Assessment of the Free Irrigation Service Act

The country's irrigation systems have a long history of recovering maintenance cost from farmers. The Free Irrigation Service Act (FISA) of 2018 was a radical departure from this policy. This study is a preliminary assessment of the policy change through an examination of secondary data and collection of primary information through key informant interviews and focus group discussions. The study found that the free irrigation had the potential to benefit millions of individuals, although it only led to a small savings in palay production cost. Moreover, while palay farmers were poorer than the average household, most palay farmers were not poor. Group interviews with farmers and staff from the National Irrigation Administration (NIA) confirmed that the main benefits to farmers of free irrigation was their savings from paying irrigation service fees (ISF). The shift to free irrigation also addressed some of the distort ions associated with cost recovery among national irrigations systems (NIS), such as understatement of irrigation service area and time allocation irrigation created a new regime of incentive with inclear implications to the behavior of NIA staff and irrigators' associations. For instance, farmers may become less demanding of the quality of irrigation service or the usefulness of an irrigation project. The funding for the operation and maintenance of NIS has also declined under the free irrigation policy. While a new funding channel has been opened for communal systems, the level of the operations and maintenance in these systems were constrained by the low level of subsidy and increased difficulty in collectin g contributions from the members of irrigators' associations. The study urges the government to continue pursuing irrigation management transfers within the con text of free irrigation based on minimum maintenance for NIA and transparent maintenance standards for both NIA and irrigators' associations. It also calls for a sustained and increasing subsidy for operations and maintenance (Q and M), which must be made available only in a performance basis. The government may also explore water saving as a performance criterion for subsidy for Q and M. This study advocates for the transformation of NIA into a service-providing agency specializing in technical assistance to irrigators' associations, contract design, and performance monitoring. Lastly, it recommends for the introduction of a mandatory review comparing the FISA with other social assistance and protection schemes in achieving equity objectives.