and institutionalreforms needed for the sound developmentof the subsector; and (c) propose a long-term program of irrigation developmentand investment. A proposed Irrigation SubsectorProject, which the government is identifying/preparingwith the support of the CP, would address the more pressing priorities and support new approaches to irrigation development.
3. Agriculture is a minor sector in the economy of Venezuela. Agriculture and Agroindustryhave remained at 5% of GDP since 1965 -- about the same size as the oil windfall that Venezuela received in 1990 -- despite massive interventionsby the Government in the sector. In Mexico, an oil exporter, agricultureamounts to 9% of GDP. Agriculturalexports in Venezuela are only 1% of total exports compared to 14% in Mexico. Further, Venezuela is the most urbanized developing country in the world -- about as urbanized as Germany and considerablymore urbanized than Japan. Nonetheless,agriculture has a larger political and social importance in Venezuela as the rural sector contains a high proportion of the poor and is the source of much of the urban poor. In addition, there is considerableBhvsical scope for expansion of the area under cultivation,and with the market oriented policies of the Perez Administrationsuch expansionwill be free to occur.
4. The irrigationpotential of Venezuela is estlmated at some 1.4 million ha and the country has ample water resources in its major watersheds to supply all foreseeablelong-term irrigation requirements. Some 520,000 ha had been developedwith irrigation infrastructureup to 1989 -- 340,000 ha by the private sector and 180,000 ha by the government as public irrigation. However, only about 108,000 ha of the public irrigationarea is currently irrigated.
5. Responsibilityfor the management and control of the country's water resources for agriculturaluse is split among several government agencies, with the Ministry of Agriculture and Livestock (MAC) retaining overall responsibilityfor agriculturalpolicy development,planning and implementationunder the general guidance of the Central Coordinatingand Planning Office of the Presidency (CORDIPLAN). The Ministry of the Environmentand Renewable Natural Resources (MARNR)is responsible for constructionand management of large multipurposedams with possible irrigation uses, and for formulatingpolicies and recommendationson water - viii -
use, for watersheds ai' dam management, for national cartography,national parks, pollution control, national land use planning, urban water and sewerage, and other aspects of environmentalpolicy.
6. Financial and economic analyses of several irrigated crops and types of irrigatio..development for different types of farmers and in the framework of the economy at large have shown the following:
a. Venezuela has a comparativeeconomic advantage in the production of rice, cotton, sugarcane and tobacco for the domestic market. However, tobacco production is limited both to specific agronomic conditionsand to farmers who have the skills to grow this crop efficiently;
b. Under present conditions, irrigationdevelopment might emnhasize high value crops. The increasedproduction under irrigationof such crops as maize and sorghuml should be avoided, except where there is an opportunityto irrigate at very low capital cost;
c. Public support through privately owned and operated medium- size irrigationschemes gives the highest economic rates of return. New public investmentsin irrigationfor low value crops cannot be justified on economic grounds. Irrigation investmentin new public schemes, especiallythose targeting small farmers, is not economicallyviable except in the limited case of high value rotations (e.g., horticulture).
7. The governmentshould continue to encourage -- by maintaining the exchange rate at an appropriate level and continuingto implement an agriculturaltrade poliey reform -- the reallocationof productiveresources away from the commoditiesin which Venezuela has no comparativeadvantage towards those c-mmoditieswhere its comparativeadvantage is relatively strong. In this new policy environment,it is expected that productionof commoditiessuch as rice, cotton, and sugarcanewould increase and substitute for imports; other commoditieswhich can be produced at costs below world prices, such as high value fruits and vegetables,would also increase. Irrigationshould be used mainly for the productionof high value crops to supply the growing urban markets and external markets. Its role should be seen as complementaryto that of rainfed agriculturewhich should be able to continue to provide the country with most of its requirementsfor basic staple foodcrops and livestock products.
8. There are clear limits to possible future irrigationdevelopment in Venezuela. If all the forecast domestic demand for vegetables, fruits, rice, sugarcane and cotton were to be met from irrigatedproduction, an estimated additionalarea of 210,000 ha would have to be developed by the year 2000, equivalentto some 20,000 ha per annum. In practical terms, investmentin new irrigationwill be substantiallymore limited, and there is no point in
Exceptfor seed prodtion. - ix - expanding irrigation for most staple crops which can be grown more cheaply under rainfed conditions. The requirementsfor irrigation expansion for sxport production should also not be overstated. In the light of the analysis and observationsmade in the present report, the government'ssubsector plans should be scaled down to make them compatiblewith economic opportunitiesand with institutionaland implementationcapacity. To create conditions which lead to irrigationbeyond these cypes of ranges would increase fiscal and economic costs and ex* erbate environmentalp- blems.
9. In the medium term, irrigation developmentshould be based on the followingprinciples:
a1. Developmentsshould be "demand driven", except as noted in (d) below. Initiativescoming from farmers, farmers' associations,and commercial enterprisesshould be supported;
b. In order to use better the country's limited resources, priority should be given to the modernizationand consolidationof the most promising of the existing schemes with the aim of raising performance to the point where farmerswill be able to take over the scheme concerned. Once this is achieved, the process of disengaginggovernment services and transferringall recurrent costs from the government budget to the irrigators can be completed. In order to achieve this, the governmentwill have to increase water rates to levels which, at a minimum, cover O&M costs. It will also be necessary to promote irrigators'associations and cooperatives,which can eventually take over responsibilityfor operation and maintenance of the schemes, to change some of the existing land tenure laws and regulations as well as -waterlegislation to bring them in line with producers' needs, and to improve irrigated agriculturalresearch;
o. In situationswhere new irrigation developmentecan be shown to be viable, the initiative for development should still come from the private sector, with the government's role being limited to the provision of basic infrastructure (e.g., damst main canals, roads, electricity distributionand services). Associated costs should be fully recovered over the long term from the users;
d. Where modernization and consolidation of existing public projects is not economically viable, they should either be recognized as components of a social program (and evaluated accordingly)and be financed from the social budget, or closed down.
10. The government'splanning should be coordinatedbetween thA various organizationsinvolved in irrigation development. The issue of whether it - -
would be necessary to create a new governmentagency to be in charge of irrigationdevelopment, or whether appropriatemodifications to the existing ones would suffice, should b- resolved on the basis of studies.
11. The governmentshould define clearly the basis for allocatingwater resources between competing users, and establish a system for arbitrationwhen conflicto arise. In the hydrographicbasins of the semi-arid zones, both administrativeand physical water resource managementmeasures would be requirod. In the4e areas, administrativeallocations of water should be reinforcedby improvod operation of control structuresin the basins and by the constructionof additionalregulating structures to regulate water availabilityto users and reduce orosion and flooding. In the main watersheds and aqulforu as well as along the main rivers, water management should focus on the allocationof >.:tertaking into account hdman consumption,industrial and power use, irrigationrequirements, and environmentalaspects. Pilot basin management systems and studies could be implementedas part of the proposed project in selected major catchmentsto develop methodologiesfor long-termmanagement of water resources.
12. The governmentshould prepare specific operationalguidelines on the environmentalsafeguards to be observed in irrigationand drainage projects. MAC and MARNR should then test the applicationof the guidelines, initially in several small watersheds in different parts of the country. In these watersheds, baseline surveys should be carried out, and the future environmentaleffects of irrigationand drainage developmentshould be monitored. The information %nd feedback generated from the field in this way shoulu be usod for the subsequentupgrading of environmentalguidelines. VENEZUELA
IRRIGATION SUBSECTOR REVIEW
I. INTRODUCTION
i.01 Major irrigation in Venezuela started following the Agrarian Reform Law of 1960, when largo government inveostmento in rural infractructure (dams, canals and sottlements) wore initiated to promote economic and social development. The Agrarian Reform Law also provided for farm families to receive land, housing, technical assistance, machinery, credit, marketitng assistance and support in cooperative development. Venezuelan private sector flood-irrigation of rice and limited irrigation of riverine strips have a history going back many decades. Development in the private -ectnr has been done in a laissez faire atmosphere,with little government support and without control of water use. The current strong interest in irrigation in Veniezuela arises from growing dependency on the import of food, stagnation of yields in rainfed production syst6ms, and possibilitiesfor increasing exports of tropical crops to markets in the United States, the Caribbean and Europe.
1.02 Although there have been sizeable investmentsin public sector irrigation infrastructureduring the past 30 years and several state institutionshave been established to support farmers, there has been no cammnsurate rise in output. This suggests the need for a careful review of experience in order to recommend suitable policies and approaches to irrigation developmentprior to the commitment of additional resources. The Bank -- as part of its ongoing agricultural sector work -- agreed to assist the Government in formulatingand implementingnew policies and strategies for a more efficient and rapid subsector development. As a first step, the Bank requested the FAO CooperativeProgram (CP) to carry out the present irrigation subsector review on its behalf.
1.03 The objectives of the review were to: (i) review the performance, potential and constraintsfaced by the irrigation subsector; (ii) propose policy and institutionalreforms needed for the sound development of the subsector, taking into account technical, economic and social considerations, the country'swater and land resourcesbase, and the agriculturalsector's potential and developmentpolicies; and (iii) propose a long term program o: irrigation developmentand investment. The present report is based on the work of a CP missionl which visited Venezuela in May 1990.
1 C. Miczaika (Leader), S. Koddorritzsch (Economist); and J.-P. Capo-Canellas (Marketing Economist), 0. Demonure (Irrigation Engineer), F. Eusepi (Agronomuist) and J. Succla-Plores (Irrigation Engineer), C~5. - 2 -
II. COUNTRY BACKGROUND2
A. Resource Base and Climate
2.01 Venezuela has a total area of 916,700 sq kmi, or about 92 million ha. Approximatelyhalf the country lies south of the Orinoco river in the Guyana Shield (southwesternVenezuela), and is largely uninhabited and covered with natural forest, except for a narrow strip along the Orinoco. Of the remaining 46 million ha, the 1985 census indicates that 31.3 million ha are used for agriculture (including livestock),encompassing some 380,000 farms. In 1989, about 2.1 million ha were under crops, 18 million ha were used for grazing, 2.8 million ha were in improved pasture and the remainder was in native pasture. In general, the country is not well endowed with good agricultural soils, and large areas are poorly drained. Nevertheless,the country falls far short of utilizing the productivepotential of its land resources. For instance, although the National Agrarian Institute (IAN) owns 7.9 million ha, most of this land has not yet been distributedand those farmers who have been settled have not yet received provisional titles. Some 222 of the area outside the Guyana shield, totalling about 9 million ha, is potentially arable land.
2.02 The agriculturallyproductive areas can be divided into four major zones (Maps 1, 2 and 3). The first is the mountainous area running east to west along the coastal strip from central to eastern Venezuela, and the Andean region running from the southwest to the northern central areas. The area comprises mostly the states of Lara, Merida, Miranda, Sucre, Tachira, Trujillo and Yaracuy. Approximately852 of the country's population lives in this region, as does the greatest concentrationof small farmers (less than 20 ha). The area produces mainly fruits, vegetables, coffee, cocoa and milk. The second major zone, the Llanos, runs from the southern Andean foothills to the Orinoco delta, and lies on both sides of the Apure river to the north of the Orinoco. A large portion of this region has drainage problems with seasonal flooding. The Llanos make up about 25Z of the land area outside the Guyana Shield and are mainly used for beef cattle production although the better drained savannahs are used for crop production. A third zone, the central plains, lies between the Andean foothillsand Gu&rico province. This zone produces mostly annual cropsp particularlycereals, and also has intensive livestock raising. The fourth region is the flood plain of Lake Maracaibo in western Venezuela,which is an importantproducer of milk and sugarcane. Some of the wetter areas on the border of this basin are being opened to the productionof plantation crops such as cocoa.
2.03 Venezuela lies within the tropical zone but has widely varying climatic conditions. Throughoutmost of the country, the rain falls over a six to seven months period. Even during the rainy season rainfall is irregular and not well distributedgeographically, which makes supplemental irrigationadvantageous in most parts of the country, except for the southeast
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(Working Paper 1, Table 1). In the Llanos, for instance, annual rainfall is 1,000-1,500mm, most of which falls during the period from May to November. On the Caribbean coast, rainfall is about 800 mm falling mainly between July and October. Some small areas in the northeast have less than 300 mm rainfall annually. The region north of the Maracaibo plain is exposed to dry winds coming off the ocean and has less than 100 mm rainfall annually.
B. AgriculturalI
2.04 Agriculture has been and continues to be an important sector in the Venezuelan economy, not only because of the political sensitivityof issues concerning food self-sufficiencyand food prices, but because of its intrinsic economic importance. Agricultureand agro-industryaccount for about 15-20Z of non-petroleumGDP and about 15Z of non-petroleumand basic metals exports in 1988. While the rural population of about 2.4 million is only 13S of the total population,Venezuela has a strong agriculturaltradition. With its abundant land resources, the country has a large apparent potential for expanding and diversifyingagricultural production and exports and increasing rural incones.
2.05 The rapid urbanizationand progressiveindustrialization in the past 20 years have contributedto a slow but steady intensificationof agricultural production, reflecting the increasing relative scarcity of rural labor compared not only to land but also to capital and o:h.terinputs (the latter two accentuatedby a policy of subsidizinginterest rnces and agricultural inputs). This trend towards intensificationof agriculture is expected to continue. FAO projectionsmade in 1987 suggest that the share of rural labor will continue to decline from 790,000, or 142 of the total average labc- force of 5.4 million in 1982/84, to 670,000 or 72 of the estimated total labor force of 9.1 million in the year 2000.
2.06 Venezuela's farmers grow a wide range of crops. Horticultural production is important for many farmers, especially in irrigated areas, and it is highly profitable. The export markets of coffee and cocoa, but also for other non-traditionalexported products, are consideredwith interest by Venezuelan exporters. Exports of tropical fruits and vegetables, particularly off-season vegetables, are being promoted due to Venezuela's comparativelylow production costs (low costs of energy and labor, good transport infrastructure and commercial experience),and its geographicproximity to the markets of the USA, Canada, and the Caribbean. Venezuela has already obtained good results in the exports of mangoes to Europe. Opportunities-- albeit not of an unlimited scale -- appear to exist for exports of a range of fresh fruits includingmango, avocado, pineapple,melon, banana, citrus, papaya, passion fruit, plantain and guava; for processed fruits, juices and concentratesof citrus, passion fruit, mango, guava and soursop; and for export of nuts such as cashew and macadamia. - 4
C. Poetialof Irrigation
2.07 Venezuela has abundant surfacewater resources (Working Paper 1, Tables 2-4) and it is estimated that rivers in the country generate 700 billion m3 of water, of which 82% flows into the Atlantic, and the remaining 18Z flows into the Caribbean and Lake Maracaibo. The main watersheds are the Orinoco, San Juan, Guanipa and Cuyoni rivers, all of which flow into the Atlantic Ocean. A further 20 minor rivers, includingthe Chama, MotatAn and Tuy, flow into the Caribbean. Of minor importance is the watershed of Lake Valencia,which has no exit to the sea. The Orinoco river originates in the Guyana shield and is 2,063 km long. Its watershed covers 640,000 km2 and occupies 702 of the country's land area. The spatial distributionof surface water resourcec is such that the most populated and developed zone of Venezuela has fewer water resourcesthan the rest of the country.
2.08 Venezuela is less well endowedwith groundwaterresources than surface water, and groundwaterpotential is estimated at some 20 billion m3 annually. The country'swater resources are generally suited for irrigation, with the exception of the Maracaibo Plain, where some salinity problems in water have been found.
2.09 The irrigationpotential of Venezuela is estimatedat some 1.4 million ha (Annex 1, Table 1). Theoretically,the country has ample water resources in its major watersheds to supply all foreseeablelong-term irrigation requirementsbut, in areas near the major cities, irrigation developmentis subject to a number of constraintsincluding competing use for potable and industrialwater supplies.
D. Sector Issues and Recommendation
2.10 The AgriculturalSector Review' identified four overriding considerationsfor the developmentof a strong and competitiveagriculture in Venezuela. first, the exchange rate, as the most crucial element in ensuring adequate levels of imports and exports and the most effective instrument for influencing allocation of resources,must be maintained at an appropriate level. Second, the Government should introducepolicy measures which address outstanding issues in the four major areas of: agriculturaltrade, where the objectives of reform would consist of aligning internal prices with world prices and to encourag6 reallocationof productive resources to those activitieswhere Venezuela is internationallycompetitive; agricultural pricing, where the policy for producers' prices would be to link them to border prices; the agriculturalfinancial sector,where the reduction and eventual eliminationof interest rate subsidies and of directed credit and portfolio requirementsof the commercialbanks should be eliminated;and agriculturalproduction, includingbudgetary and institutionalissues related to the provision of public sector support services and productive infrastructureto enhance agriculturalproductivity and improve the sector's
3 RqmatNo. 8389.VBdatd Match19, 1990. performance and competitiveness. Third, the reform program should be clearly spelled out and consistentlyapplied over the long term. Fourth, the Government should complement the reform program with budgetary support in areas where externalitiesare found, aimed at improvingagricultural productivityand the efficiency of the sector. The Review also recommended that future involvementof the Bank in the irrigationsubsector should be based on measures aimed at removing the main constraintsto the development of irrigated agriculture:insecurity of land tenure, inadequacy of agricultural credit, inefficientinter-institutional coordination, inadequate irrigated agrirculturalpractices and improvementin recovery of operating and maintenance costs and also of capital costs. The Government'sreform program has already begun in several of the above areas - most notably in exchange rate management, trade, pricing, and agriculturalcredit.
III. EXISTING IRRIGATION DEVELOPMENT
A. Irrigation Systems
3.01 It is estimated from a variety of sources that between 420,000 ha to 520,000 ha had been developedwith irrigationinfrastructure up to 1989, correspondingto 252 of the cropped area of 2.1 million ha. Of this total, 340,000 ha had been developed by the private sector and 180,000 ha as public irrigationby the Government (Annex 1, Tables 2 and 3). However, only about 108,000 ha, or 60S of the area equipped with public irrigation infrastructure, is estimated to be irrigated. The gap between irrigated and irrigable areas is wide because in some projects the distributionsystems have never been completed due to budgetary problems and other constraints,e.g., land ownership disputes, lack of farmers' demand for public sector irrigated land, problems of illegal land transfer and sales, farmers' lack of titles, insufficientcredit to meet the investment and working capital needs of small farmers, and delays and cumbersome administrativeprocedures in securing loans. About 83S of the total irrigated area is supplied by gravity, 162 by sprinkler and the remainder by drip systems (Annex 1, Tables 4 and 5). The western and central parts of the country account for half the irrigated area, and irrigationhas less importance in the other regions.
3.02 The Dublic irrigation schemes are grouped for administrativepurposes in 24 irrigationprojects (Maps 3 and 4). The most important schemes are Guirico (28,000ha irrigated and 60,000 ha potentially irrigable),Anzoategui (1,000-10,000ha irrigated, 42,000 ha potentially irrigable),and Las Majaguas (8,900 ha irrigated, 24,000 ha potentially irrigable). Three projects, Maticora, El Cenizo and Tiznados, are currently under constructionand on completion should bring an additional 31,000 ha under command. Water on about half the area is regulated by storage dams, the other half is served by run- of-the-riversystems, small tanks and wells. Most schemes are managed by MAC, but the constructionof storage systems and the release of vater from them is generally controlled by HARNR (Chapter IV, para 4.02). Some 38 multipurpose dams were built by HMARNR;50 dams were built by the National Institute of Sanitary Works (INOS), initially only to store water for human use; Zhree were built mainly for power generation;and three belong to the power companies CADAFE and EDELCO (Annex 1, Table 6). Total capacity of these 90 dams is estimated at 7,570 million m3. In addition,MAC has constructedmany, generally small, reservoirs.
3.03 Private irrKiation,which involves one or several individualfarmers with no Government support, has expanded gradually during the last few years, increasing from 285,000 ha under irrigation in 1980 to 340,000 ha in 1989. A number of factors have contributedto this increase: (i) Government policy has kept the cost of energy low; (ii) low official interest rates had been set to encourage investment in agriculture;(iii) good quality irrigation equipment, well adapted to local conditions,has become available at moderate prices; and (iv) entrepreneursin some public sector irrigation projects have successfully demonstratedthat costly irrigation investmentspay off when high value crops such as fruit, vegetables, cotton and a variety of crops for seed are grown and when marketing is well organized. Little informationon areas, crops, and methods of irrigation is available for typical types of private operations.
3.04 Constructioncosts of irrigation projects in Venezuela are difficult to determine because some projects were carried out under force account and costs were not recorded or analyzed systematically4. In addition, some projects were not well designed or planned specificallyfor irrigation. Consequently,plans had to be changed during implementationand the correspondingcost overruns are difficult to attribute to the particular project. In general, the total financial costs of on-farm investment (including land development,drainage and irrigation equipment) and off-farm investment (water conveyance,drainage, roads and energy) on public projects in the country range from US$2,000 to US$5,000 per ha, excluding agricultural support eervices and operationalsubsidies. The investment costs of private irrigation are somewhat lower. Constructioncosts have remained stable during the past 20 years when expressed in US dollar terms due to several factors: costs of labor and technical assistance are low; the Government has, in the past, subsidized the price of cement; the costs of constructionmachinery have been amortised on road and urban constructionprojects; and many contractors and most necessary constructionmaterials are available in the country. Only few data are available on costs of operation and maintenance,since these are generally lumped with the improvementand extension of projects. Operation and maintenance costs are estimated at some US$90/ha annually,which corresponds to 3S of the average investmentcost. This is on the low side by internationalstandards and reflects low levels of maintenance in some projects, especially of drainage works.
3.05 In the pat Vovernmentirrigation policy has favored the constructionof maj%. irrigationwork,, which are relatively expensive, and has neglected the constructionof on-farm developmentworks which have been only partially completed. As a result, agriculturaldevelopment of areas under command has been only a fraction of the potential. Beneficiarieshave not been required to contribute towards developmentcosts. The Government has not attempted to accelerateprivate sector developmentby encouraging farmers to finance on-farm irrigationworks of the types shown to be economically
4 A diasc of irs*im cost is &achedas Anaex3. - 7 - justified. Nor has the Government provided supporting infrastructuresuch as power and main hydraulicworks to support private development. Recently, the Government has implementedbroad sectoralmeasures such as the unification and floating of the exchange rate, the reduction of agriculturalinput subsidies and eliminationof price controls on some commoditiesto improve the productivityof agriculturalproduction. However, Government recognizes that it also needs to implement a reform program of policies relating directly to irrigation,to encourage private farmers to invest in irrigation.
B. Irrigated Croge
3.06 A wide range of crops is grown under irrigation. Areas of the main crops grown in the public sector projects are shown in the table below.
Table 3.1 Areas of Main Crons Grown in Public Sector Irrigation Projects 1988-1989
Crop TotalArea Harvested Proportionof Dry Seasor RainySeason (ha) Total Area (X) Area (ha) Area (ha) Rice 33M790 21.7 28.470 5.320 maize 21,420 13.8 60 21,360 Sorghum 20,930 13.4 60 20,870 Su9arcane 20,570 13.2 16,400 4,170 Pasture 8940 5.7 _5,59 3.890 Potato 8,370 5.4 4,960 _ 3.410 CItrus 5*630 3.6 2,600 3,030 Tomato 4.330 2.8 4,110 220 Tobacco 3,260 2.1 3.220 40 S floier 2,670 1.7 2,670 0 Carrot 2.470 1.6 1.390 1.080 Plantain 1.410 0.9 720 690 Cabbage 1,050 0.7 490 560 Others 20.930 13.4 16,570 4,360 Total 155.770 100.0 86,770 69,000
Source:MAC.
3.07 In the northern, central and eastern plains, rice and sugarcane are the main irrigated crops, along with either cotton, tobacco or horticultural crops; maize is cultivated in these areas during the rainy season without irrigation. Farmers in the western and central plains tend to be specialized, for instance, in GuArico (rice and pasture),Las Majaguas(rice, sugarcane, pasture and maize), and Santo Domingo (cotton, rice, sunflower and maize). The region of Zulia (Lake Maracaibo) produces mostly grapes, guava, citrus, and horticulturalcrops. Approximately 70% of fruit production is under irrigation,using drip and sprinkler systems and managed by private farmers. The main irrigated fruits are guava, sapodilla (nispero),papaya, avocado, citrus and mango. Mainly surface irrigation is used for vegetables. Crops that are only grown under irrigation are baniana,grapes, strawberriesand guanabana. The production of certified seeds of maize, sunflower and sorghum under irrigation is managed by private sector farmers in joint-venturewith foreign seed companies.
3.08 The densely populated northern range of the Andes has many small public irrigation schemes (between 30 and 50 ha), wh-.chare consideredby the personnel of MAC and MARNR as examples of efficient Government intervention. The Government provides all technical assistance and materials for the constructionof the schemes, while the beneficiariesassume full responsibilitiesfor operation and maintenance. The farmers grow a wide range of food and cash crops. Small scale irrigationis also carried out by small farmers in the veaas, which are fertile fields located near the rivers and in delta areas of the Orinoco river.
3.09 Groundnuts are irrigated in 50% of the area under cultivation,the major irrigated area being the Mesa de Guanipa; rice is irrigated in approximately90% of lands cultivatedwith this cereal. Coconut plantations are irrigated only in 15% of the lands under cultivation,mainly in the Tocuyo de La Costa irrigation scheme. Most production of maize seed is irrigated. Among the roots and tubers, only potato is irrigated. Among plantation crops, sugarcane is almost always irrigated. Some oil palm is also irrigated,mainly in the Las Majaguas scheme.
3010 Yields of irrigatedcrops vary widely throughout the country and by source of data. Selected estimates of yields of main irrigated crops are shown below.
Table 3.2 Yield Estimates of Main Irrigated Crops 1988-89
Crop Estimated Yietd ______(t/ha) Rice 4.5-6.0 Sugarcane 80-100 Tomato 20.0 Red Pepper 15.0 Papaya 30.0 Cotton 2.4 Tobacco 1.6
S6our: MAC and Credit Institutfons. _-9-
3.11 Yields of irrigatedpaddy are high, mainly because of the use of improved cultivationtechniques. Land preparationof paddy fielda is fully mechanized and mostly made under flooded conditions. Direct seeding of pre- germinated rice is by plane or by a broadcasterattached to a tractor. Continuous field to field irrigation is practicedwith 4 to 5 days interruptionfor the applicationof herbicides.
3.12 Sugar yields under irrigation are low; this is attributed to excessive ratooning (the cane may remain in the field for up to 10 years) and to the small difference between night and day temperatures,which contributes to slow cane maturation and sugar accumulation.
3.13 Farm technology in Venezuela differs markedly between farm size. Many medium and large farms are highly mechanized; airplanes are often used for planting and for spraying; farmers have ready access to modern inputs, commercial credit and technical assistance;marketing arrangementsgenerally have been worked out with retail markets or processing plants. In contrast, most small-scaleproducers lack capital, technical know-how and managerial capacity; they therefore tend to simplify or even eliminate some of the recommendedfarming operations and use small amounts of modern inputs. They also depend heavily on the Government for crop financing, but funds are insufficientand often come too late in the planting season.
3.14 The level of mechanizationvaries between small size farmers, who work on lands assigned by IAN and generally contract mechanization services outside their farm, and medium to large-scalefarmers, who mostly have their own machinery. However, the existing fleet is old, and the new exchange rate has made the purchase of new imported machinery expensive. Consequently, sales of farm machinery have decreased throughout the country.
C. Irrigation Methods
3.15 Gravity Water Supnlv. A wide range of irrigationmethods is used in Venezuela, as summarized in Annex 1, Table 5. However, accurate information on the scale on which each method is used, for which crops, and their performance,is not available. Surface irrigation is the most common, especially in government projects. Typical designs of main and secondary canals in these schemes provide for lightly reinforced concrete lining while tertiary canals are generallyunlined except where they are elevated. Infield distributionis by gravity flow either into small channels (furrows),border strips, or to flood the entire field (basin irrigation). Furrow irrigation is gradually becoming more importantbecause it is well adapted to local soils and topography,and because new mechanized techniques of water control have become available.
3.16 For basin irrigation,the land is graded and levelled, and the basin size ranges from 3-10 ha depending on the land slope, the soil type, the availablo otroam size, the required depth of the irrigation applicationand farming practices. Both large scale producers and small farmers generally master this method well. Public and private projects do not always have well - 10
designed supply systems, and the management of flows to the different basins appears satisfactory. However, land has been levelled only in part of the irrigated lands for crops such as rice, sugarcane and vegetables. Because of its high costs, land levellingwork has often been poorly executed and is frequently unfinished,which reduces irrigation efficiency at field level. Some farmers have problems to maintain adequatewater levels and "over- irrigate", for instance in Bocon6, so that percolation losses occur, nutrients are washed away, and the plants may drown.
3.17 For the irrigation of pastures and fruit orchards, basins are temporarilyflooded. In the GuArico project, farmers use temporary flood irrigation on rotations of pasture and rice. The basins are seeded with a grass which resists temporary flooding,and they are irrigated every 15-20 days. Temr-rary flooding of such basins by pumping water from wells is used especially for small fruit orchards (citrus).
3.18 PressurizedSupplv Systems. The use of pressurized supply irrigation systems has generally increasedduring the past few years. Estimates of sales of irrigation equipment are not available. Both center-pivotand a range of sprinkler and localized irrigationequipment are manufacturedlocally. Large sprinkler systems are installedmostly to irrigate pastures in the areas of Zulia, Lara and Falc6n. Mobile systems such as the center-pivotand the hose reel raingun have been installed on uniform flat or gentle slopes for the irrigation of high value crops, e.g., sugarcane, cotton, groundnut, and watermelon. Widespread use of these systems has, however, suffered from poor local representationof internationalequipment suppliers, the lack of spare parts, and unreliable after-salesservice. Drip irrigation is used mostly in the Zulia region for row crops (vegetables,soft fruit) and tree and vine crops, where one or more emitters can be provided for each plant. Some farmers apply fertilizerswith the irrigation. Success of drip irrigation has stimulated the growth of small local manufacturersof most of this equipment. A wide range of plastic pipes and emitters is available in the country. MAC has also developed 107 small projects in the Andean region where pressurized distributionsystems based on gravity supplies have been used. Curreot experience suggests that even small scale farmers can use this method successfullyto grow high value vegetables. The only pressurized distribution system in the lowlands is the Cariaco project (2,100 ha irrigated). The project has failed for two reasons: a design error -- the lack of discharge limiters on users' hydrants -- and the users' low technical level with most farmers combining the modern water delivery in the pressurized system with traditional gravity irrigationmethods.
D. Financial and Economic Viability of Irrization5
3.19 The economics of irrigationis determined by a range of factors including cropping patterns and intensity, farm gate values, the efficiency in water and irrigated farm management, and the cost of water development. As
5 A discussoof O fiaincil and economicvi*ft of br isausehad "igm a Amsx4. - 11 - part of the present Review, an analysis was carried out of the financial and economic viability of seven irrigationmodels which vary from each other in terms of the preceding factors. The models are broadly illuatrativeof the prevailing types of irrigated agriculturein Venezuela. Comparisonswere made between rainfed and irrigated farming for maize, cotton and soybeans, between a range of other crops grown under irrigation,and between the technology and intensity levels of the small scale farmer (camnesino)and the medium and large scale producer (empresario). For a number of basic commodities, comparisonswere also made between their economic costs of production per ton and the respective border prices. Nevertheless,eventually more analytical work could usefully be done on the potential of rainfed agriculture and irrigationmodels. The basic farm models developed for analysis are shown in Table 3.3.
(a) Financial Analysis of Crop Production
3.20 The results of the financial analysis of crop budgets (Annex 1, Table 7) suggest:
* As can be expected, it is more profitable for farmers to grow high value vegetables, fruits and tobacco than traditional low value crops, especially annual grains and oilseeds. However, the possibilitiesfor farmers to go into these high value crops are limited due to specific agronomic conditionsand marketing constraints.
* It is more profitable for the emnresario than for the campesino to grow rice, maize and cotton (Annex 1, Tables 7 and 8). All three crops show high returns to labor under both management systems, well above the reported current daily wage rate of Bs 120 (US$2.6).
* Changes in the production of maize, soybean and cotton from rainfed to irrigatedconditions result in significantlyincreased net benefits per hectare of land, but only low incrementalreturns to labor, which may not be attractive enough to induce campesinos to invest heavily in irrigation (Annex 1, Table 9).
* The farmerswho shift from rainfed to irrigatedproduction of maize, soybeans and cotton can expect a high increase in returns to capital.
(b) Economic Analysis of Crop Production
3.21 While the results of the analysis suggest that the production of most irrigated and rainfed crops is profitable at financial prices, losses to the economy arise when economic prices and costs are applied (Annex 1, Tables 10 and 11). The estimates indicate thats - 12 -
* Under present technologyproduction of maize and sorghum generates losses to the economy, while irrigated soybeans show a modest return.
* Venezuela is internationallycompetitive in the production of rice, cotton, sugarcane and tobacco. Irrigated rice and cotton appear profitable under both camgesino and emoresariofarming systems. However, tobacco production is limited to specific agronomic conditions and to farmerswho have the capacity to grow this crop efficiently.
* The profitabilityof all crops is highly sensitive to yield variations, i.o., an increase (decrease)of yields leads to an disproportionateincrease (decrease)of return.
3.22 Therefore, under present conditions,and strictly on grounds of an economic return, irrigation developmentand other policies should encourage, &part from high value vegetables and fruits, crops such as rice, soybeans, sugarcane and cotton that are profitable and have a potential for yield increases. The expansion of the production of crops such as maize and sorghum should not be promoted by public policies except where there is an opportunity to irrigate at very low capital cost. Even for the apparentlyviable crops, however, there will be ceilings on the amount which should be invested per hectare. For instance. rice production (based on one irrigated crop per year) would justify irrigation investmentsonly up to US$2,000/ha. Moreover, the results are extremely sensitive to the kinds of crop grown under irrigation. If, for example, the local market is floodedwith tomatoes, the pricer will drop and the calculationsregarding profitabilitywill prove to have .. een too optimistic.
(c) Financial Analysis of On-Farm In-estments
3.23 Government planning suggests three main options for irrigation development,public investments in new schemes, consolidationand modernization of existing public schemes, and public investmentsto construct physical infrastructure(roads, power lines, etc.) to support private irrigation development. Each of these public investmentsrequires complementaryon-farm investmentswhich would have to be financed by the individual farmer. In order to assess the profitabilityof these on-farm developmentsto the irrigator, their unit costs have been compared to the net incremental benefite generated from a hectare of irrigable land annually in the "with" and "without" investment situation, as Ahown in the following tables - 13 -
Table 3.3 TYRical Cropp in Patterns
Irrigotion CroppingPattorn CroppingPattern FinancialRates EconomicRates Investments WithoutIrrigation withIrrigation of Return(M) of Roturn(%) 1. NewPubLic a Rainfedsorghum Irrigatedrice 15 *3 Schemes Rainfedmaize Rafnfedmaize b Rainfedcotton Irrigatedrice 9 -17 Rainfedmaize Rainfedmaize c Rainfedcotton Irrigatedtomato Rainfedmaize Rainfedmaize 72 20
2. Consolidation a Rainfedsorghum Irrigatedrice 46 15 clnd Rainfedmaize Rainfedmaize Modernization b Rainfedcotton Irrigatedrice of Fxisting Rainfedmaize Rainfedmaize 29 -11 PubLic c Rainfedcotton Irrigatedtomato Schemes Rainfedmaize Rainfedmaize > 100 54
3. Pubifc Rainfedcotton Irrfgated Support Rainfedmaize tobacco 47 74 to Private Irrigatedmaize Irrigation
Saurce:Mission.
The following illustrative on-farm investments have been assumed for the purpose of this analysies
(a) New public gravity irrigation schemes: farmers' coste of land clearance and preparation (deforestation,partial levelling, and superficialdrainage) are estimated at US$800/ha and the constructionof tertiary canals at a further US$20/ha.
(b) Consolidationand modernizationof existing public irrigation infrastructure:it is assumed that the farmer had access to irrigation in the past, which was interrupteddue to the degradation of the facilities. On-farm investmentsare thus lower than in (a) and might amount to US$280/ha for land preparation and US$20/ha for the improvementof tertiary canals.
(c) Public support to develop private irrigation:costs are considerablyhigher (US$2,130/ha)than under (a) and (b) above and include land development (US$590/ha),tubewell constrAction (US$100/ha),the installationof an electricalmotor pump (US$340/ha), and the supply of irrigation equipment (US$1,100/he%. Some of these costs are borne by the public sector, but no informationis available on how much the public sector generally contributes to private sector irrigation development.
3.2!' These aseumed on-farm developmentcosts have been set against the t..t incrementalbenefits resulting in a change from rainfed farming to an irrigated-rainfedrotation in public schemes (where irrigation is generally only provided during the dry season) and a complete irrigation rotation in - 14 -
private farming (where irrigation is practiced all year round). In the public schemes, ceMResino technology and intensitylevels have been assumed. In private irrigation,the case of the oemresario has been examined.
3.25 The results of the analysis iuggest that:
* From the point of view of the financialviability of on-farm investments,farmers should be interested in participatingin efforts to consolidate existing schemes and support private irrigation.
* Cam esinos are not expected to be interested in investing in land provided on new public irrigationschemes, since the required on-farm investmentsmay not be sufficientlyprofitable considering the risks involved including land tenure problems, availabilityof credit, and me.rketingproblems.
(d) Economic Analyksisof Returns to On-Farm Irrigation Investments
3.26 Three difierent scenarios of public investmentstogether with the on- farm investmentshave been set against the net incrementalbenefit resulting from the change from a rainfed rotation to an irrigation rotation,valued in economic terms. The same three investmentoptions as above were assumeds new public schemes,which might require investmentsof US$2,800/ha;consolidation and modernizationof existing public schemes, at US$1,000/ha;and public support investmentsto private irrigation,at US$2,000/ha. In comparisonwith the other investmentoptions in :.rrigation,public support to privately owned and run medium-size irrigation schemes appears to give the highest economic rates of return.
(e) SensitivityAnalvsis
3.27 The various models have been used to develop ceilings as indicators for future investments,and to test their sensitivityto alternative assumptionsabout crops, yields and cropping intensity. None of the resulting ceilings is necessarily the "correct" one for the future, but it is instructivethat:
* Only some of the low value crop rotations grown by camoesinos (e.g., rainfed sorghum and maize versus irrigated rice and rainfed maize) can justify investment costs (on-farm developmentand irrigation infrastructureup to US$19300Iha,and public irrigation infrastructurecosts ranging between US$460/ha and US$1,000/ha).
* Other low value rotations (e.g., rainfed cotton and maize versus irrigatedrice and rainfed maize) can barely justify any irrigation investment. - 1S -
* The production of high value crops under irrigation (e.g., rainfed cotton and maize versus irrigated tomato and rainfed maize) gives investment ceilinge around US$4,300/ha for public expendituresin irrigation infrastructureat given on-farm developmentcosts. Again the caveat consists in finding areas where such crops can be grown and readily marketee.
* Public support investmento in private irrigation (e.g., rainfed cotton and maize versus irrigatedtobacco and maize) can be juctified up to US$11,500/haassuming private investmentsof US$2,200/ha and US$9,300/hafor public support.
3.28 In general this indicatesthat close attentionmust be given to the selection of farmers to qualify as irrigators on public projects; it also indicatesthat new public investmentsin irrigation for low value crops are unlikely to be justified on purely economic grounds. Irrigation investment in new schemes targeting camnesino- is not economicallyviable except in the limited case of high value rotatiorp (e.g., horticulture). Emphasis therefore should be put on low-cost consolidationof existing schemes and on support investmentsto private irrigation.
IV. MANAGEMENT OF IRRIGATIONAND SUPPORT SERVICES
A. Management of Irrigation6
4.01 Responsibilityfor the management and control of the country'swater resources for agriculturaluse is split among several government agencies. Under the guidanceof CORDIPLAN,MAC retains overall responsibilityfor agriculturalpolicy development,planning and implementation. MAC is also involved in the review of the annual plans and budgets of the sector's autonomous entities or in developinga long-term planning framework or strategy for the sector (see Organigram at Figure 1).
4 02 The construction and management of large multipurpose dams with possible irrigation use is the responsibilityof MARNR. It is also responsible for formulating policies and recomendations on water use, for watersheds and dam management, and for national cartography,national parks, pollution control, national land use planning, urban water and sewerage, and other aspects of environmentalpolicy. Until 1989, the substantivework of the Ministry was conducted through five functionaldivisions: research, planning, administration,infrastructure, and education. However, this format made coordinationdifficult. ThereforeMARNR's organizationalchart (see Organigram at Figure 2) was restructuredby creating three new divisions devoted solely to particular resources:water and lands, fish and wildlife, and forests. These resource-baseddivisions subsumed the functionsof the research and administrativedivision., which were eliminated. MARNR also created three new functional divisions -- cartography,enforcement, and
6 A ddtad dactk*= o Vin'sWa d, woo m.manad WtO d__vclqmimt s aled a Anwd2. 16 -
environmentalstandards -- which pertain to areas where the Ministry expects to be concentratingmore resources in the coming years.
4.03 MAC, MARNR and other agencies share authority in important areas, but unclear lines of responsibility-- particularlyas to who has ultimate authority -- often delay policy formulation* d implementation. For instance, MAC and MARNR have overlappingresponsibilities fox reforestation,ranching, fisherios, and itrigation. The developmentand management policies of the two ministries sometimes appear to be in conflict. Some irrigators claim that MARNR has an excessively cautious policy in reloasing irrigationwater from its dams, for instance in Gu1rico. There have also been problems between MARNR and IAN, the National Agrarian Institutesince the latter has granted title to public lands in a way that may conflict with MARNR's watershed management designs. It also seeme that, since groundwater and water in small streams is privately owned and managed, a large part of responsibilityfor water resource planning and management escapes botlhministries. For instance, no records of private water use are kept, and undergroundwaters in the Maracaibo Plain are graduallybecoming saline due to uncontrolledprivate pumping. The 1960 Agrarian Reform Law stipulatesthe creation of an Irrigation Institute, and the regulationsof the law, which were published in 1967, mention the establishmentof a CoordinatingCommittee on Irrigation Works. Neither of these have been set up.
4.04 The public sector institutionshave little planning, execution and evaluation capacity. Also they have little capacity for self-financingthus remainingunduly dependent on budgetary financing. For instance, MAC has recovered no irrigation capital zo,stsfrom farmers in the past, and presently charges only cover about 10% of overall operation and maintenance costs. Budgetary financing has also been.aiversely affected by policy and priority changes. While the budgeted allt.-:.'tionfor irrigationwas Bs 93 million in 1984 and subsequentlypeaked at At ?.,484million in 1987, it fell to Bs 929 million in 1989, only 11% of the tM.'^ilMAC budget of Bs 8,612 million. This suggeststhat, althou1gh construc't-noiis apparently continuing on several new schemes, the pace must be very slow.
4.05 It is apparent that the cuY >.^ntdiffused institutionalresponsibility for tho subsector is inhibiting the eavelopmentof a clear policy for irrigation. Coxis.qvently,coordinatil. t is weak between the main government agencies involved in overall subsectcrnolicy formulation,and the planning, constructionand evaluation of public eLctorirrigation works. The public sector institutionisare also unduly dependenton budgetary financing and have very low levels of cost recovery.
4.06 Recently the Governmenthas bejun to implement its policy of decentralizing decision making and improvingcoordination of development programs in the rural areas, through the creation of several regional developmentauthoritias. The first three agencies have been establishedunder the direct supervisio of MARNR, for the areas of Planicie de Maracaibo, Yacumb§-Quiborand Gul?ico-Tiznados. Some of the other planned agencies may be placed under the supervisionof MAC. However, the responsibilitiesof the new proposed regional developmentauthorities are not clear and could further rotard tho development of private ^watermanagement orgaiLizations. - 17 -
B. Plannin. and Design of Public Irrigation Prolects
4.07 MAC is responsiblefor planning and implementingpublic irrigation projects. Generally the design work is contracted to private sector engineering firms. MAC then appi ises the designs, approves the projects and supervises irrigation construction. However, its internal technical capacitv to appraise feasibilitystudies produced by consultantsappears to have become weak, and the design quality varies considerablyamong projects. The best irrigation designs are found in the older projects, and the designs of recent: ones are not satisfactory. For instance, the control system in the older Bocon6 project (2,700 ha irrigated)permits flexibilityto adjust water delivery to users' requirements, and the accurate gauging generates user confidence. In contrast, the more recent Tiznados project has technical flats- which were not addressed in the internal appraisal of the project. The design of the Gu4rico project (60,000hs) makes it difficult to distributewater flexibly according to users' requirements. The lack of water gauges in most projects and low water charges lead farmers to use excessive amountG of water.
4.08 In addition to weak internal technical capacity, a problem faced by MAC in appraising projects is that technical and economic criteria for project approval have not been defined. Several projects, such as Bocon69 Santo Domingo and Tierra Buena, started during the 1970s but have not yet been completed. Meanwhile new schemes, such as Gusnare Masparro and Tiznados, have been launched. It appears, therefore,that MAC has had to respond more to political pressures to initiate n-w projects than to technical and economic considerations.
4.09 Priority actions for irrigation developmentunder the VIII Development Plan of the Nation (1990-93)consist of the consolidationof large existing schemes, the constructionof irrigationworks in projects which generally have main infrastructure,but where only a small part of the irrigation system has been built so far, and the execution of small schemes mainly in the mountainous areas. The Plan proposes a four-year investment program totalling Bs 80 billion at 1989 prices (about US$2 billion at 1989 exchange rates). Be 13 billion, or 17%, are for irrigation development. The average yearly investment for the period would be more than twice the level of annual budgetary expenditurefor the sector during the period 1984-89 and some twenty times the budget for physical investment in 1989.
4.10 The proposed high levels of expenditure on irrigation raise serious reservationsas to the feasibilityof the proposed investmentprogram, both in terms of the absorptive and implementingcapacity of the sector and the availabilityof budget funds. It is not clear whether demand for the crops which can be produced viably under irrigation is sufficient to justify the implied scale of the program, outlined in paragraph 4.09 above. Also none of the projects listed in the investmentprogram have been subjected to a rigorous cost/benefitanalysis. - 18 -
C. Operation and Maintenance of Public Prolects
4.11 Operation and maintenanceof public irrigationprojects is the responsibilityof MAC, but most pro,ects have weak operation and maintenance systems. With two exceptions (Camataguaand Caus-Poc6),projects have no water users' associationsand farmers are not organized into irrigation districts. Therefore farmers have little say in deciding on operation and maintenance arrangementsand regard this as a government responsibility. In contrast, farmers' associationshave been created in most projects under the NationalFarmers' Federation,which perform lobbying functions on issues of concern to farmers such as prices of input. and commodities (Annex 1, Table 12). Farmers depend on government institutionsto organize water distribution,and these are cumbersome and slow in responding to users' needs. The result is user insubordination,and apathy and disenchantmentwith project staff. Water shortages have led to conflicts among users (GuArico). Also project management has been excessivelytolerant of willful damage by users (Bocon6).
4.12 Maintenanceworks are often carried out late because of irregular annual budget allocationswhich are subject to changes in policy and availabilityof funding. MAC has little maintenance equipment, and generally contracts out project maintenance. In spite of these problems, the main public works are generally in good conditionwhich reflects good quality of design and constructionof the conveyance structures. However, the unlined secondary and minor canals and drains are poorly maintained,weed growth in canals is serious (Guarapiche,Sur-Cojedes), and some control structures need repair. Inadequate and late maintenance (Sur-Cojedes)leads to high costs, and sometimes regrowth in the canals is so heavy that it needs to be cleared by manual labor.
4.13 The design of most projects makes it difficult to measure water use at the farm level. This is one reason why water charges are fixed nationwide at a standard rate per hectare of Be 100/ha/year (US$2/ha),with the exception of the Bocon6 project where water charges are set according to volume. Although it would be technicallypossible to measure water use in this project, distributionis set at a constant discharge, and the water charge amounts in practice to Bs 300/ha/year. Rates have not changed for at least the last 20 years. Water charges paid by farmers are insignificantcompared to the cost of other agriculturalinputs. Revenues accrue to the Ministry of Finance -- not to each irrigationproject for its operation and maintenance expenditures.
4.14 Since most schemes are not equipped to measure water use, water charges are set at low rates, and collection is not systematicallyenforced. Cost recovery rates are very low and are insufficientto cover even the cost of operation and maintenance. As a result the Government is heavily subsidizing the expendituresin the public schemes. - 19 -
D. Research. Extension and Credit
4.15 Research, Agriculturalresearch (includingresearch on livestock and fisheries) is the responsibilityof the National Fund for Agriculturaland Livestock Research (FONAIAP),which is an autonomous entity under MAC. In addition to researchg FONAIAP's responsibilitiesinclude technology transfer and the production of certain inputs such as veterinary products and seed. FONAIAP's facilitiesinclude the National Center for Agriculturaland Livestock Research (CENIAP) and a network of 16 other experimentalstations and 9 substationslocated in nearly every state of Venezuela with the exception of Carabobo, Cojedes and Bolivar. FONAIAP also maintains research programs in most major public irrigation schemes such as Majaguas, Agua Blanca, Rio Guanare, Rio Bocon6, Rio Santo Domingo and Quibor. Work at these centers is concentratedon applied research end cultural practices for the main crops. However, the programs are not geared to developing an integrated agriculturalirrigation technology,as had been envisagedwhen the centers were established. FORAIAP also operates a 250 ha experimentalfarm near Maracay, of which about 80 ha are irrigated,half by sprinkler and half by surface methods. The station has one full time professionaland five part time professionalswho are involved in research on irrigated agriculture,and has access to sophisticatedirrigation equipment.
4.16 In the past, FONAIAP'swork was oriented essentiallytoward genetic research. Recently more importance has been given to agronomic operations and transfer of technology. FONAIAP intends to expand its irrigation research, developingnew programs in different regions of the country. However, PONAIAP is at present understaffedat field level and lacks a clear focus on research priorities. Various other field trials are being carried out on plots in public irrigation systems by universitiesand IAN. The University of Caracas has an experimentalstation in the highland Tobar Colony, where strawberries, peaches and apples are irrigatedby drip methods.
4.17 Private irrigation research is carried out by various national universities,agro-industrial enterprises, farm input suppliers, and associationsof producers of specific commodities,wh'ch contract specific research Jirectly with professionals,firms or institutionsabroad. This has been the case, for instance, for work on sesame, sunflower and soybean.
4.18 Extension. Agriculturalextension is the responsibilityof MAC. However, it does not appear to provide satisfactoryextension services to public sector irrigators. The extensionistsare generallypoorly trained, and MAC's links with public research institutions,universities and private researchersare weak. It implements few field trials on applied irrigation research, and it has no specific programs to provide extension to irrigators. As a result farmers have major problems, for instance,with weed and pest control, and irrigationwater management and use (Cariaco).7
7 Formo dclan e rwtuuil researchand extm, en Oin Cover Agrbcuml ResearchEiteinn end Emctioo Subeect Review, dted May 31, 1991 (RweptNo. 9631-VE). - 20 -
4.19 Credit. Agriculturalcredit is provided mainly by private commercial banks which are responsiblefor about 90% of the total lending to agriculture. Until May 1990, they were legally required t'idirect at least 22.5% of their portfolios to the sector; this requirementhas been reduced to 17.5% and is expected to be reduced further to 12.0% in 1992. Interest rates on agriculturalloans have also been made variable, and equal to no less then 85% of market interest rates (as defined by the average lending rate of the six largest commercialbanks on non-preferentialcredit). This has reduced the subsidy throagh agriculturalinterest rates from about 50% previously to 15%. Other institutionswhich also provide funds for agriculturaldevelopment are the AgriculturalCredit Fund (FCA) and the Agriculturaland Livestock Credit Institute (ICAP). FCA is a second-tierinstitution which finances agriculturalproduction, livestock, and forestry. It is in the process of absorbing the credit portfolios of the National Coffee Fund (FONCAFE)and the National Cocoa Fund (FO1ICACAO),both of which have ceased operations. ICAP provides highly subsidized credit to small scale producers and their associations(OEC) at e 3% interest rate p.a. The AgriculturalDevelopment Bank (BANDAGRO),a public commercial bank which used to lend mainly to medium and large scale farmers, is in the process of liquidation. Under the new agriculturalpolicy, a new second-tierinstitution to replace FCA would be created, a CompensationFund would be created to guarantee loans extended to small farmers by public and private banks, and existing agriculturalinsurance schemes would be strengthened.
4.20 Specific agriculturalresearch and extension services for irrigators are weak. The available financial resources have been insufficientto meet the needs of farmers. There is a lack of improved technology,of hybrid varieties, and of training in irrigatedagriculture management. This leads to low productivitylevels for the majority of crops and to suboptimal use of irrigated areas, some of which are left uncultivated.
E. Land Tenure and Legal Framework8
4.21 Thre are four main types of land tenure in Venezuela: land that is privately owned with full title; land which belongs to IAN that is "lent" to small scale farmers in small (usually 8 ha) plots but which they cannot legally sell or use as collateral for loans; land that belongs to the municipalities;and "empty" land which belongs to the nation and is under the control of MAC but that can be turned over to IAN. The 1960 Agrarian Reform Law stipulates that government direct investment in irrigation can be made only for the agrarian reform sector. About 25.5 million ha of land have been distributedby IAN to third parties, of which 24.6 million ha, or about 96%, have been provided with some form of ownership rights. In addition, IAN owns 3.7 million ha, most of which is not distributed. Much of the land has oeveral claimants for title, which complicates its development. Where lands have been developed for irrigation and distributed9no mechanism exists for applying betterment charges for government-financedimprovements that increase the value of land, and hence windfall benefits to individualscan be very
8 Mhmld t wesitao endkegal frnewok of publicirreai isdiscused inWatkin Paper No. 2. - 21 -
large. Widespread land tenure problems in the public irrigation projects have resulted in frustrationin the subsector and is reflected in illegal transfer of lots, and the abandonmentof lots. The National Cadastral Office (ONC) is implementinga lacge program to clarify land titles throughout the country, but this will take several years to complete.
F. Control of Water Resources
4.22 The codes defining the responsibilitiesfor the ownership and control of the country'swater resources are contained in several laws, including the Civil Code and various laws on agrarian reform, forestry, land management, and the environment. This legal frameworkhas encouraged the development especially of private irrigation,but it has not promoted adequate control and management of all water resources, given that much water is privately owned and its use does not depend on government regulation. A recent review found that existing water legislationdoes not provide adequate legal instruments for resource management -- for instance,on water tariffs for public projects, registrationof water rights and uses, and the responsibilitiesof water users.
4.23 A new draft Water Law (Ley de Aguas) is before Congress. The draft Water Law attempts to resolve the problems of the lack of public control over water resourcesby giving the responsibilityfor all water resources to the Government. However, the draft Law does not provide the basic definitionsand principles necessary to give legal security to present and future water users. This is essential to promote further private investment in the developmentand conservationof water. The draft law also still has some weaknesses related to the definition of types of waters (groundwater),the system of tariffs, registration,and cadaster. Specific proposals to improve the draft law are under coneideration.
G. Management and Control of EnvironmentalImpact
4.24 The Government has consistentlytaken a positive position toward environmentalprotection. 10 Its many significantsteps to date include the creation of Latin America's first environmentalministry (MARNR), the establishmentof a large system of protected areas, and an impressive body of environmentallaws.
4.25 It practice, however, the Government has had only limited success in integratingenvironmental concerns into developmentand investmentplanning. Many laws and protected areas have long gone unenforced, since the minietry's capacity for implementingpolicy and enforcing provisions remains weak. With
9 Refue st me to te daft UN/DTCD pojec damtw ao *Impl_mtati of nstih6tioand Adminitive Arragemmtb for Wate RLIM= MaiigMa inVeem la", datdApril 1991.
10 Vmms Ebnvi=nl 1e Pqar. Repet No. Sm-VE daed Fenam 8, 1990. - 22 -
respect to projects9 MARNR is relatively diligent in requiring reliable environmentalimpact assessments (EIAs) to be filed before it will approve a project. However, once constructionis underway, the ministry has little capacity to follow-up on the EIA or to ensure that project managers are complyingwith prevailing standards.
4.26 The overall or cumulative impact on the environment of irrigation developmenthas not been evaluated. Given that most irrigation has been in the form of small schemes in dispersed areas, it is probably safe to assume that this impact has not been substantial. However, various strains on the environment are becoming evident in some areas. For example, in some watersheds in the north and northwest,water demand for irrigation is competingwith municipal use, thereby complicatingwater management and quality control. Salinizationof groundwaterhas become a problem in the Plain of Maracaibo. The increased use of agriculturalchemicals associated with greater cropping intensitiesalso poses the potential hazard of toxic runoff. In some of the larger schemes with open canals and inadequate maintenancewater-borne parasitic infectionsmay have increased. As the rate of irrigation development increases in the future, these and other environmentalrisks are likely to increase,but present data do not allow either the main sources of future risk to be pinpointed or the geographical location or scale of threats to be determined.
V. RECOMMENDATIONSTOWARDS A FUTURE STRATEGY FOR IRRIGATION DEVELOPMENT
A. Introduction
5.01 The reform measures graduallybeing introduced by the Government have already begun to yield results through the reallocationof resources towards those commodities in which Venezuela is a relatively low cost producer. Productivityof several commodities (rice, cotton and some oil seeds) increased in 1989. The Government should continue to encourage -- by maintaining the exchange rate at an appropriatelevel and implementingan agriculturaltrade policy reform -- the reallocationof productive resources away from the commoditiesin which Venezuela is not internationally competitive,towards those commoditieswhich internationallycompetitiveness is relatively strong. This would enable Venezuela to increase its production of commodities such as rice, cotton, sugarcane and tobacco to substitute for imports on the domestic market and to export the commodities it can produce at costs below world prices such as high value fruits and vegetables.
5.02 Given the ample land resources of Venezuela and rainfed patterns which allow reasonable successfulproduction of rainfed crops in normal years in much of the country, irrigation should be used mainly for the production of relatively high value crops to supply the growing urban markets with high quality products and promote an expansion of the external markets in those crops for which Venezuela is internationallycompetitive. Thus the role of irrigation in agriculturaldevelopment should be seen as complementaryto the necessary development efforts for rainfed agriculturewhich still should be - 23 -
able to provide the country with most basic staple foodcrops and livestock products at lower costs than under irrigation,even though with slightly less reliability.
5.03 If irrigation is to be carried out in an efficient and environmentallysafe manner, it is imperative that the policy, institutional and legal adjustments outlined below be initiated as soon as possible. Given the fundamentalnature of some of these adjustments,it would be unrealistic to expect that they can be completed in the short term. Nevertheless,a number of actions can and should be carried out in the short term to improve the efficiency of both planning and implementingagencies and ensure that environmentalprotection receives adequate attention.
5.04 This report is not able to present an exhaustive analysis of the internationally competitiveness of rainfed and irrigated agriculture, but the preliminary conclusions indicate that there are grounds to assume that irrigation development in selected areas would be justified. However, a first stop in defining the future role of irrigation requires not only further analyses of rainfed agriculture,but also an assessment of opportunitiesto expand low-cost methods of irrigation. Nevertheless,some recommendationscan be made based on the analyses in this report. Note that these recommendations concern irrigation only. Parallel public investmentsin areas such as research, extension, credit, pricing policy, etc., that would enhance the return on irrigation investmentsare not considered but should not be ignored by those responsible for the agriculturalsector investmentprogram.
B. Recommended Strategv for Irrigation Development
5,05 The recommendedstrategy for irrigation development should -- at least in the medium term -- be based on the following principles:
(a) Public and private irrigation development -- in an undistorted policy setting -- should be "demand driven" as an indicator of need, except as noted in (f) below. The initiative should come from farmers, farmers' associations,and commercial enterprises who see it to their advantage to invest in irrigation. Public sector support should be conditionalupon the presence of strong groups of beneficiaries,who would commit themselves to assume the investment and O&M costs.
(b) Field surveys and feasibilitystudies need to be carried out, in addition to studies covering institutionaldevelopment of the subsector, cost recovery and land tenancy and ownership aspects. Should these studies demonstrateviable opportunitiesfor further irrigation development,within the ceilings imposed by the likely evolution of demand for irrigatedproducts, most of the initiative for development should then come from the private sector with the Government's role being limited to the provision of basic infrastructure (e.g., dams, main canals, electricity distribution) and services, the cost of which should be recoverable over the long term from the water users. Farmers should be encouraged to - 24 -
finance on-farm irrigation facilities only as part of schemes which in their entirety (i.e.. including government-sponsored infrastructure)are economicallyjustified.
(c) A comprehensiveand transparentconceptual framework for handling cost recovery is needed. For existing schemes, in the short and medium term, introducingfull recovery of the direct (investments and O&M) costs of irrigation is likely to be difficult, largely because of the considerablesubsidies now provided by the Government. Nonetheless,a program for recovering at least 0 and M costs and rehabilitationcosts should be implementedfor schemes after they have been modernized or rehabilitated,and new schemes should be subject to full cost recovery. A comprehensivestudy on recovery of irrigation costs is considered a high priority activity.
(d) To ensure competent and efficient irrigation development,the Government'splanning capacity should be strengthened,and coordinationbetween the various organizationsinvolved in irrigation developmentshould be improved. The issue of whether it would be necessary to create new government agencies (at either the federal or regional level) to be in charge of irrigation development,or whether appropriatemodifications to the existing ones would suffice, should be resolved on the basis of future studies. Furthermore,to ensure effective project planning and management, government agencies should contract the services of specialized consultants supported by expatriate technical assistance.
(e) It is generally a better use of resources to complete, modernize and consolidatethan to construct new public irrigationprojects. The aim of modernizationand consolidationshould be to raise the performance of government services to the point that schemes can be transferredto the beneficiariesconcerned, and, once this is achieved, to continue the process of disengaging government services and transferringall recurrent costs from the Government budget to the irrigators. This will require that the Government move towards raising water rates to levels which cover at least O&M costs and also require -- in response to farmers' demand and with their payment for -- improved technical and support services. It would also be necessary to promote irrigators'associations and cooperatives,which can eventually take over responsibilityfor operation and maintenance of the schemes, and to change some of the existing land tenure laws and regulationsto bring them in line with producers' needs.
(f) Other existing public sector projects,where modernizationand consolidationis not economicallyviable, and which can only continue to survive on government subsidies, should be recognized as components of a social program and be financed from specifically-earmarkedbudgets, separate from normal irrigation developmentbudgets -- or eventually closed down. - 25 -
C. Support to Private Sector Irrigation DeveloRment
5.06 The Government should support private irrigationdevelopment by providing an adequate legal and incentive framework. Comprehensivewater legislation is needed in order to fill the gaps in the existing legislation and to provide legal instrumentsfor resource management, including those related to water rates for public and private projects, registrationand cadaster of water rights and users, and the responsibilitiesof water users. A new water law should resolve the problems of the lack of public control over water resources by giving the responsibilityfor all water resources to the Government. It should provide the basic definitionsand principles necessary to give legal security of access to water and holding of water rights to present and future water users. This is essential to promote private investment in the developmentand conservationof water. It should also provide the legal and institutionalframework for protecting environmental quality. Finally, it should address issues such as the definition and protection of various sources of water (e.g., groundwater),the recovery of costs incurred by the Government for infrastructureconstruction, water rights registration,and improvementof the cadaster. A study covering the above legal, financial and administrativeaspects of water resourcesmanagement is planned to be carried out with support from UN/DTCD.
5.07 The Government should also encourage the private sector to become more active in agriculturalresearch through financing and carrying out irrigationfield trials on profitable cash crops, fruits and vegetables. FONAIAP should expand its coopetrtionwith private sector research through technical advice and training. In the particular case of market information services,present facilities should be upgraded in order to provide farmers with prompt and efficient access to both local and internationalinformation. Some of these services could be at least partially financed by charging for them.
D. Support to Existing Public Sector Schemes
5.08 Several adjustmentsare required to put existing public sector schemes on a sound footing. The Government should establish detailed project operating regulationsand arrange for the ear test possible transfer of operation and maintenance responsibilitiesto kprojectbeneficiaries. Irrigation associationsor irrigation districts should be organized to arrange the water distributionto the farms, the collection of water charges, and gradually take over the operation and maintenance of the main conveyance systems. The Government should also identify opportunitiesto transfer, on a pilot basis, the management of some existing public projects which are not yet settled or in operation, to private sector irrigators and commercial enterprises -- for instance in saticoraand Tiznados, where private investors have expressed interest in growing cotton and sugarcane respectively.
5.09 In schemes to be rehabilitated,irrigation associationsshould be organizedbefore new on-farm distributionsystemS are deosignedto enable the - 26 - farmers to narticipate in the design of the layouts. Farmers' interest and participationin water user groups in public sector projects should be enhanced by adopting project designs which better meet their needs. Farmers' perceptionsof the system should be carefully examined during the design stage. Socio-economicfield studies should be conductedby an expert sociologist as part of project planning. Beneficiaries should make contributionsof labor and/or cash during project implementation. Since the farmers would be expected to pay recurrent costs, specific contracts should be made with them before existing projects are improved.
E. Current Government IrrigationDeveloRment Program
5.10 The Government'8irrigation developmentprogram to be carried out during the current Four-Year Plan includes:
(a) Consolidationof eight existing large-scalepublic irrigation projects (ranging from 4,750 to 53,800 ha) over a total area of 124,360 ha, which would call for works such as secondary and tertiary canals, drains, land levelling, access roads and social infrastructure.
(b) Constructionof irrigation infrastructurein proyectos especialeswhich generally have main infrastructure(downstream of existing dams, pumping stations),but where only a small part of the irrigation system has been built so far; the Government is consideringturning over the management of some of these on a pilot basis to private sector irrigators and commercial enterprises. MAC has prepared a list of eight projects ranging from 2,000 to 460,000 ha, covering a total area of 761,400 ha, but some of these projects are also included under (a) above.
(c) Execution of small schemes mainly in the mountainous areas to serve a total new irrigated area of 58,000 ha. This would involve the constructionof new irrigation and drainage works and access roads. Informationon specific project sites was not available.
(d) Development of priority areas over a total area of 6.4 million ha through opening of new and improvementof existing irrigation and drainage works, and roads. Again informationon specific sites was not available.
5.11 Updated costs estimates of the program and of its required external funding are not available. However, none of the projects have been subjected to a rigorous cost/benefitanalysis befo=e being included in the list of investments. Nor is the scale of the program related to the likely demand for irrigation or the institutionalcapacity to run such a program.
5.12 In the light of the analyses and observationsmade before, the Government'sfour-year plan requires scaling down to make it compatiblewith - 27 -
economic opportunities,institutional and implementationcapacity, the need to adopt a demand driven approach to irrigation development,and the priorities of private versus public sector investment.
F. Recommended Pace of Irri&ation Development
5.13 Based on the analyses of this report, it is possible to arrive at very approximate orders of magnitude for future irrigation development. If all the forecast domestic demand for vegetables, fruits, rice, soybeans, sugarcane and cotton (crops estimated to be economicallyviable under irrigation)were to be produced under irrigation,this would require that an additionalarea of 210,000 ha, or 20,000 ha annually,be brought under irrigation by the year 2000, assuming that yields for the whole irrigated area of these crops would rise by about 252 above the current low levels of productivity. Other FAO work11 indicates that Venezuelawould require a net addition from 1983 to the year 2000 of 260,000 ha of irrigation,or roughly 15,000 ha per year or a total of 660,000 ha, in order to meet its food production requirementsby the year 2000. The requirementsfor irrigation expansion for export production should also not be overstated: for instance, Venezuela's total annual exports of mangoes could be produced on an area of about 250 ha. It is important to note, however, that it makes no sense to expand irrigation for crops (most of the staples other than rice), which can be grown more cheaply under rainfed conditions or imported. Therefore the indicative targets for irrigationdevelopment should probably be well below the above figures and those proposed by Government. To create conditions which lead to irrigation beyond these types of ranges could increase rather than reduce fiscal and economic costs and exacerbate environmentalproblems.
G. Management and Control of Water Resources
5.14 Available water resources in most parts of Venezuela are well in excess of foreseeablefuture demand. Efficiency of water use in these areas is not yet a major issue, and water management requires only administrative controls. In such areas, the Government should define clearly the basis for allocatingwater resourcesbetween competingusers, and establish a system for arbitrationwhen conflicts arise.
5.15 In the hydrographicbasins of the semi-arid zones, however, both administrativeand physical water resourcemanagement measures would be required. In these areas, administrativeallocations of water should be reinforcedby improved operation of control structures in the basins and by the constructionof additional structuresto regulate water availabilityto users and reduce erosion and flooding. In the main watersheds and aquifers as well as along the main rivers, water management should focus on the allocation of water between human consumption,industrial and power use, irrigation requirements,and environmentalaspects. Pilot basin management systems and
11 PAO. Agtiubwc: Toward2000, Rmne1987. - 28 -
studies could be implementedin selectedmajor catchments to develop methodologiesfor long-termmanagement of water resources.
H. EnvironmentalSafeguards
5.16 Strengtheningthe Government'sinstitutional capacity for implementingenvironmental policy will be essential to the success of future environmentalactions related is irrigation. The most important component will be tho systematicintegration of environmentalconsiderations into general economic decision making. MARNR would remain the lead ministry in formulatingenvironmental policies. a sound regulatory framework and enforcementcapacity are crucial to ensuring adherence to Venezuela's strong environmentallaws. Enhancing both of these institutionalcapacities could considerablyimprove MARNR's capacity on the ground. But the rate at which it is realistic to build up a country wide enforcementcapacity should not be over-estimated. Redeploymentof regulatorystaff should initiallybe in seriously endangeredareas only.
5.17 The Governmentshould prepare specific operationalguidelines on the environmentalsafeguards to be observed in irrigationprojects. Since the environmentalimpact of irrigationdevelopment would vary between geographical areas, depending on their physical, biological and socio-economic characteristics,MAC and MARNR should then test the application of the guidelines, initially in several small watersheds in different parts of the country. In these watersheds, baseline surveys should be carried out, and the future environmentaleffects of irrigationand drainage development should be monitored. The informationand feedback generated from the field in this way should be used for the subsequentupgrading of environmentalguidelines.
5.18 For proposed major private and public irrigationprojects MAC will prepare the initial environmentalimpact assessments,which are to be reviewed and approved by MARNR. Reviews should identify unresolved or competing claims on the natural resources to be utilized by the project, possible effects on public health, risks of flooding,waterlogging or salinization,and possible effects on the environmentor protected flora and fauna.
I. Conclusion
5.19 Addressing the problems of irrigationand improving its performance are essential to future agricultural growth and developmentin Venezuela. Government'srole in the irrigationsubsector should be reexaminedand should focus only on the provision of the most essential activities. Further developmentof irrigation should concentrateon the followingpriorities:
e Irrigationdevelopment should be "demand driven" and farmers and the private sector should play a greater role. - 29 -
* The productivityof exiating public irrigation infrastructure investmentsneeds to be improved through completion, rehabilitation,modernization of such systems, and through the introductionof modern irrigationtechniques and applied research. This is expected to lead to more efficient and equitable distributionand management of irrigationwater.
* Completion, consolidationand modernization should take precedence over new project constructionactivities.
* Full recovery of the operation and maintenance and rehabilitation CostS and, where possible, part of the investment costa should be important short-term objectives.
* The Government'srole in irrigationdevelopment needs to be reexamined. Greater use of non-governmentresources, institutionalautonomy and public accountabilityfor irrigation developmentand more active farmer involvementshould be actively promoted. VENEZUELA
IRRIGATION SUBSECTORREVIEW
Potential for Irrigation
I. RIGABLE AREAS BY: Land Available Suiabe for Am In*gaion Gro_ndaer Smface Water Total Area Regionand Vaey State Qaa) (ha) a)_(Iba) I_ (ha)
ZliS8 Region 750,800 634,730 53,400 182,750 236,150
1. Iinm6nRiver Valley Zulia 45,000 13,500 0 4,000 4,000
2. East of the Maracaibo Plain Zulia 191,000 150,400 5,700 32,900 38,600
3. West of the MaramcaboPlain Zulia 172,000 172,000 5,200 65,300 70,500
4. Palhmr River Plain Zulia 112,740 102,300 6,800 27,300 34,100
S. Apon River Plain Zulia 104,760 92,630 0 4,600 4,600
6. East Bobures Sector Zulia-Tnljillo 44,100 38,500 17,600 22,150 38,500
7. Agua Viva North Zulia 40,000 38,300 16,000 20,000 36,000
8. Machando ano isoa River Plains Zulia 41,200 27,100 2,100 6,500 8,600
Camter-West Region 904,290 691,870 297,200 318,1301' 455,8501
9. Maticom-Cocuiza-EI Palmer Falc6n 31,930 24,900 500 11,000 11,500
10. Mitare (Pedregal River Valey) Fak6n 6,000 5,400 0 3,500 3,500
1_1.CotoAna_ Fale6n 14,200 10,700 170 2,700 2,900 P
12. Sava Cnaz de Ducaral Valley Falc6n 2,040 1,070 100 0 100 rr X
0 3. Quibor has been considered with transfer. IBURIGABLEAREAS BY: I ~~~~~~~~LaudI Avaiable Suable for Area IrriatiGn Groundwater S fface Wstw Totd Ares Regkm and Valley Sh ) (ha) (ha) ) )
13. MiddleValey of the TocuyoRiver FaIc6n 43,600 32,900 5,500 27,400 32,900 14. LowerTocuyo River and Tocuyode l Falc6n 39,720 31,800 8,000 31,400 31,80(V COta higsationSystem
15. Quedicheand Bonila River VaUcys Lara 28,700 24,400 2,900 350 3,250
16. Mmonnand DiquivaRiver VaUcys Lem 60,000 42,000 2,400 2,800 5,200 17. Aarigna Lara 27,400 19,200 2,700 6,600 9,300
18. Bucares Lam 24,800 21,900 2,170 2,900 5,070 19. Curarigua Lar 6,100 5,800 300 0 300
20. Upper Valley of Tocuyo River (Dos Lam 10,200 9,200 3,060 2,800 5,860 Cerritos)
21. Skuisique-Daragua LaM 7,900 7,100 60 2,840 2,900 22. Quiborwith Transfer lAra 45,000 40,500 1,040 13,750 14,790
22. Quiborwithout Tansfer Lam 45,000 40,500 1,040 5,150 6,190
23. Bobarm(El ZamuroReservo) Lam 2,700 2,400 300 500 800
24. Moroairo Depression Lam 17,700 1,100 3,400 1,600 5,000 25. Duca LaM 3,900 3,700 1,000 0 1,000
26. Turbio River Valley Lara-Yaracuy 37,800 26,500 11,360 1,180 12,540 27. Las Velas-LosCristales Sector Lam-Yaracuy 10,700 7,500 1,600 0 1,600
28. Sarar-La Miel Lara 18,600 17,700 7,400 2,040 9,440 o z
29. LowerTurbio River-Los Pilancones Lara-Falc6n 35,000 24,500 10,500 0 10,500 & X
0
11 f there is more water than land available,total irrigablearea is equalto availabilityof land suitablefor irrigation. o lRMUGABLEAREAS BY:
Av202aW Sailalbe for Arem Iniatn Grwater Srface Water Tdal Aen tegim ndVdbDy State a} _ (ba__ I ) (ha) I__
30. Yaitpagu (Yaacay River) Yaracuy 26,600 18,600 8,000 5,200 13,200
31. LorerYarcuy Yarmcuy 21,900 15,300 6,600 0 6,600
32. Lower Area Yaracuy-Cojedes 37.200 22,300 11,200 1,900 13,100
33. Cumaripa Yaracuy 35,200 24,600 10,600 4,300 14,900
34. Upper Nirgua Valeys Yaracuy 5,800 4,100 580 560 1,100
35. Cojede-Srame Irrigation System (Las Yaracuy 129,200 99,900 103,360 84.510 99,90W Majaguas, Ist and 2nd phases)
36. Ospino River Plain Ponuguesa 68.000 57,800 6,800 51,000 57,800
37. Guanam-Ospino Fothills Poiuguesa 65.000 45,500 52.000 49,000 45,50f2'
35. Morador River Plain Portuguesa 34,300 27,400 27,400 2,200 27,40(2'
39. Guanae hngato System Portuguesa 7,700 6,100 6,200 6,100 6,100W
Los AndES Regi5 537,600 383,300 106,740 202,290 294,080
40. Monay Llano Tujillo 58,000 52,200 17,400 37,000 52,20(2
41. El Cenizo rgation System Taijillo 72,500 68,000 29,000 39,000 68,000
42. Andean Vallys (Mdrida-Trujillo) Tmjillo-MWrida 10,000 10,000 0 10,000 10,00(2
43. Mocotes Rmer Valley (Fovar-Bailadores) MWrida-Tdchira 15,000 15,000 380 5,000 5,380
44. Upper Pregonr Valleys MErida 1,000 1,000 0 1,000 1,000(
45. Chan RiverValley M6rida 7,500 7,500 200 7,500 7,50(L P z
46. Tdchua luermositan Valep Tachira 5,000 5,000 50 5,000 5,00(' - xi I- I.- 47. San Antonio del Tkbir-Urefi Frontier T6chira 10,500 10,500 1,050 10,050 10,500a/ O Sector h IRRIGABLE AREAS BY: Land Avaable Suitable for Area irrigation Groundwater Suface Water TOalWAMea Regpmai Valley State (ha) (ha) (ha) (ha) a})
4S. Upper Paguey Rivr r Barinas 6,500 2,000 400 1,600 2,000 49. Paguny-CataguaSano Domingo River Barinas Pr je-_ t =_ _ _ _ _ 9,800 53,900 19,660 19,140 38,X00 P5.ins (Irigation P ioject) _ _ _ _ _=____.___
50. Santo Domingo River Plain o u.ation Barinas 8,700 6,500 0 6,300 6,300 Project)
51. Caipe River Plain Barinas 3,700 2,800 1,100 1,700 2,80oo 52. San6o Dovringo River Plain Barinas 20,000 16,000 6,000 10,000 16,000
53. Bocon, River Irgation Sys__m Bannas 14,900 7,200 11,900 7.2Q0 78260' 54. MaspaorofSantoDoniindgo-Southeastearinas Barinas 67,100 40,300 6.700 8,830 15.550 Sectorw
M asp .rje arrot .______.__ _ _ 55. AnaroTicoporeCanguas Rivr Plains ______Barinas 68,000 40,800 6,800 10,000 i,600 w 56. Lower Cnawgua-Ticoporo (Cakzada de Paez) Barinas 41,200 20,600 4,100 8,O00 12.100 57. Bocon6 River Plain (SouthCastof Guanare- Barinas 30,000 24,700 2,8000 0017,0 Mnsparro Project)
.Ceatral aid Capital Re* 284.700 200,75? 21,0S0 617,570 ! 9 650 56. South of San Carios Cojedes 19.200 15.900 I,SG0 3 90 115.850 59. Tinaco River Valley Cojedes 9.700 X.700 650 X,Q50 S,700
60. T.naco Rivcr Plain Cojedes 42.200r165000 1 6 .0 0 3,030 8&00 61. San Carlos Irrigation System Cojedes 1(;44O 7,750 2,90t} M 4^c 7f75'J5 > 62. Pao River Valley Coes1.5,700 749 >O} ,3%I'l >,700 ,F _ . t , / ,r I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~CDIX 63. Cl:irgva Pivcr Valley Cojedes-GuAico 54,000 43,20( "m MI +j O ,400wt gt-lt 64. Bejuma-Mc.ntalbAn-Chirgua Carabobo 12,500 8,1) | 5(0 200 700 _ r ; ~~~~~~~~~~~~~~~~~~J. _ON _ 65. South and Southwest of Valencia Carabobo 14,000 12,600 930 9.'970 9,9i0 IRRIGABLEAREAS BY: Land Available Soiable for Area 1ff%m GCrmdwater SuzrfaceWater Total Area Regiaioad Valy State ('a) (ha) (ha ) ) )b
66. GuacamValeys and areas arund Lake Carabobo 25,000 20,000 2,500 400 2,400 Valencia
67. Angua Valeys (Cagaa-Turmeo) Aragua-Carabobo 16,500 13,200 1,650 11,100 12,650
68. Cagua-Villade Cure Angua 20,000 16,000 2,000 400 2,400
69. AraguaValleys (Tejerfas-La Victoria) Arsgua 22,500 20,300 2,500 1,300 3,800
70. Chaallave-Ocumare-Yare Miranda 8,000 5,600 0 1,500 1,500
71. Santa Luais-SantaTeresa Mimanda 3,500 2,600 0 2,600 2,600 72. Araira IntermontaneValleys Miranda 2,500 2,300 0 2, 2,250
CerW Ual1_ Regionq 381,350 343,100 19,800 118,450 138,250
73. Paya River Valley Guinco 22,100 19,800 0 4,350 4,350
74.Tiznados River Valley Guinico 19,400 17,400 0 15,000 15,000 75. GudricoRiver irrgation System Gudrico 77,100 69,400 9,600 55,000 64,600
76. Ara of ExpansionofGudrico River Gudrico 33,100 29,800 2,500 12,800 15,300 IrigationSystem
77. LowerGu6inco River (Northof Camaguan) Guirico 80,300 72,200 6,000 9,200 15,200
78. Memo-LosAceites River Valleys GuImico 79,900 72,000 0 5,100 5,100
79. MiddleGu6nco River Valley Guarico 28,200 25,400 _ 70 1,550 15,850 80. Orituco River-Ahagracia(Guanapito) Guirico 41,250 37,100 1,000 1,850 2,850 0 t D
(IQ a, z Noribeastens Region 687,700 422,200 59,150 134,550 193,700 C X 0 81. Unare River BasinValleys Arzodtegui-Guarico 275,200 247,700 0 60,500 60,500
82. NeverfRiver BasinValleys Anzodtegui 58,400 52,600 0 40,900 40,900 IRRIGABLEAREAS BY: I ~~~~~~~~LandI Available Suitaldefor Area Inigatim G Surface Water Tal Area Regm and Vly s(a) Us) 83_ misHta AnwAtegui 280,000 56,350 56,000 350 56,350
84. Mhnzl_e River Valley Sucre 4,400 3,500 400 200 2,400
85. Cu_nacos Valley Sucre 5,400 4,900 0 4,700 4,700 &6.Cariaco lhTnga System Sucre 5,300 4,200 350 3,200 3,550
87. Pmnoi*oCa y Sucre 2,300 2,200 350 150 500 88. Caspano Valleys Sucre 1,600 450 0 450 450
89. Carip River-UpperGuarapiche Valleys Monagas 7,500 6,000 250 _ 250 90. Amam River Valleys Monagas- 18,200 16,400 1,800 9,800 11,600 Anzodtegui _
91. Valleysof GuarapicheRiver and Affluents Monagas 29,400 27,900 0 | 12,500 12,500
TOTAL 3,546,400 2,675,950 | 557,370 1,023,740 1,405,430
Sourme:MARNR, 1984.
eQ v fD p: tDX 0 0% - 36 - Table 2
VENEZUELA
IRRIGATION SUBSECTOR REVIEW
Irriaation Development in Venezuela: 1962-1989
Public Sector Private Total Year Sector Irrigated Area Area with Irrigated Irrigated (ha) Infrastructure Area Area L______(ha) (ha) (ha) 1962 41,641 12,577 1963 47,046 13,389 1964 51,941 20,083 1965 63,756 28,055 1966 52,877 29,340 1967 57,924 30,658 1968 64,914 36,653 1969 66,930 37,869 1970 70,269 38,542 1971 71,217 38,880 1972 73,319 44,261 1973 78,662 49,776 1974 83,496 49,663 1975 87,941 57,486 1976 94,720 47,353 1977 96,347 55,834 1978 104,798 46,525 1980 123,533 101,390 285,110 386,500 1985 155,121 101,263 338,000 439,263 1986 164,524 100,503 1987 170,948 102,929 1988 178,137 105,837 1989 179,921 107,655 341,520k' 449,175 it Pijon edimate.
2pe: MAC, 1990. ANNEX i - 37 - Table 3
VENEZUELA
IRRIGATION SUBSECTOR REVIEW
Areas Irrigated by the Public and Private Sectors (1989)
______Public Sector Private Sector Total Rogion/State ___ 1 Irrigated Areaswith IIArva Infrascture Irrigated Area IrrigatedArea (ha) (ha) f (ha) J ( (ha) (%)
CentrW 28,382 16,510 3.7 65,610 14.6 82,120 183 Miranda 900 557 0.1 10,670 2.3 11,227 2.5
FederalDistrict _- - 830 0.2 830 0.2 Aragua 18,310 11,675 2.6 19,218 4.3 30,893 6.9 Carabobo 3,098 2,520 0.6 27,845 6.2 30,365 6.8 Cojedes 6,074 1,758 0.4 7,047 1.6 8,805 1.9 Fiat 41,020 22,464 5.0 94,901 21.1 117,365 26.1 Falc6n 5,060 3,249 0.7 6,637 1.5 9,886 2.2 larA 5,957 3,574 0.8 49,765 11.1 53,339 11.9 Portuguesa 25,645 12,416 2.8 21,489 4.8 33,905 7.6 Yaracuy 4,358 3,225 0.7 17,010 3.8 20,235 4.5 Andel 44,861 33,514 7.5 43,951 9.8 77,465 173 Barinas 4,482 2,980 0.7 1,842 0.4 4,822 1.1 Merida 11,257 8,780 2.0 13,082 2.9 21.862 4.9 Tachint 10,861 10,291 2.3 13,925 3.1 24,216 5.4 Trujillo 18,261 11,463 2.6 15,102 3.4 25,565 5.9 Cenbsl UVasos 53,800 28,944 6.4 10,536 2.4 39,480 838 Guarico 53,800 28,944 6.4 9,809 2.2 38,753 8.63
Apure _- - 727 0.2 727 0.2 &Autr.Iv 9,729 5,323 1.2 23,519 5.2 28,842 6.4 Anzoategui 2,405 1,675 0.4 10,103 2.3 11,778 2.6 Monagas 2,532 11 0.2 8,110 1.8 9,'85 2.2 Sucre 4,792 2,837 0.6 5,151 1.2 7,988 1.8
Nueva Esapata _ - 0.0 156 0.03 156 0.03 5iPISSll0 0 0.0 1,538 03 1,538 03
Bolivar _ - 0.0 1,262 0.3 1,267 0.3
DeltaAmacure _ - 0.0 27S 0.06 275 0.06
zmIIY 2,129 900 0.2 101,465 22.6 102,365 22.8 Zulbi 2,129 900 0.2 101,465 22.6 102,365 22.8
Total 17,2 1765 =41______- =9
V2%: Percentagesrefer to the total irrigatedaea. SQg: Prepared by the mbsaonbased on data providedby MAC. VENEZUELA
IRRIGATION SUBSECTOR REVIEW
General Features of Existing Public IrriRation Prolects (1989)
Stae rarigable Areas Areasw Infiasactue IkrigatedAras Percentase Iigation Year of Water E ~~~Eihs z(`4ec (ha (ha) of Use (f I system Consiction Resourco
Arang Camatagus 12,422 12,000 6,500 54.2 14 1963-1969 Reservoir C.N. Angua 8,900 6,310 5,175 82.0 5 1941-1963 Various Barin BoconoRiver 7,200 3,240 2,700 83.3 1 1961-1976 Reservoir Sto. Domingo 3,800 1,242 280 22.5 1 1962-1976 Derivation Carabobo Carabobo 4,702 3,098 2,520 81.3 14 - Various Cojedes San Carlos 7,324 6,074 1,758 28.9 9 1941-1943 Derivution Falc6n Falcon 9,333 5,060 3,249 64.2 6 - Various Guarico Guanpito 2,432 1,800 1,112 61.8 1 1960-1964 Reservoir
Guarico River 60,000 52,000 27,832 53.5 1 1954-1976 Reservoir OD Lama LAI 6,000 5,957 3,574 60.0 3 - Vsnous MEnda V.A. Mdrids 11,257 11,257 8,780 78.0 107 - Various Miranda El Tuy 900 900 557 61.9 1 1939-1941 Derivation Monagas Guarapiche 5,200 2,532 811 15.0 15 - Derivation Poitguesa Las Majagas 24,000 18,921 8,924 47.1 1 1959-1976 Reservoir GuanmteRiver 8,569 6,724 3,492 51.9 2 1963-1976 Derivation Sure Cariaco 3,920 3,260 2,151 66.0 5 1962-1976 Derivation Cumana 1,607 1,532 686 44.8 1 1941-1948 Derivation Tachira V.A. Tachira 10,861 10,861 10,291 94.8 126 - Various Trujillo El Cenizo 5,749 5,110 3,263 63.9 1 1947-1976 Derivation Caus-Poco 3,831 2,309 1,500 65.0 12 - Various
Prg. V. Alto. 10,842 10,842 6,700 61.8 57 - Various P- B Yarscuy Yaracuy 9,266 4,358 3,225 74.0 12 - Derivation fD 7Zui I Zulia 2J129 2.129 900 42.3 9 - Various T - Total J 262.353 179.921 107.655 60.0 4071 Source:MAC, 1990. - 39 - ANNEX 1 Table 5
VENEZUELA
IRRIGATION SUBSECTOR REVIEW
Ty,es and Methods of Irritation 1/
Seotor I Project irrigated Type of Irrigation | Main I Area (ha) Irrigation j Method I Crops Public Anzoategui 10.000 Gravity Furrows Miscellaneous Camatagua 6,500 Gravity/ Furrows Miscellaneous Pumping CNAragua 5,175 Pumping Sugarcane Bocon6River 2,700 Gravity Furrows/Basin Misc./Rice SantoDomingo 280 Gravity Furrows/Basin Misc./Rice Carabobo 2,520 Gravity Furrows Miscellaneous SanCarlos 1.758 Gravity Furrows Miscellaneous Falcon 3,249 Gravity Furrows Miscellaneous Guanapito 1,112 Gravity GuaricoRiver 29,832 Gravity/ Furrows/Basin Misc./Rice Pumping Lara 3,574 Gravity Furrows Miscellaneous VA M6rida 8,780 Gravity Furrows Miscellaneous ElTuy 557 Gravity Furrows Miscellaneous Guarapiche 881 Pumping/ Furrows Horticulture Gravity LasMajaguas 8,924 Gravity Furrows Miscellaneous GuanareRiver 3,492 Gravity Furrows/Basin Sugarcane/Rice Cariaco 2,151 Gravity Furrows/ Sugarcane/Fruits/ Sprinkler Horticulture Cumana 686 Gravity Furrows Miscellaneous VA Tachira 10,291 Gravity Furrows Miscellaneous El Cenizo 3,263 Gravitv Furrows Sugarcane/Misc. CausPoco 1,500 Pumping Furrows/ Sugarcane/ Sprinkler Horticulture V. SitosProgram 6,700 Gravity Furrows Miscellaneous Yeracuy 3,225 Gravity Furrows Miscellaneous Zulia 900 Pumping Furrows/ Horticulture/ Sprinkler Fruits
Private LakeMsracaibo Pumping Furrows/ Fruits Plain Sprinkler Metfoora Pumping Sprinkler Cotton/Sunflower Tkzn6dos Pumping Furrows/ Maize/Horticult./ Sprinkler Cotton/Tobacco _Suate T_igualauay Pumping Furrows Sugarcane J./Prepared by the mission. iouOQ:MAC. VENEZUELA
IRRIGATION SUBSECTORREVIEW
General Features of Reservoirs 1
Normal Area to Catchnmt Ammal Maximum irriga2ton State Reservoirs River Capaci Use be Irrigated Area Inflow Capacity Subproject nS2.9 (ha) (ki) mill. in' mill. m'
zuiiaMameldte Socuy 250.93 R/CUCC 3,515 - 508.1 345.6 Zulia
Tule Cabir( 267.80 RIC/CII 5,675 - 327.9 410.0 Zulia
PuebloViejo - 1,000 -
Machango_ Machango 110.0 RICr_ - - 111.64 148.7
Falc6n Matcora Matlcora 453.15 RICIICIT 3,560 1,490 237.1 550 Maticora
El Mamito _ - _ 120 - - - _
Pedregal _ - _ 1,215 - - - _
Jatira-Tacariguna Jatia-Tacarigua 69.68 RIC 2,550 454 151.2 90.4 Felc6n
Cnz Verde Qda. Tua 1.28 R 30 - - - -
El iim - _ R 1,900 - - - -
Las Barmncas _ _ R 555 - - - -
Mapara _ - R 226 - - - -
El Hueque Hueque 280.0 R 1,530 - - - - lAa Los Quediches Los Quedches 38.70 C/R 300 92 24.2 46.7 D os Cedios Tocuyo 149.0 C/RtT 1,000 910 338.2 204.9 La7a
El Zamuro Qda. Fundacion 15.0 CIR/CuT 370 - _ _ >1 CD 'Prepared by the misnion. |
' Also called Socuy.
Also called Tocuyo de la Costa. Nornal Area to Catcarent Anmml Maxinum irrigafion State Reseivoirs River Capacity Use be Irrigated Area Inflow Capacity Subproject ha) am!) mill m5 ill Tn Atarigua Tocuyo 420.0 CIRJCIr| 2,075 2,732 473.0 519.0 Yaracuy
El Ermitafo _ 22.5 CRrT - - - -_
Yacumbo-Quibor_ _ _ Yacumbo 435.0 CIR - - - -
Gunrico Guarico Guarico 1,840.0 CIIRJCIT 23,140 8,000 277.8 2,242 Guarico
Trzmados Tizamdos 870.6 RJCVr 6,700 - 428 9 1,100 Tiznados
Guanapito Orituco 49.04 C/RICLPT 300 180 68.6 54.9 Guanapito
Taparito Qda. lAya 14.70 RBC/C 380 171 14.4 21.1 _
La Tigeita _ - R 100 - - -
El M6dano Qda. Tuctpide 11.66 C/R 476 193 14.1 18.8 Unar El Guarical Qda. Soledad 4.70 RCU/C 440 164 14.1 7.7 Unare
Tanuco Taananco 141.06 RICICICr 2,200 1,054 129.4 248.5 Unare
El Corozo _ - R 272 - - - _
Jabiia- - R 300 - - - _
E Cigarr6n Tanmanco 246.0 RMU/CMT 5,050 3,427 155.1 388 Unare El Pueblito Qda. Honda 314.98 RICVC 4,900 1,600 159.6 452.7 Unare
Guarico La Becera ipire 469 CRIRT 1,780 1,637 212.9 575 Unare
rieirra Blanca _ - _ 40 - - -
Sta. Rosa _ _ 70 _- _-
Monagas El Guamo Guarapiche 80 CAR1CT/ 1,300 124.6 168 Guarapiche T
Nuevo Mundo Amana . C/R _ - - _-
Nueva S. Antonio _ _ R 23 _ _ _ _
S. Fco. de _ _ R 22 ______~~Macamac ______
'Zaracuy Cabuy Cabuy 11.3 R 178 44 8.8 15.6 Yaracuy 0
Dumte Duute 0.9 C/R 23 4.5 - 1.1 Yaracuy Normal Area to Catchmnie Arnual Maximm Irition. State Rsavoirs River Capacity Use be irripted Area Inflow Capacity Subprect mllM m _ a -n _, 11 m -All - Cumaripe Yaracuy MAb.S C/R 1,300 435 57.3 140.9 - I Guaremal Diego/Guartmn 3.9 C/CIIR 37 52 0.25 4.7 Yaacuy
Cojedes P_O-LABalsa -_ 5,100 - - - Pao-Cachinche -_ _ 1,650 - - - _ Azagua Taiguaiguay L. Minas/Aragua 90.3 Rtl 1,800 182 32.5 100.8 CN Aragua Suat& Aragua 43.5 Rrr 849 198 26 49.9 CN Aragua Camitagtu Guarico 1,573.9 RIC/T 5,944 2,185 390.5 1,746.0 Camaagu- Mrida Onia Onia/Culegrin 46.2 fR/Cl 600 303 1,576.8 66.0 Carabobo CaTabobo _ - _ 534 - - - _
Guataparo _ - _ 380 - - - Ekuinns Masparro M_spanro 870.0 R/GE/CI - 500 950 965.3 - Portuguesa Bocono-Tucupito BoconeTmucupito 3,485.0 RJGEICV - - 2,620 3,734.0 Bocono T
Las Majaguas CojedeaISerare 301.6 R/CIr 4,250 302 473 346.1 LOS ______M ajaguas Trujillo Agua Viva MotatAn 156.4 RJCIr 1,852 - - - Mirnda Guiria Guina - C - - - -
Lagarlijo _ _ _ 451 - - - -
Qda. SC" _ _ _ 95 - - - _
El Guapo - 600 - - - _
Auezategii LA Estaia Argu- 110.5 RIClCT/ 2,400 1,935 35.4 164 Azoategui T
ElCuji Qda. TagurimalC. 49.1 CAft 1,270 172 9.1 62.3 Alegre El Andino Qda. ElCormmo 14.5 lP 178 35 19 19.1 Una OD Vista Alegme Unar 49.0 C/r._ 460 354 42.9 87.0 Unare 0 Sucre Turimiqise _ - R 1,500 - - - _ -I
C7mveUiaos claveUinos 131.0 C1IR 1,145 105 147.6 156.5 Caiaco -43- ANNEX 1 Table 6 PagL of 4
WI
03
;1 i'1 jSf
=- - i VENEZUELA
IRRIGATION SUBSECTOR REVIEW
Financial Profitability of Selected Crops
Cop Water luensityAl Yid Price cog Cos Net Net Retunn Reaurn Labor Resouce Farm kg/ha Bs/kg Rslk Bs/ha Benefit Benefit Labor pt Manday ______~~~~~~ ~~Bs/ha$/ha Bs/M CatD
Rimc(paddy) irmgated canmpesino 3,600 9.50 6.18 22,237 11,963 260 1,324 54 10 Rimc(paddy) irigaed emnpesario 5,400 9.50 6.16 36,968 14,332 312 2,190 39 7 Maizw rai-fed campesino 2,500 8.50 6.40 16,005 5,245 114 994 33 6 maize inigated ca_pesilo 3,500 8.50 5.35 18,722 11,028 240 1,123 59 11 maize rin-fed enrnnario 3,500 8.50 6.55 22,941 6,809 148 3,524 30 2 maize irrigaed eprensario 4,500 8.50 5.24 23,585 14,665 319 2,564 62 6 Sorghum rain-fed campesino 2,000 8.00 6.50 13,009 2,991 65 868 23 4 Soybens rain-fed capxesino 1,600 13.50 10.68 17,089 4,511 98 1,!48 26 4 Soybeans iriplted campesino 2,500 13.50 9.08 22,700 11,050 240 1,041 49 12 Sunflower rain-fed campeno 1,400 16.00 15.16 21,226 1,174 26 511 6 3 Collon rain-fed canpeno 1,200 22.00 18.09 21,712 4,688 102 240 22 39 Ciuci rain-fed empresario 1,600 22.00 17.31 27,690 7,510 163 252 27 57 Couon irrigated engnrsano 2,400 22.00 12.72 30,538 22,262 484 434 73 71 Sugarcane I year inigated campesino 100 MT 516 Bs/bfM 333 B&IhM 33,339 18,261 397 555 55 42 Sugarcane rtocing irigaed campeino 80 MT 516 BA/fM 306 Bs/Mtf 24,557 16,723 364 677 68 30 Tobacco irrgaed empresano 1,600 60.00 34.04 54,471 41,529 903 367 76 168 lack Beans irrgaed canrno 1,000 35.00 21.87 21,875 13,125 285 383 60 50 Tomato irrgaed campesno 20,000 4.00 1.88 37,667 42,333 920 498 112 121 Pepper irit campesino 15,000 5.00 2.09 31,409 43,591 948 633 139 85 t-3 Papaya irred campesino 30,000 3.00 1.21 36,227 53,773 1,169 645 148 84 Fluitains irrigated campesino 15,000 5.00 2.24 33,654 41 346 899 656 123 82 OrmnnJuea ______nwnesaio 35,000 3.57 0.78 27.359 97.591 2,122 1,355 357 79 bpuhoini aaon F= bMOM Smtsckfm, noui = bScaePdo pr. - 45 - ANNEX 1 Table 8
VENEZUELA
IRRIGATIONSUBSECTOR REVIEW
Changes of Profitabilityof Selected Crop Production by Switching from Small-ScaleFarming to Large-ScaleProduction
Crop INCREMENTALCHANGE IN Yield Production UnitCost Net Benefit(per ha) Returnto Man-day (kg/ha) Cost Man-day Total (Bs/ha) (BE/kg) (S) (Bs) CS) (Bas)
Rice (paddy, irrigated) 1,500 14,731 -0.02 -1% 2,369 52 866 -3 Maize (rainfed) 1,000 6,936 0.15 +2% 1,564 34 2,530 -4 Maize (irrigated) 1,000 4,863 -0.11 -3% 3,637 79 1,441 -5 Cotton (rainfed) 400 5,978 0.78 -5% 2,822 61 12
Source:Misaion. - 46 - ANNEX 1 Table 9
VENEZUELA
IRRIGATION SUBSECTOR REVIEW
ChanRes of Profitabilityof Selected Crop Production by Switching from Rainfed to IrriRatedAgriculture
INCREMENTAL CHANGE IN
Crop Yield Production Unit Cost Net Benerit (per ha) Return to Man-day (g/ha) Cost Man-day Total (Ba/ha) (Ba/kg) (%) (Bs) (S) (Ba)
Maize (campesino) 1,000 2,717 -1.05 -17% 5,796 126 129 S
Maize (empresario) 1,000 644 -1.31 -20% 7,866 171 -960 4
Soybeans 900 5,611 -1.6 -15% 6,539 142 -207 8
Cotton 800 5,978 -4.59 -27% 14,752 320 12 14
SourLe: Mission. VENEZUELA
IRRIGATION SUBSECTORREVIEW
Economic Profitability of Selected Crops
Crop WPter Farm Yield Border Pmoduction Production Net Net Net Net Break-even Resource TYe kg,/ba Price Cost Cost Benefit Benefit Benefit Benefit % Increaseof Bs/R Ba/ha Bkg BB/ha S/ha BB/u SIMT Yield Rice (paddy) irgated campesino 3,600 9.03 25,929 7.20 6,565 143 1.82 40 irigated empesario 5,400 9.03 36,577 6.77 12,163 264 2.25 49 Maize ain-fed campesno 2,500 4.70 16,939 6.78 -5,187 -113 -2.07 -45 45% irigated campesino 3,500 4.70 22,398 6.40 -5,948 -129 -1.70 -37 36% rain-fed empresano 3,500 4.70 21,399 6.11 -4,949 -108 -1.41 -31 30% irrigated empreiaao 4,500 4.70 24,601 5.47 -3,451 -75 -0.77 -17 16% 4 Sorghum min-fed campesio 2,000 5.53 13,795 6.90 -2,741 -60 -1.37 -30 24% Cotton min-fed campesno 1,200 23.3! 22,482 18.74 5,489 119 4.57 99 rain-fed empresario 1,600 23.31 25,387 15.87 11,907 259 7.44 162 iipgated empreario 2,400 23.31 30,734 12.81 25,208 548 10.50 228 Soybeans rain-fed campesino 1,600 10.94 17,719 11.07 -214 -5 -0.13 -3 2% irrigated campesino 2,500 10.94 26,414 10.57 938 20 0.38 8 Sugaman irrigated canpesino 100 627.00 37,003 370.03 25,697 559 256.97 6 Sugarcane1995 100 357.00 37,003 370.03 -1,303 -28 -13.03 0 4%
Tobacco irniuated empresario 1.600 87.02 52.932 33.08 86.295 1.876 53.93 I1,172 Source:Mission. 1/ Campesno = small-scalefamer, Empsario = large-scaleproducer. >
o > - 48 -
ANNEX 1 Table 11
VENEZUELA
IRRIGATION SUBSECTORREVIEW
Comparison of Financial and Economic Prices
Domestic Farm-gate Econonic Economic Cost Breakeven Crop Price Border Price of Production Net Benefit Yield (Bs/kg) (Bs/kg) (Bs/kg) (S/bM) (%)
Rice (paddy) 9.50 9.03 7.20 40 - 49
Maize 8.50 4.70 6.77 - 5.46 -45 - -17 45% - 16%
Sorghum 8.00 5.53 7.0 -30 24%
Cotton 22.00 23.31 18.74 - 12.81 99 - 228
Sugarcane 516.00 627.00 370.00 -3 - +8
Sugarcanc (1995 onwards) 357.00 370.00 -283
Tobacco 60.00 87.20 33.00 1.172
Source: Mission. - 49 -
ANNEX 1 Table 12
VENEZUELA
IRRIGATION SUBSECTOR REVIEW
Existing Small Farmers Association in Irrigation Projects
State Irrigation Number of Registered ______Project Associations Farmers Anzoategui Anzoategui 2 50 Aragua Camatugua 8 340 CN Aragua 12 516 Barinas Bocon6 7 601 Sto. Domingo 6 59 Carabobo Carabobo 14 365 Cojedes San Carlos 11 365 Falc6n Falc6n 6 148 Guarico Guarico 70 930 Monagas Guarapiche 9 160 M6rida M6rida 34 986 Miranda El Tuy 15 119 Lara Lara 13 370 Portuguesa Guanare 6 399 Las Majaguas 16 834 Sucre Cariaco 6 125 Cumana 14 234 Tachira Tachira 152 4,539 Trujillo El Cenizo 18 156 Yaracuy Yaracuy 13 407 Zulia Zulia 11 169
Total 2 1 :433 [ 11,872_ ] Source: MAC. - 50 - ANNEX 2 Page 1 of 14
VENEZUELA
IRRIGATION SUBSECTOR REVIEW
Physical Development of Irrigation
A. CLIMATE AND WATER RESOURCES
Climate
1. In accordance with the Koeppen geographical classification, Venezuela is located in a tropical climate zone with hot, rainy characteristics in most of the country. However, the Andes region and several zones of the Guyana Massif have a temperate tropical highland climate, while around the Gulf of Venezuela and the coastal zone of Cumanh, the climate is hot and dry. The country's temperature regime is isothermic with an annual average of 240C, varying between 280C in the Maracaibo depression and 18.50 C in the Andes region.
2. As a consequence of climatic conditions, precipitation occurs during two periods: "winter" or the humid season, and "summer" or the dry season, both of which vary according to region. This variation in precipitation affects agricultural production and need for irrigation. In a large part of the country's central region (the Llanos), annual precipitation reaches 1000 to 1500 mm and is unevenly distributed between May and November, while the rest of the year has little or no precipitation, a situation that allows the production of one crop only. Along the Caribbean coast and the part of the Llanos with scarce vegetation, precipitation is normally less than 800 mm, and occurs during a 100 day period between July and October; in these zones, as in semi-arid zones in the northwest with precipitation of less than 300 mm, agriculture is carried out with complementary irrigation. In some regions, the irregularity of rainfall is more pronounced; for example, north of the Maracaibo basin where dry Caribbean winds prevail, precipitation is less than 100 mm, while in the south it is 1750 mm. In the northern region of Guayana annual precipitation is above 200 mm and occurs during a 200 day period, between May and December, while in the south it is above 3500 mm. Those zones with less than 700 mm per year generally have irrigated agriculture. Some zones have a bimodal precipitation curve with peaks in May and October. Agriculture, therefore, is based on semi-permanent irrigation. In some zones in the east, this condition is due to the influence of the trade winds (called "nortes") from the Caribbean Sea; in the west this situation occurs in the Zulia region due to the characteristics of the Gulf of Venezuela and Lake Maracaibo.
3. Venezuela has a network of weather recording stations which covers the country rather well; nevertheless, there is only a small number of complete weather recording stations (type Cl stationt' Most of the available data is reliable and generally corresponds to average recording periods of less than 20 years per station. In general, in most of the country - 51 - ANNEX 2 Page 2 of 14
evaporation is 2000 mm per year, averagewind speed is 5 km/h, average relative humidity is 70% and average sunshlne is 7 h/day.
Water Resources
4. Surface Water. In terms of water resources, surface water is abundant; however, its spatial distributionis not favorable for irrigation. The country may be divided into three natural geographic regions: the coastal Andean region, predominantlymountainous, including Lake Maracaibo; the central Llanos region with flat topography;and the Guayana region, south of the Orinoco River, also known as the Guayana Massif. Venezuela'swater potential is formed by basins discharginginto the Atlantic Ocean: the Orinoco, San Juan, Guanipa and Cuyoni; the basins that discharge into the Caribbean Sea can be grouped into 20 smaller rivers including the Chama, MotatAn and Tuy; and the isolated and less important basin of Lake Valencia.
5. The Orinoco River begins in the Guayana Massif and is 2063 km long; its basin covers 640,000 km2, or 70.2% of the country's territory. It is estimated that the total quantity of surfacewater generated in the country is 700,000 million m3, of which 82% comes from the rivers of the Atlantic basin, the largest of which are located south of the Orinoco where the average yield is 1.36 million m3/km2. The remaining 18%, or 126,000 million m3 of water, flows into the Caribbean Sea or Lake Maracaibo and comes from basins with an average yield of 0.24 million m3/km2, half of which is concentratedin the western Llanos. This spatial distribution,linked to annual precipitation, implies enormous volumes of water for the Guayana Massif region, and lesser flows and variable quantities in basins draining into the Caribbean Sea. Thus, the more developed and populated northern zone of Venezuela has fewer water resources. Records of river flows vary between 8 and 30 years; it is considered that the recently installedgauging stations are reliable.
6. Ground Water. Based on available information,it may be stated that in general the country has few ground water resources compared to surface water. There is an average annual volume of 20,000 million m3 of good quality ground water, which is equivalent to less than a fifth of the country's average volume of surface runoff. Ground water is drawn from relatively impermeable formations of various ages; for example, underlying material from the Cojedes River hydrographicbasin is composed of rock formationsdating back to the Triassic Period (very old) to the recent era, during which two types of aquifers have been formed: shallow aquifers, and aquifers collecting runoff underground;in the case of the Motat4n River hydrographicbasin, the underlying material consists of Pre-Cambrianera and other more recent rock formations.
7. Replenishmentof aquifers comes basically from precipitationand surface runoff, while undergroundrecharge comes from the Andes. The use of aquifers is limited in regions with abundant surface water resources; however, in arid and semi-arid zones it is used permanentlyand intensely to the point of risking its availabilityand quality, as in the case of the Maracaibo Llanos. Tubewells constructed for irrigation in arid and semi-arid zones generally are between 40 and 100 m deep and spaced with a density of 20 to 100 - 52 - ANNEX 2 Page 3 of 14
wells for each 100 km2. The depth of the water table in most aquifers is between 10 and 30 m and well discharges are generally between 20 and 50 1/s. The private sector is the main user of ground water.
Water Quality
8. In some central areas there is significantinteraction between surface and ground water, to the extent that rivers change from influents to effluents, resulting in variable water quality. In the case of arid or semi- arid areas, low precipitationand high evaporationtend to produce highly salinesoils; thus, when water filters through such soils, it acquires a high mineral content. With the exception of the Maracaibo Plain, where water of doubtful quality was recently found, the rest of the country in general has good-qualitywater, classified as ClSl (excellentquality without risk of sodium).
Water Balance
9. Rainfall distributionin the area north of the Orinoco River and especially in the Caribbean basin, does not meet crop water requirements,due to high evapotranspiration;thus, in general, a seasonalwater deficit exists between November and April. In the Oriente (Eastern) region (states of Monagas and Sucre) annual evapotranspirationranges between 1200 and 1340 mm and precipitationbetween 1060 and 860 m, which means a deficit of between 140 and 480 mm during six months (Novemberto April). In the Occidente (Western) zone, the deficit is more pronounced (states of Zulia and Falc6n) where it varies between 800 and 2000 mm, over the entire year; in October, in some years, precipitationexceeds evapotranspiration. In the Llanos (states of Portuguesa and GuArico) there is an intermediatedeficit value for December to April. In order to assure one harvest in the west and two harvests in the east and the Llanos, irrigationwould be required. For the Guayana region, precipitationexceeds evapotranspiration,which results in excess water causing major flooding and drainage problems.
B. IRRIGATIONDEVELOPMENT
Background
10. Little evidence exists that irrigationwas practiced by native people, with the exception of the Timoto-Cuicapeople who developed structures to prevent erosion, reservoirs, irrigationcanals and drainage systems in the Llanos. In 1863 a canal was built to divert water from the GuSrico River, irrigationwas practiced in the flat lowlands of the Manzanares River, and in Coro, the Caujaro dike was built. In 1874 the Ministry of Public Works (MOP) was created, the predecessor of MARNR and MAC. In 1940, the IrrigationWorks Administrationin MOP was created, and since that year, the first modern irrigationprojecto wore establishedin Venezuela, primarily to increase the production of crops raised in the northern part of the country. The main - 53 - ANNEX 2 Page 4 of 14
developmentswere in Suata and Taiguaiguay (8000 ha), Cuman& (2500 ha), and El Tuy (1340 ha) on the northern coast and in San Carlos (4000 ha) in the Llanos to the west; projects were also developed in Guataparo,Neveri, Chirguas and El Cenizo. In the followingdecade, several new irrigationworks were developed. However, with the exception of the Guarico project in the central Llanos in 1954, progress was generally slow, which is reflected in the fact that by 1958 the Governmenthad only developed 13,700 ha. Nevertheless,a new impetus was given to irrigationdevelopment starting in 1958, when constructionof several main projects began, and a policy was established for settlement of small farmers (campesinos)on relativelysmall plots of land.
11. By 1965, areas equipped with irrigationinfrastructure had increased significantlyto 63,000 ha, as a result of extensive developmentsin the central and western Llanos. Most of this increase consisted of small irrigationsystems, the majority of which are located in settlementareas in the Los Andes zones (states of TAchira, M6rida and Trujillo) and the high plateaus of the northern coast near Lake Valencia. In the 19709, the growth of areas provided with irrigation infrastructurewas moderate but steady, reaching 123,533 ha in 1980. In the past ten years, the rate of growth of areas under irrigationfell with respect to previous decades. By 1989 the governmenthad provided 179,921 ha with irrigationinfrastructure. A lack of data exists with respect to private sector irrigation. However, it is estimated that in 1980, 386,500 ha were irrigated,by 1985, 439,263 ha, and in 1989, 449,175 ha, which means that three-quartersof the total irrigated area in the country was developed by the private sector.
Distributionof IrrigatedAreas
12. The use of water for non-agriculturalpurposes in the Caribbean basin area tends to reduce the potential for providing irrigationto agriculturallands, due to the limited availabilityof water resources; this situation becomes critical in areas with a high concentrationof population and industry, as in major Venezuelan cities, especiallyCaracas. Consequently,irrigation is limited in these areas.
13. Geographically,the major irrigated areas are located in the west and in Zulia with 26.1% and 22.8% of the nation's total, respectively, followed by the central and Andean zones and finally the central Llanos, east and Guyana. Most of the private sector irrigated areas follow similar geographicalpatterns. It is estimated that in total 407 irrigationschemes have been constructed;grouped, for administrativepurposes, into irrigation projects under MAC's supervisionand assistance. Total irrigated area is 449,175 ha, which means 21Z of total area cultivated,well above the world average of 15% (FAO, 1987).
Potential of Irrigated Areas
14. Venezuela has potential to increase irrigatedagriculture, but at the same time it lacks a suitable policy framework. To improve irrigated agriculturaldevelopment, it is necessary to organize and strengthen - 54 - ANNEX 2 Page 5 of 14 institutions,improve the level of training of human resources, and introduce a policy without major subsidies. In 1984, MARNR carried out national studies with the objective of identifyingand prioritizingpotential areas for irrigation,taking into account climate, water and soil resources, economic aspects, irrigation tradition and regional impact, and infrastructuralissues, among others. These studies identifiedabout 1,b06,000ha throughout the country as potentially suitable for irrigation,of which apnroximatelyone third could be suppliedwith ground water and the rest with surface water; it also showed that availabilityof suitable lands is generally greater than availabilityof adequate water resources. A summary of potential areas is given below:
Region Potential Soil Irrigable Area Availability Area ------(ha)--
Zulia 750,800 634,700 236,200 Center-West 904,300 691,900 455,900 Andes 537,600 383,300 294,900 Central and Capital 284,700 200,800 88,700 Central Llanos 381,400 343,100 138,300 North-Eastern 687,700 422.200 193,700
Total 3,546,500 2,676,000 1,406,900
The area actually irrigated in some existing public projects is only approximately20% of the potential of these projects.
Water Storage Dams
15. Venezuela has a good network of hydraulic infrastructurefor multiple purposes, including irrigation. The existence of water deficits has motivated the constructionof reservoirs,to regulate river flows, to store water during the rainy season and increase the availabilityof water for irrigation during the low flow season. An estimated 38 multipurpose reservoirswere built by MARNR, 50 by INOS (initiallyonly for domestic water supply) and 3 for power generation only, 2 administeredby CADAFE and 1 by EDELCA. Total design capacity for these reservoirs is calculated at 7570 million m3, for different purposes including irrigation. MAC has generally built small reservoirs,which are used to store pumped ground water or surface water for irrigation.
16. Of the 90 reservoirsbuilt by MARNR and other entities, four have capacities exceeding 1000 million m3, four between 500 and 1000 million m3, and five between 250 and 500 million m3. It is estimated that ten reservoirs are being used exclusivelyfor irrigation,with irrigated areas well below ths potential created. A greater density of hydraulic infrastructureworks is found in areas with water shortages located in the area north of the Orinoco River. - 55 - ANNEX 2 Page 6 of 14
C. DRAINAGEDEVELOPMENT
Flood-Prone Areas
17. One of the predominanttopographical and physiographical characteristicsof Venezuela is the presence of plains. In general, floods occur naturally due to heavy, sudden rains, resulting in runoff onto flat plains with fine-texturedsoils and low permeability. In some cases, man's interventionin changing the natural drainage and runoff systems contributes to inundations. In the region north of the Orinoco River, 10 million ha is flood-prone,which amounts to 41Z of its total area. Deltas, interinr delta plateaus, and swampy plateaus, both coastal and lakeside (types I to IV), cover 36% of the flood-proneareas. They are characterizedby prolonged flooding and low agriculturalpotential, and are more suited to wildlife.
Drainable Areas
18. The purpos4 of drainage is to improve flood-proneareas through the implementationof drainage systems, and to use these areas for irrigated agriculture. MARNR made a preliminaryestimate that 8.5 million ha could be drained. By 1982, drainage projects covered 6.5 million ha, of which, according to plans, the drainable area was 4.6 million ha and usable area 3.1 million ha; in accordancewith plans, works were carried out on 1.2 million ha, approximately20% of the area. The area planned for drainage in the short term, after 1982, was 584,000 ha, and in the medium term, 1,890,000ha or 38% according to plans; in the long term, the remaining 42% is expected to be provided with drainage systems. Some projects were suspended in accordance with HARNM priority criteria.
Areas with Underground Drainage and Salinity Problems
19. The occurrence of areas with high groundwatert ale and salinity problems is not significantand is found only in small areas with a hot, dry climate in the states of Zulia and Falc6n; for example, in the states of Lara and Trujillo, high groundwatertable problems exist. In Maticora (Falc6n State) some experience has been gained with managing and chemical treatment of saline soils, and recovering them for private irrigated agriculture. The InteramericanCenter for Water and Land Development (CIDIAT),with headquarters in M6rida, has informationon management of soils with drainage and salinity problems in Venezuela.
Projects Under Construction
20. Four irrigation projects are presently under construction: Matleora,Camare, El Cenizo and Tiznadoes,which cover 31,000 ha (1991). There are two drainage projecte in Caipe-La Yuca and Isla Cocuina for which works were planned (1989) on 76,000 ha, and three irrigation and drainage projects: Guanare-Masparro,Turen II (SouthernCojedes) and Biruaca-Achaguaewhere works - 56 -- ANNEX 2 Page 7 of 14
were planned (1989) on 270,000 ha, totelling 40i,000 ha. As of 1990, none of the planned projects had been completed.
D. CHACACTERISTICSOF IRRIGATIONAND DRAINAGE
Irrigation Infrasatticture in Ptublic Sectot: ItYoJects
21. Venezuela has a variety of designs for irrigation infrastructure. Most irrigation and drainage infrastructuredesigns were prepared by government-contractedconsulting firms who proposed their own considerations and criteria for the designs, because no official design standards for headworks, conveyance, distributionand irrigation methods exist, MARNR has a good file of designs organized by CARDEX classification,with infcrmationon dame and irrigationsystems developed by MOP and MARNR. Howevcrttit is necessary to improve the filing system of designs prepared by MAC.
22. Pumping Projects. Water drawn from wells (Caus-Poc6,Tierra Buena) or rivers (Guarapiche)is generally discharged into a network of locally manufacturedMezzogiorno-type elevated canals and distributedthrough simple gates. This type of distributionis generally adequate for very small projects. When the pumping units serve areas of less than 100 ha, distributioncan be made by rotation or proportionally. In larger areas (Merecure,600 ha; Guarapiche system), it is necessary to know at all times the number of irrigation subscribersand the volume to be delivered to each of them, in order to match demand with installedpumping capacities;the exception is the San Vicente project (Guarapiche)in which water is pumped into a reservoirwhich is regulated by a gate which maintains a constant downstreamwater level. With this system, if demand increases, the gate is raised, releasing a greater volume of water. When the level in the reservoir goes down too much, a device activates a supplementarypumping unit, which operates until the balance is restored; this concept works with electric motors. Good management of pumping projects requires application of water rates on a volumetric basis. Thus, since an important energy and equipment amortizationcomponent is added to the cost of water, more advanced concepts should be adopted with regard to gauging and controllingthe volume of water to be delivered.
23. Gravitv-TvDeRiver Diversion Projects. Water is generally diverted from a river (whether or not regulatedby a reservoir)by means of headworks consisting of a diversion dam, sediment trap and a regulating structure. in some projects it is taken directly from the dam (Tiznados,Gufrico). The projects generally have a network of primary, secondary and tertiary canals. The primary and secondary canals are usually built as earthen canals lined with reinforced concrete. The tertiary network is generally not lined, but in some projects the portion lined is medium (GuArico)to high (Bocon6);most lined tertiaries are elevated canals (Santo Domingo, Bocon6).
24. Distributionfollows regulated supplies and on-demand concepts. Adequate control facilities are often lacking particularly tn small systems. For regulated supplies, the flow is regulatedupstream, while in on-demand -57 - ANNEX 2 Page 8 of 14 systems, the flow is regulated downstream. In the latter case, flow variations cause water level changes upstream,which automaticallytrigger the regulatingworks. Some systems are considered "on-demand"but are not (Tiznados,Santo Domingo); although it is true that farmers are free to handle the gates, modifications do not take place upstream and consequently downstream users suffer. In these cases, water is wasted and there is no way to establishwater rates on a volumetric basis.
25. The most common control structures are the Mexican types, which are based on the double gate type developedby USBR. These gates consist of short lateral weirs and radial gates; both are submerged. This structure does not allow accurate gauging at the main canal, and at the headworks, which is essential to measure the difference in head. The diverted flow is kept constant despite variations in the level of the canal; however, any modificationupstream causes modificationsin all structures downstream. In large systems, management is so complicatedthat a single contract is made with the subscriber (for each crop season), independentof real needs. This type of control leads to wasting water; charging on a volumetric basis is possible only with well-trainedpersonnel. In the Bocon6 project a combinationof Giraudet weirs and Neyrtec-typemodules (locally constructed) is used, which cause only small variations in head. Flow modificationsat the headworks require resetting the primary canal gates supplying secondaries. All other structures adapt automaticallyto new demand conditions. With its semi-automaticoperation and precision in measuring flows delivered, the system allows for distributionon a volumetric basis.
26. PressurizedDistribution Projects. There ls only one example of this type of distributionin the public sector: part of the Cariaco project with 900 ha irrigatedby sprinkler,where water is pumped from the secondary canal by 4 electrical pumps and is used by farmers with hydrants on their lalud. However, most of them use gravity irrigation,which means that the supply of substantialpressure at the hydrants causes great losses. This failure is due to a design error (lack of pressure reducers) and the great diversity in level of training among the farmers. Some small irrigation projects in the Andes region have well-balancedsystems with small diversion headworks, short low-gradientcanals and preastsrizeddistribution systems with galvanized pipes, connectedwith moveable aluminum laterals on which sprinklers operate.
Irrigation Infrastructurein Private Sector Projects
27. A significantportion of irrigated land in the private sector is equipped with tubewells and pressurizedsystems, sprinklers,micro-sprinklers and drippers,which irrigate high-valuecrops suclhas sugarcane and treecrops (in the zones of the western Llanos and Lake Maracaibo Plain). As in the public sector, there are no limits or controls on pumping groundwaterwith the exception of constructionpermits which require that the spacing of wells be more than 400 m. Water is also pumped directly from surface waters, where a farmer or group of farmers have built an intake for supplying irrigation water, which is distributed and delivered in turns or proportionallyin relation to the area served. Some small projects in the Andes region use a - 5S - ANNEX 2 Page 9 of 14
prescurized distributionsystem with galvanizedpipes, connectedwith moveable aluminum laterals on which sprinklersoperate.
Drainage InfrastructureDesign
28. USBR standards are used for the design of drainage systems. The most widely used method to control flooding and surface runoff has been the constructionof dams or reservoirs. Most public sector projects are provided with a drainage infrastructureconsisting of main drains normally located in large depressions or natural ravines; collector drains located according to physiographicalrelief and lateral drains built on the edges of fields. Except in a few isolated cases, there are few on-farm drains. In general, excess water from main drains and collectorsis dischargedinto rivers, lakes or the sea. The main characteristicsof collector drains are: depth of 1-3m, bottom no less than 1 m for a trapezoidalsection carrying dischargesof up to 50m3. In urban areas drains are concrete-lined.
Scale and Methods of Irrigation
29. The size of irrigationprojects varies, depending on the availabilityof water and land; 75% of public sector projects do not exceed 10,000 ha, the smallest of which is El Tuy project with 900 ha. The total adds up to 64,040 ha. The remaining 251 of the projects are between 10,000 and 52,000 ha, the latter correspondingto the Gu6rico River project, with a total of 115,881 ha. In ths private sector the size of irrigation systems is also variable and is basically defined by the size of the property. Thus, a sugarcane farm in the central Llanos could be 20,000 ha, while a small farmer's land may be 10-15 ha. Diversion and distributionof water, in most of the irrigated areas, is by gravity, followed by pumping from rivers or bquifers. The characteristicsof water supply, type of soil, topographyand crop to be irrigated determine the differentmethods of water applicationin Venezuela. 70% of irrigatedland uses gravity irrigationmethods (mainly furrows), 162 uses sprinklersand 5% drip irrigation. Land distributionby irrigationmethod and sector is the following (1990):
IrrigationMethod Private Sector Public Sector Total ------(ha) ------
Gravity 272,800 83,300 356,100 Sprinkler 48,500 24,300 72,800 Drip 20 800 -- 20,800
Total 342,100 107,600 449,700
30. Many public sector areas that use pumping plant sugarcane irrigated through furrows and fruit crops irrigated from small reservoirs. Pastures are irrigated by flooding for i*ich small reservoirsare built without much level4ng; for rlce it ir cuimmonto level the land first. In most cases, the selection of i;. - i^n method reflects the farmers' technologicallevel. - 59 - ANNEX2 Page 10 of 14
Experiencewith Irrigation Practices
31. Irrigation and drainage, initially administeredby MOP until 1976, is now taken care of by MARNR insofar as major hydraulic infrastructureworks are concerned, and by MAC, which directs the developmentof irrigation and drainage systems, agriculturalresearch and extension. Irrigation is introducedwhen rainfall is scarce or non-existent,during the low flow or 1summer" season when river flows are minimal. Dams storing water for irrigation and other uses are administeredby MARNR, which, in coordination with MAC, supplies water to public sector projects. Projects administeredby MAC prepare cropping patterns and irrigationprograms. Independentof demands made by each farmer, water supplies by MARNR depend on the availabilityof surplus water, after demands for domestic and industrialwater supply are met. Thia means that in "dry" years, water available for irrigation is minimal. For the private sector, pumping from rivers or aquifers begins in the dry season. The irrigationperiod is slightly variable from west to east. In the Cariaco and Guarapiche projects, irrigationwater stored in dams is distributedbetween November 15 and May 15, despite the rains in the "nortes" (trade winds) season (November-February).For the GuArico project, irrigation water is distributedbetween October 15 and April 30. In Las Majaguas, the official irrigation season is between November 1 and June 30, sometimes extended to mid-August. In the Caus-Poc6 project, aquifers are pumped between November and February and between June and August; in El Cenizo, water is distributedby gravity during the same periods as Caus-Poc6. In the private sector areas of the Lake Maracaibo Plain, water is pumped from November 1 to April 30; however, during the "winter" frequent complementaryirrigation is required. In some projects, like El Cenizo, water is rationed during the low flow season and is distributedin turns.
32. The quantity of water per hectare supplied for rice cultivationin the majority of projects is 1.5-2.0 1/sec, with the exception of the Bocon6 project where it is 3 1/sec. The average depth of water applied for rice cultivation in Gu&rico is 1.4 m, in allocationsof 20 cm, which is adequate according to experiencesfrom other countries. In Bocon6, however, it is 2.4 m, due to an uncontrolledsupply of water. The irrigation duty for horticulture,grasslands, sugarcane and fruit crops in most public sector projects is almost always greater than l 1/sec/ha,which means that in most cases there is an over-supply. In the private sector, except where some farmers grow sugarcane, cotton, or maize and sunflower for seed production and have experience in irrigation,supplies generally exceed crop water requirementseven when pressurized irrigationmethods are used. In general, the tertiary canals do not deliver less than 45 1/sec; this flow is used to irrigate the area for an unlimited time. In some cases, farmers do not know how to use siphons for furrow irrigation,which would save them time and effort; instead they prefer to apply the water in a more traditionalway.
33. Conveyance and distributionefficiencies, keeping in mind that most canals are lined, are estimated at around 70-802, which is quite acceptable. However, applicationefficiencies are rather low; it is estimated that in most public sector projects these values range between 25-40Z. In most cases this is due to a lack of volumetric gauging of water delivered at each property, - 60 - ANNEX 2 Page 11 of 14
because there is no measuring device or simply because there is no personnel to control it. Excess water applicationis also due to the farmer's lack of understanding of crop water requirementsand in a few cases because irrigation is used on sandy, porous soils. In the public sector, irrigationis normally done 8 hours per day, five days per week; the rest of the time the user can irrigate as needed; in the private sector irrigationmay take more than 8 hours, every day of the week. Frequency of irrigationdepends basically on the type of crop, irrigationmethod, and water availability;in Guarapiche tomatoes are irrigatedby furrows every 5 days; on the Lake Maracaibo Plain, sprinkler and drip irrigationis done every two days for fruits, and every 5 days by furrows.
IrrigationTechniques
34. Surface Irriaation. The irrigationmethoQs most frequentlyused and most important for the country are by furrow and flooding. Furrow irrigation is very important for all annual crops planted in rows and is becoming more importantbecause of the introductionof new water control technologies;it also has the advantage of not wetting plant leaves and it lends itself well to all terrain and topographicalconditions. In Venezuela, the method's potential is underutilized. Proper practices disappearedunder the influence of immigrantsfrom the Canary Islands, accustomedto small plots and difficult topography,who continued their habits despite much more favorable conditionsin Venezuela. Therefore,in general, furrows are too short, water is handled manually without the use of simple devices like siphons, and there is a general lack of understandingof the concepts of application depth and distributionefficiency. The system used leads to irrigation requiring abundant labor and a poor distributionof water. Other irrigationmethods, such as "melgas", appear unimportant.
35. Flood irrigationin Venezuela has two variations: permanent and temporary flooding; the former is used exclusively for rice grown on levelled land with bunds around units of 3 to 10 ha according to topography,or with bunds along the contour lines. The option selected often depends on the farmer's level of investment. Flood irrigationis well-managed in Venezuela, both at the level of small and large farmers. Bunds separatingfields are narrow and weeds are controlled;use of water between paddies appears excellent and cropped areas, both public and private, have an efficient distributionnetwork. However, there are real problems with regard to water depth applied since the tendency is to apply excess quantities as in the Bocon6 project (2.4 m).
36. Transitionalflooding is used for grasses and tree crcps. In the GuArico project rotationalsupply is practiced between grasses and rice. Basins are planted with grasses tolerant to transitionalflooding; water is applied every 15 to 20 days. The limitationof this method lies in structural damage to the soil caused by animal grazing. Transitionalflooding methods with small reservoirs are important for small orchards (principallycitrus).
37. The difficultiesencountered in handling surface irrigationshow that the chain of agronomic research-extensiondoes not work well. Surface - 61 - ANNEX 2 Page 12 of 14 methods are the only ones available to small farmers on the plains; thus, if technical know-how is not shared, there is little possibilityof developing agricultureat the small farmer level.
38. Pressurized Irrigation. In the past two decades, a variety of new pressurizedirrigation technologieswere successfullyintroduced, including big jet-type sprinklers,center pivots and localized irrigation. Their acceptance and use by progressive farmers brought about the development of a new small local industry producingmost components for sprinklers,drip irrigation and micro sprinklers. A good selectionof internationalpumping equipment at reasonableprices as well as good repair facilities,are available. An importantwell drilling sector has also developed.
39. Small Sprinklers. This technologyhas declined all around the country except in Los Andes. Highland farmers take water from public and private sector canals and/or reservoirs by gravity (making use of the unevenness of the Andean valleys) into a network of galvanized pipes connected with on-farm galvanized iron or aluminum laterals,equipped with small sprinklers. The success of this technology stimulated the developmentof an important and highly profitable horticulturalsector. Farmers frequently have problems with excess pressure (causing high maintenance costs because of broken gaskets) which could be solved by installinglocally produced pressure reducers with the possibilityof downstream control. The achievementsof Andean farmers demonstratethat success does not depend exclusivelyon farm size and financial ians.
40. Irrigationwith Larse Jet-TvRe SDrinklers. This method is developingwell in the Zulia, Lara and Falc6n areas where it is generally used on selected grasslands,with the systems moving over the fields.
41. Center Pivot Irrigation. This type of irrigationhas been used in areas with light soils, high-value crops (sugarcane,cotton, groundnuts, "patilla"). More general adoption of this technologyhas been affected by poor representationfrom internationalsuppliers and an inadequate saiply of spare parts.
42. Localized Irrigation. Successful applicationof irrigation technologiesstimulated small manufacturersto produce most components fo0 localized irrigation. A complete range of materials such as mist-producing sprinklers,micro sprinklers and drippers is available in the country. This method is most widely used in Zulia for high-value fruit production. Certain farmers use advanced "ferti-irrigaci6n"techniques.
Operatien and Maintenance
43. Public sector irrigationprojects experiencemany budgetary restrictionsfor operation and maintenance activities. For this reason, the works normally carried out do not meet the needs, and thus many of these poorly-maintainedprojects operate with limitations,especially those with non-lined canals and drains full of weeds and sediment. In the case of hydromechanicalequipment (radial and circular gates, division boxes), routine - 62 - ANNEX2 Page 13 of 14
maintenance is lacking and repairs are much needed (for example, El Cenizo intake, Bocon6 secondary system). MAC is presently reducing its qualified and semi-qualifiedpersonnel and its policy is to carry out maintenancework by contractors,leaving only the minimum personnelnecessary to look after system operation. This policy should be complementedby organizingextension courses on proper O&M for farmers who could progressively finance 0&M works. In the public sector, only 60Z of the area provided with irrigationinfrastructure is utilized for the following reasons: deteriorationof equipment and irrigation works due to lack of proper maintenance, incompletesecondary and tertiary irrigationnetworks and, in some cases, pumping stations and on-farm development facilities. In general the farmer does not contribute towards 0&M costs, with the exception of some schemes such as Caus-Poc6,Camatagua, and Guarapiche,in which farmers provide part of the diesel motor fuel; however, serious problems are taken care of by the Government.
44. In most irrigationprojects, the duties and rights of each farmer with respect to O&M are not defined. Nevertheless,25-30 years after being built, concrete structuresand lined distribution canals are still in good condition,reflecting good quality of design and construction. Access to most irrigationprojects appears well maintained,but some maintenance roads along canals and drains are not. There are an estimated 380-400 0&M personnel, including engineers,technicians and laborers,which means that each person is in charge of an average area of 270-280 ha. This is consideredbelow the norm used in other countries. 0&M in the private sector is supported entirely by farmers, who in general service their own equipment and infrastructure. Most of them have modern communicationequipment, portable radio transmittersand mobile service units.
Water Users' AssocLations
45. In Venezuela there are no water users' associations,such as users' committees,nor governmentadministrations through IrrigationDistricts. In general, there are no users' organizationsfor medium- and large-scale projects with the exception of the Camatagua and Caus-Poc6 projects in which farmers are organized to pump irrigationwater and then distributeit in canals or reservoirs,respectively. Existing organizationsare mostly "economic"one started by farmers in an irrigationproject for purposes of marketing their products and obtaining production support services (cotton growers, citrus growers, etc.). There are presently an estimated 300 of such associationswith about 7,000 members. The organizationsplay an important role in economic issues such as input and guarantee prices. Most projects located in the Andes region (states of TAchira, M6rida and Trujillo) are administeredby Water Users' Committeeswhich generallyhave up to 40 members. Each Committee is run by a president, a treasurer,a secretary and a public relations officer who are elected annually. It is estimated that small projects administeredby the farmers themselvesin these states, cover about 16,000 ha. - 63 - ANNEX 2 Page 14 of 14
46. The General Sectoral Directorate of Drainage and Irrigation of HAC has prepared a draft document for establishinga Water Users' Association in each irrigationproject. It mentions the users' obligation to pay part or all O&Mcosts, and adds that water charges will be calculatedeach year based on proposed budgets for O&M expenditureswhich then are submitted to the Council of Ministers for approval. Payments are to be made to the National Treasury. - 64 - ANNEX 3 Page 1 of 4
VENEZUELA
IRRIGATION SUBSECTOR REVIEW
Estimate of Investment and Operation and Maintenance Costs for IrriegationandDrainLae
InvoestmontCosts for Completed Projects
1. Project constructioncosts were studied by using historic cost data, and by applying the methodologyproposed by J. Astorga in the document "R6gimen tarifario para los sistemas de riego administradospor el MAC" ("Tariff scheme for irrigation systems administeredby MAC"), and the current costs method; this resulted In estimates of existing investmentsin line with current unit prices. Total investment cost per hectare, calculated by using both methodologies and based on an inventory of existing works, are between US$2,000 and US$5,000 for irrigation,public roads and drainage networks (Annex 3, Table 1), which means that the cost, expressed in US$, is relatively stable over the past 20 years and is significantlylower than international rates for similar works. This is due to severalfactors, including: (i) low salaries paid to laborers and middle-levelstaff; (ii) subsidies on cement; (iii) machinery amortized in the constructionof large urban programs; (lV) the large number of qualified constructioncompanies; and (v) local availabilityof most constructionmaterials. In addition, the projects studied did not require heavy investment,for such works as tunnels, aqueducts, etc. as they were constructed in relatively flat areas, and the canal distributionnetworks were relatively economical in comparison to low- pressure pipe systems. Although it is true that cement subsidieshave disappeared,other factors like salary depreciationand the competence of constructioncompanies should level out these effects. It is therefore reasonable to assume that the present price structure, expressed in US$, will remain in effect for several years to come.
2. The methodology used to calculate current costs is the following. All calculationsare made based on unit prices in effect in 1990 as determined by COVENIN standards. For canals, the methodology established in the pre- feasibility study of the Unare basin was used. The marginal cost of canal sections is considered to Cecteasewith an increase in the capacity of the canal (in m3/sec). Canal prices per linear meter were calculated for several oxiating sections and adjusted to a logarithmicregression; the following equations were obtained:
P - 47.74 x ln(Q) + 66.63 (earthen canals, gradient 1/1,000) P - 48.72 x ln(Q) + 100.91 (earthen canals, gradient 1/2,000) P - 55.78 x ln(Q) + 112.62 (earthen canals, gradient 1/5,000) P - 26.66 x ln(Q) + 89.57 (Mezzogiorno-typecanals) where P is the cenal cost in US$/linear m, and Q is the flow in m3/8. - 65 - ANNEX 3 Page 2 of 4
3. The viability cost is calculated on the basis of a canal width of 6 m and a transport cycle of 30 km and the drains according to a typical section for each category, with category I corresponding to those canals with a gradient of 1/1,000 and category 4 to elevated canals. The calculated current costs are suitable for estimating new projects while the COCEN1N referontial costs, expressed in dollars, do not change significantly. Annex 3, Table 2 shows the results of this analysis and the costs shoxn therein refter tn the project costs if they were to be built today.
Investment Costs in Drainage Projects
4. As a consequence of the characteristics of a tropictnl, rainy climate with large lla.ios ana plains, drainage projects in Venezuela are o' ery important. Until now, investments have been made in high-priority projects, including Sur del Lage, Turen 11, Apure and Guanare-Masparro llodt-c.½s; nevertheless, new investments are planned for future stages to complete these projects. Investments carried out until 1982 were US$217 million and by 2002 investments of US$105.0 million are foreseen (Annex 39 Table 3).
5. Other drainage projects, classified as low priority, for whlch future investments are planned, are: Uribante-Arauca, Rio Yacaruy and Aroa, and Paguey-Canagu4. The investments planned for 1987 were US$8.7 millilon and for 1989 US$54 million (Annex 3, Table 3).
Investmentsin Projects Under Construction
6. In 1990 four irrigation,two for drainage and three irrigationand drainage projects were under construction, with estimated investments of US$129.4, 41.6, 239.3 million respectively,with a total of US$410.4 million. Details on estimated investmentsfor each project and the area planned for development,are shown in Annex 3, Table 4.
Operation and MaintenanceCosts
(M) Irri4,ation Projects
7. Annual programs for 0&M vary according to general budget availability,which makes it difficult to estimate O&M costs from data provided by MAC. Therefore,O&M costs were estimatedbased on data collected in various projects, and for five of them a table was developedwhich calculatesthe expendituresfor regular maintenance. The average is Bs3.900/ha per year (US$85),which represents 3% of initial investment. It is worth mentioning that the cost for maintenance of drains could be significantlyimproved by the use of adapted equipment instead of current technology (Annex 3, Table 5).
8. Calculationswere made based on data provided by project 0&H personnel. The main assumptionsare: canals accumulate20 crmof sediment every three years, 6% of the lined surface in canals is damaged from thc- effects of expanding clays or others, personnel costs arc calcitlatedon the basis of personnel needed and current salaries, special works rcquire 2 per - 66 - ANNEX3 Page 3 of 4
thousand of their value for O&M, drains are maintained according to costs established by Sur-Cojedesproject personnel.
(Ui) Drainage Projects
9. O&M personnel of the Sur-Cojedesproject calculate that the maintenance of each km of a principal drain costs Bs104,000/year(US$2,261), secondary drain Bs20,500/year(US$446) and tertiary drain Bs5,200/year (US$113). For the drainage network density of this project, the amount for O&M of drains is Bs294/ha/year(US$6.4); however, these costs could be lower if proper equipment is used regularly.
Costs of On-Farm Development
10. Part of the irrigatedareas is underutilizeddue to a shortage of credit for on-?arm development. Nevertheless,farmers bring additional hectares under :.rrigation by implementing works with equipment contracted from the private sector. The cost of on-farm developmentin different regions of the country varies from US$650/ha to US$800/ha, depending on topography,plant coverage and the required level of terracing (informationfrom the UEDAs and farmers).
Investments in Private Projects
11. The amount invested in the private sector for irrigation development depends fundamentallyon the technology selected and proximity to sources of water and eventually of energy. The great majority of farmers irrigate by surface methods; however, a growing number of farmers uses modern technology (drip and micro irrigation)and sprinklers. The following numbers, provided by Venezuelan and French companies, refer only to irrigation equipment in place, and do not include investmentsin pumps, water and/or electrificationadduction works and land levelling, since these factors vary greatly from one project to another.
- Surface irrigation:
The area equipped with surface irrigation is estimated at 8,000 ha, mainly in the state of Zulia. Equipment costs vary from US$900 to US$1,300/ha,depending on types and technical options. Most equipment is manufacturedlocally. (Source: Gotasca, Bedroven).
- Sprinkler irrigation:
The area equipped with sprinklers is estimated at 75,000 ha, of which most are self-propelledhigh-discharge (jet) type sprinklers. Equipment costs are generally lower than US$1,000/ha,and US$800/ha for normal type sprinklerequipment. The cost of self-propelled equipment depends on the water application rate. The estimated cost under Venezuelan conditions varies from US$800 to US$1,000/ha. A good portion of the equipment is manufacturedlocally. The Venezuelan Irrigation Company (Venezolanade Riego) estimates the current market at 5,000 to 10,000 ha/year. (Source: Gotasca, Bedroven, Irrifrance,Venezolana de Riego). - 67 - ANNEX 3 Page 4 of 4
Center Pivot Irrigation:
In Venezuela there are an estimated 300 to 400 center pivot systems, concentrated mainly on the Guanipa plains (Oriente). The average surface covered by one center pivot is 60 ha and the cost is around US$1,000/ha. Most of the equipment is currently our of order, because of operation and maintenance problems. (Source: Irrifrance.)
12. It is worth mentioning that the prices provided by various sources are lower than the costs in other countries. - 68 - ANNEX 3 Table 1
VENEZUELA
IRRIGATIONSUBSECTOR REVIEW
Analysis of Investment Costs in Irrigation and Drainage Projects
Project Total Investment Investmentin Irrigation Cost per ha (USS) Area USS x 1000 and Drainage Considered USS x 1000 _ Historic EstimatedCurrent Historic EstimatedCurrent Costs Costs Costs Costa Bocono 15,715 15,715 25,970 2,182 4,565 7,200 Caraco 27,061 19,070 7,3770 3,152 3,322 6,200 *2,250 Cumaripa 25,233 17,918 2,587 6,926 Ei Cenizo 30,930 18,605 3,101 6,000 Ei Gurico 118,261 92,380 76,622 3,299 2,322 28,000 Guanapito 7,789 4,447 2,069 2,149 1. Majaguas 80,429 69,388 3,451 23,300 S. Domingo 19,762 19,762 20,518° 3,088 2,954 6,400 °7,044 Tocuyo C. 16,163 9,317 3,727 2,500
e Estimatedcurrnt costsrefer to area indicatedwith ° ANNEX3 - 69- ^Table 2 Page 1 of 5
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(USS) (BI.) (USS) (BI.) (USS) 1,634.0 217.9 788 105.0 Sur del Lgo Dredging,canalization, dikes 1978 1986 578.2 7'.1 121.8 16.2 Tusen D Conditioningof chamels, canalization, 1972 1993 268.5 35.8 81.5 10.9 and dikes ApureModules Dikes, ads, ueanization 1974 1985 686.5 38.2 113.5 15.1 -4 Guna-Masparo Maspano Rservoir, Boconoand 1974/1977 2002 500.8 66.7 471.2 62.8 Tucupido. Impoved eqwipmentfor maintenanceof drains IADWPrioritf 65 8.7 405.0 54.0 Unbane-Arauca Guaymal Reservoir 1987 1991 20 2.7 280.0 37.3 Ya"y Rivedr/ Agua Linda Reservoir and Corepano 1986 1991 10 1.3 40.0 5.3 Paay-Canagu rangua Rescrvoir, Pagucyand Curbatr. - - - - 35 4.7 85.0 11.3 dikes and drains TOTAL _ 217.9 853.0 113.7 405.0 54 _ 1,634.0 cr- 1DX 75 - ANNEX 3 Table 4 VENEZUELA IRRIGATION SUBSECTOR REVIEW Investments in Projects Under Construction, 1989 (millions) Name State Planned Implementation Investment Planned Investment Area (Years) (B/) (USS) per ha __a) (USS)] Irrioation Maticora Falc6n 15,000 4 1,430 37.63 2,509 El Cenizo/ Trujillo 8,000 3 950 25.00 3,125 Caus-Poc6 Tiznados Guarico 30,000 4 2,000 52.53 1,751 Camaro Falc6n 2,000 3 542 14.26 7,130 Caipe-La Yuca Barimu 60,000 4 600 15.79 263 Isla Cocuina Delta- 16,000 4 980 25.78 1,611 Amacauro Irrieation and Drainage auanare- Portuguesa- 200,000 5 6,852 180.32 901 Masparro Barinas Tumen Il-South Cojedea 60,000 4 981 25.82 430 Cojedes Binuca- Apure 10,000 4 1,260 33.16 3,316 Achaguas TOTAL 401,000 15,595 410.40 1,020 11 Under consideration. Source: MAC, 1989. Sectoral Directorate of Drainage and Irrigation. - 76- _ Table 5 IRRIA-TIONS§UBSECTQR REYIEW PROJECI DESCRIPTION AMOUNT | AREA COST Box 1000 I ha Bs/He Carisco Road Maintenance 4,508 Rcpair 884 Maintenance- SpecialWorks 101 Maintenanceof Drains 3,247 Canal Desilting 252 MaintenanceHeadworks 252 Salaries 2.160_ ______TOT L 11.424 ~ .1 4.472 Guarico Road Maintenance 17 637 Repairs 11 193 Maintrnanc - SpocialWorks 0 Maintenanceof Drains 20,100 Canal Desilting 10,534 MaintenanceH idworka 2 107 ______Salaries 21.900 TOTAL 89.471 30 2711 Bocono Road Maintenance 24,262 Repairs 3,995 Maintenance- SpecialWorks 30 Maintenanceof Drains 18,676 Canal DeBilting 7 392 Maintenancegeadworka 1,478 Salaries _ 4320 TOTAL 60.144 57 10.442 Sto. Road Maintenance 4,781 Domingo Repaira 5,865 Maintenance- SpecialWorks 26 Maintenanceof Drains 4 645 Canal Desiltirn 7,392 Maintenanceifesdworka 1,478 ______Salaries 5.940 . . . .____.___.___.__ TOTAL 30.127 70 4.277 Tiznadoa Road Maintenance 1 815 RepairS 4,806 Maintenance- SpecialWorks 0 Maintenanceof Drains 732 Canal Desilting 3,690 MaintenanceHeadworks 738 Salaries 4.860 . TOTAL 16.641 5.647 2.947 _e______GENERALTOTAL 207.787 53.701 3.869 - -7777 - M 4 Page 1 of 9 IRIGATIJON SUBSECTORREYIEW ANNEX 4: FINANCALAN ECONOMIC VIAEILIT FIRIATO I-ntro.ductio 1. This Annex presents an analysis of the comparativeadvantage of several irrigatedcrops and types of irrigationdevelopment from the financial perspectiveof the individualfarmer, and in the frameworkof the economyat large. The analysisis based on crop budgetswhich are consideredto be broadlyillustrative of farmingin Venezuela.Comparisons were made between rainfedand irrigatedfarming for maize,cotton and soybeans,between a range of other crops grown under irrigation,and betweenthe technologyand intensitylevels of the small scale farmer(camoojlno) and the mediumand largo scalo producer(mDrelsarig). 2. The basoicassumptions and cost and price data which underpin the analysis are given in Working Paper 2. FinancialAnalysis of Crop Production 3. Returnsto Land. The financialanalysis of crop budgetswas based on costo actuallypaid by farmers,i.e., includingsubsidies for fertilizerand the full O&M costs of irrigation.These distortionshave been modifiedin the contextof the subsequenteconomic analysis. The analysisconfirms -- as shown in the table overleafand as can be expected-- that it is more profitablefor farmersto grow high value vegetables,fruits and tobaccothan traditional low value crops, especially annual grains and oilseeds. However, the possibilitiesfor farmereto go into these high value crops shouldnot be overectimatedin view of both the specificagronomic conditions which they requireand marketingconstraints. - 78 - ANNEX 4 Page 2 of 9 Returns to Land Comodity ,NetBenef its (Us Sorghum 65 Rice (Paddy) 260 -- 310 Maize 114 -- 320 Sunflower 26 Soybeans 98 -- 240 Sugarcane 400 Tobacco 900 Tomato 920 Pepper 950 PLantain 900 Paay 1170 Oranges + 2000 Source: Mission. 4. Returns to Water. In situationswhere water resources for irrigation are limited, the returns to water could constitutean importantanalytical element in assessing the financialviability of irrigation. However, water availabilitydoes not appear to be a limiting factor for most irrigation schemes that could be developed in the medium-term. While not carried out at this stage, it is recommendedthat project planners should perhaps consider such analyses in the future. 5. Campesinovs. Empresario. The analysis shows that it is clearly more profitable for the emRresario than for the camDesino to grow rice, maize and cotton. Returns per hectare are higher by 20% for rice, by 30X for maize, and by 60% for cotton for the emDresario than for the camDesino. All three crops, however, show high returns to labor under both management systems, ranging from an equivalent of US$5 for cotton to US$35 for maize. These levels are well above the current daily wage rate of Bs 120 (US$2.6). 6. Returns to labor are considerablyhigher for the emDresario than for the camResino. When shifting from campesinoto empresario cultivation practices, returns to labor increase by over half for rice, twofold for maize and remain constant for cotton. However, the comparativelyhigh returns to labor and the high increasewhen going from the camDesino to the emDresario situation should again not be overestimatedin the sense of an incentive for small-scalefarmers to adopt high intensitypractices, since no distinction was made between hired and family labor, and hi3h returns to labor are achieved by a high degree of mechanizationwhich may simply be out of reach of the 2ampoaino. - 79 - ANNEX 4 Page 3 of 9 7. Fainfed vs. Irritated Crops. Changes in production of maize, soybeans and cotton from rainfed to irrigatedconditions result in significantly reduced, production costs per ton -- as shown in the table below -- and net incrementalbenefits per hectare increase sharply. However, incremental returns to labor may be too low to induce campesinos to invest heavily in irrigation. For instance, a shift from rainfed to irrigatedmaize cultivation under campesino conditions leads to a net incrementalbenefit (NIB) of US$130/ha, or doubles the farmer's return to land. The NIB on labor, however, is low. Maize production using emRresario technology also gives a high increase in returns to land (NIB US$170/ha), and a reduction in returns to labor. However, maize production gives a high increase in returns to capital (from 30% to 60%). The return to capital refers to net benefit/working capital and was seen as an importantdecision making criterion especially for commercial farmers. The situation is basically the same for soybeans and cotton: a high NIB on land (soybeans,US$140/ha; cotton, US$320/ha),a reduction or only slight increase in returns to labor, and a high increase in returns to capital. Comparison of Financial Production Costs of Rainfed and IrrigatedCrops Commodity FinancislProduction Cost (USS/t) RainfedMaize 140 IrrigatedMaize 115 RainfedSoybean 232 IrrigatedSoybean 197 RainfedCotton 376 IrrigatedCotton 276 Source: Missio- Economic Analysis of Crop Produation 8. While production of most irrigated and rainfed crops appears profitable at financialpricts, losses to the economy arise when economic prices and costs are applied. For chis analysis, import parity prices were applied for rice, maize, sorghum, cotton, and sugarcane; and export parity prices were estimated for tobacco. On the cost side, correctionswere carried out in order to account for the subsidy on fertilizersand the interest paid by farmers on working capital. These modificationsindicate that the economic costs of some crops are lower than financialcosts (e.g., maize rainfed empresario,cotton rainfed empresario)basically because different interest rates are applied on working capital. For instance, in the financial analysis of the campesino, a preferentialrate of 3S per annum was applied, whereas the current rate of 282 was assumed for the commercial farmer. For the economic analysis, these interest costs were omitted from the overall production costs. The net effect of higher economic cost for inputs (fertilizerand irrigation) and elimination of interest results in lower overall economic costs in comparison to the financialproduction cost in the case of the empresario due to the high interest rate which he is charged. All other costs were considered to reflect scarcity values. Standard conversion factors or shadow wages rates were not applied due to the lack of adequate basic data. The -~ 80)- ANIEX 4 Page 4 of 9 ostl.mateoindicate that, for inotance, maize production generates losseo to tho ecornomyranging from US$45 (rainfed, campy0sino),to US$15 (irrigated, omlapre^io)per ton. In order to reach the break-even point, yields wruld have to incronse by 16-45%, dopending on the intonoityof cultivation prarti-ecsand water. Such an incroase would appear difficult to attain in the modium torm. Under presont tochnologysorghum productiongives an economic lTon of US$3I0per ton and would roquire ylold incroasoo of 24% in order to broak eVelG. Rainfed soybean production leado to a small looo of US$3 per ton while irrigatodnoyboans chow a modost return of US$8 per ton. 9. The analysis ouggeststhat Venezuela has a comparative economic advatengo in tho production of rico, cotton9 sugarcane and tobacco. Irrigated rice snd cotton appear profitableunder both campesino and r2saK^o farming systemo. Tho economic returns of sugarcaneproduction at prevailing yields (100 t/ha), economic costs, and iresentworld market prices for raw sugar (US$31.5/t)are aloo good. However, World Bank projections indicate a drop in the sugar price in the mid-term (US$250/t),which would lead -- cetegis gaibua. -- to a slight economic loss of US$0.30 per ton of sugarcaneproduced at a yield of 100 t/ha. Tobacco appears to be one of the crops on which Venezuela can make an economic profit, even if border prices were to drop to US$720/t from the present border price of US$1,890/t.However, tobacco production is limited to specific agronc'u- conditionsand to farmers who have the capacity to grow this crop efficie.itly. 10. The profitabilityof all crops in highly sensitive to yield variations, i.e., an increase (decrease)of yields leads to an disproportionateincrease (decrease)of return. Therefore,under present conditions,and strictly on grounds of an economic return, irrigation developmentshould emphasize,apart from high value vegetables and fruits, crops such as rice, soybeans, sugarcane and cotton that are profitable and have a -ptential for yield increases,and the expansion of the production of loss-making crops such as maize and sorghum should be avoided except where there is no opportunityto irrigate at very low capital cost. Even for the apparently viable crops, however, there will be ceilings on the amount which should be invested per hectare. For instance, rice production (based on one irrigated crop per year) would justify irrigationtinvestments only up to US$2,000/ha. Moreover, the results are extremely sensitive to the kinds of crop grown under irrigation. If, for example, the local market is flooded with tomatoes, the prices will drop and the calculationsregarding profitability will prove to have been too optimistic. Financial sis of On-Farm Investmento 11. Government planning suggests three main options for irrigation development,public investmentoin new schemes, consolidationand modernization of oxisting public schemes, and public investmentsto construct physocsl infrastructure(roads, power lines, etc.) to support private irrigation developmont. E.achof these public invaetmentoreqlulroo complemontaryon-farm investmentswhich wou.ldhave to bo financed by the individual farmor. In order to assess the profitabilityof these on-farm developmentsto the irrigator,their unit costs havo boon compared to the net incromontalbenefito gonorated from a hoetaro of irrigable land annually in tho "with" and "without" invostmentsituation, ao shown in the table overleaf. - 81 - AEX 4 Page S of 9 The following illustrativeon-farm investmentshave been assumed for the purpose of this analysis: (a) New public gravity irrigation schemes: farmers' costs of lnud clearance and preparation (deforestation,partial lovelling, and superficialdrainage) are estimated to coot an equivalent of US$800/ha, and the constructionof tertiary canals a furthar US$20/ha. (b) Consolidationand modernizationof existing public irrigaiacEn infrastructure:it is assumed that the farmer had access to irrigation in the past, which was interrupteddue to the degradation of the facilities. On-farm investmentsare thuo lower than in (a) and might amount to US$280/ha for land preparationand US$20/ha for the improvementof tertiary canu.1d (c) Public support to develop private irrigation:costs are considerablyhigher (US$2,130/ha)than under (a) and (b) above and include land development (US$590/ha),tubewell construction (US$100/ha),the installationof an electrical motor pump (US$340/ha),and the supply of irrigationequipment (US$1,100/ha),i.e., US$2,130/ha,but these costs are not all borne by the public sector. 12. These assumed on-farm developmentcosts have been set against the net incrementalbenefits resulting in a change from rainfed faxming to an irrigated-rainfedrotation in public schemes (where irrigation is generally only provided during the dry season) and a complete irrigation rotation in private farming (where irrigation is practiced all year round). In the public schemes, campes±no technology and intensity levels have been assumed. In private irrigation,the case of the empresario has been examined. Typical cropping patterns and financial rates of return (FRR) of the different models are shown in the table overleaf and details on results follow. The analysis shows that, from the point of view of the financialviability of on-farm investments,farmers should be interested in participatingin efforts to consolidate existing schemes and support private irrigation. However, campesinos are not expected to be interested in investing in land provided on new public irrigation schemes, since the required on-farm investmentsmay not be sufficientlyprofitable cosidering the risks involved, such as land tenure problems, availabilityof credit, and marketing problems. - 82 - ANNEX 4 Page 6 of 9 Financial Rates of Return of Irrigation Investments I Irrigation 1Cropping Pdttern | CroppingPattern | FinancialRates of Investments WWithout Irrigation I With Irrigation Returnt 1. New Public a rainfedsorghum irrigatedrice 15 Schenes rainfedmaize rainfedmaize b rainfedcotton irrigatedrice 9 rainfedmaize rainfedmaize c rainfedcotton irrigatedtomato rainfedmaize rainfedmaize 72 2. Consolidationand a rainfedsorghum irrigatedrice 46 Modernizationof rainfedmaize rainfedmaize ExistingPublic b rainfedcotton irrigatedrice Schemes rainfedmaize rainfedmaize 29 c rainfedcotton irrigatedtomato rainfedmaize rainfedmaize ) 100 3. PublicSupport rainfedcotton irrigatedtobacco to Private rainfedmaize irrigatedmaize 47 Irrigation ._._. Source:Mission. 13. New Public Schemes. Three farm models (see below) chow that the FRR to on-farm investment in new public schemeswould be above the camiesino'scost of borrowing at the preferentialrate of interest of 3% p.a. However, two models (la, rainfed sorghum and maize vs. irrigatedrice and rainfed maize; and lb, rainfed cotton and maize vs. irrigatedrice and rainfed maize), where basically one low value rotation is substitutedby a second low value rotation, indicate that returns might not be attractive enough for campesinos to invest in irrigation. The introductionof a high value horticulturalcrop in the "with irrigation rotation" (rainfed cotton and maize vs. irrigated tomato and rainfed maize, Model 1c) leads to a large net incrementalbenefit and thus gives high returns on the farmer's investment. However, cultivation of high value crops may not be possible throughoutVenezuela due to agronomic reasons, limited camDesino capacity to grow such crops, and limited absorptive capacity of markets. 14. Consolidationand Modernization. Due to the low cost of land development,returns are higher than in the previous situation. All three models, including those based on low value rotations, give high FRRs (Model 2a, rainfed sorghum and maize vs. irrigated rice and rainfed maize; Model 2b, rainfed cotton and maize vs. irrigated rice and rainfed maize; and Model 2c, rainfed cotton and maize vs. irrigated tomato and rainfed maize). 15. Support to Private Irrigation. The case of an empresario who would construct and operate his own irrigation infrastructure(Model 3, rainfed cotton and maize vs. irrigated tobacco and maize) shows an FRR of 47S, which is well above the present interest rate of 28S p.a. for commercial loans to agriculture, and which should be sufficient to induce emRresarios to go into irrigation,provided that they can include at least one high value crop in the rotation. - 83 - ANNEX 4 Page 7 of 9 Economic Analysis of Returns to IrrigationInvestments 16. Three different scenarios of public investmentstogether with the on- farm investmentshave been set against the net incrementalbenefit resulting from the change from a rainfed rotation to an irrigationrotation, valtuedin economic terms. The same three investmentoptions as above were assumed: new public schemes, which might require investmentsof US$2,800/ha;consolidation and modernizationof existing public schemes, which could require investments of US$1,000/ha;and public support investmentsto private irrigation,where costs would vary according to the extent of support provided, say, from US$500 to US$2,000/ha,of which the latter is applied in the analysis. The results are summarizedbelow. In comparisonwith the other investmentoptions in irrigation,public support to privately owned and run medium-size irrigation schemes appears to give the highest economic rates of return. Economic Rates of Return to IrrigationInvestments l ModeL EconomicRates of Return I (%)~ i lb -17 lc 20 2a 15 2b -11 2c 54 3 74 Source: Mission. 17. New Public Schemes. This is the most expensive investmentper hectare and gives the lowest returns of the three options. The economic rates of return (ERR) in the low value rotations (Models la and lb, rainfed sorghum, maize and cotton vs. irrigated rice and rainfed maize) are negative. However, when a high value crop is substituted for a low value crop (Model lc, rainfed cotton and maize vs. irrigated tomato and rainfed maize), the ERR increasesto 20%, which is well above the assumed opportunitycost of capital of 12%. These results suggest that, if new public irrigationinvestments are to be carried out at all, sites and farmers must be selected carefully in order to avoid an economic loss. Bearing in mind that only high value rotations can make the on-farm investmentviable, it seems that at present -- on strictly ERR grounds -- there is only limited justificationto construct new public irrigation. 18. Consolidationand Modernization. Returns to consolidationand modernization are -- as expected -- generally higher than for new public irrigationconstruction. Model 2a (rainfed sorghum and maize vs. irrigated rice and rainfed maize), has an ERR of 15%, but Model 2b (rainfed cotton and maize vs. irrigated rice and rainfed maize) still has a negative return. - 84 - ANNEX 4 Page 8 of 9 19. The two low-value (and low intensity) crop rotations, due to declining commodityprices, could result in an economic loss, which in turn leads to negative net benefits both for the "with" and the "without" irrigation rotation. The net incrementalbenefit, however, generally remains positive, indicating that a substitutionof one loss-makingrotation by a relatively more profitable rotation has taken place. This means that economic gains can be made (i.e., through changes in cropping patterns) which are not directly attributableto irrigation. 20. High returns (54%) are achieved from consolidationwhen high value crops are irrigated (Model 2c, rainfed cotton and maize vs. irrigated tomato and rainfed maize). In general, returns to consolidationand modernizationof existing irrigation schemes are higher than for new public irrigation schemes. Again the irrigationplanner must carefully select the projects which are to be consolidatedand modernized, in order not to incur losses or under-utilize capital. 21. Support to Private IrriRation. With an ERR of 74%, support to private irrigation is the economicallymost attractive option. This is basically due to the possibilityof year-round irrigation,and the high economic value of crops produced under irrigation (tobacco). SensitivityAnalysis 22. The various models have been used to develop ceilings as indicators for future investments. The table overleaf illustratesthe sensitivityof the models to alternativeassumptions about crops, yields and cropping intensity. None of the resulting ceilings is necessarily the "correct"one for the future, but it is instructivethat only some of the low value crop rotations grown by camDesinos (Models la and 2a, rainfed sorghum and maize vs. irrigated rice and rainfed maize) can justify investment costs (on-farm developmentand irrigation infrastructureup to US$1,300/ha,and public irrigation infrastructurecosts ranging between US$460/ha and US$1,000/ha). Other low value rotations (Models lb and 2b, rainfed cotton and maize vs. irrigated rice and rainfed maize) can barely justify any irrigation investment. 23. In contrast, the production of high value crops under irrigation (Models lc and 2c, rainfed cotton and maize vs. irrigated tomato and rainfed maize) gives investment ceilings around US$4,300/ha for public expendituresin irrigation infrastructureat given on-farm development costs. Again the caveat consists in finding areas where such crops can be grown and readily marketed. Public support investmentsin private irrigation (Model 3, rainfed cotton and maize vs. irrigatedtobacco and maize) can be justified up to US$11,500/haassuming private investmentsof US$2,200/haand US$9,300/ha for public support. 24. In summary, this indicatesthat close attentionmust be given to the selection of csMesinos to qualify as irrigators on public projects; it also indicates that new public investmentsin irrigation for low value crops are unlikely to be justified on purely economic grounds. Irrigation investment in new schemes targeting carpesinosis not economicallyviable except in the limited case of high value rotations (e.g., horticulture). Emphasis therefore - 85 - ANNEX4 Page 9 of 9 should be put on low-cost consolidation of existing schemes and on support investments to private irrigation. Investment Ceilings ModeI| CroppingPattern Cropping Pattern Total Public WithoutIrrigation WithIrrigation Irrigation Irrigation l Investment Investment l Costs Costs l ______j ______(USS/ha) (USS/ha) la rainfedsorghum irrigatedrice 1,300 460 rainfedmaize rainfedmaize 2a rainfedsorghum irrigatedrice rainfed maize rainfed maize l 2b rainfedcotton irrigatedrice 180 , rainfedmaize rainfedmaize Zc rainfedcotton irrigatedtomato rainfed maize rainfed maize _ . lc rainfedcotton irrigatedtomato 5,100 4,300 rainfed maize rainfed maize ._ ___ _ 4,800 3 rainfedcotton irrigatedtobacco 11,500 9,300 rainfed maize irrigatedmaize SoLuce: Mission. - 86, - ANNEX 5 Page 1 of 4 VENEZUELA IRRIGATION SUBECTOR REVIEW Bibliography A. SPECIFIC PROJECT DOCUMENTS ECACI, Estudio socio-economico para el desarrollo de la empresa campesina colectiva integrada del sistema de riego Bonoco-Masparo. Agosto 1985. ---. Estudio socio-economico para el desarrollo integral de la empresa campesino agricola colectiva integrada Punta Gorda dtl sistema de riego Rio Santo Domingo. Barinas, enero 1986. Federaci6n Campesina de Venezuela, Bases fundamentales para el desarrollo del area Sur-Cojedes. Caracas, marzo de 1990. Gobernaci6n Estado Cojedes, Area de desarrollo agrario integral Sur Cojedes: Propuesta para su creaci6n y desarrollo. San Carlos, marzo de 1990.. Iffill, F., Proyecto de recuperaci6n de tierres del Departamento Tucupita protegidas de las inundaciones del rio Orinoco. Caracas, 1974. IICA/MAC, Portafolio de ideas de proyectos de inversi6n publica para el desarrollo agropecu&rio de Guanare-Masparro 1990-1998. Abril de 1990. MAC, Sistema de riego Rio Tiznados. Caracas, junio de 1981. --- , Proyecto Guanare-Masparro. Octubre 1981. --- , Sistema de riego Camare. Octubre 1981. --- , Proyecto Turen. Octubre 1981. --- , Proyecto Turen II-Sur Cojedes. Octubre 1981. --- , Sistema de riego Maticora. Octubre 1981. --- , Informacifn para elaboraci6n de diagn6stico del sistema de riego El Cenizo. Febrero 1982. - 87 - ANNEX 5 Page 2 of 4 --- , Programa de desarrollo rural integradoen proyectos de riego y drenaje: Regi6n Loc Andes, proyectcoEl Cenizo. Caracas, abrll 1982. --- , Programa de desarrollo rural integrado en provectos de rlego y drenaje afnos1982-1991. Proyecto rio Tiznados. Caracas, abril 1982. --- , Diagn6stico de la problemdtica del sistema de riego Cariaco. Cariaco, noviembre 1984. --- , Evaluaci6n de las alternativasdel rio Motatan en Agua Viva. Caracas, enero de 1984. --- , Establecimiento de metas de producci6n mayores que las existentes en el sistems de riego Cariaco. Caracas, junio de 1985. --- , Sistemas de riego Rio Bocon6 y Cojedes Sarare (Las Majaguas). 1987. --- , Cuenca del rio Unare. Caracas, noviembre de 1988. --- , Marco estrat6gico para promover el desarrollo agropecuirio del area prioritaria Guanare-Masparro:1990-1994. Cabaneta, Barinas, marzo, 1990. --- , Informe sobre el sistema de riego rio Santo Domingo. Barinas, mayo de 1990. --- Desarrollo de areas baio riego por bombeo en el proyect. Guanare- Masparro. 1990. --. Diagnostico de la problematica existente en el sistema de riego Cariaco. Sin fecha. --- , Ante Proyecto de riego por bombeo el el area Guanare-Masparro. Sin fecha. --- , Caracteristicas fisicas del proyecto re riego El Cenizo. Sin fecha. MAC/Caltec, Estudio diagnosticode drenajes-areacomprendida entre los rios Masparo-Caipey La Yuca. V&rios informes y fechas. MAC/FUDECO, Estudio de factibilidadde riego en el Area de proyecto Turen II- Sur Cojedes. Barquisimetro,1987. MAC/RAEPRO, Proyecto de riego Tiznados. Caracas, enero 1984. MARNR, Uso actual de la tierra en la cuenca medlo rio Tiznados. Caracas, 1982. MOP, Estudlo agrol6gicosemidetallado valle del rio Tiznados. Turmero, abril 1967. - 88 - ANNEX 5 Page 3 of 4 --- , Proyecto de desarrollo integral de la planicie de Maracaibo. Maracaibo, febrero 1983. --- , Estudio preliminar y anteproyecto de la zona de riego del sistema Maticora. Sin fecha. --- , Obras de embalse Agua Viva. Sin fecha. Universidad nacional experimentalRomulo Gallegos, Proyecto asistenciatecnica a tre asentamientoscampesinos ubicados en el valle de rio Tiznado.s. San Juan de los Morros, marzo de 1986. Sin autor, Estudio hidrol6gicopara el sareamientodel sector comprendido entre los rios Caipe, La Yuca y Masparro. Caracas, abril 1986. B. GENERAL IRRIGATION Hornmig6nPrefabricado S.A., Canales elevados prefabricados,Caracas. Sin fecha. IIr.A/MAC,Proyecto de reglamentopara los sistemus de riego construidoscon fondos piblicos. Sin fecha. MAC, Algunas caracteristicasy recomendacionesde uso para los suelos de algunos sistemas de riego atendidospor la Direcci6n general de riego del MAC. Caracas, abril de 1980. --- , Regimen tarifario para los sistema de riego administrados por le Ministerio de agricultuiray cria. Caracas, mayo de 1982. --- , Bases de un reglamento general y de normas para los sistemas de riego. Caracas, noviembre de 1983. El desarrollodel riego en Venezuela, 1989. --- , Perfil de proyectos especiales. Marzo de 1990. --- , Definici6n de politicas agricolas. Abril de 1990. El nuevo rumbo de la reforma agraria. Sin fecha. --- , Autoridaded unicas de area para el desarrolloagricola. Sin fecha. MARNR, Actualizaciondel Plan Naclonal,Areas inundablesy sue posibilidades de saneamiento,sin fecha. --- , Actualizaci6n del Plan Nacional, Areas regadas y areas regables, sin fecha. - 89 - ANNEX 5 Page 4 of 4 --- , Actualizaci6n del Plan Nacional, Poluci6n en cuencas destinadas al abastecimientourbano, sin fecha. MOP, II curso de formacionde tecnicos en manejo de embalses:movimiento .e embalses. Caracas, noviembre de 1977. --- , Costo del servicio de agua por metro cubico entregado en la unidad de produccifn. Sin fecha. C. MISCELLANEOUSDOCUMENTS Banco Central de Venezuela, Informe econ6mico 1988. CORDIPLAN, VIII Plan de la Naci6n: El gran viraje. Octubre de 1989. FONAIAP, Plan estrat6gicoFonaiap 1988-92. Sin fecha. ICAP, Programaci6ncrediticia ciclo invierno 1990. Sin fecha. tIAC,Memoria anual ICAP 1988. Barquisimetro,sin fecha. ---. Taller exportaciones agricolas. Caracas, mayo 1989. --- , IMmorita1989. Sin fecha. ---. Calendario agricola 1990. Caracas, febrero 1990. --- , Politica agricola. Marzo 1990. Oficina central de estadisticae informatica,V csnso agricola. Sin fecha. World Bank, Venezuela Country Economic Report: Policy Choices and Economic Growth. Report No. 6711-VE. March 3, 1988. , Venezuela AgriculturalSector Review. Report No. 8389-VE. March 19, 1990. 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