What Can We Learn From Development of Irrigation Management Transfer In Mexico1?

Setting Institutional Foundation for IMT

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Setting Institutional Foundation for IMT

The government played a central role in the conceptualization of IMT. During implementation, new actors - new water ministry, farmer water user associations, local hydraulic committees, federations of associations, etc - entered the institutional scenery. A new organizational structure emerged. Today, the government, still retaining the overall supervisory responsibility, plays mainly the role of monitoring, regulation, training and advisory. Below, the transition of the government role is explained while the new actors are presented in chronological order.
The first steps were oriented to consolidate institutional and legal frameworks. In 1989, the government, seeking for more independence in the management of water resources, established the National Water Commission (CNA, or CONAGUA as later known), which became an autonomous body under the Agricultural and Animal Husbandry Secretariat.
“…when CONAGUA was created, we all thought that the golden days were coming back. But in fact, the new agency reduced its involvement in the technical aspects of O&M of ID. Instead, it concentrated on the formulation and enforcement of regulations” (Galdino, CONAGUA)
“The creation of CONAGUA had a very good reception among the former staff of the Ministry of Hydraulic Resources because it was seen as an opportunity to go back to the original work that the agency had…” (Cobian, El Grullo WUA, and former CONAGUA)
The best description of CONAGUA maybe an agent of change since its main aim was to induce changes in water resources management on behalf of the government. It reshaped the water culture in Mexico (Trava, 2002). One of the CONAGUA mandates was the transfer of the operation, maintenance and administration of the ID to new entities that were governed by water users. Apparently, the establishment of CONAGUA satisfied the interests of the government’s irrigation lobby, which were willing to support the IMT (Garces, 2001).
In 1994, the Secretariat for the Environment, Natural Resources and Fisheries was created and the CONAGUA was placed under them, but with a high degree of autonomy and independence.
In 1992 a new National Water Law (NWL) was promulgated –which was a landmark document and acted as the legal framework for IMT (in fact, the Federal Water Law of 1972 already suggested eventual transfer of irrigation infrastructure to its users, but didn’t specify a timeframe (Ramos, 1999)). The 1992 NWL sets the legal framework for WUA. It not only defines the obligations of WUA to operate and maintain irrigation districts, but also stipulates that the WUAs are responsible for fee collection and that the fees should be sufficient to cover the O&M and administration costs of the entire systems. In 1994, regulations and bylaws were issued. For example, the NWL bylaws Article 97 states that WUAs should request both hydraulic infrastructure concession and water concession in order to legally allow them to operate irrigation infrastructure and be responsible for its maintenance. The water concession titles –normally granted for 20 years to up to 50 years - is the best assess for WUA. They represent legal certainty that WUA have the required water resources to deliver their irrigation services. To ensure this, the NWL stipulates that the water concession as well as the hydraulic infrastructure concession should be registered at the Public Registry of Water Rights (REPDA, in Spanish) in each CONAGUA regional office that corresponds to a river basin where the irrigation water source is drawn. The water concession title is especially important in the context of water crisis within a basin because it gives the WUA the right not only to use the water and manage irrigation facilities but also to sell the water within the agricultural sector or with other sectors.
NWL Article 503 states that a water concession should be granted only to a legal entity, which should have an internal bylaw. Therefore, WUA must be a legal entity. It should be noted that WUA have the legal figure of a Civil Society governed by the private law in Mexico. They are non-profit organizations, and benefit from tax exemption.
The relevant NWL article (# 654 ) states that the ID will be managed, operated and maintained by water users or by whom the users assign:
“…The 1992 National Water Law clearly states that the Irrigation Districts should be operated by the water users or a third party. This left no room for discussion of alternatives. It was not a choice but a mandate. The government established a certain timeframe to implement this law ….I personally experienced the first meeting to implement the IMT in Ameca and Acatlán de Juárez. In those places, water users grow sugarcane and there is a profitable sugar mill who initially asked for the ID transfer. The farmers that originally refused to accept the IMT gave a second thought when they learnt the intention of the sugar mill company. To give to a second party, like a private company, the legal possibility to provide the irrigation service was a very clever part of the new law since it acted as a positive pressure on the water users so they would take the responsibility and accept the infrastructure that is transferred to them. I used to tell the users that the irrigation infrastructure was like their family asset; even though the irrigation infrastructure is owned by the government, its use and benefit are for them. Actually, the law foresees the acquisition of the infrastructure by WUA although water will always be a national asset. WUA would be decision makers over the infrastructure like any other owners”. (Galdino, CONAGUA staff)

A Phased Approach to IMT

IMT has been implemented in two-phases (Fig. 1). Phase-I was to transfer secondary networks to WUA. Phase-II was to transfer primary networks to federations of WUA. A time schedule for IMT was determined, outlining the IDs that were to be transferred in sequence.

Phase-I focused on the transfer of secondary canal networks to water users that shared a common infrastructure defined as module (modulo in Spanish). Equipment and heavy machinery required to perform the maintenance works of that infrastructure were also part of the transfer package. CONAGUA set annual transfer goals in terms of the number of WUAs that were to be established. It hired consulting firms to carry out a part (around 40%) of the WUA formation, and did the rest by its own Irrigation Districts Department. The required time and difficulties differed in each WUA:

“….in some cases, the organization process up to the Acceptance and Commitment Act singing took one year. We had to make meetings in every ejido or commune… which was what they called grass-root communities, directly linked to water users.” (Galdino, CONAGUA staff member)
How Did Farmers React to IMT? In most cases, there was resistance to change and a general feeling of insecurity from farmers. They thought that they were going to be left alone or that they were not capable to perform the new tasks. Traditionally, the agriculture sector had been subsidized by the government. One of the objectives of the irrigation sector reform was to increase the competitiveness of the agriculture sector in order to take advantage of NAFTA. The following story as recalled by Mr. Raul Medina, the first president of Rio Lerma WUA, describing his reaction at the time the IMT was introduced.
“…we were somewhat surprised….They notified us that IMT had taken place all over the country and that we were one of the last ID to be transferred… We learnt that this program started with the big and less problematic ID and they left at the end the ones with some kind of conflicts or problems like ours….We were a small module… Some of us didn’t even know about the existence of the CNA. I remember seeing a guy who, now and then, came to ask for a water fee or wheat sacks … In our case, we neither paid the water fee nor gave them any wheat sacks. So, we were a problem case.”
Former staff of CONAGUA, Cobian, who is now working at El Grullo WUA recalled:
“…the authorities presented two options: either you take it or you take it. Well, it wasn’t said that way but it meant the same. …. Luckily in our area, the water users were already participating in irrigation management… People accepted the challenge and started to work on it.”
Figure 1. Irrigation Management Program phases

NOTES: SRL is the legal figure adopted by the federation of WUA and stands for Limited Liability Societies (in Spanish Sociedad de Respondabilidad Limitada, SRL).

In spite of the anxiety, the incentives from the IMT were good enough to overcome the obstacles and to convince even the most reluctant water users. The incentives were: direct control of the income from the water fees and from rental of heavy maintenance machinery and equipment - besides doing the maintenance works. Moreover, there were other two imminent reasons to accept the IMT: the government, in accordance with its new policies, was no longer going to subsidize the irrigated agriculture; and, there was a need of an immediate action to rescue the deteriorating ID infrastructure on which farmer economic activities depended on.
Reform of the Irrigation Agency –Parallel to WUA Development

As government started to reduce subsidies to agriculture, salary expenditure became a main issue for CONAGUA. One objective of the IMT program was to reduce this burden by reducing the number of staff. By 2005, the number of CONAGUA ID staff involved in irrigation district management decreased from 8,000 in 1990 to 3,000 in 2005. The expenditure on human resources department represented around 34% of the total budget in 2000. The overall budget decreased in real terms significantly as can be observed in Figure 2.

This process was not without difficulties. Initially, resistance to IMT from public servants was great. Many staff at the Irrigation District Department were unionized employees and thus could not be fired:
Figure 2. Annual budget for the water agency in Mexico

SOURCE: Secretaria de Hacienda y Credito Publico (Mexican Finance Ministry). Expediture budget databases (in Spanish, Presupuesto de Egresos): http://www.apartados.hacienda.gob.mx /presupuesto/index.html.

NOTES: For years 1980 to 1994, the annual budget correspond to the Agriculture and Hydraulic Resources Ministry; for years 1995 to 2006, the annual budget correspond to the CONAGUA as reported under the Secretariat for the Environment, Natural Resources and Fisheries

“…one of the main obstacles of IMT was the internal resistance from CONAGUA employees. They feared loosing their jobs and lacked the confidence in water users’ capabilities to handle the infrastructure…. But eventually, the best operators and technicians from the IDs were hired by WUA…Water users knew who the good honest and hard working guys were …” (Galdino, CONAGUA staff member)

“During the transfer, a lot of staff left CONAGUA to work for WUA. Still there was a lot of staff without a job. But they were part of the union and could not be fired. I made some sport facilities for them in order to keep them busy. Can you image? Paying them for playing … Unbelievable? But I couldn’t rearrange their jobs because the union forbidden to ask employees to perform different tasks from those that they were hired for” (Galdino, CONAGUA staff member)
Soon after, a voluntary retirement program was launched with government budgetary support, aiming to reduce more staff. This program is still in force now and consists of offering a lump sum - the usual sum paid according to the labour law when an employee is fired - but keeping the pension benefit continuously. It is reported that the cost to government was between US$ 20,000 to 90,000 per position that is cancelled. This program was a good deal, especially for those who already had a job offer by a WUA:
“…it was a good deal for everybody - CONAGUA got rid of many staff and these staff got a higher salary under WUA contracts in addition to receiving incentives for early retirement. WUA gained qualified and experienced staff to work for them” (Cobian, El Grullo WUA and formerly CONAGUA employee)
WUAs selected the most competent and honest employees from the former CONAGUA staff, most of whom accepted the offers as salaries were higher with WUA. Since WUA managed to downsize the number of required staff, they were able to pay more to their technical staff. It was a win-win situation for everyone.
Rehabilitation to Address ID Deterioration – An Integral Part of Irrigation Reform

In addition to the agency streamlining of CONAGUA, another issue was to address the deteriorated irrigation systems and deferred maintenance. During initial meetings with water users, this issue was discussed with farmers as only 58% of the required budget for proper O&M of the IDs was available (Palacios et al, 2002). Mr. Cobian from a WUA and formerly worked for CONAGUA recalled:

“It is totally true that the infrastructure was deteriorated before IMT, …and it was so difficult to control scattered systems from far away ….when replacement for a certain part was needed, a requisition to the government for purchase was made and approval received.... By the time it arrived, replacement of another part was needed”.
“A farmer said to me that the IMT program was a story like this: you come along driving your old semi-functional car. We cross each other and you invite me into your car. I get in and suddenly, you release the steering wheel and tell me to take it over. I have no choice, I start driving and you just get out of the car and say ‘see you later’, leaving me with the old car. The maintenance of the ID infrastructure was left behind for many years. Farmers didn’t want to receive the infrastructure in those bad conditions”, said Mr. Galdino from CONAGUA.
Initially, new equipment for maintenance was bought for some WUA as incentive to participate in IMT. In most cases, due to budget limit, the government only invested repairs to machinery and equipment and negotiated with the WUA to address deferred maintenance in stages:
CONAGUA promised to address deferred maintenance in stages since it didn’t have enough money to do it all at once. If you ask any WUA, they would say that CONAGUA did not keep their promises. But the good part of it is that farmers now have experienced the difficulties of O&M and are making best effort to cope with the system maintenance on time… Now they are much more aware of the deferred maintenance problem and also understand better the government situation.” (Galdino)
Amador Sanchez, a farmer from Salvatierra WUA, recalls the advice from Severo Gutierrez, a farmer from Culiacan where one of the first modules was transferred:

“…I went to visit (sponsored by the CONAGUA) the Culiacan WUA that was already in operation for a few years, and there I met Severo Gutierrez. When I told him we were hesitating about accepting IMT in our ID, he told me: ‘go for it and don’t be afraid. The CONAGUA promised us machinery for maintenance in good state. But they just painted the old machines … But we managed them. Now we even have our new machinery and equipment.’ After I came back from this visit, I was willing to accept IMT”

In addition, there are currently other governmental programs to support WUA and help reduce the maintenance gap. These programs also help in addressing the competitiveness of the agricultural sector under NAFTA and complement the IMT program. Normally, the support programs involve an investment shared half and half between the federal government and the WUA. If the municipal and state governments also participate in the investment, WUA’s share can be less than half.
Structure of WUA

WUA have four administrative levels (Figure 3 and Table 1): the General Assembly (Box), Oversight Committee, Executive Board and Technical Unit. The first three groups consist of water users that have non-remunerative positions within WUA. The Technical Unit consists of a General Manager and his staff that are professionals hired and remunerated under contract, and directly controlled by the Executive Board (Garces, 2001), with the General Manager more involved in the operational and technical issues.

To minimize potential corruption, in some WUA, amendments to by-laws have been made to prohibit members of the WUA executive boards to pursue or support a political campaign while they are in service. Also, there are restrictions on technical staff hiring as candidates should not be first or second degree relatives of the board members.

The General Assembly meets at least every two months, and does not include all the water users but rather representatives or delegates of water users - both land tenure sectors: ejido and the private property. The number of ejido water users is normally significantly higher than private owners. Since an ejido’s average land tenure could be as little as 0.5 ha, it could cause logistical difficulties when convening a general assembly due to too many people. Therefore, representatives or delegates were elected to reduce the actual number of people at a general assembly. The election of the representatives is done periodically within each ejido and the number should represent 10% of the total ejido members. It is important to mention that CONAGUA participates in the General Assembly with the right to speak but no right to vote.

Figure 3. Organization structure of a Water Users Association

SOURCE: IMTA not published training material

NOTES: In some cases there is not a General Manger in the WAU and the Executive board performs the administration, accountability and operational management.

Table 1. Characteristics of Administrative Levels of Water Users Association





General Assembly

  • Elect and supervise the Executive Board;

  • Approve seasonal O&M plans;

  • Approve yearly budget;

  • Approve proposed water service fee;

  • Elect representatives to Oversight Committee


Within each ejido or group of private owners

Oversight Committee

  • Inspect accounting records;

  • Oversees assesses and inventory;

  • Ensure yearly financial auditing;

  • Attend to all General Assembly meetings

- Ejido commissioners

- Private owners commissioners

- CONAGUA ID staff

- State representative

Commissioners elected by General Assemble. Representatives selected by their institutions -3 yr

Executive board

  • Manage affairs and resources

  • Agree, sign, modify, renew staff contracts

  • Purchase assets and agricultural inputs

  • Represent WUA

  • Execute resolutions of General Assembly

  • Supervise O&M, administrate per plan,

  • Send O&M budget for CNA approval

  • Call for bids, handle correspondence

  • Present a yearly financial budget to General Assembly.

President, Secretary, Treasurer and their alternates

3 year period, re-election possible only for a second period

Technical Unit

  • day-to-day O&M and administrative matters.

General Manager

Administrative and Accounting assistants, Ditch tenders

Hired with Board authorization

Source: Prepared for this document based on IMT Mexico case study (Garces, 2001)
WUA, CONAQUA and Local Governments. CONAQUA staff continued with the operation at least during one irrigation season after IMT. During the following years, every WUA evolved in different speeds. Most were able to take charge of O&M and paid for all the O&M costs. Some WUAs united with other WUAs within their ID and took over the responsibility of O&M of the main ID networks (phase-II).
WUA were not alone in the decision making process. The relationship between CONAGUA, state representatives, and water users’ organization is presented in Fig. 4. In every ID, a Hydraulic Committee (HC) was created, as required in the NWL bylaws, to decide on issues related to seasonal planning, water trading and access to externally funds. The HC consists of 1 member from CONAGUA, one from the state government (normally the Rural Development Ministry of the local state), and presidents of all the WUAs in the ID. WUA present annual work plans and budget plans to the HC. CONAGUA notifies the volume of water to be allocated for the coming year. Then, a water fee is set by the water users and approved by CONAGUA. The distribution of the water fee income is negotiated at HC and subsequently, O&M are executed by the corresponding organizations in charge, i.e. CONAGUA for headwork; CONAGUA or a SRL (see section on IMT in Phase-II) for main networks; WUA for secondary networks, etc. The HC was envisioned under the NWL as a mediating and coordinating body, whose structure and mode of operation were to be defined under the regulations of each district (Garces, 2001). In some IDs, however, they have become serious decision-making bodies, from district-wide water allocation to setting water fees (Urban, et al, 2000).
Establishing Self-sufficiency Water Fees

Service water fee is the backbone of WUAs’ financial self-sufficiency. There is no water permit charge by CONAGUA and water service fee is, for CONAGUA, the only chance to eliminate subsidy as intended by IMT. Before IMT, during the early 1980s, farmer contributions to O&M costs were less than 20%. There was thus a huge gap between water fee paid by users and what is needed for self-sufficiency. Asking water users to overcome this gap, as required in Article NWL was not as difficult as it appeared for CONAGUA. WUA realized soon that they were going to manage the income from the water fees and this made it easier to increase the fees. The roles of water fee collection also changed: WUA was responsible for the collection and the CONAGUA had to negotiate a proportion of this fee to cover its O&M for main networks and head-works. The negotiation was often tough, and usually settled between 15% and 25% paid to CONAGUA out of the total water fee collection.
As presented in Table 1, one of the responsibilities of the Executive Board is to send an O&M budget plan to CONAGUA’s regional office and to the General Assembly for approval. Based on the approved budget and water availability, a fee per volume is defined. If the water fee does not fulfill the self-sufficiency condition, CONAGUA could object:
“In theory, water fee estimation should be based on the required O&M costs and available water. But in practice, they adjust their costs to a water fee estimated based on a reasonable annual increment from last year and the available water. If we don’t check whether a WUA has covered 100% of their required O&M costs, the WUA can run short of budget, irrigation maintenance will suffer. Similar cases can happen when WUA try to ‘save’ what is collected. ”
However, since volumetric measurement devices are not available at the farm level, water fee at this level is expressed in Pesos per irrigated ha, or per crop ha, or litres per second during 24 hr of irrigated ha based on an average irrigation depth estimated for every ID. For example, if the fee (based on the O&M costs and water availability) is set at 1¢/m3 , and the average irrigation volume per turn used in a hectare is 4,500 m3 (considering application and conveyance losses), the service fee will be US$ 45/ha. The most common is by Pesos/irrigated ha, under which the number of irrigation turns are agreed or else, the water fee is set in terms of irrigation per hectare (pesos per irrigation turn in/hectare) and is paid at each irrigation turn.
Annually, the Executive Board has to deal with the difficult task of adjusting the water fee to fulfill the self-sufficiency condition, i.e. to set an accurate O&M budget. During the first year when IDs were operated by WUA, the water fee had to increase as much as 4 times compared to prior to IMT. In subsequent years, WUA did not succeed in keeping up with inflation and peso devaluations and the fee fell, in dollar terms, from US$17/ha in 1993 to US$8 in 1996 (Kloezen et al, 1997).
The Executive Board only makes small increases to the fee each year, because:

  • water users complains about their hush economic condition;

  • a high water fee would jeopardize re-election of some members who often promise no increments to the water fee at their campaigns for the executive board;

  • additional funds required for maintenance, i.e. buying new machinery and equipment, are collected through “special fees” from water users in some years. This is a way of breaking maintenance costs by having an additional special fee which some times can be as high as the ordinary annual water fee. But water users appear to be more willing to pay;

  • they use part of their capital savings to complement the required expenses. To avoid significantly fee increase during drought years, they estimate the water fee based on average water availability. In wet years, they make a profit that save for dry years; and/or,

  • WUA has achieved optimal uses of water and their incomes, and there is no differed maintenance.

The water fee ended up representing around 4% to 10% of the farm production costs. According to ANUR, the average irrigation fee is US$45/ha, which varies depending on the ID, from US$150/ha in small IDs to US$ 40/ha in large IDs. The use of the fee collected is around 50% in maintenance, 25% in operation and 25% in administration expenses. Typically, the maintenance costs refers basically to all expenses related to the heavy machinery work –operators salaries, fuel, repairs, etc; operation costs are mainly salaries of operators and some minor repairs to gates, and administrative costs are the office employee salaries and office expenses. About 2.5 Mha are currently irrigated in the country. Thus the total income from water fees is estimated at US$112.5 million. In general, the water fee collection rate is high since water users, in accordance with NWL Article 67, are required to present a sole planting authorization permit (in Spanish, Permiso Único de Siembra), which is issued only after the water fee is paid.

Capacity Building for WUA

The government has implemented strategies to support the newly formed WUA not only in financial terms but also in training. The IMT earmarked US$30m for institutional development wherein training was a main component (Garces, 2002). During Phase-I of IMT, WUA staff received on-the-job training in O&M at the National Centre for Technology Transfer of Irrigation and Drainage, owned by the government. In 1994, the Mexican Water Technology Institute (IMTA) was established and part of its mandate was to provide training to ID executive board members and users. From 1998 to 2004, CONAGUA hired IMTA to conduct annual training to WUA staff and members.

Another agent for capacity building is the National Irrigation Users Federation (Asociación Nacional de Usuarios de Riego, ANUR), which the government set up in 1994. Its aim was to act as a WUAs representative in the negotiation with CONAGUA and other government bodies. It has also played an important role in sharing of success stories and experiences of WUA. A series of ANUR events, financed mainly by CONAGUA, facilitated capacity building of WUA. Mr. Raul Medina of Rio Lerma WUA recalled:

“During an ANUR convention, we met an engineer, who told us about soil conservation, evapo-transpiration and other technical knowledge for efficient irrigation. I was amazed. It was the first time I ever heard about them. After we came back, we organized with other 5 WUAs to open a lab with second hand equipment from CONAGUA. We started our studies, soil tests.”

After 2004, CONAGUA’s training programs have been open to any training bidders who could meet the demand of more than 3,000 water users and board members. The service providers are commonly local universities or research centers. Since the WUA boards are replaced every three years, the need for continued capacity building and training is always there.

Figure 4. Outline for an ID operation, management and administration

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