Service Dominant Logic for Irrigation Service

1. ICID Asian Conference in Adelaide, June 2012 Service Dominant Logic for Irrigation Service Hajime Tanji and HirohideKiri National Institute for Rural Engineering, NARO, Japan Toshiaki Iida The University of Tokyo

2. What is service science? • In developed countries, industrial structure is moved to service industry. Production of service is more important than production of goods.(Innovate America(2005))

3. What is service science? • How to provide good service is key issue of many industries. • In many products, price of goods or quality of goods are not main reason of high sales. The main reason of high sales may depends on quality of service. • Service science seeks conditions of client requested service.

4. Drinking water system Service provider Water company Service client Inhabitants Supply water as good Facilities are funded, constructed, owned and managed by a water company Receive water fee on water volume

5. Irrigation water system? Service provider Water company Service clients Farmers Supply water as good Facilities are funded, constructed, owned and managed by a water company Receive water fee on water volumeor area

6. Irrigation water system? Service provider Water company Service clients Farmers Supply water as good Facilities are funded, constructed, owned and managed by a water company Receive water fee on water volumeor area

7. What is irrigation service? • Irrigation benefit, not only water volume but also utilization value. • Water (as good) is only one component of irrigation service. • Good irrigation service should increasing benefit of irrigation. • Irrigation service should replay to any request by farmers. • Irrigation service should produce new benefit. • Renautet.al. (2007) says irrigation service is a major problem second to modernization problem.

8. What is the purpose of service science of irrigation? • Improving quality of irrigation service. • Improving yields of crops. • Improving quality of crops. • Improving working time and quality of water management. • Decreasing fertilizer input. • Decreasing the risk of • On demand service of irrigation. • Avoiding or minimize draught risk. • Connecting the value of agricultural products to consumer.

9. Vergo’s new paradigm; SDL • In former days, goods and service are considered opposed terms(GDL: Good Dominant Logic). Many researchers suggested this scheme is not adequate. • Vergo (2004,2010) proposed new paradigm (SDL: Service Dominant Logic)in which good and service are connected and providers and clients are working together to create value. • The authors applied to used two paradigm (GDL and SDL) to express irrigation service.

10. SDL for irrigation Tertiary canals and inside field. Main and secondary canals. Connecting points (or boder) of providers and clients Service provider Water company Service clients Farmers Supply irrigation service Co-value creation Facilities are funded, constructed, owned and managed by a water company Water fee is only a part of service cost.

11. SDL application to four irrigation schemes Each scheme has border or connecting point.

12. G-D logic VS. S-D logic regarding value creation for irrigation service Aothors’ application Vergo’s original paper

14. Case studyAichi irrigation scheme Aichi irrigation scheme Kiso River Irrigated area Paddy and Upland crops 15,000 ha, Main canal 100 km Nagoya City Main crops Rice, Onion, Butterbur, Orange, Fig, Tropical orchid, Carnation etc. Tomei Expressway Tokaido Main Line TokaidoShinkansen Main canal Mikawa bay Ise bay Irrigated area

15. Aichi irrigation scheme • Constructed in 1961. After 2000, Aichi irrigation scheme was renewal. • Conveyance efficiency of main canals are 100%. • In near future, total intake volume may decrease 10 -20%, which should accomplished by improving efficiency at tertiary canal levels. Water in tertiary canals are managed by farmers groups. • How to improve water management by farmers group is an important issue. • Is there any good rule of water management or water fee system ?

16. Aichi irrigation scheme Main canal Central control office Farm pond Inside field part

17. Who pays fee for irrigation service?Co-creation value of irrigation. Payment based on area size Payment based on area size or water volume=alternative?

18. Constraint of water fee system • Harmonize to “Farmers Investment” and “Farmers Works” for water management. That is, initial investment and farmers works based on area should be considered. • All farmers can pay water fee by income from crops. This means even highest water consumption can be allowed. • Improving irrigation efficiency can be strongly promoted. • Total income by water fee should be keep for maintaining WUA.

19. How to improve service quality?-Proposal of new water fee system- • Water fee is firstly based on irrigated area. • To promote improving irrigation efficiency, if farmers save some volume of irrigation water, he or she can get some cash back of water fee depends on saved volume.Drought function ? • For high consumption area, some countermeasure to reduce irrigation consumption, such as decreasing infiltration by topsoil brought from another place to mix with the soil, should be applied by cost of WUA. • Unit water fee ratio should be adjusted to keep total income to WUA.

20. Conclusion • Irrigation service can be expressed by Vergo’s SDL. • Water fee is only a part of irrigation service cost. • New allowable irrigation fee system can be proposed based on SDL. • References • Council of Competitiveness (2005) Innovate America: Thriving in a World of Challenge and Change. National Innovation Initiative Summit and Report.  • Lusch RF, Vargo, SL, & Tanniru M, (2010) Service, value networks and learning. Journal of the Academic Marketing Science. 38,19-31.   • Renaut, D., Falcon, T, and Wahaji,R. (2007) Modernizing irrigation management – the MASSCOTE approach. FAO Irrigation and drainage paper No.63 • Vargo, SL. & Lusch RF. (2004) Evolving to a New Dominant Logic of Marketing. Journal of Marketing 68, 1-17.