Ongoing Research

Bishnu Pariyar

Department of Social Policy & Social Works

University of York,

Heslington, York, United Kingdom

YO10 5DD

Email: bp122@york.ac.uk

1. Title

“Pedalling out of Poverty: Social Taxonomy, Socio-Economic Heterogeneity and Distributional Implication of Irrigation Development in Nepal”

2. Background and Research Problem

Nepal demonstrates a distinct social taxonomical stratification based on the caste system which is embedded within the Hindu religion, and encompasses a wider socio-economic heterogeneity (Adhikari, 2002 & 2003). The origin of the caste system still remains a contentious issue.¹ It continues to act as an obstacle in the development of indigenous and the dalit communities.² An important part of caste system is that dalits are considered to be untouchable and they face multitude of disadvantages in land endowment, socio-economic marginalisation, political participation and alternative employment opportunities (Lawati, 2005).³ Also, they are mostly sukumbasi (landless) or land-poor if they have any lands, and are living in the rural areas know as khorias (unproductive and rainfed areas) and public lands. Understandably, this sector of population represents a significant proportion of population under poverty (NPC, 2002). Efforts to alleviate poverty through irrigational development, while at times successful, continue to face challenges associated with landlessness and land poorness amongst the dalits and indigenous communities. The benefits from the irrigation development accrue to landlords and land rich households, which are usually, but not always from higher caste groups, while negative externalities associated with it are born by mostly, landless and land-poor households. Furthermore, the opportunity cost associated with engagement in irrigational maintenance programmes are higher amongst landless and land poor people. Aggregation of all these heterogeneities has meant that social equity aspects of irrigation development are seriously questioned.

3. Literature Review: Poverty-Irrigation Nexus

The relationship between poverty reduction and irrigational development has become a topical issue amongst academics and policy makers alike. A ministerial Bonn Conference on fresh water management declared that, “combating poverty is the main challenge for achieving equitable and sustainable development and irrigation water plays a vital role in relation to human health, livelihoods, economic growth as well as sustaining ecosystems" (Reba, 2003). There is a general consensus that irrigation development particularly in agricultural countries help reduce poverty significantly (Fan et.al, 1999; Ravallion and Datt, 1996; Mellor, 2001; Desai, 2002).

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1. The caste structure is based on the Hindu Varna System which divides people into four categories according to their occupational activities viz.: Brahmin (learned people, priests), Chhetri (warriors), Vaishya (traders, agriculturists), and Sudras (engaged in menial services). Originally it merely meant the type of work one does but gradually it became hereditary (SNV, 1998). This hereditary transformation of Varna (from parents to offspring irrespective of their work speciality) distorted into the present complex and rigid caste system in Nepal. Though, untouchability and discrimination on the basis of caste was formally outlawed by the 1963 National Code and the Constitution of the Kingdom of Nepal, it still prevails widely in Nepalese society.

2. There is a considerable debate in defining dalits. For Bharati (2002 p3) dalit is not a caste in itself, but groups of castes being exploited by existing social and economic traditions. Schultz (2003), refers dalits as untouchables; Gurung (2004, p3) synonymies dalits with untouchables, low-castes, harijans, schedule castes and, oppressed; while for Rasali (2005) dalits are Karmajans (traditional occupational castes) suffering socio-economic and political suppressions emanating from orthodoxy Hindu religion.

3. The untouchable occupational caste group includes Damai, Kami, Sharki, Chamar, Pode, Satar, etc. People from other castes and ethnic groups do not eat food and water touched by them. In the recent days they are called ‘Dalit’. ‘Dalit’ is a more respected word used to recognise the untouchable groups in Nepal.

Considerable work done in the last five decades in Asia and else where have shown that the multitude of tangible positive externalities associated with irrigation development are considered to be the most potent source of higher farm incomes and hence it is the driving force for poverty reduction (Mellor, 2001; Sakthivadivel et.al, 2002). Bhattarai et.al. (2003) in their study of poverty reduction in India concluded that agricultural output and irrigational development coupled with enhanced literacy rate contributed towards poverty reduction. They further go onto argue that, poverty reduction in rural India strongly depends upon the effective irrigation access and efficient irrigation development (ibid, p6).

The direct benefits of irrigational development operate at local and households level with higher production, higher crop yields, reduce risk of crop failure, all year-round and non-farm employment opportunities and food security. Globally, 17 per cent of global irrigated land contributes to about 40 per cent of world cereal production (Lipton, et.al., 2002). In the last half a century, global irrigated land has increased by about 250 per cent reaching to 266 million hectors by 1997 (FAO, 2000). Furthermore, crop diversification, cropping intensification and shifts from subsistence to commercial cropping is likely to help poorer households by reducing food prices (Hussain and Hanjra, 2004). Writing on Indian irrigation systems, Dahawan and Datta, (1992) posit that, in the irrigated rural settings up to 3 crops a year can be grown as compared to just a single crop in a year in the rainfed settings. Indirectly, irrigation development acts as production and supply shifter and help boost aggregate growth where, both rich and poor households benefits however, later in the long run rather than in short run, a form of Kuznet curve (Kuznet, 1955).

Drawing macro level data, Lipton et al. (2002) compared the prevalence of poverty and amount of land irrigated in Africa and Asia. They contend that region with higher irrigated cropland has higher poverty reduction. Similar study was carried out by the World Bank during 1990s. The World Bank report demonstrated that Sub-Saharan Africa experienced the world’s worst form and level of poverty with absolute poverty level of 47.7 per cent in 1990 and 46.3 per cent in 1998, with just 3 per cent of irrigated cropland. In contrast, the experiences from East Asian and Pacific, North Africa and Middle East with 35-40 per cent of irrigated croplands showed higher poverty reduction in the 1970s (World Bank, 2000). Hussain et.al. (2002) studied intra country experience of poverty reduction due to irrigation and found out the incidence of chronic poverty in the rainfed areas of Sri Lanka and Pakistan are likely to 10 per cent and 5 per cent respectively more than their adjoining irrigated areas. Furthermore, Hussain et al. (2002) note that poverty head counts ranges from 18-53 per cent in irrigated and 21 -66 per cent in rainfed settings – a difference of 20-30 per cent between the two settings. Abundantly, research has shown that, 1 per cent increase in agricultural production can reduce poverty by an equal amount (Thirtle et.al., 2001).

On the production side of poverty-irrigation relationship, irrigation development creates localised demands for both farm and off-farm income generating economic activities indirectly. A study by Liedholm and Meade (1987) concluded that due to the spill over effects of expanding agricultural activities non-farm employment opportunities expand readily. It is well established that, due to the prominent of agricultural sector and adaptation of green revolution in low income countries agricultural growth rate of 4-6 per cent adds immense purchasing power (Mellor, 1995).

Angood et.al. (2002) presented a case study of three Farmers Managed Irrigation (FMI) schemes in Nepal namely Janakalyan, Kalleritar and Yampaphant irrigation schemes, where they concluded that, small scale irrigation development on those three (FMI) schemes, were effective tools for rural poverty reduction. Following Angood et al.’s study, Brabban et.al (2004) re-examining the impacts of the same three irrigation schemes concluded that, irrigational development can have significant positive impacts in all dimensions of development- human assets, natural assets, financial assets, physical assets and social assets (Brabban et.al., 2004).

However, research on the relationship between irrigation and poverty involves aggregate macro level analysis. Furthermore, although much work has been done in relation to the implications of local level socio-economic heterogeneities on forest management (Adhikari, 2003; Luintel, 2003), very little work has been done in irrigation development. The growth aspects of irrigation are well accepted. Despite the close inter linkages between irrigation development and poverty reduction there is still a considerable polarisation on equity dimension. Head and tail inequity, also know as upstream-down stream inequity has been well documented (Hussain, 2004). A growing body of literature argues that growth can lead to a skewed income distribution raising questions about the anti-poverty strength of irrigation development (Fields, 1989; Squire, 1993; Lipton and Ravallion, 1995; Ravallion, 1995). Sceptics argue that it is naïve to assume that irrigation development is distribution neutral. Also, since the distribution of irrigation water is land based, irrigation development is inherently biased against the landless and land poor. In his synthesis studies of 307 irrigational systems during 1970-89, Freebairn (1995) found that both inter-farm and interregional inequalities widened in 80 of the studies. However, these studies suffered from fundamentally methodological sampling errors (Hussain, 2004). Banik et al. (2003) in their study of natural resource endowments and poverty in a tribal belt of Chhotanagpur Plateau (India) demonstrated a significant differences in the benefits accruing to higher landholding households from higher social strata as compared to those from lower caste affiliations (Banik et al, 2003).

Since Nepal exhibits a highly skewed land distribution (as mentioned in the policy relevance section below), the probability for unequal water distribution is high. Furthermore, existence of caste system with dominance of higher castes in policy domains, and disproportionately higher land distribution amongst them has meant that the same group are deriving much of the benefits from the irrigational development in Nepal. Ethnic minorities, indigenous people, and dalits, who represent a significant number of landless households marred with poverty, have tended to lag behind in benefiting from irrigational development in Nepal. Much work needs to be done to inform policy makers, about the trajectories through which the benefits of irrigation development trickle down in a caste based society such as Nepal.

4. Policy Relevance

4.1 Relevance to Irrigational Development

Irrigational development is of special interests for a pre-dominantly agricultural country like Nepal where almost one-fifth i.e about 18 per cent of its total land area is utilised for agriculture (CARE-Nepal, 2001; CBS, 2004) and more than 76 per cent of the total population are engaged in agriculture for their livelihoods (Economic Survey, 2001/02) contributing to up to 40 percent of national GDP (Adhikari, 2001). Also, Nepal is the second richest country, only second to Brazil in the world in terms of its potential water resources with possession of about 2.27 per cent of the world water resources potential (CBS, 1999). A country report for Nepal’s environmental statistics note that, altogether Nepal Comprises of about six thousand rivers having about 45 thousand kilometres in length (Kharel and Suwal,2001). However, despite being water-wealthy and having 30 per cent (14-17 per cent in 1997, in Pant, 2003), irrigation-based agricultural production, only 54 per cent (42 per cent in 1995/96) of the net cultivated land has access to some form of irrigation (NLSS, 2004 p3), while just 41 percent of the irrigated land receives year –around irrigation (Mishra and Bhattarai, no date).

4.2 Relevance to Poverty Reduction

Nepal is one of the poorest countries in the world with about nine million people (38 per cent of the population) are living under absolute poverty line (daily income less than one US dollar) (NPC, 2002). Nepal has Human Development Index (HDI) of 0.504, which is lower than all its South Asian neighbours except Pakistan (UNDP, 2004). Within Nepal rural poverty outstrips urban poverty. Rural poverty (44 per cent of rural population) is almost double than that of the urban settings (23 per cent of the urban population) (ibid, p2). The HDI for urban settings is 0.581, while for rural settings remain 0.452 (UNDP, 2004). For the project site district, the HDI is 0.450, less than the national rural settings. Also, the Human Poverty Index (HPI) records indicate that, rural human poverty exceeds urban poverty with HPI value being 42.0 and 25.2 respectively with national HPI remaining 39.6 (UNDP, 2004). The poverty intensity level and severity gap for urban are is 7.0 and 2.8 per cent respectively. The same measures, for rural areas remains 12.5 and 5.1 per cent respectively, while for overall Nepal it is, 12.1 and 5 per cent respectively (NPC, 2003 p25). The differences in poverty levels between rural and urban settings call for special attention due to the fact that, poverty in Nepal is predominantly rural phenomenon where, nearly 90 per cent population live and 55 per cent population undertaking agriculture for their livelihoods and remain below absolute poverty line, far too high than in any other sectors (NESAC, 1998). Thus it is imperatives to prioritise rural poverty reduction, particular in agricultural sector if poverty in Nepal is to be reduced.

4.3 Relevance to Equity in Natural Resource Distribution

Nepalese agrarian relations are semi-feudal and capitalistic in nature where, land endowments are concentrated amongst rich peasants and landlords (SAAPE, 2004). Furthermore, unequal cultivable land and access to productive resources have reinforced towards high poverty level and continuation of semi-feudal and capitalism. Latest figures from Nepal Living Standard Survey indicate that a vast majority of the agricultural household rely on subsistence farming from small farms. About 45 per cent of small farmers operate in less than 0.5 ha of land, occupying 13 per cent of agricultural land while 8 percent of large farmers operate in 2 ha or more of land, occupying about 31 per cent of total agricultural land (NLSS, 2004 p 4). The concentration index for agricultural land is 0.50 (0.54 in 1997) reflecting a highly uneven distribution of land resource in Nepal (Pant, 2003; NLSS, 2004).

A vast majority of poor, landless and land-poor, undertake agricultural activities for their own consumption purposes and for landlords. In doing so, a significant proportion of agricultural households (about 28 per cent of which, 7 per cent are landless and 21 per cent operate in rented- land) work on crop share basis also known as adhiya (a system in which the total production is equally divided between farmers and landlords) or tyahu (a system in which, landlord and the farmer share two-third, and one third of the total production respectively) or some type of contractual basis (NLSS, 2004). However, in both adhiya and tyahu systems, production costs such as labour costs, cost of manures and so on are borne by the farmers themselves without any contribution from the concerned landlords. According to census 2001, about 25 per cent of the households are considered to be agricultural landless (with no land or owning less two ropanies of land). Landlessness is more acute among the Dalits, as out of all absolutely landless, 22 per cent are Dalits (Basnet, 2004). Amongst the Dalits, average landholding per household is 2.46 ropanies of khet (irrigated land) and 4.5 ropanies of pakho land (semi arid and rainfed land respectively). This has a major implication for food security. It is reported that more than 50 per cent of the Dalits have food deficiency (Dahal et.al, 2002).

Sharma et.al (1994) in their study of socio-economic status of dalits and indigenous tribes in Nepal noted that, food security amongst dalits is severely constrained. They reported that almost about 21 per cent dalit households, food grain produced in a year lasts less than 3 months. For 19.4 per cent of them, food grain lasted for 4-6 months, while 14.5 percent could grow food grain enough to consume for whole year. Only 5.1 per cent of them had surplus food grain production. Given these circumstances, it is important to evaluate whether the poorer households usually affiliated to lower castes are benefiting as much as the richer households usually from higher caste background in deriving benefits from irrigation canal development in Nepal or not.

5. Aims and Objectives

The main objective of this study is to investigate the local level socio-economic heterogeneity and social taxonomical settings, their determinants and their impacts on use of the natural resources. It will shed light on how the caste system and social exclusions shape the individual’s action and expectations and their use of natural resources and its implication on equity, efficiency and sustainability of the irrigation system in Nepal. The specific objectives are;

1) To examine the determinants of local social taxonomical stratification and irrigational management institutions and analyse their impacts on the effectiveness and sustainability of irrigational resources at the local level

2) To analyse the economic consequences and thus equity and distributional aspects of irrigation management regimes

3) To examine the potential barriers for rural poverty reduction and to assess whether there is significant relationships between local level heterogeneity and emergence of poverty reduction through irrigation development

4) To draw conclusion about socio-economic impacts and livelihoods implications of irrigational management on different stakeholder groups in which it is implemented

6. Research Questions

This study seeks to understand how institutionalised social differentiation can result in inefficient use, inequitable allocation, and unsustainable use of irrigation canal water in Nepal. The crux of the arguments in this study is that social system and, socio-economic heterogeneity play a prominent role in distribution and sustainable use of irrigation water. Furthermore, this study seeks to understand ways and means of creating institutional durability and long term management of irrigation resources at local level. This study specially addresses the following questions;

1) What are the institutional mechanisms that govern the access to and use of irrigation water resources?

2) What are the determinants of local management institutions? How institutions affect successful irrigation outcomes in terms of poverty alleviation?

3) What are local economic consequences (equity and distributional issues) of irrigational canal at local level?

4) Does local level heterogeneity (physical attributes of resource and both economic and social heterogeneity among resource users) obstruct the evolution of productive and egalitarian institutional arrangements at the community level?

5) What are the additional institutional options that ensure increasing access of the landless, land-poor and dalits community members to local irrigation resources that ensure equitable and efficient irrigation management outcomes at the local level?

7.Methodology

7.1 Theoretical Framework of Analysis

The basic purpose of this study is to understand the impacts of socio-economic heterogeneity, and existing aged-old caste system, and the ways these factors influence in defining property rights, and formation of local level institution for irrigation water management in Nepalese context. Both irrigation water and infrastructures are common pool resources, due to their low excludability and a high rivalry nature and demonstrate higher probability of over-exploitation and inequitable resource distributions (Cheung, 1970; Theesfeld, 2001, Adhikari, 2003, Datta, 2001). The occurrences of the later case, however, are due to existing heterogeneity amongst user groups, lack of appropriate institutional arrangement, and absence of well defined property rights for using common pool resources (Adhikari, 2003). In this research, the methodological approach utilises insights from new institutionalism and theoretical and empirical literature from new institutional economics and developmental studies that underscore the role of formal and informal institution for natural resource management. The perspective on institutions adopted here follows the approach of North (1990) who defines institutions as humanly devised constraints that shape human interaction that ultimately affects the performance of economy by their effects on the costs of exchange and production. In the Context of irrigation development in Nepal, the role of castes system is of paramount importance. It affects directly or indirectly, in institution formation, defining property rights, and other associated formal and informal regulations for resource management. Call for institutional changes are made due to propensity to achieve equity and efficiency in resource allocation (Ostrom, 1992). Failures of the existing institutional structures and governing rules and regulations results into inequitable and inefficient resource allocation and call for evolutionary institutions capable of responding to underlying economic circumstances of the community are inevitable (Bardhan, 1993).

7.2 Site Selection

We will select three Village Development Committees (VDCs), namely Bhalayakharka, Chakratirtha and Dhamileekuwa VDCs, from South-eastern part of Lamjung district, Nepal (see the appendix II for the map of VDCs and Lamjung District), where the selected Rainastar Irrigation Project is operating since 1984 covering an area of 570 hector. Rainastar irrigation canal has been selected because it represents a typical rural setting in Nepal and demonstrates significant group heterogeneities. Approximately, a total of 250 households from the above mentioned VDCs will be surveyed. Since we are investigating about implications of socio-economic heterogeneity on irrigation system, hamlets with significant group heterogeneity based on (a) income distribution (b) land endowment, (c) caste distribution will be selected and surveyed.

7.3 Field Research Activities

Phase I

The first phases of research will consist of the following activities;

· Literature review will be undertaken on empirical studies of group heterogeneity, institutions and irrigation resource management.

· Household structural questionnaire survey will be prepared, and research design will be conceptualised

· Planning and arrangement of the field study

Phase II

A visit to Nepal will be made for a period of 20 weeks for field research. About 5 weeks will be spent be spent in Kathmandu for the programmes listed below;

· Three research assistants preferably a resource economist, a political scientists and a dalit intellectual will be recruited for the duration of about three months. The recruited local researchers along with the principle investigator with guidance of PI’s academic supervisor(s) will design samples and household survey

· Collect primary and secondary data.

· Collect any specific research material from Kathmandu.

· Formal and informal discussions with government official, international conservation organization and local NGOs working on irrigation development

· Final field visit planning and preparation

Phase III

A total period of 20 weeks is allocated for field visit which will be made by both principal investigator and research assistants.

· A round table discussion with the members of water users’ associations, irrigation management committees, and Village Development Committee members will be held to understand key issues related with the Rainastar irrigation project.

· Wealth raking exercise will be carried out to identify the factors, which the community defines as important in the categorisation of the socio-economic position of households, and to assign individual households to ranks identified. All user households will be divided into three different stakeholder groups: Poorer households, middle wealth families, and richer/wealthier households derived from household incomes, land holdings and caste ranks.

· The sample households will be stratified on the basis of wealth ranking. A minimum sample of 20 per cent of households in each stakeholders will be sampled

· The questionnaire will be pre-tested before the main survey with small focus groups to discuss their reactions to questionnaire prior to detail survey

· Administer household survey

Phase IV

After fieldwork, about four weeks will be spent in Kathmandu. This provides opportunity to:

· Share the initial findings with knowledgeable local experts

· Complete informal visit and discussion that was incomplete before field visits

· Gather remaining secondary information from Kathmandu

7.4 Data Analysis and Final Report Preparation

Upon return to the UK, the PI would undertake following tasks;

· Prepare summary of the household and community survey data

· Undertake a more rigorous regression analysis to analysis, to test for the significance of individual household characteristics and income distribution

· Econometric analysis of determinants and impact of local irrigation management regimes

· Write up a final report presenting research findings

· Submit the final report

8. Expected Outcomes and Policy Recommendations

This research will add knowledge on how social taxonomy (caste system) and socio-economic heterogeneity influence the efficiency in resource use, equity of resource distribution, empowerment and welfare of community members. This will have major implications upon poverty reduction strategies through the development of irrigation systems. Furthermore, this study will recommend future policy directions for equitable irrigation development capable of optimising welfare of poor people whose livelihoods directly or indirectly depends on agricultural activities. It is expected that, the major output of this research will be on equity aspects and distributional implication of irrigation development in Nepal with view to increasing livelihood security of poor, landless, dalits and indigenous people in Nepal. This study will help better inform policy makers about institutional support structures that would facilitate more equitable irrigation development at local level.

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10. Appendix

Appendix I

a) Nepalese Land and Measurement Matrices : Conversion Factors

Area	Weight
1 hector== 19.66 ropani	1 muri paddy= 50 kg
1 Ropani= 16 aana	1 muri maize= 65kg
1 hectare= 1.1477 bigha	1 muri wheat= 65kg
1 hector= 30 katha (approx)	1 muri= 20 pathi
1 bigha= 20 katha
1 bigha=400 dhur

Source: (CBS 2000)

b) Poverty:

In this paper, poverty threshold is taken as population living with income under one US-Dollar a day which is also UNDP measure of absolute poverty.