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World Bank Document Report No. 9221-VE Ve,nezuela Irrigation Subsector Review Public Disclosure Authorized November19, 1991 AgricultureOperations Division CountryDepartment I LatinAmerica andi the CaribbeanRegion FOR OFF!CIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Document of the WorldBank Public Disclosure Authorized Thisdocument has a restricteddistribution and may be usedby recipients only in the performanceof their official duties.Its contents may not otherwise be disclosedwithout World Bankauthorization. CURRENCYEQUIVALENTS US$1.00 - Bs46.00 (May 1990) BslOO.0 - US$2.07 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
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