Technical Assistance Consultant’s Report
Project Number: 45353-001 June 2015
Azerbaijan: Developing Water Resources Sector Strategies in Central and West Asia
RETA 8015
Prepared by Ramchand Oad, Dennis Wichelns, Ted Patterson, Steve Parsons
For Asian Development Bank and Ministry of Emergency Situations, Government of Azerbaijan
This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.
Currency Unit – Manat (As of 15 May 2015) $1.00 = 1.03 Manat (In Sept-Dec 2014, when this study was conducted in Azerbaijan, the currency conversion rate was $1.00 = 0.75 manat. All currency numbers mentioned in the report are at this rate).
Abbreviations
ADB – Asian Development Bank AOJSC – Azerbaijan Amelioration and Water Management Open Joint Stock Company AZN – Azerbaijan Manat 3 billion m – Billion cubic metres CCA – cultivable command area EAP – Environmental Action Plan EC – European Commission EECCA – Eastern Europe, Caucasus and Central Asia (countries) EU – European Union FAO – Food and Agriculture Organisation of the UN GDP – Gross Domestic Product GEF – Global Environment Fund GIS – Geographic Information Systems GISS – Goddard Institute of Space Science GFDL – Geophysical Fluid Dynamics Laboratory IFAD – International Fund for Agricultural Development ISD – Irrigation Systems Department IWRM – Integrated Water Resources Management Plan JICA – Japanese International Co-operation Agency JSC – Joint Stock Company KfW – Kreditanstalt für Wiederaufbau - German development bank MAC – Maximum allowable concentration mcm – Million cubic metres 3 m /s – Cubic metres per second MENR – Ministry of Ecology and Natural Resources NHD – National Hydro-meteorology Department (of MENR) NPD – National Policy Dialogue NWS – National Water Strategy OECD – Organisation for Economic Co-operation and Development OSCE – Organization on Security and Cooperation in Europe OJSC – Open Joint Stock Company O&M – operation and maintenance PCB – Polychlorinated Biphenyls PRECIS – Climate modelling system from UK Met Office (Providing Regional Climates for Impacts Studies) RBMP – River Basin Management Planning SAWR – State Agency for Water Resources SIDA – Swedish International Development Agency SPSD – State Program for Socio-economic Development SNC – Second National Communication (to the UNFCCC) TA – Technical Assistance TACIS – Technical Assistance to CIS (EU aid programme) UNDP – United Nations Development Program UNECE – United Nations Economic commission for Europe UNESCO – United Nations Education, Scientific and Cultural Organisation UNFCCC – United Nations Framework Convention on Climate Change USAID – United States Agency for International Development WFD WB – World Bank WFD – Water Framework Directive WUA – Water User Association WUAP – WUA Development Support Project
WEIGHTS AND MEASURES
ha – hectare km – kilometer 2 km – square kilometer m – meter m3 – cubic meter
NOTES (i) The fiscal year (FY) of the Government of Azerbaijan ends on 31 December. FY before a calendar year denotes the year in which the fiscal year ends. (ii) In this report, "$" refers to US dollars.
CONTENTS
PREFACE iv EXECUTIVE SUMMARY v 1. INTRODUCTION 1 1.1 Purpose 1 1.2 Motivation for a Water Strategy 1 1.3 Objectives, Strategies, and Tactics 2 1.4 This Study 3 1.5 Structure of the Report 4 PART A: WATER RESOURCE ASSESSMENT 5 2. NATIONAL SETTING 6 2.1 Location 6 2.2 Climate 6 2.3 Population 7 2.4 Economy 8 3. WATER RESOURCES 9 3.1 Rainfall 9 3.2 Surface Water 10 3.3 Groundwater 11 3.4 Marginal Quality Water 12 3.5 Floodwater 12 3.6 Climate Change 12 4. WATER USE 13 4.1 Agriculture 14 4.2 Domestic 14 4.3 Industry and Energy 15 4.4 Environment and Recreation 15 5. WATER MANAGEMENT 15 5.1. Physical Features 15 5.2. Water Monitoring 16 5.3. Water Policy and Legislation 16 5.4. Institutions 17 5.5. Financing the Water Sector 19 5.6. Managing Floods and Droughts 20 5.7. Water Sector Reforms 21 6. AGRICULTURE, IRRIGATION, AND LAND DRAINAGE 22 6.1 Overview 22
6.2 Crop Areas and Yields 22 6.3 Government Policies – Agricultural Subsidies 24 6.4 Ensuring Food Security 25 6.5 Irrigation and Drainage 26 PART B 27 DEVELOPING A WATER STRATEGY 27 7. THE CHANGE DRIVERS FOR A WATER STRATEGY 28 7.1 Demographics, Regional Integration and Economic Growth 28 7.2 Urbanization 28 7.3 Environment and Climate Change 28 7.4 Changing Responsibilities in Water Administration and Governance 28 8. THE KEY CHALLENGES AND OPPORTUNITIES 29 8.1 Trans-boundary Rivers – Related Water Quality and Quantity Issues 29 8.2 Managing Increasing Demand for Water 31 8.3 Agriculture – Irrigation, Drainage and Low Productivity 31 8.4 Managing Water Related Hazards – Floods and Droughts 33 8.5 Water Governance for Improved Water Management 34 9. POLICY ENVIRONMENT 35 9.1 Current Initiatives 35 9.2 Potential Future Initiatives 35 10. STRATEGY FORMULATION 36 10.1 Envisioning the Future 36 10.2 Setting the Goal and Objectives 37 10.3 Strategy Framework 37 11. POTENTIAL INTERVENTIONS AND INVESTMENTS 40 11.1 Investing in Institutions 40 11.2 Investing in Water Resource Monitoring and Data Management 41 11.3 Investing in Irrigation and Drainage 41 11.4 Investing in Agricultural Extension Education 43 12. STRATEGY IMPLEMENTATION 44 12.1 Deriving Investment Plans for the Strategy 44 12.4 Monitoring and Evaluation (M&E) 45 REFERENCES 46
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Azerbaijan
Developing Water Resources Sector
Strategies in Central and WestJune Asia 2015
PREFACE
1. Water is a scarce and valuable resource in the Republic of Azerbaijan, where the average annual rainfall is less than 450 mm. Two large rivers of the South Caucasus region, – the Kura and the Aras – flow through the country, forming a large fertile lowland plain suitable for irrigated agriculture. All sectors; including agriculture, commerce, industry, and urban use water from these rivers, which also provide environmental amenities, both in stream and in the discharge of fresh water to the Caspian Sea. Thus, the whole of the country and its entire population will benefit by implementing policies and supporting investments that regulate and enhance the use of limited water supplies, while addressing the demands of competing sectors. Such policies and investments will form the core of a national water strategy.
2. The agriculture sector requires a substantial portion of the country's fresh water supplies, and that dependence could increase, over time, with climate change. Other sectors will also require more water in the future, in view of both an increasing population and continued growth in the national economy.
3. This report has been prepared by consultants retained by the Asian Development Bank. The team was assisted in country by the ADB Azerbaijan Resident Mission and the Ministry of Emergency Services through its State Agency for Water Resources. Dr. Ramchand Oad, served as the Team Leader and Water Resources Specialist; Ted Patterson as the Irrigation and Drainage Engineer, Steve Parsons as the Hydrologist, and Dennis Wichelns as the Economist. The team was assisted by local consultants Rafig Verdiyev, Niyazi Sulemanov, and Farda Imanov.
4. The consultant team is grateful for the warm reception and technical support provided by many people and organizations in Baku. Mr. Arif Akhundov and other specialists in the State Agency for Water Resources assisted the team in obtaining helpful information from stakeholders. The ADB Country Director, Olly Norojono, and Program Officer, Yagut Ertenliche, and their staff arranged stakeholder workshops and meetings with government agencies. The ADB Project Officer, Akhtar Ali, and his colleague, Mariz Igaya, provided helpful guidance and logistical support. The team appreciates all of the assistance received.
Ramchand Oad, Dennis Wichlens, Steve Parson and Ted Patterson: 30 June 2015.
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EXECUTIVE SUMMARY
1. This report presents an assessment of water resources in Azerbaijan Republic with the objective of developing a national water strategy for the country. The report provides an overview of water availability and management, and describes the outlook for water supplies and demands in future. It identifies and analyses water related challenges and opportunities for addressing those challenges. The analysis provides the base for formulation of a water strategy including the country vision and goals, strategy components, and related infrastructure investments and institutional enhancements.
2. The climate of Azerbaijan is continental. Annual rainfall varies from about 300 mm in eastern areas to more than 1,000 mm in the western mountains. The total renewable surface water resources are about 30 billion m3/year. Two major rivers (the Kura and Aras) flow through the country, forming a large basin occupied by good agricultural soils. The country also has groundwater resources, which are located mostly in the foothills of the Greater and Lesser Caucasus and in the alluvial aquifers of the Kura-Aras plain. The average annual rainfall on the Kura-Aras plain is less than 400 mm, which is insufficient for crop production. Irrigation is required to achieve profitable yields in this largely agricultural zone.
3. About two-thirds of Azerbaijan's water resources arise outside the country. Both the Kura and Aras rivers traverse national boundaries. Thus, the volume and quality of water entering Azerbaijan are influenced in part by activities in upstream countries. The annual water withdrawal in Azerbaijan in 2013 was about 12.5 billion m3, of which about 8.23 billion m3 were usefully consumed and about 4.28 billion m3 were recorded as losses. Demand for water will increase in future, with increasing population and economic growth. Climate change also will influence future water demands, particularly in agriculture. The national water strategy for Azerbaijan should include a discussion of the policies and investments needed to ensure that the limited water resources are allocated wisely and used efficiently in all sectors.
4. Major issues regarding water resource management in Azerbaijan include increasing demands for water in agriculture, industry, and households; degradation of water quality; water-related hazards including floods and droughts; and the low productivity of land and water use in agriculture. The agriculture sector is strategically important for the country’s social and economic development, as it provides income and employment for about 40% of the work force, while ensuring household and national food security. Agriculture uses an estimated 70% of the water diverted from rivers, and there are significant opportunities to enhance the productivity of land and water in agriculture. Most crop production takes place on irrigated lands in the Kura-Aras River basin, and the yields of most crops are low by international standards (World Bank, 2012).
5. The administrative structure for water governance currently in place falls short of ensuring optimal use of country’s water resources, but it can be enhanced. The primary challenge is to ensure that water is allocated and used efficiently in meeting several objectives, including food security, domestic water supply, commercial and industrial demands, and environmental requirements. A central government organization with a mandate for central planning and supervision related to all aspects of water resource development would greatly benefit resource management. Efforts that have worked well in other countries include the establishment of a Ministry of Water Resources that oversees trans-boundary coordination, water policy, legislation, planning, regulation and water monitoring. Some countries have established a National Water Authority or a National Water Board, which acts as a central water oversight organization.
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6. Efforts to enhance institutional capacity to acquire information and utilize it for decision making also should be considered when forming the national water strategy. Water quality and volume are monitored in Azerbaijan, and that information can be used to improve water management. Information describing groundwater availability and quality is especially important. The institutional capacity to manage information in support of decision making can be enhanced through education, training, and applied research. Minimizing the damage from floods and droughts also requires coordinated planning, management, and response activities involving several government agencies. Planning and management can be enhanced by increasing the efficient collection and wilful sharing of real-time information regarding stremflow, weather, aquifer parameters, and water supply and demands, across the country.
7. The quality of surface water in Azerbaijan, particularly in the Kura and Aras Rivers, is an issue requiring substantial attention. Data gathered at the Georgian-Azerbaijani border reflect values higher than maximum allowable concentrations (MACs) for phenols, oil products, metals and sulphates. The Aras River water entering Azerbaijan is reported to exhibit concentrations in excess of the MACs for copper, molybdenum and other heavy metals. Efforts are needed also to enhance the management of floods and droughts in Azerbaijan, as these events occur with some frequency, and often with substantial impacts on livelihoods and property.
8. Azerbaijan has substantial water infrastructure in place, including major dams and reservoirs and an extensive irrigation distribution and drainage network. Yet, in recent years, agriculture has not received the investments needed to sustain and enhance productivity. A majority of the irrigation canals are earthen, resulting in substantial conveyance and operational losses. Rehabilitation and modernization, coupled with improved management, are needed to improve irrigation efficiencies and increase crop production. Proper drainage of agricultural land is also essential to sustain irrigated agriculture. For security against flooding, an effective flood forecasting system needs to be established and flood protection infrastructure improved. To facilitate both flood forecasting and water resource planning and management, meteorological stations and a telemetric network need to be rehabilitated and upgraded to function properly.
9. Given the challenges and opportunities discussed above, the overall goal of formulating a water strategy would be, “to ensure that adequate quantities of suitable quality water is available for economic and social development of Azerbaijan while fully meeting the water allocation requirements for sustainable environmental management.” The desired outcomes or components of the national water strategy would be: (i) Improved access to good quality water for all social and economic purposes; (ii) effective cooperation mechanisms in place with neighbouring countries for managing trans-boundary waters in terms of both quantity and quality (iii) modernized agriculture sector through investments in irrigation and drainage infrastructure and better water management practices, as well as improving farmer access to other inputs and technical assistance; (iv) enhanced water administration and governance, for both surface and ground water, and (v) adaptation to climate change and ability to manage risks due to exceptional water conditions including floods and droughts.
1. INTRODUCTION
1.1 Purpose
1. This report is an assessment of water resources in Azerbaijan Republic with a view to formulate a national strategy for promoting efficient management of available water resources for social and economic development on a sustainable basis. We provide an overview of water availability and its current management, as well as describing the outlook for both water supply and demand in the future. We consider water requirements of all sectors of the economy including agriculture, urban and industry as well as environmental water allocations and water management for natural disasters including floods and droughts. We identify the major challenges the country faces in water resource management, and identify options for meeting these challenges. We then formulate a strategy for how best to realize these options, which includes establishing country goals and objectives as well as a strategic framework reflecting desired outcomes and identifying required institutional enhancements and investment areas. The national strategy will be complete when all water related government agencies and stakeholders fine tune the strategic framework and detail both their future development plans and related investment requirements.
1.2 Motivation for a Water Strategy
2. Azerbaijan is considering the reform of its water management policies and programs, to ensure future food and energy supplies, sustain the environment, and achieve important components of national security. To achieve these goals, the country must address identified challenges regarding water supply and demand. These include better protection of water resources from pollution, improvements in water use efficiency, better planning and management of floods and droughts, and successful collection of revenues from water users to ensure the sustainable management and delivery of water services (OECD/EAP, 2014).
3. A national water strategy is needed for addressing such challenges in a coordinated way, across all levels of government, while involving other stakeholders and ensuring consistency of policy. Since 2010, the United Nations Economic Commission for Europe (UNECE) has assisted the Government in developing a water strategy through the National Policy Dialogue (NPD) initiated by the European Union (EU). The UNECE is assisting also in the development of an agricultural strategy paper, which will include discussion of water availability, allocation, and management in agriculture.
4. Azerbaijan has a continental climate, with notable variation in average rainfall and temperatures from eastern lowlands to the western mountains. The average annual rainfall in the largely agricultural Kura-Aras lowland is less than 400 mm, which is insufficient for crop production. Average annual rainfall in the higher-elevation western areas is greater than 600 mm. Several data sources report the total renewable water resources in Azerbaijan are about 30 billion cubic meters (billion m3) per year for surface water (Arif Akhundov, 2014). The average annual withdrawal from surface water is about 12 billion m3, or about 40% of the country's estimated 30 billion m3 of annual surface water resources1 (FAO, 2009). Thus, from an aggregate perspective, the supply of water is sufficient to meet current demands, and there is potential to further develop the country's surface water resources. Yet, issues
1 Please note that the actual river water diversions are about half of the available stream flow. The difference accounts, among others, for water discharges to the Caspian Sea and for other environmental purposes including maintaining habitats for wildlife. It also indicates future potential for investment in water storage facilities.
regarding water quality, agricultural productivity, soil salinization and waterlogging, and competing demands for water in other sectors must be considered in the context of developing a national strategy regarding water resources.
5. Water is unevenly distributed across the seasons and regions in Azerbaijan. The mountainous areas of the Greater Caucasus experience increasingly prolonged inundations and flash floods during the wet season and extended dry spells during the dry season. Two major rivers (the Kura and Aras) flow through the country, forming a basin between them with good agricultural soils. Crop production on the Kura-Aras plain requires irrigation, although many farmers produce winter2 wheat and barley using rainfall with only limited supplemental irrigation. Agriculture accounts for a substantial portion of the water consumed in Azerbaijan each year, and an estimated 90% of the value of agriculture generated each year relies on irrigation. The agriculture sector therefore needs a renewed focus as much of the consumptive use of water in Azerbaijan, typical of most countries, occurs in agriculture.
6. Prior to the 1990s, Azerbaijan's extensive system of municipal water supply and wastewater collection and treatment plants were operated largely by the “vodokanal” organizations of local administrations. The piped water supply systems served 95% of the population of Baku and about 83% of the population in other smaller cities. In the recent past, the condition of some water supply and treatment facilities has noticeably depreciated. Leakage from these systems is high but poorly documented, and metering of water supplies is not complete. The Government has adopted the target of providing all towns and villages with a reliable water supply system and complete sanitation services, as part of its State Program on Poverty Reduction and Sustainable Development (Government of Azerbaijan, 2008).
7. Looking forward, the demands for water will increase in Azerbaijan, while the annual supply will remain largely the same, or will be modified somewhat by the influence of climate change. Competition for water also will increase, both within and across productive sectors, in both cities and rural areas. Institutional enhancements and investments will be needed to ensure that water resources are developed in accordance with national interests, and that water is allocated and used wisely in all sectors. Those institutional enhancements and investments should be consistent with a national water strategy that depicts the long-term view for water resource development in Azerbaijan, and acknowledges the important roles of water in agricultural and industrial production, in commerce, in households, and in environmental applications.
8. The process for developing a national water strategy should include a thoughtful discussion pertaining to the broader questions of social and economic development in Azerbaijan. At present, much of the country's GDP is earned through the production and sale of oil and gas. Given the fixed nature of the volume of those resources, the relative importance of the primary energy sector will inevitably decline at some point in the future. Prior to that decline, Azerbaijan should have established a plan and made the necessary investments for sustaining desirable rates of economic growth and continuing to enhance livelihoods in rural and urban areas.
1.3 Objectives, Strategies, and Tactics
9. Strategies are best described in the context of well-defined goals and objectives. Once the goals and the components of a strategy are identified and agreed, one can determine the best approach for implementing the strategy. Tactical considerations will become pertinent when implementing the components of a strategy to best effect. In a
2 In Azerbaijan, the winter crop is referred to as autumn wheat or autumn barley.
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sense, a strategy involves a long-term perspective, while tactics involve shorter term efforts to implement components of the over-arching strategy.
10. Many questions of national importance require strategic approaches and strategic investments if they are to be satisfactorily resolved. Strategies normally involve both investments in infrastructure as well as institutional enhancements, with long-term and wide- reaching implications. Once the strategies are identified, appropriate tactics and activities can be implemented, and revised as needed, to achieve the strategic objectives. In Azerbaijan, one plausible national goal might be that of maintaining economic growth and continuing to enhance social welfare, even as revenues from the sale of gas and oil inevitably decline in future. For a national water strategy, the primary goal could be to ensure that adequate quantities of good quality water are available for all social and economic development needs as well as that required to ensure environmental management at acceptable levels. It is evident that agriculture and other non-oil sectors will regain importance in the mix of economic activities that comprise Azerbaijan’s national GDP in the future, and water is a critical input to agriculture production.
11. Four additional considerations for the national water strategy, in addition to agriculture, seem pertinent. These involve maintaining and/or improving water quality, sustainable management of the country’s groundwater resources, the improvement of water and sanitation services and their extension to currently non-served areas, and the optimal management of both floods and drought to minimize the resultant negative impacts. Later quality issues are perhaps most challenging, given that much of the surface water in Azerbaijan arises in neighbouring countries, where the water quality is significantly degraded by agricultural, industrial, and municipal effluent. Water pollution occurs also within Azerbaijan, from both point and nonpoint sources. These pollutants impair the quality of water for a range of uses, including irrigation, drinking, and environmental enhancement.
12. The strategy must address improving the quality of surface water, giving full consideration to both internal and international sources of water pollution. The strategy must also address the need to optimize the management and use of groundwater. The annual net groundwater recharge in Azerbaijan is notably smaller than the amount of surface water available, yet groundwater serves as an important source of drinking water and supplemental irrigation in some areas. Groundwater use is versatile to a degree and it can be effectively used to offset the negative impacts of drought. A comprehensive plan that describes how groundwater will be managed, particularly in aquifers recharged by major rivers, will be helpful in generating greater return from the country's groundwater resources.
13. The Government already is implementing a program of extending water and sanitation service across the country, and that effort certainly should continue under any future strategy. It will also be helpful to provide guidelines for extending service, in conjunction with other efforts to enhance the supply of water for agriculture and to improve water quality, particularly in rural areas. Water supply and sanitation service have notable impacts on water quality, and efforts to expand service can be designed in conjunction with efforts to extend irrigation systems. Considerations for managing floods and droughts are particularly pertinent in Azerbaijan, given the frequency with which these events occur. Programs for addressing floods and droughts should include the components of monitoring, planning, response, and adaptation.
1.4 This Study
14. This study provides a comprehensive review and analysis of Azerbaijan’s water resources and identifies the main challenges the sector faces. It analyses the issues and highlights opportunities that exist in the specific socio-economic environment of Azerbaijan.
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The study reinforces the need for a national water strategy (NWS) to address the issues and it provides the necessary framework for compilation of a comprehensive NWS. The transformation of this framework into a complete NWS will require preparing medium and long term development and investment plans for all water based sub-sectors by concerned government agencies in close collaboration with end-users.
15. The study reviewed available secondary information, conducted two comprehensive stakeholders’ consultations, held numerous meetings with officials from the main government ministries, agencies, institutions and companies, which are involved in the management and regulation of water resources, collected relevant data from them and discussed in detail their visions of future sector evolvement from their perspective,. The study benefitted from the experience and contributions by the Government’s higher authorities, policy makers, managers, national and international organizations, academicians and water experts. Two reviews by the Government Ministries and other stakeholders’ helped improve the final report (The team’s response to comments from various stakeholders on earlier drafts of the report are documented in Appendices A & B).
1.5 Structure of the Report
16. The main report consists of two parts:
Part A: Water Resource Assessment . Analysis of supply and demand for water nation-wide and by key sectors
Part B: Formulation of National Water Strategy
. Change drivers for a national water strategy . Identification and analysis of water related challenges and opportunities for improvement, . Strategic Framework: establishing country-wide goals and objectives, desired outcomes and indicators . Potential investments and institutional enhancements.
17. Four annexes supplement the background information presented for selected subject areas in the Main Report. These are:
Annex A: Institutions for water resources management in Azerbaijan
Annex B: Revitalizing agriculture in Azerbaijan
Annex C: Water resources assessment for Azerbaijan
Annex D: Irrigation and drainage subsector in Azerbaijan
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PART A: WATER RESOURCE ASSESSMENT
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2. NATIONAL SETTING
2.1 Location
18. Azerbaijan is located on the western shores of the Caspian Sea, in the eastern part of the South Caucasus region (Figure 1), with a land area of 8.64 million hectares (ha) and a population in 2015 of 9.7 million (FAO, 2015). About 4.75 million ha are considered agricultural land and about 1.0 million ha are forest lands. In 2005, the cultivated area was 2.06 million ha, or 43% of the total agricultural land area.
Figure 1. Map of Azerbaijan
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2.2 Climate
19. Nine of eleven defined climate zones are found in Azerbaijan. The average annual temperature is about 15o C in the Kura-Aras Lowland, the coastal regions south of the Absheron Peninsula, and in the Lankaran Lowland. The temperature declines near the mountains, averaging about 5o C at an altitude of 2,000 m, and 2o C at 3,000 m. The highest annual rainfall occurs in the higher elevations of the western region, while the least rainfall occurs on the Absheron Peninsula, in the east. About 43% of the country is at an elevation more than 1,000 m above sea level (FAO, 2009).
20. The climate zones of Azerbaijan can be summarized as follows:3
(i) Semi-desert and dry steppe in the central lowlands in the Kur to elevation 400 m, the Caspian zone from the end of Samur River to the Gizilagaj gulf, the plains of Nakhchivan along the Aras River, and the valleys of the Talish
3 http://en.wikipedia.org/wiki/Climate_of_Azerbaijan. Accessed 19 May 2015.
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Mountains below 1,000 m. Annual rainfall accounts for 15-50% of the potential evaporation. Winters are usually cool, though cold on the Aras River plains, and in the valleys of the Talish Mountains. Summer temperatures can exceed 40o C.
(ii) A moderate climate with mild, dry winters covers the south hills (below 1,000 m) of the Greater Caucasus, the Ganikh-Eyrichay Valley between 200 and 500 m, and the north and east hills of the Lesser Caucasus between 400 and 1,500 m. Annual rainfall accounts for 50-100% of the potential evaporation.
(iii) The Lankaran-Astara region is moderately warm, with dry summers. Annual rainfall accounts for 100-150% of the potential evaporation. Winters are cool, summers are hot and dry, and autumns are rainy. The months of May through August are usually dry, requiring irrigation to support crop production.
(iv) A cold climate with heavy precipitation, year-round, in the south hills of the Greater Caucasus between 1,500 and 2,700 m, includes forest, subalpine, and alpine zones. Annual rainfall accounts for more than 150-200% of the potential evaporation. Winters are cold, summers are cool.
(v) Alpine tundra in the areas of the Greater and Lesser Caucasus above 2,700 m, and Nakhchivan above 3,200 m. Annual precipitation accounts for more than 100-200% of potential evaporation. Winters and summers are both cold. In some places, snow does not melt until the following winter.
2.3 Population
21. Azerbaijan’s population increased from 2.9 million in 1950 to 9.7 million in 2015. The urban proportion of 40% in 1950 increased to 53% in 2010. Azerbaijani comprise about 92% of the population, followed by Lezgi and Russian at 1.4% each. About 45% of the population is between the ages of 25 and 54, 22.7% are children (0-14 years), 17.5% are young (15-24 years) and 14.8% are above 55. The population growth rate declined sharply in the 1990s, before increasing in the early 2000s, and reaching 1.2% in 2008 (Figure 2). The current growth rate of about 1.0% is expected to decline in the future, reaching zero in 2040, when the population will have reached a peak of about 10.6 million (Figure 2).
22. Although the population growth rate is about 1.0% and declining, population will continue increasing in Azerbaijan through 2040. The larger population, and the increasing per capita income, will contribute to increasing demands for water in agricultural, industrial, domestic, and environmental uses. According to official estimates, the national poverty prevalence fell from 50% in 2001 to 7.6% in 2011. Much of the reduction in poverty other than that derived through employment opportunities offered directly as a result of oil and gas development has been achieved by investing revenues from oil and gas production in schools, universities, hospitals, and the modernization of social programs (OECD, 2011).
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Figure 2. Population and population growth rate (1992 to 2050)
Population in thousands Population growth rate
Year Year Source: FAO, 2015.
2.4 Economy
23. Prior to gaining independence in 1991, Azerbaijan’s economy was mainly agriculture based. In the 1990s and 2000s, the country transitioned from an agriculture-based, centrally planned economy, to an oil-industry led market economy. With the rapid growth in the energy sector from 2005 to 2008, Azerbaijan’s economy expanded significantly, with average annual GDP growth of 24%. The non-oil sectors grew by 12% annually during those years. In 2008, GDP growth declined to 9% overall and 3% in the non-oil sectors, due to the global economic recession. Although Azerbaijan was less impacted by the international financial crisis of 2008 to 2009, than were other countries in Eastern Europe and the South Caucasus, the sharp decline in oil and gas revenues revealed the vulnerability of its economy to energy shocks and commodity price risk (OECD, 2011).
24. Agriculture maintained a positive growth of 3.5% in 2009, which increased to about 8.6% from 2010 through 2012 and posted an annual growth of 8.2% in 2013. This relatively robust growth has significantly reduced poverty in the country. In 2013, only 6% of the population was considered poor, compared with 50% in 2001.4 However, given the inevitable limitation of its oil and gas reserves, the Government is challenged to diversify the sources of economic growth, while reducing dependence on the energy sector. Investments that improve agricultural productivity will be important components of an economic diversification program that enhances future growth opportunities (Ciarreta and Nasirov, 2012).
25. The Government is implementing an ambitious program to improve transportation, expand access to water and sanitation, and extend communication and information technology (Government of Azerbaijan, 2008). With rapid growth of the energy industry, agriculture’s weight in the national economy has declined from about 35% of GDP in Soviet times to about 5.5% in 2012. However, agriculture still has strategic importance for the country’s social and economic development, as it provides income and employment for about 40% of the work force. In the late 1990s, the Government implemented major land reforms in which collective and state lands were distributed to rural households, leading to an expansion in cropping and livestock (Government of Azerbaijan, 1996a). By 2000, about 97% of the entitled rural population received land titles with an average landholding size of 2.3 ha per household. The amount of land suitable for supporting a farm household varies by region, ranging from 2.1 ha in Sabirabad, 4.2 ha in Salyan, and 13 ha in Barda (State Statistics Committee, 2005; Rzayev, 2007). Survey data for 2000 to 2012 suggest the average size of family farms in Azerbaijan is about 2 ha (ECA, 2012). Given its knowledge
4 Based on the 2001 poverty line of AZM (Old Menat) 120,000 or US$30 per capita per month.
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and export base and the favourable climate and geographic location, agriculture has significant development opportunities that remain unutilized. Presently, the sector is characterized largely by low-productivity subsistence agriculture.
26. The Government has recently implemented several strategic programs to improve agriculture, including the Reliable Provision of Food Products Program (2008-2015; Government of Azerbaijan, 2008), which seeks to rehabilitate irrigation infrastructure, develop food processing and marketing enterprises and establish a Research Centre for Agriculture. The irrigation subsector development strategy was outlined in the State Program on Amelioration and Irrigation in the Presidential Decree of 2006, with a view to improving water resources and the irrigation sector (Government of Azerbaijan, 2006b).
27. Azerbaijan implemented the state program for socio-economic development (SPSD) from 2004 to 2008 and from 2009 to 2013. The SPSD contributed to a high growth rate in the non-oil sector by creating new enterprises and job opportunities, increasing the quality and number of public utilities and social infrastructure, improving the business environment, improving infrastructure, and decreasing poverty. The State Program for Poverty Reduction and Sustainable Development (2008-2015) also helped to reduce poverty significantly. Azerbaijan’s Vision 2020 document describes the country's goals of achieving a competitive economy, upgrading communications, establishing a knowledge-based society, developing human capital, and enhancing civil society, while protecting cultural heritage and the environment, and improving institutions and legislation. The vision is to establish Azerbaijan as an economically and politically developed, and competitive, country by 2020.
3. WATER RESOURCES
3.1 Rainfall
28. The long-term, average annual precipitation in Azerbaijan is about 450 mm5, which is equivalent to an annual volume of 38.7 billion m3 (FAO Aquastat, Azerbaijan Country Fact Sheet). The amount of rainfall received each month varies substantially during the year and across the country, with important implications for water runoff, capture, storage, and management. Generally, rainfall is higher in western portions of Azerbaijan and lower in eastern regions.
29. Monthly rainfall in Azerbaijan is best characterized as a bi-modal distribution, with a notable rainy season in the spring (April to June) and a somewhat less notable rainy season in the fall (September to November). The mean-monthly rainfall at various locations in Azerbaijan and for the country is given in Table 1, based on estimations derived from the World Bank Climate Change Information Portal for the period 1990 to 2009. The amount of rainfall received each year actually varies substantially across the country, with largest rainfall experienced in the Southern Caucasus Mountains in the North-west of the country, and the Lankaran area of the extreme south-east. Lowest rainfall is within the lower Kura- Aras plains and the Caspian Sea coastal area near Baku.
30. The high rainfall in western Azerbaijan provides the opportunity to produce winter grains (referred to as autumn grains in Azerbaijan) without irrigation on limited areas and to capture and store excess water in reservoirs. Indeed, several reservoirs have been built in central and western Azerbaijan, including the large Mingachevir Reservoir, to provide flood control and capture excess water for irrigation. Farmers in western Azerbaijan can produce
5 The average annual precipitation is the sum of average monthly precipitation. In Table 1, the annual average rainfall for Azerbaijan is shown as 421 mm.
9 winter small grains without irrigation, although yields will be limited in years when rainfall is not sufficient to satisfy crop water requirements. Crop production in eastern Azerbaijan is not possible without irrigation.
Table 1. Mean-monthly Rainfall in Azerbaijan Stations Mean-monthly Rainfall (mm) in period 1990 to 2009
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Azerbaijan 22.2 26.5 39.6 51.6 59.9 51.2 25.8 23.0 29.4 41.4 28.0 23.0 421.6
Baku 20.8 13.0 19.8 25.9 24.1 18.8 13.8 11.1 34.4 38.4 24.3 17.7 262.1
Ganja 19.1 15.3 31.7 74.3 61.4 68.8 45.0 28.1 24.5 51.6 27.9 28.2 475.9
Gazakh 19.9 24.3 40.5 92.4 81.4 103.3 51.6 42.4 32.0 48.1 37.4 39.3 612.6
Lankaran 212.0 192.6 206.6 194.5 119.6 97.2 79.1 82.3 106.9 128.2 185.4 184.8 1789.2
Salyan 28.4 22.5 26.1 41.2 25.8 17.8 10.5 10.4 30.9 42.9 29.3 25.8 311.6
Zagatala 26.4 23.8 46.5 91.8 99.2 102.8 74.0 54.9 49.4 53.6 46.3 47.1 715.8
Nakchivan 20.4 15.6 45.5 85.7 75.0 46.8 45.2 20.9 17.6 44.4 31.4 30.4 478.9
Source: World Bank, Climate Change Information Portal, May 2015.
3.2 Surface Water
31. The total renewable surface water resources are estimated to be about 30 billion m3/year (please note this is the surface runoff resulting from the rainfall of about 38.7 billion m3/year mentioned in para 28). The annual internally generated surface water resources are about 7.5 billion m3 and the incoming annual stream flow from neighbouring countries is about 22.5 billion m3. Annual groundwater recharge is estimated at about 6.5 billion m3. Most recent figures presented to the team by the State Agency for Water Resources (SAWR) cite annual surface water resources of 28.5 to 30.5 billion m3. During droughts, the annual surface water supply can be as low as 22.6 billion m3 (Akhundov, 2014). We accepted the number 30 billion m3 for surface water resources and used it in our analyses of water supply.
32. Azerbaijan has four major river basins, including two international basins, the Kura and Aras, and two internal coastal basins, one in the northeast, between the Samur and Kura Rivers, and one in the southeast, in the Lankaran region (Figure 1). The Kura and Aras rivers together form the largest basin in the country. The Kura River rises in the Kars upland in northeast Turkey, flows into Georgia and crosses the border to Azerbaijan in the northwest, before discharging into the Caspian Sea. The river is 1,515 km in length, forming a basin of 188,000 km2, of which 58,000 km2 (31%) are in Azerbaijan (UNECE, 2011). The estimated annual inflow from Georgia is 10.3 billion m3 (Akhundov, 2014). The Aras River also rises in the northeast of Turkey and enters Azerbaijan from territories of Turkey and Armenia. It discharges into the Kura River about 100 km downstream of the border with Armenia. The estimated annual flow of the main branch of the Aras River and its tributaries from neighbouring countries is 12.2 billion m3, which brings the annual trans-boundary flow into Azerbaijan to 22.5 billion m3.
33. The Samur River, located in the northeast of the country, rises in Russia and then forms a portion of the border with Azerbaijan. Its estimated annual discharge is 2.4 billion m3 half of which is considered to be available for Azerbaijan. The internal basins comprise the
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Caspian Sea coastal river basins in the northeast, between the Samur and Kura River Basins and the Caspian Sea coastal river basins in the Lankaran region in the southeast, south of the Kura River Basin.
3.3 Groundwater
34. There are 18 hydro-geologic basins in Azerbaijan, within three geo-structural regions, the Fold Mountains Area of the Greater Caucasus, the Fold Mountains Area of the Lesser Caucasus, and the Kura-Aras Lowland (Alakbarov, c.2000). Most of the potable and mildly mineralized groundwater occurs in the Kura-Aras Lowland and the porous-stratal basin of the Samur-Gusarchay Valley (Figure 3).
35. Eestimates of groundwater recharge and the volume available for withdrawal vary, and some are not necessarily current. Aquifers in Azerbaijan are recharged by rainfall, river flow, and seepage from canals (Alakbarov, c.2000). Annual recharge is estimated to be about 6.5 billion m3, of which about 4.35 billion m3 constitute the base flow of the main rivers. Thus, the actual groundwater resource is 2.15 billion m3 (FAO 2009; quoted in UNDP/GEF, 2013a). The largest sources of recharge are the Kura and Aras Rivers, which carry heavy pollutant loads from neighboring countries, thus potentially degrading the quality of groundwater in Azerbaijan (Alakbarov and Imanov, 2010).
Figure 3. Location of Groundwater in Azerbaijan
Legend: Unit rates of usable groundwater, in litres per second (l/s) 1: up to 0.1 l/s, 2: 0.1 to 1.0 l/s, 3: 1 to 10 l/s, 4: greater than 10 l/s, 5: borders of areas with differing rates of groundwater availability Source: Alakbarov, c. 2000. Groundwater of Azerbaijan. This is an undated, unpublished report, 16 pages.
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3.4 Marginal Quality Water
36. The volume of water recycled and reused in Azerbaijan has ranged from about 1.5 billion m3 to 2.5 billion m3 since 2000, with the exception of 2002, when the volume recycled was less than 1.0 billion m3. Thus, in most years, the volume of water recycled has ranged from 15% to 21% of the volume withdrawn from surface water sources.6 Ideally, opportunities exist for optimizing the collection and reuse of agricultural drainage water. As sections of the irrigation and drainage system are renovated and improved in future, provision can be made for capturing and reusing surface and subsurface drain water. However, using practices that are consistent with maintaining soil salinity within an acceptable range requires sophisticated management techniques coupled with state of the art real time monitoring of flow volumes and salt loads.
3.5 Floodwater
37. The pattern of flooding in the Kura River basin has been significantly influenced by the construction of the Mingachevir Reservoir in 1953. Hasanova and Imanov (2010) report that prior to construction of the dam, the Kura flooded its lower valley in most years, during the late spring and early summer snowmelt period. Following completion of the reservoir and the smaller Shamkir dam (1982), and the Aras dam on the Aras River (1971), flooding incidence has been notably reduced. Thus, much of the floodwater potential in Azerbaijan already has been developed with the construction and operation of large and small dams on the Kura and Aras Rivers. The Mingachevir reservoir holds about 2.5 billion m3 of flood runoff each year for release during the rest of the year. The other reservoirs in the country are significantly smaller, but on average it is expected that about 3 billion m3 of flood runoff is retained for use within the country each year.
3.6 Climate Change
38. The United Nations Framework Convention on Climate Change (the Second National Communication) has evaluated the possible impacts of climate change on the water resources of Azerbaijan (MENR, 2010). The United Kingdom's Hadley Centre for Climate Change performed the modelling, using the PRECIS 1.4 modelling system. Modelling projections were made for 2021 to 2050, and for 2071 to 2100.
39. For 2021 to 2050, the modelling indicates rainfall in Azerbaijan will increase by 10% to 20% compared with the period 1961-1990. Increases vary with location – increases are 0% to 10% in Nakhchivan and 20% in the eastern part of the country. From 2021 to 2050, the temperature is expected to rise by 1.5 to 1.6oC, leading to evaporative increases of 0.4 mm to 1.2 mm per day. Modelling of water resources indicates these changes will result in little change to the available resources, with a reduction in water resources in the Aras basin being compensated by additional resources expected in the eastern part of the country.
40. From 2071 to 2100, rainfall is expected to increase from the west of the country to the east, from 20% in the west to 80% in the east. Temperatures are expected to increase by 3 to 6oC, with most of the country having a 5oC rise compared to the 1961 to 1990 period. The large predicted increases in rainfall in the model are doubted, and it is suggested by the report that predictions from other models of changes in water resources for the period 2071 to 2100 indicating a 15% reduction in water resources are more plausible. Other work undertaken on climate change impacts in Azerbaijan has produced different estimates of expected changes. The National Climate Change Centre of Azerbaijan in the MENR used
6 The consultant team highly suspects these reuse numbers.
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model results including the GISS (Goddard Institute of Space Studies model) and GFDL-3 (Geophysical Fluid Dynamics Laboratory model) Models.
41. The Climate Change Centre also examined climate projections from the Special Report on Emissions Scenarios, and agrees with the climate change scenario suggested by the Azerbaijan Academy of Sciences, regarding a 10% to 15% reduction in water resources by 2100 (Table 2).
42. Impacts of climate change on crop water requirements. Irrigated agriculture likely will be impacted by higher temperatures due to climate change. With evaporation rates increasing by 0.4 mm to 1.2 mm/day from 2021 to 2050, irrigation requirements might increase by 15%-20%. From 2071 to 2100, water requirements for crops will be higher due to higher temperatures, but crop irrigation requirements might be partly offset by significantly increased rainfall. The Climate Change and Ozone Centre of MENR have responsibility within the Government to “assess potential impacts on natural ecosystems and the economy of the expected climate change” and so should be the main source of information on the impact of climate change and water requirements. The process of preparation of the third national submission to the UN Framework Convention on Climate Change has started, and is due for reporting soon (March 2015)7. This process will generate improved estimates of possible climate change and its impacts should be available soon.
Table 2. Potential effects of climate change on water resources United Kingdom's Hadley Centre for Climate Change Scenario (50 years, or as noted) Potential surface water resources (% of present) GISS 86
GFDL-3 81
SRES_A2 79
Azerbaijan Academy of Sciences 90
PRECIS model for 2021-50 100
PRECIS model for 2071-2100 80-85
4. WATER USE
43. For the most recent year 2013, the total water abstraction is about 12.5 billion m3, of which about 8.230 billion m3 are usefully consumed and about 4.28 billion m3 constitute losses (Table 3). The losses, mostly in the conveyance of water supplies for irrigation, municipal and other uses and application to irrigated lands, are quite high – about 35%.
44. Irrigated agriculture is the largest water user, consuming about 40-50% of the total water withdrawn. Industry accounts for about 15-20% of surface water deliveries, while the domestic uses and drinking water volumes are much smaller. While these abstractions are generally accepted to lie within the allocations for the various uses, the precise allocation mechanism remains unclear. Regarding environmental flows, there is an old Soviet-period agreement for the minimum flows that should be left in rivers. For the Kura and Aras, these minimum environmental flows are 175 m3/s for Kura and 35 m3/s for the Aras (Team meeting with MENR, Sept. 29, 2014).
7 http://www.az.undp.org/content/azerbaijan/en/home/operations/projects/sustain_development/tnc/
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Table 3. Surface water withdrawals and use (billion m3) Water Withdrawals 2000 2005 2007 2008 2009 2010 2011 2012 2013
A. Total water abstractions 11.11 12.05 12.27 11.74 11.43 11.57 11.78 12.48 12.51 B. Total water use 6.6 8.61 8.37 7.89 7.64 7.72 8.01 8.25 8.23
B.1 Irrigation 3.82 5.71 5.84 5.47 5.59 5.50 5.75 5.77 5.75
B.2 Domestic use 0.45 0.52 0.36 0.35 0.38 0.41 0.40 0.28 0.31
B.3 Industrial needs 2.32 2.36 2.16 2.04 1.64 1.74 1.76 2.10 2.06
B.4 Drinking water 0.08 0.06 0.05 0.04 0.05 0.05 0.05 0.04 0.05
C. Reported water losses 3.05 3.46 3.90 3.85 3.79 3.85 3.77 4.24 4.28 Note: Minor inconsistencies in water uses and water losses are attributed to data by different sources. Source: United Nations Development Programme.
4.1 Agriculture
45. Irrigated agriculture accounts for the largest portion of water abstractions in Azerbaijan. From 2000 to 2013, about 40-50% of the total water withdrawn from surface sources was beneficially used for irrigation (Table 3). Irrigation is essential to both Azerbaijan’s agriculture and economy as it supports water requirements of a large part of Azerbaijan’s cropped land (World Bank, 2012). Current irrigated area is reported to be 1.45 million ha and the total cultivated land is about 2.1 million ha. We describe water use in agriculture in greater detail in Chapter 6 of this report on Agriculture, Irrigation, and Drainage.
4.2 Domestic
46. The Azersu Joint Stock Company utilizes both surface water and groundwater when delivering domestic supply. According to Azersu, about one-fifth of the water supplied is derived from groundwater. Of 80 small cities, 48 are supplied with groundwater, and in 32 cities, groundwater is the sole source of water supply (Team meeting with Azersu JSC on September 25, 2014).
47. High quality drinking water for the city of Baku is obtained from several sources, at some distance from the city: . Khachmaz (established in 1956; design flow capacity 2.65 m3/s) . Shollar lines (1917, 1937; 187 km from Baku, design flow capacity 1.5 m3/sec ) . Djeiranbatan water intake (fed from the Samur river by Samur-Absheron Canal) . The recently constructed Oguz Gabala Baku water pipeline project can deliver fresh drinking water to Baku at design capacity of 5 m3/s.
48. Azerbaijan has made notable progress in recent years, in extending water supply and sanitation in both urban and rural areas. As the national population increased from 8.1 million in 2000 to 9.3 million in 2011, and the proportion of citizens living in urban areas increased from 51% to 54%, sanitation service coverage increased from 73% to 86% of urban residents (WHO, 2013). Sanitation coverage in rural areas increased from 50% of households in 2000 to 78% of households in 2011, such that the national rate of sanitation coverage increased from 62% in 2000 to 82% in 2011.
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49. The proportion of urban residents in Azerbaijan with access to improved water supply has remained constant at 88% from 1990 through 2011, while the proportion with access to a piped water supply has increased from 67% in 1990 to 72% in 2000 and 78% in 2011 (WHO, 2013). Notable progress has been achieved in rural areas, where access to an improved water supply has increased from 49% in 1990 to 59% in 2000 and 71% in 2011. However, most rural residents lack access to a piped water supply. Just 20% of rural residents had access to a piped water supply in 2011.
50. In 2005, wastewater treatment plants were operating in 16 of the 75 important cities and towns in Azerbaijan, yet all had been constructed during the Soviet era, and most were no longer fully functional (ADB, 2005; Puri and Romanenko, 2006). Also in that year, about 78% of households on the Absheron peninsula, which includes Baku, were connected to a wastewater collection system. Although these data are somewhat old, it is likely that substantial investments are needed to enhance wastewater capture, treatment, and reuse in Azerbaijan. Such efforts can generate water for use in agriculture and also for landscape irrigation. FAO (2009) and Sato et al. (2013) report that of the 0.659 billion m3 of wastewater generated in Azerbaijan in 2005, 0.161 billion m3 were treated and used for such purposes.
4.3 Industry and Energy
51. Industrial water requirements are specified in abstraction licences that reflect established norms for industrial facilities. The largest licensed water use is for energy generation, in the form of hydropower and for cooling thermal energy plants. The largest hydropower stations are located at the Mingachevir Reservoir on the Kura River, with a capacity of 402 MW, and at the Shamkir reservoir, upstream of Mingechevir, with a capacity 380 MW. The estimated national requirement for cooling water is 2.4 billion m3 per year. Most of this water flows through a thermal energy facility, and is returned to the river at a higher temperature. The estimated flow through hydropower turbines each year is 14 billion m3. This volume is returned directly to the river after energy generation, largely unaltered from its original state. Hydropower generation is not a major consumptive water user and the country plans to construct additional hydro-electric capacity in future without adding much additional demands on the country's water resources (UNDP/GEF, 2013d).
4.4 Environment and Recreation
52. Water in the Kura and Aras Rivers provides environmental amenities, both in stream and in the form of discharges into the Caspian Sea. We are not aware of in-stream flow requirements or targets for the discharge of water into the Sea, either annually or by season. Thus, we are unable to estimate the volume of water required for environmental maintenance flows. The “norms” or guidelines establishing minimum environmental maintenance flows in the Kura nd Aras Rivers during the Soviet era is given in paragraph 44. We are aware that the Mingachevir Reservoir as well as other reservoirs, the rivers themselves, and the Caspian Sea are all used for a variety of recreational activities but these do not involve consumptive water use.
5. WATER MANAGEMENT
5.1. Physical Features
53. There are more than 140 reservoirs in Azerbaijan with a total storage capacity of about 21.5 billion m3, of which, about 10.9 billion m3 are usable (FAO, 2009, UNDP/GEF, 2013d). The largest of these is the Mingachevir reservoir, commissioned in 1953, which has a design storage capacity of 15,370 million m3. Other large reservoirs include: Shamkir
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(commissioned in 1982) with a storage capacity of 2,677 million m3; Aras (commissioned in 1971) with a storage capacity of 1,254 million m3; and Sarsang8 (commissioned in 1976) with a storage capacity of 565 million m3. Many of the reservoirs are multi-purpose, providing irrigation storage, hydropower generation, and flood protection. In addition to storage reservoirs there are sixteen gated diversion structures on major streams and rivers providing gravity fed water supplies for irrigation and other uses.
54. In 2013, the estimated length of all irrigation canals, including primary and secondary delivery canals and tertiary on-farm canals, was 52,000 km, of which fewer than 5% were concrete lined. The largest canals are the Upper Garabakh, the Upper Shirvan and the Samur-Apsheron, all of which are earthen canals. The Upper Garbakh canal, which runs southeast from the Mingachevir Reservoir to the Aras River, is 174 km long and has a flow capacity of 113.5 m3 per second (m3/s). About 85,000 ha of agricultural land receive irrigation water from this canal. The Upper Shirvan canal also heads at the Mingachevir Reservoir and runs east to the Akhsu River. It is 126 km in length, with a capacity of 78 m3/s, and provides irrigation water for about 91,100 ha.
55. Many of Azerbaijan's irrigation canals and water control structures, and the extensive drainage system, were constructed during the Soviet era, and many would now benefit from repair, rehabilitation, and modernization (UNDP/GEF, 2013a, page 10).
5.2. Water Monitoring
56. The National Environmental Monitoring Department in the Ministry of Ecology and Natural Resources (MENR) is responsible for monitoring the quality of all surface waters, including transboundary rivers. The Hydro-Meteorology and Geological Survey Departments in MENR monitor the climate, rivers, lakes, and groundwater. The Department of Hydro- Meteorology monitors rainfall, air temperatures, and the flow, depth, and discharge in major rivers. The Geological Survey Department monitors groundwater quality and water table elevations.
57. Several other agencies also monitor water resources, in according with their responsibilities. For example, the Amelioration JSC monitors the volume of water diverted in the main and secondary irrigation canals, the deliveries to Azersu and water user associations (WUAs), and the discharges from main drains.
58. The State Agency of Water Resources (SAWR), established in 2011, develops operational rules for major reservoirs with a view to reducing flood peaks. The Amelioration JSC, which designs, builds and operates the dams and reservoirs, operates the primary water distribution network and maintains records of water deliveries to Azersu and WUAs. The Azersu JSC subsequently monitors the volume and quality of water delivered to its customers.
5.3. Water Policy and Legislation
59. Water policy in Azerbaijan is implemented largely through legislation, and in particular through the National Water Code of 1997 (Government of Azerbaijan, 1997). Several laws and bylaws have been adopted on the basis of this Code, including the Law on Water Supply and Wastewater, the Law on Amelioration and Irrigation (Government of Azerbaijan, 1996b), the Law on Hydro-meteorological Activities, and the Law on Safety of
8 The Sarsang reservoir is within the occupied territory and currently is not under control of Azerbaijan authorities.
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Hydro-technical Installations. Water policy is implemented also through National Plans, State Programs, and Action Plans. By the end of 1996, the Government, with the support of the World Bank, developed the National Environmental Action Plan, which highlights the importance of protecting and managing water resources.
60. The State Water Policy of Azerbaijan provides for: 1) access to safe drinking water for all citizens, in compliance with international water quality standards, 2) a balance between the economic needs and the sustainable use of water resources, and 3) the right of present and future generations to use water in an environmentally sustainable manner.
61. The recent transition to a market economy provides a unique opportunity to consider environmental problems while conducting economic and political reforms. On February 18, 2003, the Government adopted the National Program for Sustainable Socio-Economic Development in the Environmental Context. One section of the Program is dedicated to water policy issues. According to the National Program, by 2010, “every person in the country shall have access to good quality water” (Government of Azerbaijan, 2003). The Program promotes efficient water use by providing economic incentives, improving drinking water quality, revising environmental laws, and reducing pollution in transboundary rivers.
62. As part of its program of enhanced cooperation with the European Union, Azerbaijan has defined priority areas for improving resource management in the Country Strategy Paper for 2007-2013, under the European Neighbourhood and Partnership Instrument (Voloshin, 2014). The most important legislation regarding water resources in the EU is the Water Framework Directive, which defines key principles and objectives, and provides a framework for integrated management of water resources (UNDP/GEF, 2013). The Directive was translated in Azeri, and is being used by several government agencies to implement a pilot river basin management plan according to integrated water resource management principles in the Ganikh and Ganjachay river basins.
5.4. Institutions
63. Several ministries, agencies and joint stock companies share responsibility for managing water resources in Azerbaijan. The entities with foremost responsibility include the MENR; the Amelioration and Irrigation Joint Stock Company (JSC), which manages water deliveries for irrigation; and the Azersu JSC, which is responsible for municipal and industrial water supply (Table 4). The Ministries of Emergency Situations, Agriculture, Energy, and Health also have interests and responsibilities that involve water resources.
64. A number of other agencies share minor degrees of responsibility for water management in Azerbaijan, including the Tariff Council, which determines service charges for the delivery of water, and the State Statistics Committee, which records information and data describing and documenting water resource availability and utilization, . In addition, there are many WUAs representing smallholder farmers, and technical irrigation departments, the field arm of the Amelioration JSC, responsible for operating and maintaining the irrigation and drainage networks. In summary, there is at present a wide array of institutions with mandates pertaining to the country’s water resources (Table 4).
65. None of the agencies involved in water resources and enumerated above has an over-arching supervisory role for specific river basins. Such a role might include authority to make decisions regarding sectoral water allocations, to regulate water use through water permits, and to mitigate water conflicts within a given river basin or basins.
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Table 4. Institutions Involved in Water Management Ministry, Department, or Responsibilities Pertaining to Water Company Ministry of Emergency Situations State Agency for Develops operational rules for major reservoirs for reducing flood peaks; Water Resources Monitors surface and groundwater resources MENR National Hydro-
Meteorological Dept. Participates in establishment of government policies and planning exercises National regarding water resources. Monitors water quality of surface waters entering Environmental the country. Monitoring Dept.
Caspian Carries out routine stream discharge measurements and systematically Environmental monitors both surface and groundwater quality. Monitoring Admin. National Geological
Exploration Service Ministry of Participates in framing Government policies regarding water resources for Agriculture irrigation and provides technical support to farmers in matters related to efficient water use in agriculture production. State Phyto-Sanitary
Control Service
Monitors the quality of water supplied to the public for drinking and other Ministry of Health domestic purposes. Republic Hygienic and Epidemic. Centre Designs and builds country’s water related infrastructure including the flood protection network. Manages irrigation and drainage infrastructure, and Amelioration and facilitates irrigation water delivery to farmers as well as water supply to certain Irrigation Joint Stock Azersu projects and industrial concerns. The nation-wide flood protection and Company agricultural drainage networks are also the responsibility 0f the Amelioration and Irrigation Joint Stock Company. Manages both hydropower and thermal generation; of electricity and its Azer- energy JSC subsequent transmission and distribution to all users. Develops and manages water resources subsequently, supplying, treating and Azersu JSC delivering the water for both household and industrial use. Azersu is also responsible for wastewater treatment and sanitation.
66. The MENR holds the constitutional authority for water resources planning. Historically, planning was the responsibility of the Amelioration Ministry, and the work done by the Ministry in the past remains the basis of many water resources planning decisions. Several government agencies share flood management and protection responsibilities. The SAWR has management responsibility, while MENR and the Amelioration JSC also have substantial areas of responsibility. In particular, MENR is responsible for forecasting and the Amelioration JSC is responsible for planning, construction, management, maintenance and renewal of the extensive system of flood protection infrastructure throughout the country. MENR has primary responsibility for water quality management, which includes monitoring, permitting of discharges, and enforcement of environmental regulations. The responsibility for regulating environmental flows in rivers is not completely clear. However, the monitoring information gathered and maintained by MENR could be used to develop and enforce environmental flow requirements.
67. The benefits and synergy of integrated water resources management and river basin planning can be achieved through several efforts that improve institutional coordination (UNDP/GEF, 2013):
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. Appropriate re-aligning of institutional roles, with especial attention to water regulation and governance, . Improving lines of collaboration between institutions, and . Effective sharing of data and compilation of integrated data-bases available to all key stakeholders and donors involved in water resources management.
5.5. Financing the Water Sector
68. The Amelioration and Azersu JSCs receive large budget allocations, as shown in budget allocations data in Figure 4. From 2008 to 2013, the budget allocation for the Amelioration JSC increased from about 400 million AZN to 900 million AZN (Figure 4). The organizations also receive differing amounts of foreign investment. The Amelioration JSC received foreign investments of 77 million AZN in 2012. Both external and internal financial resources are used to build, rehabilitate and modernize infrastructure while recurrent costs, including payroll, and system operation and maintenance are normally met from local resources alone. The foreign loans and grants are used largely to supplement financing of infrastructure projects (UNDP/GEF, 2013; page 23).
69. The Azersu JSC has performed well in developing infrastructure for providing water to urban and rural communities. This is reflected in the large government budget allocations and foreign investments it has received during the last decade. However, sanitation facilities and water treatment plants need increased attention, especially in rural communities. Likewise the Amelioration JSC has performed well in building, operating and managing major reservoirs, the irrigation distribution and agricultural drainage networks, and the country’s flood protection infrastructure. As noted with regard to Azersu above, further improvement with respect to the agricultural drainage system, portions of which no longer function, are required on the part of Amelioration JSC.
Figure 4. Budget allocations for water organizations
Source: UNDP/GEF, 2013. Azerbaijan National IWRM Plan, page 23.
70. The Amelioration and Azersu JSCs are not collecting sufficient revenues from water users. At minimum, the water supply companies should collect adequate service charges from users to finance normal operation and maintenance costs. An example of the costs and revenues associated with providing irrigation service illustrates the financing gap in one irrigation system which seems to be representative of conditions throughout the country (please see the box, below). In the Salyan region, Amelioration delivers water to WUAs at an
19 average cost of 5 to 10 AZN per 1,000 m3. Yet, the payment received from WUAs can be as little as 0.5 AZN per m3. WUAs further deliver the water to members, who pay 2.0 AZN per 1,000 m3. Yet, the average payment required for sustainable operation and maintenance by the WUA is from 10 to 17 AZN per 1,000 m3. In this example, neither the Amelioration JSC nor the WUA is collecting sufficient revenue to sustain water delivery service without a perpetual subsidy from the government.
Example of Charges for Irrigation Water Delivery
Payment from WUA to Amelioration = 0.5 AZN per 1000 m3 Required = 5 to 10 AZN per 1000 m3 Present payment from farmer to WUA: 2.0 AZN per 1000 m3. Required for sustainable O&M = 10 to 17 AZN per 1000 m3
Sources: Team interviews with the Amelioration OJSC and a WUA in the Salyan region, 2014. Data also from World Bank, 2012.
5.6. Managing Floods and Droughts
71. The World Health Organization (WHO-ROE, 2010) has compiled a flood hazard distribution map that has been cited by the UNDP-GEF (2013) as an indication of where the key flood hazards exist in the country. The areas of “high” and “very high” flood risk are in the main Kura and Aras River valleys, and in the mountain valleys of the Greater Caucasus. It should also be noted that there is also an area to the south of the lower Kura in the vicinity of the Gizil-Agach State Reserve which is subject to frequent flooding. As this is an area of wetlands included in the UNESCO list of Ramsar sites of ecological importance it is assumed this frequent inundation is indeed beneficial. Three types of floods occur in Azerbaijan:
(i) Fluvial floods associated with the major river system of the Kura and Aras, (ii) Mountain torrent floods in the highlands resulting from rainfall and snowmelt. Associated mudslides and hillside movement can occur, and (iii) Coastal flooding, exacerbated by the rising level of the Caspian Sea.
72. Data from the second submission by Azerbaijan to the UN Forum on climate change indicates a recent increase in the number of flood events occurring annually. While this increase might be attributed to the effects of climate change, the MENR report does not comment on the changes.
73. The key agencies associated with flood management are the Amelioration JSC and SAWR. Amelioration has several departments that design and implement operations, and manage water resources. The Amelioration JSC has the advantage of having field offices, such as the Irrigation Systems Department (ISD), which performs the operation and maintenance of irrigation and flood protection facilities in each district. The size of the field staff within SAWR is limited and mot compatible with the work required to operate and maintain the country's major dams and reservoirs and the balance of flood protection infrastructure.
74. Earlier assessments of water resources in Azerbaijan largely report average values of water availability, rather than describing the variation over time or across seasons.
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Without access to detailed information describing variability, it is difficult to evaluate the frequency or significance of droughts. The ongoing work of the Institute of Water Problems in evaluating water resource availability will enhance understanding of the variation in water supplies, and the potential impacts of droughts.
75. Previous studies reveal little evidence of severe droughts in Azerbaijan. While 2014 was identified as a particularly dry year, the impacts appear to be localized to the slopes of the Greater Caucasus, where agriculture is mostly reliant on rainfall, and farmers irrigate from small streams. Most of Azerbaijan's water resources are concentrated within the Kura- Aras basin, where the Mingachevir reservoir provides the opportunity to offset the potential impacts of annual droughts. The reservoir also allows for the coordination of river releases to achieve both agricultural and environmental objectives during dry periods.
5.7. Water Sector Reforms
76. Several ministries and JSCs are implementing water development and management projects. The Amelioration JSC is building several new water reservoirs and canals, including the Takhtakorpu reservoir to ensure the safety of drinking water in Baku as well as the remaining portion of the Absheron peninsula, and the water reservoir and hydropower plant on the Shamkir River (tributary of the Kura River). Amelioration is planning to also construct three hydropower stations below the Shemkirchay reservoir, which is currently used only to supply irrigation water.
77. The Azersu JSC is building facilities to extend drinking water supply and sanitation service. New wastewater treatment plants are designed for 29 cities and are under construction in 21 cities in the Kura-Aras basin. All major cities and nearby villages will be connected to the Waste Water Treatment Plant Network by 2015. Remaining communities will be connected to the network by 2030. All newly constructed plants are required to meet international standards. Azersu is also planning to provide continuous (daily, 24-hour) high- quality water supply to all residential areas of Azerbaijan by 2030.
78. The Government of Azerbaijan has sought active cooperation with international development agencies including the World Bank, ADB, KfW and JICA in implementing and planning projects to improve water sector management. Since 2003, the Government, with the assistance of the World Bank, has implemented three projects to rehabilitate and improve on-farm irrigation systems, and subsequently turn the improved systems over to WUAs for management.
79. The Rehabilitation and Completion of Irrigation and Drainage Infrastructure Project (RIDIP) and the Irrigation Distribution System and Management Improvement Project (IDSMIP) were implemented by the Amelioration JSC. On-farm irrigation systems serving more than 80,000 ha have been completed, and work on systems serving an additional 82,000 ha is underway. A third project, WUA Development Support Project (WUAP), is underway to further strengthen farmers’ associations. The projects are considered a success and provide a good model for further rehabilitation and upgrading of irrigation and drainage systems (The World Bank, 2012).
80. ADB is the principal financier of Azersu’s water supply efforts, presently approaching USD $1 billion. ADB is also supporting the Government’s State Program on Poverty Reduction and Economic Development, and has initiated the poverty reduction partnership process. Beginning with this Technical Assistance assignment, ADB will also assist in developing a country operational strategy, emphasizing integrated and sustainable water resource management.
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81. Another program of high priority has been water policy reform, including strategy development and related legislation to achieve consistency with the principles of water management based on river basins and integrated water resources water management. The European Union has supported these efforts through its National Policy Dialogue (NPD) under the EU Water Initiative. Such dialogues improve regulatory and administrative frameworks, assist countries in determining priorities, and identify projects that need support and raise capacity in countries addressing water management challenges. ADB supports the establishment of river basin organizations (both formal and informal) to facilitate stakeholder consultation and participation, and to improve planning, information gathering, monitoring, and advisory services (ADB, 2003).
6. AGRICULTURE, IRRIGATION, AND LAND DRAINAGE
6.1 Overview
A large number of residents in rural areas earn their living in agriculture, either as a farm owner, farm worker, or employment in the processing or marketing of farm products. Thus, agriculture remains an important source of employment and livelihood support in rural areas, even though the sector no longer accounts for a large portion of Azerbaijan's GDP. Of the $64 billion national GDP in 2011, agriculture, fisheries, and forestry accounted for just $5.8 billion, or 9% (EU/FAO, 2012). Yet, agriculture accounts for about 38% of the country's labor force and 40% of the female labor force (Merkle et al., 2012). The rate of growth in the agricultural labor force has been declining in recent years, but the number of persons employed in the sector has increased over time. In 2013, an estimated 1.08 million persons were employed in agriculture (FAO, 2015).
82. Despite the importance of agriculture as a source of employment in rural areas, the sector receives little public investment. In 2012, the agriculture line item in the national budget was $580 million, or just 2% of total expenditures in that year (EU/FAO, 2012). Inadequate investment in agriculture likely is partly responsible for the decline in productivity observed since the early 1990s. As previously noted agriculture also accounts for a substantial portion of the water consumed in the country each year. Crop production in summer requires irrigation, and farmers also irrigate winter wheat and barley crops. . Meat and milk production account for the largest annual values of agricultural output in Azerbaijan, followed by wheat, fruit, and vegetables.
83. Of the 4.9 million ha suitable for cultivation and grazing in Azerbaijan, an estimated 1.5 million ha are irrigated. Some of the irrigated land has been degraded by waterlogging and high salinity, which often is a symptom of poor water management and inadequate drainage. An estimated 1.1 million ha suffer from moderate to severe salinization, while an estimated 0.4 million ha are slightly saline (World Bank, 2013). Many observers of irrigated agriculture in Azerbaijan and other countries in the region have suggested the need to rehabilitate large areas of irrigation and drainage systems, which fell into disrepair with the dissolution of the Soviet Union. There no longer was an institutional structure in place to support the collective management of the irrigation and drainage network. Individual households had little incentive and limited capital with which to operate and maintain the large canals, pump stations, and diversion structures.
6.2 Crop Areas and Yields
84. Following the dissolution of the collective farm system, small-scale, private farms account for most of the agricultural area and most of the value of production in Azerbaijan. In 2011, private entrepreneurs operating small and large farms accounted for $5.5 billion of the $5.8 billion (93%) in agricultural value generated (EU/FAO, 2012). Within the private sector,
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67% of the specialized agricultural producers are family households, 33% percent are small farms, and only 0.2% are large farms (FAO, 2012).
85. The area planted in crops has increased from about 1.0 million hectares (ha) in 2000 to 1.6 million ha in 2013, of which about 1.5 million ha are on small-scale, private farms (Figure 5). Much of the increase in sown area since 2000 is due to increases in the production of winter small grains, and fodder. Cotton production has declined from about 100,000 ha in 2000 to 20,000 ha in 2014, while the area planted in vegetables has increased from about 60,000 ha to 80,000 ha during that time. The areas planted to maize and potatoes also have increased, while the area planted to sugar beets has remained less than 10,000 ha.
Figure 5. Area planted in all crops, 2000 to 2014, in 1,000 ha
Planted Area, 1000 ha
1800 1650 1500 1350 1200 1050 900 00 02 04 06 08 10 12 14
Year
All Farms, 1000 ha Small Farms, 1000 ha
Source: Azerbaijan statistics, www. Azstat.org.
86. The yields of major crops in Azerbaijan have been largely constant for many years, showing only small increases, over time. Since 2000, barley yields have remained in the range of 2.0 to 2.5 tons/ha, while wheat yields have been constant at about 2.7 tons/ha (www.Azstat.org). Average cotton yields have increased over that time, from 1 to 2 tons per ha, but this has occurred while the area planted to cotton has declined from 100,000 ha to just 20,000 ha. The average yields of fruit and berry crops have increased from about 6 tons per ha to about 7 tons per ha (www.Azstat.org).
87. The average yields of vegetables, maize for grain, and potatoes have increased more notably, over time, while the average yield of sugar beets has varied somewhat more than the yields for other crops (www.Azstat.org). Vegetable yields have increased from about 13 tons per ha to 15 tons per ha, while maize yields have increased from 3 to 5 tons per ha. Potato yields have almost doubled since 2000, increasing from 8 to 15 tons per ha (www.Azstat.org). The average yield of sugar beets has been increasing since 2005, which is the same year that the area planted in sugar beets increased from 3,000 to 8,000 ha. The increasing yield might reflect the contribution of a newly formed large-scale corporate sugar beet operation in the country.
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88. Many farm households raise livestock as sources of meat and milk. Animals are no longer used for draft power. (EU/FAO, 2012). The numbers of cattle, sheep, and poultry have increased by 40%, 50%, and 70%, respectively, since 2000 (Figure 6). In 2014, there were an estimated 2.7 million cattle and buffaloes, 8.6 million sheep and goats, and 25.2 million poultry in Azerbaijan (www.Azstat.org). The market value of milk and meat production is much higher than the market value of individual major crops. The estimated value of milk production in 2012 is $502 million, while the estimated value of cattle, sheep, and chicken production is $640 million (Azstat.org). Taken together, the summary value of milk and meat production in 2012 ($1,142 million) represents about 50% of the value of agricultural production in that year. Fruit production represents about 17% of the agricultural value, while vegetables account for 12% of the value. Wheat and potatoes, together, account for about 14% of the value of agricultural production in 2012.
Figure 6. Index of numbers of livestock (Year 2000 = 1.00), 2000 to 2014 Index Number (Year 2000 = 1.0) 1.8
1.6
1.4
1.2
1.0
0.8 00 02 04 06 08 10 12 14 Year
Cattle, Buffaloes Sheep, Goats Poultry
Source: Azerbaijan statistics, www.Azstat.org.
6.3 Government Policies – Agricultural Subsidies
89. The Government promotes wheat production, in part, to ensure national food security. In recent years, domestic wheat production has accounted for 50% to 60% of wheat consumption, while imports have accounted for the remaining 40% to 50% (ww.Azstat.org). The average amount of wheat available for domestic consumption has remained in the range of about 200 kg to 220 kg per person, per year, over time (www.Azstat.org). The program of domestic production and imports has been successful in ensuring a sufficient aggregate supply of cereals, meat, and vegetables in Azerbaijan. Since the break-up of the Soviet Union, the amount of calories/person/day has increased from fewer than 2,500 calories/person/day to about 3,000 calories/person/day (www.Azstat.org).
90. The Government supports agricultural producers primarily through subsidies on fertilizer, seed production, machinery, direct transfers, and reduced taxation. The direct transfers include a 40AZN payment/ha/year, for the area planted, and an additional 40 AZN/ha/year, for the area planted in wheat, barley, or rice (EU/FAO, 2012; EC/FAO, 2013). The Government also provides fertilizer and wheat seeds to farmers at 50% of the market
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price. These payments likely have contributed to the decline in cotton and tobacco production in Azerbaijan in recent years, as the areas planted in wheat and other grains have increased (EU/FAO, 2012).
91. The payments for wheat, barley, and rice reflect the Government's interest in promoting the production of basic food crops. Farmers have responded by planting large areas of wheat, such that the sum of the additional subsidy payment to wheat and rice producers in 2012 was AZN 25 million (EC/FAO, 2013). Those farmers received an additional AZN 64 million for inputs and through the above-market prices they received for wheat delivered to the State Grain Reserves. The latter component is made possible through Government support of producer prices. In 2010, the Government supported price of wheat in Azerbaijan was $288/ton, while the producer prices for wheat in Russia, Ukraine, and Kazakhstan were $127, $136, and $148, respectively (EC/FAO, 2013).
92. The Government's financial support of wheat, barley, and rice production might reflect a policy goal of achieving national food self-sufficiency, rather than food security. The farm-level margins from producing fruits and vegetables are substantially higher than those pertaining to wheat and rice. In 2013, the estimated margin for wheat production was AZN 237/ha, while the estimated margins for potatoes, vegetables, and melons were AZN 2,543, AZN 2,113, and AZN 1,450 per ha, respectively (EC/FAO, 2013). It must be noted here that the irrigation water requirements of potatoes, vegetables and melons are considerably greater than those for wheat and barley. This explains while farmers in Azerbaijan produce a fair amount of fruits and vegetables, grain production continues to account for more than half the area planted in recent years. Seasonal availability of supplemental irrigation of wheat and barley is generally assured, while water availability for additional areas of crops requiring irrigation during the summer months is highly questionable. Farmers are aware of this when arriving at their cropping plans for any given year.
6.4 Ensuring Food Security
93. With an increasing population and rising aggregate income, food demands have increased in recent years. Those demands have been met by increases in the areas planted in wheat and rice, and also through larger purchases of grain on international markets. In addition to seasonable availability of irrigation supples government subsidies also influence farm-level crop production choices as well as provide higher incomes to many farmers. As indicated, reliable supplies of irrigation water as perceived by the farmer are a legitimate factor influencing the cropping pattern choices. Yet, the agricultural subsidy program in Azerbaijan is costly, and seems to prevent market signals from working their way through to decision makers at the farm and processing levels.
94. Past investments in the sector, from both private and public sources, have not been sufficient to maintain desirable levels of productivity. As a result, the condition of land and water resources in agriculture has degraded, over time, input use has declined, and crop yields have not increased at desirable rates. Land degradation has impaired crop yields, and the lower yields have reduced the potential for farmers to invest in efforts to restore productivity. Small farmers with limited financial ability will need assistance from the private sector or the government to lift themselves out of this cycle of resource degradation and inadequate investment. The Government is eager to increase wheat production, in the interest of producing a larger portion of the country's wheat requirement, and reducing grain imports. Food security is certainly an important objective, but grain self-sufficiency is not necessarily an efficient program. As earlier indicated, there are many sources of wheat and other grains in international markets, and the price of these grains appears generally affordable.
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95. An alternative strategy might involve increasing the production of higher valued crops in Azerbaijan, for sale in domestic and international markets, while reducing the production of lower valued commodities. The higher values would be helpful in generating employment opportunities, increasing incomes, and enhancing livelihoods, particularly in rural areas. They would also create opportunities for farmers and their associations to invest more heavily in the natural and physical capital that will enable them to generate higher crop yields and greater values, over time. Crop diversification, resulting in higher valued cropping patterns will increase the incremental value of water in agriculture, such that farmers will have greater incentive to manage water wisely, to reduce system losses, and to implement efficient irrigation and drainage strategies. Farmers also will have greater incentive to pay irrigation service fees, thus providing the funds necessary to support their WUAs. For all of these reasons, investments in agriculture and innovations in the policy environment will lead to wiser use of water in the sector, with positive implications for land and water management in Azerbaijan.
6.5 Irrigation and Drainage
96. An estimated 1.45 million ha of Azerbaijan's 2.1 million ha of agricultural land are equipped for irrigation (World Bank, 2012). In 1913, less than 600,00 ha were irrigated. The intensive development of irrigation occurred after World War II, growing rapidly until the mid- seventies, then steadily increased to current levels in the mid-nineties. The area has remained largely constant since that time.
97. Producing a summer crop in the Kura-Aras lowlands requires about 7,500 m3 of irrigation water per hectare (refer Annex D). Yet, the irrigation norms used by the Amelioration JSC recommend delivering about 5,000 m3 per ha for summer crops, including cotton and corn. That volume is about 60% of the irrigation requirement quantified by accepted professional standards. (World Bank. 2012: Table 1, page 1). Thus, summer crops are grown in conditions in which they frequently experience water stress. Cotton production has largely been discontinued in Azerbaijan, due partly to low yields, resulting from water shortages in summer.
98. Wheat is the dominant winter crop in Azerbaijan, accounting for about 40% of planted area in 2013. Farmers recognize that in the Kura-Aras lowlands, more than 75% of the annual rainfall occurs during the growing period for winter wheat (Oct–June). Producing wheat is a risk-minimizing strategy, given the limited and unreliable supply of irrigation water. Effective rainfall satisfies about 40% of the crop water requirement in the lowlands of the Kura-Aras Basin. Inadequate irrigation water limits the yields of wheat and other crops. The average yield of wheat obtained in recent years is less than 2.5 tons per ha, which is notably lower than the yield achieved in other countries (World Bank, 2012: Table 2, page 2).
99. Surface or subsurface drains are required on much of the irrigated farmland in Azerbaijan, to collect and remove saline drainage water that would, otherwise, cause waterlogging and/or increase soil salinity. About 610,000 ha (42%) of the irrigated land in Azerbaijan is equipped with a drainage system. Most of the collected drainage water flows through large collector drains to the Caspian Sea. Not all of the drainage systems and collectors are functioning as designed. Estimates suggest that repairs and renovation are needed on as much as one-half the area originally equipped with drainage systems (Rzayev, 2007). In addition, new drainage systems are needed on as many as 200,000 ha, where rising water tables are threatening agricultural productivity (Consultant team meeting with specialists at the Amelioration Joint Stock Company, Sept. 24, 2014).
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PART B
DEVELOPING A WATER STRATEGY
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7. THE CHANGE DRIVERS FOR A WATER STRATEGY
7.1 Demographics, Regional Integration and Economic Growth
100. The demand for water in Azerbaijan will increase in the future, due partly to increasing population and rising incomes. The current population growth rate is about 1.0% and declining, such that population will continue increasing through 2040. The increasing demand for water will be limited to some extent by the relative inelasticity of water use in the domestic sector. In addition, most of the water used in households can be recovered and treated for re-use in agriculture, landscape, and other applications. In this sense, most water use in households is non-consumptive. Thus, investments in wastewater recovery, treatment, and re-use will limit the impacts of increasing population and income on the net increase in demand for water in the domestic sector.
7.2 Urbanization
101. Developed urban centers in future will attract more rural population to migrate for their livelihood and better life style. Current urban-rural proportion of 53:47 is likely to considerably change in next 2-3 decades due to cities with better opportunities. The urbanization and change in lifestyle will increase water and sanitation demands in future. A strategy to maintain a reliable and increased water supply to cities needed. Both groundwater and surface water resources will be in pressure and needed to be strategized. Wastewater treatment could be one option as urban water is not a consumptive use. Azerbaijan already has invested in developing reliable water supplies for Baku. Similar investments are needed for other cities and also in rural areas, where water and sanitation service is not yet adequate.
7.3 Environment and Climate Change
102. With increasing levels of income, the demand for environmental amenities also will increase. Residents of Azerbaijan and those in neighboring countries will desire higher levels of water quality in the Kura, Aras, and other rivers and also in the Caspian Sea. Higher levels of aggregate income will facilitate national investments in improving water quality, in conjunction with investments that extend water supply and sanitation to rural areas. In developing the national water strategy, we must consider investments in water quality as integral components of investments to enhance water supply. Efforts to reduce water pollution within Azerbaijan and in upstream countries will increase the value of water in rivers for use in agriculture, municipal and industrial water supply, and in providing environmental amenities.
103. Climate change will modify the pattern of precipitation and temperature in Azerbaijan. It is projected that temperature above 10 Celcius will increase by 10-35 days a year and surface water will reduce by 23% by 2050 (UNDP, GEF and Ministry of Ecology, 2010). Both will have implication to water availability and crop production. As previously suggested, some areas likely will see increasing rainfall, while others will see reductions. Investments in water storage will enhance the ability to adapt to changes in the amount and variation in annual rainfall, while also reducing the vulnerability of agriculture to climate change. Investments in other forms of water infrastructure, such as irrigation canals and drains, will also enhance climate change resilience, by reducing water losses within the delivery system.
7.4 Changing Responsibilities in Water Administration and Governance
104. As pointed out in Part A of this report, responsibility for managing water resources in Azerbaijan is shared across several ministries and agencies, including MENR, SAWR, the Amelioration JSC and Azersu. This structure has worked well in the past, and has merits in
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the present, as well. Yet, in future, it will be useful to consider merging key responsibilities for water supply, allocation, and quality within a single government authority. As the demand for water increases, decisions regarding investments in water supply and allocation of developed water resources will gain importance, as will policies regarding water quality, wastewater recovery, and re-use. Thus, it may be necessary to develop comprehensive water policies and investments within a single authority that is home to specialists with expertise in a wide array of technical disciplines.
105. Agriculture will continue to be the sector in which most of the developed water resources are utilized in Azerbaijan. Investments in the productivity of agriculture, which are essential to improve rural incomes and enhance food security, will increase the value of water applied on farms. As a result, water users will increasingly value both water conservation and better crop management practices. Investments in irrigation, drainage, and agricultural productivity will all lead to better water management and conservation. Water deliveries for agriculture can be adjusted annually, as needed, to accommodate for fluctuations in supply that result from normal variation in weather or from climate change. For these reasons - the large volume of water used in agriculture and the ability to adjust deliveries annually - specialists in the Ministry of Agriculture need to be involved in policy discussions and investment decisions pertaining to water resources in Azerbaijan.
106. Investments in peri-urban agriculture also will enhance water management, production, and employment in key regions. With increasing urbanization, the volume of wastewater generated in cities and requiring treatment for re-use will increase, over time. Agricultural areas on the fringes of large and medium-sized cities will provide ready sources of demand for fully treated and partially treated wastewater. Policies that promote wastewater treatment and re-use, with due consideration of water quality and public health issues, will enhance peri-urban agriculture, with positive implications for food and nutrition in urban areas and also for household incomes in the agricultural sector.
8. THE KEY CHALLENGES AND OPPORTUNITIES
107. We have identified a number of challenges including (i) water quality and quantity issues related to trans-boundary rivers, (ii) managing increasing demand for water (iii) low water and land productivity in irrigated agriculture, (iv) managing water related hazards, and (v) water administration and governance. Proper monitoring of water resources, data management and its use in decision-making is an important issue that is common to most of the identified challenges. We explain these challenges and describe opportunities to address them with a view to enhance the sustainable management of water resources.
8.1 Trans-boundary Rivers – Related Water Quality and Quantity Issues
108. Challenge. The quality of surface water in Azerbaijan, particularly in the Kura and Aras Rivers, is an issue requiring substantial attention. An estimated 80% of the wastewater load from countries in the basin is discharged into surface waters (Campana et al., 2012). As earlier noted, data gathered at the Georgian-Azerbaijani border reflects values higher than maximum allowable concentrations (MACs) for phenols, oil products, metals and sulphates. The Aras River water entering Azerbaijan is reported to exhibit concentrations in excess of the MACs for copper, molybdenum and other heavy metals (UNDP/GDF, 2013b: Water Quality Assessment).
109. The quantity of stream flow in the trans-boundary rivers varies over a wide range making its management difficult, and the river flows entering Azerbaijan have decreased over time (UNDP/GEF, 2013c). High temporal and spatial variability create water scarcity in some regions of the country.
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110. Assessment. Countries located downstream on trans-boundary rivers often face problems of (i) poor water quality, (ii) upstream induced flow variations over time, including reduced stream flow at critical times (e.g. during summer cropping season), ( iii) degradation of riverine ecosystems, and (iv) unexpected flooding resulting from untold releases of water by the upstream entities.
111. Information received from MENR verifies that water quality is a pressing issue in Azerbaijan.9 Many households in rural areas do not have reliable access to safe drinking water, and the lakes and rivers of the country are polluted with both organic and inorganic substances (UNDP/GEF (2013b). Much of this pollution originates in upstream reaches of the Kura and Aras Rivers. However, lower reaches of the Kura River and its delta as well as the Absheron Peninsula are contaminated with residual chlorine pesticides and other chemicals from agricultural and industrial processing facilities located within the country (De Mora et al., 2004; Aliyeva et al., 2012, 2013).
112. Opportunities. Regional collaboration is needed to improve the quality and quantity of surface water entering Azerbaijan via trans-boundary rivers. Thus, Azerbaijan should continue to participate in international deliberations regarding water quality. There is significant international support for improving collaboration in managing the trans-boundary rivers. The UNECE-sponsored National Policy Dialogues and the UNDP-GEF project are among those offering support. Progress is slow, in part, because both Georgia and Armenia have not yet signed the Helsinki convention on trans-boundary watercourses (United Nations, 2014).10
113. Azerbaijan should move forward with its ongoing investments in water measurement and monitoring, to enhance understanding of the concentrations and transport of pollutants. The country will also continue upgrading wastewater treatment facilities in rural and urban areas, while prioritizing investments in areas with the highest potential returns to improvements in water quality. Azerbaijan should also establish a program of water quality targets, investment requirements, and program delivery schedules, which can be used as a guide for securing international support for contributing to the achievement of regional water quality objectives
114. Groundwater in Azerbaijan generally is characterized by high quality and is commonly used for agricultural and industrial uses (Alakbarov, c.2000). However, in the lowlands, groundwater often has a high salt content, due primarily to geological characteristics, improper management of irrigation water and poor surface and subsurface drainage. As groundwater is a major source of water supply for domestic uses, its quality is important in view of health concerns.
115. Variation in hydrological flow is caused by numerous human interventions including direct water abstraction from surface and groundwater bodies, increased evaporation due to impoundments, urbanization and deforestation. Severe water deficit has not occurred in the Kura-Aras basin to date and consequently shortages of water have not presented any serious threats to the population. However, population growth and rapid economic development in the basin will impose increased pressure on surface and groundwater resources. Climate change could also have an adverse impact in the medium and long term (UNDP/GEF, 2013c).
9 Monitoring network operated by MENR, with support from international agencies (particularly EU-funded projects within the Kura and Caspian Sea basins) 10 The United Nations Treaty Collection, Chapter XXVII Environment. Status on Dec. 8, 2014. https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXVII-5&chapter=27&lang=en
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8.2 Managing Increasing Demand for Water
116. Challenge. Further development of water use within Azerbaijan, notably for irrigation, is limited by the management capacity and infrastructure and the available water. To make the most of limited water resources, management systems promoting efficient use of water and good governance within the water sector are needed.
117. Assessment. The current annual water abstraction of about 12.5 billion m3 is considerably less than the available water supply of about 30 billion m3. Thus, on a yearly basis, the available water supply is sufficient to meet demand. However, within the year, there are periods of high and low stream flows. What is lacking is the management capacity and infrastructure to capture excess stream flows during the high runoff period, so they are available for use during the times of shortage. In addition, about 35% of the abstracted water is not consumptively used, but rather is lost in conveyance and distribution systems.11
118. In aggregate, the annual water supply in Azerbaijan is sufficient to meet annual demands, yet there are regions and periods in which water is scarce. Most agricultural production takes place in the Kura-Aras lowland, where rainfall is not sufficient to carry summer crops through the season. Irrigation is required, and yet the delivery system does not have the capacity to deliver water in a timely fashion to all farms in the region. Thus, crop yields are constrained by limited supplies of irrigation water as well as by inadequate access to high-quality seeds, affordable fertilizer, technical assistance, and financial credit.
119. Opportunities. Efforts to better understand the demand and supply of water, across sectors and supported by enhanced water monitoring and analysis, will be helpful in motivating improvements in water management. Regarding demand, improvement of water use efficiency should be given high priority, especially in the irrigated agriculture sector. This can be accomplished, in part, through physical measures such as canal improvements inclusive of installation of appropriate flow control and measuring structures. Policies that provide incentives for efficient management, such as water allocations, irrigation and domestic supply service fees, also are appropriate. Demand management in river basins involves raising awareness that water is scarce, and that all water users must implement wise management practices.
120. Regarding supply, measures can be taken to increase the amount of water available for agriculture, cities, and other societal needs. Storing water during high flows and releasing it in low flow season can overcome certain water deficiencies in the low flow season. Minimizing water losses in conveyance and distribution systems can also help bolster water availability. Appropriate water conservation measures include rainwater harvesting, and wastewater collection and reuse. Rainwater harvesting can provide households with good quality water for domestic purposes. Development of groundwater also can provide additional water supplies for domestic use and irrigation.
8.3 Agriculture – Irrigation, Drainage and Low Productivity
121. Challenge. Crop yields in irrigated areas are low (wheat yields average 2.5 tons/ha), due principally to shortages of irrigation water supply. The delivery capacity of some canals is not sufficient to serve all of the irrigated area during periods of peak crop water use. More than 90% of the irrigation canals in Azerbaijan are earthen, resulting in substantial conveyance and operational losses (World Bank, 2012; page 15).
11 It should be noted that water “lost” from irrigation canals contributes towards groundwater recharge and is partly used by trees and other vegetation growing along the canals.
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122. Agricultural drainage systems serve more than 600,000 ha of irrigated land in Azerbaijan, yet about half of the drains comprising the systems have deteriorated to some degree, due to the lack of needed maintenance (Rzayev, 2007). In addition, soil salinity and waterlogging impair productivity and limit crop production opportunities on areas with rising watertables not yet served by the drainage network. The worsening drainage situation is another serious constraint to the productivity of irrrigated agriculture in Azerbijan.
123. Assessment. Azerbaijan has an extensive system of irrigation infrastructure. The performance of the canal system, however, has depreciated during many years of use and inadequate maintenance. Many main and secondary canals are unreliable for sustained operation and critical reaches suffer from excessive seepage losses. Upgrading and rehabilitation, coupled with improved management (including proper O&M) are needed to improve irrigation efficiencies and increase crop production.
124. The Government is working with the World Bank, IFAD, and other donors to rehabilitate and improve farm-level irrigation distribution systems,12 and then assign them to WUAs for management (World Bank, 2012: page 4). In recent years, on-farm systems serving more than 80,000 ha have been completed with World Bank and IFAD assistance and work on systems serving another 82,000 ha is underway. An additional $900 million are required to complete this work on the balance of the irrigated area (Interview with the World Bank WUA Implementation Unit; Sept 26, 2014).
125. Inefficient water use is reported to be a problem throughout the Kura-Aras river basin. There are considerable conveyance losses in those reaches of the earthen irrigation canals traversing areas of permeable soils and the absence of adequate water control structures contributes to significant operational losses. The underlying causes include:
. Inadequate recurring expenditure to provide proper operation and maintenance, . A lack of capital investment in rehabilitating and modernizing irrigation schemes, and . A lack of knowledge of the hydrologic regime upon which to base an integrated water resource management and river basin management policy and regulatory framework (World Bank, 2012).
126. Rehabilitation of inoperable drains nationwide, provision of drainage relief to waterlogged areas, and rebuilding the outfall system are priority needs. More than 50% of the installed drainage system requires rehabilitation and improvement. A national assessment of groundwater levels and salinity conditions will be helpful in identifying and prioritizing the additional areas requiring drainage service. Given the large role of irrigated agriculture in providing rural employment and ensuring food security, the rehabilitation and improvement of existing drains and providing drainage relief to areas with high groundwater levels should be given high priority.
127. Opportunities. Upgrading and rehabilitation, coupled with improved management (including proper O&M) are needed to improve irrigation efficiencies and crop production. The Amelioration JSC should comprehensively assess the main system infrastructure and management, identifying priority opportunities to improve performance as a part of the preparation of an Irrigation Master Plan, followed by a physical upgrading program consistent with the findings of the assessment. With regard to the on-farm systems,
12 On-farm irrigation systems in the Azerbaijan context date back to Soviet times and are at the level then used to deliver irrigation water to a single state or collective farm which typically covered between 1,500 and 5,000 ha. At present these “on-farm” systems continue to serve the same area which is now broken down into hundreds of individual farms. A WUA is formed for each of the former on-farm systems which at some point in time will assume responsibility for management, operation and maintenance of the distribution system.
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Amelioration JSC should prioritize and package the systems remaining to be rehabilitated and transferred to the WUAs, such that the groupings identified are of interest to the various potential donors.
128. The Amelioration JSC should assemble a database of water levels and soil and water salinity data, while preparing a national drainage plan, which would provide an assessment of groundwater levels on all agricultural lands, including irrigated lands (1.5 million ha) and those already drained (600,000 ha). The plan would identify the need for drainage and describe the best ways to improve drainage service. In addition, drainage service should be extended to an additional 200,000 ha of irrigated land, comprised of principally covered horizontal drains for about 150,000 ha, with the balance served either by open field drains or drainage wells in fresh groundwater areas. It will be helpful also to establish a drain monitoring network for both existing and new drains, to enable real time analysis of water and salt balances
8.4 Managing Water Related Hazards – Floods and Droughts
129. Challenge. Extreme events such as floods and droughts often cause substantial damage to livelihoods and property.
130. Assessment. The capability to forecast floods and an early warning system are presently quite limited. Many metrological stations and portions of the telemetric network would also benefit from a comprehensive rehabilitation and modernization. The ability of district offices to forecast floods can be improved by developing an early warning system. In parallel, flood protection infrastructure such as river levees must be provided in vulnerable river reaches and existing levee systems rehabilitated and improved, ensuring safe passage of design floods. Flood zoning is an important non-structural measure, which minimizes the long-term potential for flood damage by relegating development away from flood prone areas of the floodplain.
131. Several water related agencies collect data describing water flow rates, flow volumes, and water quality, at various sites. Such data is collected with varying frequency and only some of the information is made publically available. Most of the data are maintained within internal data banks of the agency or institutions involved and are not easily accessible. This limits the data use by researcher academicians, students, independent scholars, and donor organizations and restricts the research and innovation in the sector.
132. Opportunities. The key opportunity underlying any improvement in the management of floods must be the understanding of the flooding process. Therefore, there is significant potential for (i) improving and strengthening the knowledge base; (ii) improving the capacity for analysis of floods; and (iii) providing new and improving existing flood control and protection works.
133. A comprehensive monitoring system for rainfall and river flow, stream flow and flood forecasting models and issuing early warnings can help reduce potential damage from flood and drought. This improved knowledge base will also enhance understanding of flood and drought mechanism. Mapping flood and hazard zones will also be required to effectively manage the extreme events and minimize the risk from flood. Flow regulation and reservoir water management and providing advance information on flood through hydrological and climatological monitoring and modelling also offer opportunity to reduce the risks. Provision of properly designed flood management infrastructure should be considered, where feasible and existing flood protection works rehabilitated and improved as necessary.
134. Past experiences related to floods have shown that (i) defining clear role and responsibilities of the participating agencies, (ii) a mechanism for efficient sharing of
33 information, (iii) adequate resources to deal with rescue and recovery operations, and (iv)relevant training of the agencies and their staff are required to effectively manage the impacts of flood and drought. The role of affected communities should also be recognized in the management of extreme events. Most of the system appears to already exist, and reorganizing the role and responsibilities among agencies and relevant training will be required for this initiative.
135. For flooding on the Kura – Aras River System, possible solutions include (i) integrated management of reservoirs to optimize benefits of irrigation and hydropower generation while minimizing flooding; (ii) advanced information on possible floods through a comprehensive program of hydrological and climatological monitoring and modelling; and (iii) flood protection projects to address key limitations in the existing channel system and existing flood embankments in the flood prone areas.
8.5 Water Governance for Improved Water Management
136. Challenge. Several institutions are responsible for management of water resources in their domains. As indicated earlier, there is no central body to plan, coordinate, monitor and evaluate, and transparently manage water. Therefore ineffective coordination and the expedient flow of information pose various challenges in water management. An apex water body that has the mandate of ensuring proper water administration and supervision, and the needed resources to implement the mandate is missing.
137. Assessment. The water sector’s institutional framework suffers from a lack of integration and coordination among related organizations. Information sharing among institutions is largely informal, and takes place as needed. Communication and data sharing can be improved between water management authorities and other agencies concerned with water, land, agriculture, ecology and other related disciplines13. Our assessment further indicates that:
(i) There is no central planning entity that currently considers anticipated future water availability in line with the projected demands of all sectors including industry, municipal and domestic, irrigation, and environmental maintenance flows;
(ii) Integrated management of the river system and infrastructure needs improvement to minimize the flood threat while maintaining adequate reservoir storage to meet the various sub-sectors late season demands;14
(iii) Again, there is a need for a comprehensive quantity and quality monitoring system for both water resource availability as well as sectoral abstraction and use. Such a monitoring system would allow the generation of meaningful and accurate water balances for any desired timeframe;
138. Opportunities. A modern water management administrative structure can be established upon the strengths of existing institutions. Opportunities for capacity building and additional activities have been identified in consultation with stakeholders.
(i) The National Water Policy Dialogue for Azerbaijan, which draws from many ministries and agencies, provides a coordination mechanism between some water related organizations. Such coordinating mechanisms, including trans-
13 Annex A on Institutional Framework provides more detailed information on institutional aspects of water management in Azerbaijan. 14 This situation is perhaps improving with the recent efforts of the State Agency for Water Resources.
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boundary discussions with neighboring countries, should be continued and maintained. (ii) A central apex body, such as a ministry, cabinet level coordinating commission or oversight board, might improve coordination, in support of sustainable water management. An independent Ministry for Water Resources or National Water Authority might be considered. The Authority would determine and implement water allocations across competing sectors. The Authority would oversee a system of water withdrawal and use permits, and would ensure that water is put to good use in all activities for which such permits are issued.
9. POLICY ENVIRONMENT
9.1 Current Initiatives
139. National water strategy. The Government is currently undertaking several important policy initiatives to secure its water resources. The SAWR is conducting a comprehensive assessment of water supply and demand, and plans to use this information in formulating the national water strategy. Also, the Amelioration JSC through its Institute for Water Problems is involved in water resources assessment and formulation of development plans for water resources.
140. Trans-boundary water management. The Government is actively involved in obtaining international agreements to ensure the perpetual security of trans-boundary relations and resources, with particular emphasis on the quantity and quality of water in rivers that enter Azerbaijan from the territory of its upstream neighbours. The national policy dialogues have been effective in this context and the government plans to continue its participation in such initiatives (UNDP/GEF; 2013a, b, c).
141. Devolution of water governance. The Government is implementing institutional enhancements to achieve the best management of Azerbaijan's human and natural resources, including water. It continues to decentralize responsibility for natural resource management to those with the greatest stake in resource use. Both Amelioration and Azer Su, two main water suppliers, have been structured as open joint stock companies. The government also has encouraged farmers to organize into WUAs to better manage irrigation water distribution and achieve efficient use.
142. Revitalizing agriculture. Growth in agriculture has lagged behind that of industries and manufacturing, and the government is working to revitalize the sector. The President issued a decree on January 16, 2014 commissioning the Ministry of Agriculture to develop a strategy to improve the agriculture sector, with special emphasis on production, processing, marketing, and the environment. The Ministry of Agriculture, with EU assistance, has formulated a Draft Strategy for Agriculture (Development Strategy for Agriculture in the Republic of Azerbaijan, Second Draft: Nov 3, 2014).
9.2 Potential Future Initiatives
143. Several additional interventions also could improve water management. The components of the water strategy we have formulated in next chapters of this report includes the following interventions:
(i) Enhancing the institutional assignment of responsibility for proper governance and supervision of water resources. Continuing to decentralize water management responsibilities to water users, while ensuring that appropriate
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prices, allocations, and other policies are in place to motivate users to implement wise management practices.
(ii) Implementing a regular program of assessing the supply and demand for water, with the goal of incorporating risk and uncertainty in supply forecasts and addressing the economic components of water demand.
(iii) Investing in new infrastructure and equipment, as needed, to provide reliable water supply to agriculture, industry, and domestic users, while ensuring that the costs of such investments are reflected in the prices of delivered water.
(iv) Promoting improvements in existing irrigation, drainage, and re-use practices with a view toward revitalizing the agriculture sector economically.
(v) Enhancing monitoring of water resources and data management. A limited water monitoring system already exists and managed by various organizations. The new database and information sharing in rainfall, potential evaporation, stream flow measurements, reservoir and lake water levels, and groundwater levels, will be most helpful. Enhanced regional coordination of data collection and reporting efforts is also important.
10. STRATEGY FORMULATION
10.1 Envisioning the Future
144. The initial step in the process of developing a national water strategy is to envision the desired trajectory of economic growth and development, and to describe water's role in achieving that trajectory. With the diminishing role of the mining and oil sectors as an economic growth engine in the future, other sectors will gain relative importance in sustaining economic growth and development. Among those sectors will be agriculture, services, tourism, and finance. Population growth and the pursuit for a better life will accelerate urbanization. The industrial sector is also expected to grow at a moderate pace. Each of these sectors will require adequate and safe water supplies for their future development.
145. The visioning process will benefit from analysis of population trends, resource requirements, and market opportunities. Water resource planning should project the corresponding increases in food, water supply and sanitation services to support that population. Planning should also project the likely changes in commercial and industrial demands for water, as the mix of economic activities moves away from oil and gas, toward services, tourism, and finance. Agriculture planning should envision the rate of growth in area planted, area irrigated, and crop output, in addition to projecting likely changes in cropping patterns, in response to market demands and more reliable supplies of irrigation water, planners must estimate the net effect on agricultural water demands.
146. In summary, the visioning process should produce alternative scenarios of economic activity in the future, with estimates of both the quantity and quality of water required to support the activities in each sector. A water accounting and water balance exercise should accompany the visioning process, to ensure that sufficient water is available, in aggregate and with respect to both time and geography, to support sectoral activities in each scenario. It will be necessary to include an analysis of the potential impacts of climate change on agriculture and other sectors, and to allow for accompanying uncertainties when considering alternative scenarios.
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10.2 Setting the Goal and Objectives
147. Once the future scenarios are in place, the Government can realistically identify goals and objectives that will provide the basis for developing the building blocks or components of the national water strategy. For example, if the desired vision includes a thriving agriculture sector that produces a wide array of high valued crops, then the goal of ensuring timely and reliable irrigation supply for the modified cropping pattern becomes most pertinent. The goal of extending water supply and sanitation service to all villages in the country has already clearly stated and undertaken by the Government. The strategy for finalizing achievement of that objective should be considered in concert with the objectives of enhancing the irrigation supply and improving both surface and groundwater management toward that end. Efficiency can be gained by coordinating certain activities and investments across the various sectors requiring water supplies.
148. The goal of reducing damage from floods and droughts also has been defined in advance, as it is important to limit such damage in any future scenario. However, the strategy for minimizing damage might benefit from consideration of other objectives and the strategies to achieve those objectives. For example, agriculture is perhaps uniquely impacted by both floods and droughts, and the potential harm from each event can be substantial. The optimal investments in flood and drought protection might vary with considerations regarding likely cropping patterns and the potential impact of floods and droughts on specific crops.
149. A visioning exercise encompassing the country, regional and grass root levels is required to capture pertinent details of all sectors using water. Each sector using water resources as well as the sectors that deal with the extreme events should undertake a comprehensive assessment of their future water needs. For example, the Ministry of Agriculture, with EU assistance, has formulated a Draft Strategy for Agriculture (Development Strategy for Agriculture in the Republic of Azerbaijan, Second Draft: Nov 3, 2014). This is a good start as outcome of this exercise will serve as an important input in the development of the national water strategy. Similarly MENR’s initiative on climate change with the United Nations Framework Convention on Climate Change is also a positive step.
10.3 Strategy Framework
150. With input from the above exercises one can now frame Azerbaijan’s national vision and goal for managing water resources. This can be stated as, “to ensure that adequate quantities of suitable quality water are available for the full economic and social development of Azerbaijan while fully meeting the water allocation requirements for sustainable environmental management”. For achieving this country vision/goal, we need to identify components or building blocks of the National Water Strategy (NWS). The strategy components, after agreed upon by all water stakeholders, will be implemented through appropriate institutional enhancements and investments. Based on the analysis of water related challenges and opportunities, we suggest consideration of the following components for the NWS (A brief outline of the NWS including components, needed investments and outcome indicators is provided in Table 6 )
Strategy Component 1. National Water Information System Development of a robust water resources monitoring and information system inclusive of all surface and groundwater sources is an important building block of the NWS. The country’s water sector will benefit from modern water monitoring facilities and improved prediction capabilities using robust modelling and mechanisms to generate dependable early warnings of flood events. The water monitoring system will be upgraded covering all the major reservoirs, rivers and water bodies.
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Knowledge concerning groundwater status will be upgraded with improved monitoring of its discharge, configuration and quality. Such detail will allow projections of optimal groundwater use ensuring annual abstractions are matched by natural recharge.
Component 2. Water infrastructure. The agricultural sector, in particular, needs renewed focus to increase productivity through investments in modern irrigation and land drainage infrastructure. The State Program for Azerbaijan (2006-2015) identified 11 priority areas in irrigation and drainage. Among these: (i) rehabilitation and upgrading the existing infrastructure, (ii) land improvement (primarily agricultural drains), (iii) expansion of irrigation,15 (iv) flood protection, (v) water storages, and (vi) research and training.
The Amelioration JSC should comprehensively assess the main system infrastructure and management, identifying priority opportunities to improve performance as a part of the preparation of an Irrigation Master Plan. Rehabilitation of inoperable drains nation-wide, provision of drainage relief to recently water-logged areas and rebuilding the outfall system are priority sector needs, and would be similarly identified in the Drainage Masterplan to be prepared by Amelioration JSC.
Component 3. Responsive and efficient institutions and improved governance. A transparent, participatory, efficient and effective water governance is needed. The government needs to increase capacity in water administration and governance by (i) instituting transparent and unbiased allocation of the rights to use water, (ii) continue effective cooperation with neighbouring countries to better manage both quantity and quality off trans-boundary river water, (iii) promoting adaptation to climate change and ability to manage risks due to exceptional water conditions including floods and droughts, and (iv) Ensuring participation of beneficiaries in planning and implementation of policies and investments.
Component 4. Improve water use efficiency and reduce impact of floods and droughts. Our assessment of water resources indicates that about 35% of the water diverted at the source is lost in the water conveyance and distribution system. Although, the “lost” water has some beneficial uses, e.g. it contributes towards groundwater recharge; it is nonetheless not available for the purpose it was diverted for (irrigation or domestic water supply). The losses occur both in the irrigation canal network and in the network for industrial and domestic water supply.
Improving water use efficiency will require, (i) providing piped water supply and sanitation facilities to 90% of urban and 40% of rural population, (ii) rehabilitating and upgrading earthen irrigation canals and related control structures, and (iii) improved water use and management practices both in water delivery and on-farm systems. Investments made under this component would ensure irrigation water supply meeting water requirements of all users 90% of the time. At the same time, the available water supplies should be sufficient to meet the projected water demand by industrial and environmental sectors.
Component 5: An apex water body to better coordinate and oversee water governance.
15 The team does not necessarily endorse the option of expanding irrigated area. We anticipate Amelioration JSC’s master planning effort will show the wisdom of increasing reliable irrigation supplies to presently irrigated areas resulting in both increased yields and higher cropping intensities as opposed to further development of raw land and the high costs associated therewith.
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The government may consider instituting an organization (an Authority or a Ministry) that has the mandate of ensuring proper water administration and supervision, and the needed resources to implement the mandate. This Authority would determine and implement water allocations across competing sectors. The Authority would oversee a system of water withdrawal and use permits, and would ensure that water is put to good use in all activities for which such permits are issued. The Authority also would oversee a comprehensive and informative water monitoring program.
Table 6. Summary Outline of Water Strategy for Azerbaijan Component No Investments/Actions Indicators
1 . Assess needs & opportunities . Needs assessment evaluating existing water monitoring report prepared and and information system; approved (Year 1); . Develop an action agenda, . Implementation and implementation and investment plans investment plans and prioritize actions. approved (Year 1-2); . Develop comprehensive plan for . Priority components future monitoring networks and started (yr. 3). National water appropriate processing and analysis . Availability higher quality information system of the data generated. hydrological data and . Procure equipment, install and improved user access to develop data management systems the information. (Years . Develop advisory services for users of 5-6) hydrological data . Training in use of new monitoring and data management systems;
2 . Conduct country-wide assessment of . Needs assessment existing irrigation & drainage facilities, report prepared and . Develop detailed master plans for approved (Yr. 1): both irrigation and agricultural . Short to Mediun term:- drainage, Master plans for . Conduct feasibility studies for priority irrigation & drainage investments identified in the master approved and planning exercises, including (a) undertaken, Year 1; rehab & improvement of main . Subsequent feasibility & Irrigation and irrigation systems, (b)rehab & design work on high drainage improvement of on-farm irrigation priority investment infrastructure systems, (c) rehab & and packages undertaken improvement of existing agricultural during year 2; drains, and (d) construction of new . Construction work on agricultural drains high priority projects from . Finalize designs and tender initial year 3 to year 7. contract packages . . Long-term: improved . Implement over the next 5 -20 years crop yields, reduced O&M costs.
3 . Quantify water losses and efficiency . Needs assessment at system, project and user levels reports for all sectors . Develop investment and (Agriculture, domestic, implementation plans and monitor and environment) (2-3 results years) . Develop flood management plans . Investment, . Implement risk reduction plan and implementation and monitor results. monitoring plan for water Improve water use . use efficiency prepared efficiency and . Contract for development of DSS for and implemented (5-10
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reduce water- flood management and provision of years) related hazards technical advice on use of information . Need assessment from DSS; reports on flood . forecasting and early . Contract for technical assistance for warning systems; water flood mitigation in Southern Caucasus quality management and region mitigating land . TA for reservoir management and degradation (1-3 years) resource allocation processes for . Investment and drought impact mitigation, including implementation plans for development of early warning flood management, systems for drought protecting water quality and halting land degradation (10-20 years) . Development, implementation and investment plans approved (Year 1-2) . Priority projects started (year 3) . Final reports from technical assistance contracts (Years 5-6) 4 Create a water . Allocates water for various uses, . A water apex body apex body to better Provides coordination among all water constituted (1 year); coordinate and related organizations and oversees agreed upon by all oversee the sector actions and facilitates conflict relevant water – Ministry or resolution institutions National Water . Promotes IWRM approaches and . Operationalizing IWRM Authority other best practices. and other best practices (2-3 years) . Monitor and evaluate performance. Make adjustments
11. POTENTIAL INTERVENTIONS AND INVESTMENTS
153 Consistent with the strategy components described above, we also suggested related investments and actions that might be considered (Table 6). We now describe in detail several interventions and investments or projects that it appears would have first priority in strategy implementation. We describe one intervention that involves support for institutional enhancement, two that involve investments in physical infrastructure, and one that involves investment in education and outreach.
11.1 Investing in Institutions
154 As indicated throughout this report, an apex water body is needed to oversee, plan and optimize water sector activities and to coordinate actions identified in the NWS. This body will provide central supervision and oversight at both the country-wide and river basin s, including water allocation among various sectoral uses. The body could take the form of a water ministry or a cabinet level authority.16 In either case the goal would be that of
16 Should an authority be established, it might consist of about five appointed members, each of whom has notable experience in at least one area of the water resources sector, yet with no current appointment in any of the pertinent water resource ministries. Members would be appointed by the Prime Minister and approved by the Parliament. The appointed members might include distinguished academics, retired specialists from pertinent ministries, and private sector individuals.
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establishing an oversight body to formulate water policy, effectively plan for sectoral development, and oversee the day to day activities within the water sector. Regardless of the form of central water body opted for by the Government and sector stakeholders, it is paramount that the interests of all concerned sub-sectors including (i) Agriculture and Fisheries; (ii) Irrigation and Drainage: (iii) Commerce and Industry; (iv) Environment and Natural Resources; (v) Hydrology and Engineering; and (vi) Water Supply and Sanitation be suitably represented within the organization.
11.2 Investing in Water Resource Monitoring and Data Management
155 The Government should consider investing in efforts to extend enhanced water monitoring capability, as well as improved data storage and management, and more comprehensive analysis of data sets, as part of the Government's ongoing program of upgrading its hydrologic information network. Goals would include achieving real-time analysis and reporting of a wide range of hydrologic information, in support of better quantitative and qualitative resource management as well as prediction of floods.
156 It will be important to replace outdated and un-serviceable equipment and provide comprehensive training on topics such as data collection, data management, and data analysis. Equipment requirements might include: . Modern equipment for hydrometeorology: automatic weather stations, acoustic- Doppler current profilers for measuring river discharge (ADCP), current meters, cableways, automatic water level recorders. . Water level recorders for key hydrogeological measuring points. . New hydrogeological monitoring equipment: borehole loggers, salinity probes, water level dippers, differential GPS, field water quality measuring kits. . Field measurement instruments, sampling and laboratory equipment for water quality measurements. . Real time data transmission and receiving equipment for key monitoring locations: including reservoirs, rivers, key groundwater sites, weather stations and important water quality sampling points. . Computers for the office and field, and database servers. Software for data entry and management (including checking and validation), secure data storage, and data sharing. . Computers for capture of water use data for integration into core databases
157 In addition to the above hardware components, it will be necessary to design and put in place new procedures and processes for network management, data capture, data processing and data dissemination. This will entail considerable institutional development and capacity building to develop agencies capable of delivering efficient support to modern water management techniques in Azerbaijan. Such a program might also include support for flood forecasting systems, but those might be developed separately. Flood forecasting might be better included in a subsequent project.
11.3 Investing in Irrigation and Drainage
158 There will be four categories of potential major investments necessary to adequately rehabilitate and modernize existing irrigation and drainage infrastructure, while also providing new infrastructure where no alternatives exist.
(i) Continuation of the ongoing rehabilitation and modernization of on-farm irrigation infrastructure, with a view toward transferring the completed facilities to water user associations for management and maintenance;
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(ii) Comprehensive rehabilitation and modernization of main irrigation infrastructure, including main and secondary canals, diversion structures, and pumping plants. Discussions with Amelioration JSC indicate that costs will not be available until the agency conducts its detailed assessments and planning studies, as one of the initial steps within this effort;17
(iii) Comprehensive rehabilitation and modernization of the existing drainage network, covering some 610,000 ha, including both covered and open field drains and the collector system; and
(iv) Provision of agricultural drainage to an additional 200,000 ha of irrigated land. A detailed assessment and planning study of these required facilities will be conducted as an initial step within this effort and will be include a drain monitoring network for both existing and new drains. This will enable real-time analysis of both water and salt balances.
159 Substantial investments in irrigation and drainage systems will be required in the next 15 to 20 years. The Government and donors will benefit from early indications regarding the project packages that will require funding in the short and medium term. These investment packages and time frames for possible processing and implementation include:
(i) A Technical Assistance (TA) loan for the Amelioration JSC, to assist them in preparing irrigation and drainage master plans. This TA could be processed and implemented with the Government’s approval, and is estimated to cost $8.0 to $10.0 million.
(ii) Additional packages of on-farm irrigation system improvement, formulated In accordance with the ongoing World Bank financed work.
(iii) The initial package of new drainage facilities, consisting of covered horizontal drains on some 50,000 ha. Each package is addressed briefly below.
160 TA Loan for Forward Planning in the Irrigation and Drainage Sector: With the Government’s approval, forward planning in both the irrigation and drainage subsectors might become a priority investment. The proposed TA Loan would provide Amelioration JSC the necessary assistance to prepare Irrigation and Drainage Master Plans, conduct feasibility studies, and prepare final designs for the initial investment envisaged under each sub-sector plan.
161 Additional Packages of On-Farm Irrigation System Improvements: The Amelioration JSC will package the remaining irrigation rehabilitation and improvement works under this ongoing program into suitably sized investments, to interest a broad array of international donors and multi-lateral finance institutions. The Amelioration JSC and the World Bank have estimated the total cost of the remaining rehabilitation and improvement work on on-farm systems at between $800 and $900 million. All additional packages would be tailored after the works currently ongoing and in addition to the physical improvement works provide organizational strengthening for water user associations. The executing agency for all additional works under this program would be the Amelioration JSC and concerned Rayon Irrigation Departments (RIDs).
17 The irrigation development master plan to be prepared by AIOJSC is envisaged to include in the longer term (15 to 20 years) an appropriate number of major river diversion structures, with associated distribution works to provide gravity irrigation deliveries to areas currently receiving pumped supplies.
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162 Initial Package of New Agricultural Drains: Subject to the findings of the Drainage Master Plan study and subsequent project preparation of this package, financed under the initial investment described above, it is anticipated this subproject would finance the installation of horizontal perforated plastic drains enveloped in an appropriate gravel pack under about 50,000 ha of irrigated land now affected by a high water table.18 The first subproject, which will be identified in the planning study, will subsequently undergo a feasibility study, followed by final design. It will most probably include the drainage of the 50,000 ha mentioned above, associated drain monitoring provisions, construction supervision consultants, vehicles and office equipment, and both physical and financial contingency provisions.
11.4 Investing in Agricultural Extension Education
163 Investments in the number and quality of agricultural extension service personnel who advise farmers regarding water management and their production and marketing activities would be helpful. Extension service personnel serve a particularly important role in Azerbaijan, where many current smallholder farmers did not choose farming as an occupation, but rather became farmers somewhat suddenly in the early 1990s, when the Soviet Union unexpectedly collapsed. At that time, large state farms were dissolved and the land was distributed among farm workers and their families. The new farmers had little or no experience operating the many aspects of an independent farming operation. Many of the new farm households lack a sufficient understanding of crop production and marketing opportunities, and many would benefit substantially from greater advice and guidance from extension service personnel.
164 The Government, with ADB support, might consider investing in training and education programs that will enhance capacity in agricultural extension. For example, ADB might support the establishment of an Extension Service Training and Education Program, in conjunction with an appropriate university in Azerbaijan. One goal of such a program would be to increase the number of highly trained and motivated extension service personnel available to assist farmers, farm cooperatives, and water user associations.
165 An Extension Service Training and Education Program (ESTEP) might provide certificates that reflect training in selected technical areas. For example, the ESTEP might offer a 12-month program in Agricultural Extension for individuals already possessing a 4- year degree in agronomy, horticulture, animal science, or hydrology. A 24-month program might be offered for individuals who do not yet have such a degree. In addition, ESTEP might provide a 6-month Water Management Certificate Program for farmers and staff members of regional water offices and water user associations, wishing to enhance their capacity to manage water in agriculture. Such a certificate program might require only a high school diploma, in order to maximize the appeal and the extensive value of the program.
166 ADB's support for an ESTEP might involve finance for building and equipping new facilities, funds for hiring and retaining faculty members, and scholarships for participants. Targets could be established for the number of graduates leaving the program, by year, with an overall goal of producing 10,000 to 20,000 highly trained extension service personnel within 10 years. Given that there are more than 800,000 small-scale farms in Azerbaijan, a large number of extension service personnel could be gainfully employed. Training as many as 20,000 new professionals within 10 years might require the establishment of regional programs on two or more university campuses.
18 Based on the mix of drainage modes utilized in the currently drained areas, and with due consideration to the additional constraints to open field drains as a result of land reform, it is likely that no fewer than 150,000 ha of the 200,000 ha to be newly drained will be served by covered horizontal drains. Construction of open field drains could eliminate small farms by reducing the cultivable area below the minimum size required for financial viability.
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167 One rationale for investing in the training and education of agricultural and water management professionals, in addition to enhancing farm production, is to elevate the perception of agriculture in Azerbaijan. The program also would provide significant rural employment opportunities for trainers and for the new extension service personnel.
12. STRATEGY IMPLEMENTATION
12.1 Deriving Investment Plans for the Strategy
168 An investment plan will include individual investment packages by sub-sector and in the order of established priority. For each investment package, the start date, completion date and anticipated cost would be provided (please see Table 7 for an illustrative investment plan outline). The development of an investment plan and action plan must involve active participation and coordination of all government and non-government stakeholders. All water related government organizations will prepare their medium and long term development plans. The medium term development (10-15 years) will provide the overall sector plan, while emphasizing investments in the water sector.
169 The consultant team has formulated the basic elements of the water strategy that can provide useful guidelines for the government in its subsequent efforts to derive an investment plan. Before that happens, the government departments and all other stakeholders should agree on the water strategy. This should not be very difficult to accomplish since the water strategy was developed with active participation of all water related government and non-government stakeholders. The State Program Vision 2020 and the strategy components presented in this report can provide guidance, but the appropriate government agencies must formulate the desired investment plans.
Table 7. Sample Investment Plan Cost Implementing Priority and Time Sector Investment Package Estimate Agency Frame ($)
Develop Priority 1. tbd National Water comprehensive plan for Project start: MENR Information water resources immediate SAWR System monitoring and data Project management. completion: Rehabilitation and Priority 1 tbd Water upgrading of water Project start Amelioration Infrastructure -- delivery canals and date: JSC Irrigation related control Project end date: structures. Assessment of existing Priority 1 tbd Water water institutions and Project start: Governance & tbd improvement immediate Management opportunities Project end: Contract for tbd development of DSS Amelioration for flood management Water Related JSC, SAWR. and provision of tbd Hazards technical advice on use
of information from DSS
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12.2 Stakeholder Participation
170 Effective and transparent methods of implementing Azerbaijan’s Water Strategy are crucial to ensuring long-term protection and wise management of water resources. The development of this implementation framework will be a participatory process that considers both present and future demands on water, and ensures the protection of ecosystems. Participation of all stakeholders and beneficiaries is important in the planning and implementation of development interventions. Supporting legislation must provide appropriate roles and responsibilities for regulation and management of the water sector, in a way that meets internationally accepted norms to allow appropriate international cooperation in water resources management. Regulation of water use such as permitting water withdrawals and restricting wastewater discharge, should be time-limited (i.e. subject to periodic review and revision) and appropriately monitored, to ensure that water users follow the conditions imposed by the licences and permits.
12.3 Financing
171 It is important to analyse and strengthen the economic dimension of the water strategy. A comprehensive analysis would: (i) make the national strategy financially robust, in a manner that contributes to economic development, (ii) put water policy and strategy on a sustainable financial path, (iii) reform economic instruments, and (iv) make the link between water policies and economic development. The first step in achieving a robust strategy is to inventory the economic instruments available to policy makers, as such instruments can generate revenues to finance water services, promote water efficient practices and enhance the financial viability of low cost options. Some commonly used forms of economic instruments are: abstraction charges or fees and pollution charges, tariffs for water services, and payments for ecosystem services.
12.4 Monitoring and Evaluation (M&E)
172 A monitoring and evaluation plan is important for successful implementation of the water strategy. Such a plan would ensure that the components of the strategy and the desired outcomes are achieved as planned in the short and medium term, and that long-term goals are in focus and achievable. If the desired outcomes are not being achieved in the short to medium term, the planned investments and actions can be modified accordingly.
173 The M&E plan should identify indicators for each investment, and provide for measurement of these indicators to establish whether the investments are indeed meeting the objectives of each strategy component (or contributing to achieving the desired outcomes).
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REFERENCES
Ahouissoussi, N., Neumann, J.E., Srivastava, J.P., Okan, C., Boehlert, B.B., Strzepek, K.M. 2014. Reducing the vulnerability of Azerbaijan's agricultural systems to climate change. World Bank Studies. Washington, DC: World Bank.
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ANNEX A: INSTITUTIONS FOR WATER RESOURCES MANAGEMENT IN AZERBAIJAN
I. Overview
1. Several ministries and agencies share responsibility for managing water resources in Azerbaijan. The ministry with foremost responsibility is the Ministry of Ecology and Natural Resources (MENR). Substantial authority is found also in the Amelioration and Irrigation Open Joint Stock Company, which manages water deliveries for irrigation and other uses, and the Azer Su Joint Stock Company (JSC), which is responsible for municipal and industrial water supply (Table 1). The Ministries of Emergency Situations (MES) as well as Agriculture, Energy, and Health have interests in water management, yet they are not charged with responsibility for determining how water resources are allocated or used in Azerbaijan (Table 2).
Table 1: Azerbaijan Ministries and JSCs responsible for water management 1 Ministry of Ecology and Natural Resources (MENR) . National Hydro-meteorological Department . National Environmental Monitoring Department . Caspian Complex Environmental Monitoring Administration . National Geological Exploration Service 2 Amelioration and Irrigation JSC 3 AzerJSC Su 4 Ministry of Emergency Situations . State Water Resources Agency (SAWR)
2. Several other agencies share some degree of responsibility for water management in Azerbaijan, including the Tariff Council, which determines service charges for the delivery of water, and the State Statistics Committee, which records information describing the state of water resources in the country. In addition, there are many WUAs representing smallholder farmers, and there are technical irrigation departments 1 responsible for operating and maintaining the irrigation and drainage works. In sum, there is an array of institutional assignments pertaining to water resources.
1 The Rayon Irrigation Departmets (RIDs) are the field units of the Amelioration and Irrigation JSC. Table 2. Ministries with interest in water management, but without direct responsibility 1 Ministry of Agriculture . State Phyto-sanitary Control Service 2 Ministry of Energy . State Agency on Alternative and Renewable Energy Sources . Azer energy JSC 3 Ministry of Health . Hygienic and Epidemiological Centre
II. Perspective
3. In many countries, the responsibility for allocating and managing water resources is divided among ministries and agencies. Often, the current assignments reflect the evolution of the relative importance of water in different sectors. For example, in countries in which agriculture has long been the dominant water using sector, the agriculture ministry might carry responsibility for managing a large portion of the national water supply. In other countries with little agriculture, but substantial industrial and commercial activity, water resources might be overseen by a ministry of industry or a ministry of commerce. Some countries have established ministries of water or ministries of water and infrastructure, which oversee the development and allocation of water resources across sectors.
4. Given the importance of water in supporting agriculture, industry, commerce, mining, and municipalities in Azerbaijan, it is reasonable to suggest that the country might establish a new agency, ministry or authority with oversight responsibility for water resources. The new body might also be charged with coordinating water resource development and allocation with all of the ministries and agencies that presently share responsibility for water management. This new, oversight entity might be constituted as a Ministry of Water Resources or National Water Authority with the mandate to supervise and coordinate all water related activities.
5. The new organization might include several departments, staffed by technical specialists with notable expertise in pertinent subjects. For example, the agency might include departments pertaining to surface water, groundwater, water quality, trans- boundary issues, economics and policy, irrigation and drainage, energy, industry and commerce, public water supply. Each department might be home also to a liaison specialist who maintains communication with technical staff persons in pertinent ministries and agencies. This would enable the new body to encourage helpful interaction among technical specialists across the spectrum of disciplines involved in water resource development and water management.
6. The new apex could also be charged with the mission of communicating water scarcity conditions across sectors and over time. As the demands and competition for water increase, it is essential that all water users in Azerbaijan are made aware of scarcity conditions in ways that influence their water use decisions. The new, oversight agency would be well placed to implement a highly visible and effective program that would inform all water users of relative scarcity conditions in all areas of the country.
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III. Considerations
7. We understand that the Government is presently considering the establishment of several new entities with responsibility for water resources in Azerbaijan. Those entities include:
(i) A Water Policy Department within MENR, (ii) A Water Sector of the Gazakh Division within MENR, (iii) A Central Kura River Basin Council within MENR, and (iv) A State Water Commission of the Azerbaijan Republic.
8. As noted, three of these new entities would reside within one ministry, MENR, while the proposed State Water Commission would be an over-arching panel of high- level representatives from many ministries and organizations. We agree with the notion of establishing River Basin Councils and we appreciate also the desire to establish a department for establishing water policies. Yet, we wonder if this configuration of new entities will be successful in achieving the desired outcomes.
9. The rationale for establishing a State Water Commission with broad representation, is sensible, given the importance of water resources in all sectors of the country. Yet, such a large panel involving so many high-level representatives might have difficulty operating effectively in addressing complex water resource issues of interest to many individuals, communities, commercial entities, and government organizations.
10. As proposed, the State Water Commission would include more than 20 high-level members, in addition to a Chairman and Vice-Chairman. Each member naturally would represent the interest and technical expertise of his or her ministry or organization, while also giving due consideration to the national perspective regarding investments, development, and allocations pertaining to water resources. While all representatives likely would provide excellent, professional input to the proceedings of the State Water Commission, it likely would be difficult to obtain consensus on important matters, given the large number of Commission members. It might also be difficult to arrange well- attended meetings of such a high-level, heavily obligated group of individuals.
11. One of a number of alternatives to such a large commission might possibly be the formation of a National Water Authority (NWA), with oversight mandate for water resource development and allocation in Azerbaijan. The Authority would consist of three to five appointed members, each of whom has notable experience in at least one area of water resources specialty, yet with no current appointment in any of the pertinent water resource ministries. The appointed members might include distinguished academics, retired specialists from pertinent ministries, and private sector individuals. The goal would be that of establishing an oversight authority with no current obligations to any particular ministry. Service on the NWA might be limited to two terms of fixed duration, such as three or four years per term.
12. The NWA, configured in this fashion would be given a technical staff to assist them in analyzing technical and policy issues that come before the Authority. Such issues might include petitions for new water allocations of new investments that would modify the flow of water resources in the country. Representatives of ministries and departments might petition the Authority for consideration of new policies regarding the use or discharge of water in the country.
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13. The Authority would meet on a regular schedule and it would announce its agenda in advance. Those ministries, departments, and individuals with issues before the Authority would be given time to speak and present materials. The Authority would establish periods of public comment before reaching decisions. Members of the public would be given the opportunity to speak during regularly scheduled sessions of the Authority meetings.
14. The NWA would oversee the development of national water policies. Among its technical staff, the Authority would include well-trained hydrologists, engineers, economists, and other social scientists, with experience in designing and implementing water policies. The Authority would rely on its technical staff for guidance when reviewing policy proposals, and it would also issue contracts with independent firms for special studies, as needed, to enhance current understanding of pertinent water issues. The National Water Authority would maintain a degree of separation from existing ministries and departments in the water sectors, so that its decisions would reflect only the interests of the country, rather than the interests of any one ministry, department, or sector.
15. In consideration of the “pros and cons” of establishing such a body in Azerbaijan, pitfalls relating to the body’s acceptance by existing and long established entities currently controlling the sector and by far the greatest proportion of its development and recurrent budgets such as Amelioration JSC and Azersu. The JSCs are staffed by able, experienced professional and technical; staff, whom collectively could be most weary of a new entity made up of academics with little “hands on” experience in the sector,
16. Considering both the positive and negative aspects of establishing a National Water Authority, the Government will want to consider in parallel, the utility of establishing a Ministry of Water Resources. Such governmental organizational arrangements have proved quite successful in framing and overseeing national water policy in developing economies such as Egypt. Regardless of the reorganization configuration judged most suitable and effective in the Azerbaijan context, it must, in view of the strategic importance of water to agriculture, industry, commerce, mining, and municipalities in the country, provide effective sectoral oversight conducive to informed sector planning, robust and efficient sector development and equitable sharing of water supplies among all users.
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ANNEX B: REVITALIZING AGRICULTURE IN AZERBAIJAN
1. Many residents of Azerbaijan earn their living in agriculture, either as a farm owner, farm worker, or employment in the processing or marketing of farm products. Thus, agriculture remains an important source of livelihood support in rural areas, even though the sector no longer accounts for a large portion of Azerbaijan's gross domestic product (GDP). With the increasing production of gas and oil products in Azerbaijan in recent years, agriculture's contribution to GDP has declined to less than 10%. Of the $64 billion national GDP in 2011, agriculture, fisheries, and forestry accounted for just $5.8 billion, or 9% (EU/FAO, 2012). Yet, agriculture accounts for more than 20% of the country's active labor force. The rate of growth in the agricultural labor force has been declining in recent years, but the number of persons employed in the sector has increased over time. In 2013, an estimated 1.08 million persons were employed in agriculture (Table 1).
Table 1. Evolution of population and labor force in Azerbaijan, 1998 to 2013
Population, in millions 1998 2003 2008 2013 Total population 8.0 8.4 8.9 9.4 Total labor force 3.4 3.9 4.5 5.0 Labor force in agriculture 1.0 1.0 1.1 1.1 1998 to 2003 to 2008 to Annual growth rate (%) 2003 2008 2013 Total population 1.0 1.2 1.2 Total labor force 2.8 2.7 2.1 Labor force in agriculture 1.2 1.0 0.4 Source: FAOSTAT, FAO of the United Nations http://faostat.fao.org/site/550/default.aspx#ancor Accessed on Jan. 14, 2014
2. Despite the importance of agriculture as a source of employment in rural areas, the sector receives little public investment aside from that targeted to irrigation and drainage through the annual and development budgets of the Amelioration JSC. In 2012, the agriculture line item in the national budget was $580 million, or just 2% of total expenditures in that year (EU/FAO, 2012). Inadequate investment in agriculture likely is partly responsible for the decline in productivity observed since the early 1990s.
3. Women comprise more than half of the agricultural labor force in Azerbaijan. Since 1998, women have accounted for about 53% of the labor force (Table 2). Such a pattern is typical of agricultural labor composition in many developing countries, in which men migrate to cities in search of employment, while women remain on the farm (Nation, 2010; Gunchinmaa et al., 2011; Doss et al., 2014; wa Gĩthĩnji et al., 2014).
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Table 2. Population and labor force composition in Azerbaijan, 1998 to 2013
Item, in percent 1998 2003 2008 2013 Rural population 48.7 48.0 47.0 45.9 [% of total population] Labor force in agriculture 27.7 25.6 23.6 21.6 [% of total labor force] Females 54.1 54.2 53.5 52.6 [% of labor force in agriculture] 1998 to 2003 to 2008 to Annual growth rate (%) 2003 2008 2013 Rural population -0.3 -0.4 -0.5 [% of total population] Labor force in agriculture -1.6 -1.6 -1.7 [% of total labor force] Females 0.0 -0.3 -0.4 [% of labor force in agriculture] Source: FAOSTAT, FAO of the United Nations http://faostat.fao.org/site/550/default.aspx#ancor Accessed on Jan. 24, 2014
4. Agriculture also accounts for a large portion of the water volume consumed in the country each year. Crop production in summer requires irrigation, and farmers also irrigate wheat and barley in winter. An estimated 90% of the value of agriculture generated each year relies on irrigation, either directly in crop production for sale or home consumption, or indirectly, through the production of crops fed to livestock. Meat and milk production account for the largest annual values of agricultural output in Azerbaijan, followed by wheat, fruit, and vegetables. Each of these activities provides employment opportunities and creates demand for complementary inputs, transport services, and processing.
5. Of the 4.9 million ha suitable for cultivation in Azerbaijan, an estimated 1.5 million ha are irrigated. Some of the irrigated land has been degraded by waterlogging and salinity, which often are symptoms of canal conveyance losses, excessive water application and inadequate subsurface drainage. An estimated 1.1 million ha suffer from moderate to severe salinization, while an estimated 0.4 million ha are slightly saline (World Bank, 2012).
6. Many observers of irrigated agriculture in Azerbaijan and other countries in the region have expressed the need to rehabilitate large areas of irrigation and drainage systems, which fell into disrepair with the dissolution of the Soviet Union. The systems, which were designed originally to serve large-scale irrigation on state farms, are not well suited for serving much smaller farms operated by individual households. In addition, when the Soviet Union dissolved, there no longer was an institutional structure in place to support the collective management of the irrigation and drainage network. Individual households had little incentive and limited capital with which to operate and maintain the large canals, pump stations, and diversion structures.
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I. Recent trends in cropped area
7. Following the dissolution of the collective farm system, small-scale, private farms account for most of the agricultural area and most of the value of production in Azerbaijan. In 2011, private entrepreneurs operating small and large farms accounted for $5.5 billion of the $5.8 billion (93%) of the agricultural value generated (EU/FAO, 2012). Within the private sector, 67% of the specialized agricultural producers are family households, 33% percent are small farms, and only 0.2% are large farms (FAO, 2012b).
8. The area planted in crops has increased from about 1.0 million ha in 2000 to 1.6 million ha in 2013, of which about 1.5 million ha are on small-scale, private farms (Figure 1). Much of the increase in sown area since 2000 is due to increases in the production of winter wheat, barley, and fodder (Figure 2). Cotton production has declined from about 100,000 ha in 2000 to 20,000 ha in 2013 (Figure 2), while the area planted in vegetables has increased from about 60,000 ha to 80,000 ha during that time (Figure 3). The areas planted in maize and potatoes also have increased, while the area planted in sugar beets has remained at less than 10,000 ha (Figure 3).
Figure 1. Area in all crops, 2000 to 2013 (Source: Azstat.org)
Planted Area, 1000 ha 1800 1650 1500 1350 1200 1050 900 00 02 04 06 08 10 12 14 Year All Farms, 1000 ha Small Farms, 1000 ha
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Figure 2. Area in selected crops, 2000 to 2013 (Source: Azstat.org)
Figure 3. Area in selected crops, 2000 to 2013 (Source: Azstat.org) Vegetables Maize (Grain) 90 45 80 36 70 27 60 18 50 40 9 30 0 00 02 04 06 08 10 12 00 02 04 06 08 10 12