WATER RESOURCES AND IRRIGATION POLICIES IN PERU

1. WATER RESOURCES AND IRRIGATION POLICIES IN PERU APEC International Conference on Natural Resources and Infrastructure Management for Agriculture August 6 – 8, 2012 Bangkok, Thailand MSc. Ernesto Helfgott Head, Technical Irrigation Office - Subsector Irrigation Program - Ministry of Agriculture

2. PERU: GENERAL FACTS • Country name : Republic of Peru • Area : 1,285,220 km2 • Population : 30,054,400 • Capital city : Lima (population: 9.11 million) • People : Amerindian (45%), Mestizo (37%), European/White (15%), African, Japanese, Chinese, and other (3%) • Language : Spanish (official), Quechua (official), Aymara, Ashaninka and other • Religion : Roman Catholic (81.3%), Evangelical (12.5%), other (6.2%) • Currency : Nuevo Sol (S/.) • Government : Constitutional Republic. • Head of State : President Ollanta Humala Tasso • Membership : UN; Organisation of American States (OAS); Asia Pacific Economic Community (APEC); Andean Community (CAN); Rio Group; Union of South American Nations (UNASUR), Inter-American Developmental Bank (IADB). Thailand Peru

3. PERU: ECONOMIC SITUATION • GDP: $153.549 billion • GDPgrowth: 6.0% • GDP per capita: $10,588 • GDP by sector: agriculture: 8%; industry: 25%; services: 56%, other: 11% • Inflation: 2.08% • Population below poverty line: ▼ 27.8% • Gini coefficient: ▼ 47.9 (2008) 26th in the world • Main industries: mining, construction, oil, natural gas, fish processing, textiles, sugar, tourism • Ease of Doing Business Rank: 41st • Exports: $45.5 billion (copper, gold, coffee, asparagus, paprika, textiles, fishmeal, fruits and vegetables) • Main export partners: China 15%, Switzerland 13%, U.S. 13%, Canada 9%, Japan 4%, Germany 4% • Imports: $33.5 billion (oil, plastics, machinery, vehicles, iron and steel, wheat, paper) • Main import partners: U.S. 20%, China 17%, Brazil 7%, Ecuador 5%, Argentina 5% • Credit rating • •Standard & Poor's: BBB+ (Domestic), BBB (Foreign), A- (T&C Assessment), Outlook: Stable • •Moody's: Baa3, Outlook: Stable • •Fitch: BBB-Outlook: Positive

4. WATER RESOURCES

5. WATER AVAILABILITY IMPORTANT FACTS • Coastal area: 2% of the total water but 66% of the population lives in this area and is under water stress. The population in some areas in the Andes mountains is also under water stress. • In spite of this situation, water is not adequately managed: irrigation efficiency is low (35%) and water fees do not cover real costs. • Additionally, watersheds are subject to contamination processess: mining, industrial and urban residual water. • Climatic change may aggravate water scarcity.

6. WATER CONSUMPTION BY SECTORS IMPORTANT FACTS • Agricultural sector: 86% of total water. • Population and industry continue growing. • There is an increasing pressure over water, especially by the population, competing with agriculture, industry and especially mining. • Many water conflicts are appearing.

7. MAJOR LAND USE (ha) ANNUAL AND PERMANENT CROPS (ha - 2,012) *In addition, 300,000 ha were lost due to drainage and salinity problems

8. IMPORTANCE OF IRRIGATION IN PERU • Agriculture employs 30% of the population and represents over 10% of total exports. • Two thirds of agricultural GDP is produced in the Coastal Area, a region totally dependent on irrigation because of very low precipitation. • In the Highlands, agricultural production is very irregular: it is mainly rainfed and subject to climatic stresses. • Thus, irrigation plays a vital role in increasing agricultural production and diversification in the Coastal Area and in the Highlands, to ensure adequate food supply. • IMPORTANT FACTS ABOUT IRRIGATION IN PERU • Water resources are state owned. • The framework for water resources use is the Water Resources Law N° 29338-2,010 (assessment of water and integrated management, priority access to water, legal security, respect for community water, decentralization of public water management, efficiency in use and watershed management). • The Water User´s Associations (WUA) manage irrigation systems and collect water payments. • Most WUA are now financially and technically independent, due to intensive public and private programs. • Water fees are usually calculated per hectare instead of per volume. • Water fees oscillate between 20-30 US$/ha and collection rates vary from 60% to 70% in the Coastal Area. • Traditional irrigation (furrow and flood) is used in 90% of the land, while drip and sprinkler irrigation is used in 10% of the land. • The overall traditional irrigation efficiency is around 35%. • Inefficient irrigation has generated salinization and drainage problems in 300,000 ha of the coastal valleys. • The 2003 Policies and Strategies seek to increase the profitability and competitiveness of irrigated agriculture, improving water use efficiency. THERE IS A NEED TO: Improve water management and irrigation efficiency Follow adequate irrigation policies

9. IRRIGATION POLICIES IN PERU* • GENERAL OBJECTIVE: • Contribute to improve profitability and competitiveness of irrigated agriculture, by intensive and sustainable use of land and by increasing water use efficiency. • 2. SPECIFIC OBJECTIVES: • Give stability to the institutional framework of the private and public sectors, related to water management. • Improve water management efficiency, consolidating infrastructure and promoting adequate operation and maintenance. • Insure an equitative use of water, regulating water rights. • Order water supply and demand, in a watershed management oriented vision. • Promote technical and economical self-sufficient Water User’s Associations. *Based on the document «National irrigation policies and strategies in Peru, a State Policy proposal for the next 10 years» *Multisectorial technical comision (2,003): -Ministry of Agriculture -Ministry of Housing and Construction -Ministry of Economics and Finance -National Water Users Association

10. IRRIGATION POLICIES IN PERU GENERAL GUIDELINES • Promote sustainable technology to increase water and soil use efficiency • Promote institutional strengthening, technical and financial assistance projects and programs, with Water Users Organizations and private investment, to achieve efficient management of irrigation water • Ensure adequate economic, social and environmental viability of irrigation project investments with public resources, according to the National System of Public Investment and the guidelines of Agricultural Policies • SPECIFIC GUIDELINES • Irrigation institutionalism • Consolidation of the current major hydraulic infrastructure • Technical irrigation and drainage • Research and capacity building in irrigation • Water rights in collective blocks for irrigation • Irrigation in integrated water resources management • Environmental measures related to irrigation • Irrigation water management funding

11. THE IRRIGATION SUBSECTOR PROGRAM (www.psi.gob.pe) The Program aims to increase the productivity of irrigated agriculture in the Coastal Area and in the Highlands in order to improve the well being of farmers and contribute to poverty alleviation. The Government focuses on increasing capacities of some water users’ organizations (WUO) and improving irrigation infrastructure and land titling and registration. • Major achievements in the Coastal Area Programs at a glance: • Two thirds out of the 64 WUO are technically and financially autonomous. • The project developed transparency in procedures and decisions in water distribution, thus reducing conflicts among water users. • Average O&M cost recovery increased from 45% to 81%. • Approximately 10,000 ha were equipped with improved on-farm irrigation technologies such as drip irrigation. • Farmers contributed with 30% of the investment costs and covered all the crop production costs. • Yields per ha were raised by 20-30% in on-farm improvement areas. • Approximately 10,000 new jobs were created. • Water conveyance efficiency increased on average from 55% to 68% in improved irrigation systems. • Nearly 190,000 new water rights were formalized. • Surveyed farmers increased their household incomes on average by 30% in on-farm improvement areas

12. THANK YOU AND WELCOME TO PERU!