The view from within - cooperation between ministries

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By Brian Chatterton


Introduction

Bureaucracies are organised by activity not by purpose. For example in South Australia the Ministry of Lands were responsible for the irrigation areas and their employees turned the water on and off but the Ministry of Engineering and Water Supply built and maintained the pumps and channels. The Ministry of Agriculture provided advice on water use that was limited to plants and soils. It did not include irrigation equipment and machinery where farmers were left to fend for themselves against a barrage of advertising by corporate interests. Later the Ministry of Engineering and Water Supply took over the functions of Lands and later still farmer-controlled trusts took over the functions of both. Farmers could not interact with a single ministry but were reliant on several ministries organised according to activities.

Reasons for lack of cooperation

The lack of cooperation starts with the training and culture of the people who work within the ministries. They have been university trained, at least at the more senior levels, and universities have directed them on the path of specialisation. They come out of university as engineers, as hydrologists, as soil scientists and other specialists. It is natural that they should hold onto their specialisations and organise the ministries accordingly. Add to these specialisations the centralised organisation of the bureaucracy and one can see how difficult interdepartmental cooperation is at an effective level on the ground.

If a soil scientist and a water engineer wish to cooperate on a program they need authority up one chain of command and then down another. The ministry is structured like an inverted tree. The trunk is the central power structure of the minister and senior officers and the branches are the people out in the districts. This is the case whether they are within one ministry, two or more. Add on a few more specialist areas and one can see how difficult it is to organise multi-disciplinary programs.

Multi-disciplinary programs do not provide a career path. They come and go but the specialisations are there for ever and it is not surprising that staff see them as being the most important path to promotion.

When I became Minister of Agriculture I found that the staff of the Ministry of Agriculture in one of the major regional centres reported to seventeen different managers at head office in Adelaide and there was no formal head of the regional office. If intra ministerial cooperation is so difficult what hope for inter ministerial cooperation?

Management style combined with treasury control is another factor that increases the pressure to centralise the bureaucracy. There is too much emphasis on authorised expenditure and not enough on effective expenditure. The result is that more and more expenditure decisions are referred up to senior levels and even to the minister. This gives the illusion of better control but considerably stifles local initiative. As minister I delegated authorisation and demanded accountability for the effectiveness of the expenditure as measure by results.

Wider objectives and political leadership

In addition to these bureaucratic reasons for a lack of cooperation there is often a lack of political leadership. What is the purpose of the agricultural sector? This is such a simple question you will accuse me of stupidity in asking it. The answer is obviously to produce agricultural products, such as food and clothing. We can go further and say so much rice or cotton or wheat. Alternatively we can put a value on these outputs. We then look at the various ministries and they see themselves as providing inputs or advice in the production process for these commodities. Commodities have become a fetish and farmers have been forgotten.

I believe that this is the wrong approach. We should see the agricultural sector as providing a prosperous living for farmers and food for ourselves. This is a revolutionary concept. Ministries of water see themselves as providing water for irrigated land not for irrigation farmers. The ministry of agriculture sees itself as supporting the production of crops and animals and is not focused on the farmer. Renaming the Ministry of Agriculture as the Ministry for Farmers and Food would be a symbol of such a change.

Regional re-organisation

When I became minister I re-organised the ministry on a regional basis. The regions were in many ways equivalent to the Egyptian governorates. Instead of specialist divisions and sections all controlled from head quarters I established regional directors who managed a mixed staff and controlled a separate regional budget. They were given the task of focusing on the needs of farmers in their region not just on single crops or enterprises. Fortunately we had a Premier who encouraged other ministers to delegate more power to their regional centres. There was the potential to establish considerable cooperation at a local level.

The failure of the regional approach.

The decentralised regions did not survive. At least they survived in name but not as the primary centres for the delivery of services to farmers.

They did not survive because of the hard wired centralised power structure. The inverted tree that I referred to earlier was still in place with the trunk at the central headquarters. Those senior officials at headquarters who were close to the Director General and the Minister gradually clawed back power from the regional directors who were based hundreds of kilometres away. Of course this could have been off set if there had been a continuous political will at the ministerial level to insist on regional participation but ministerial support for the regions proved to be capricious over the decades after my retirement.

The regions lost most of their budgets through power plays at the centre and through a new form of budget management. Program budgeting was introduced as a major reform of government expenditure. It was intended to make ministries more accountable for their expenditure. Instead of budget lines for great blocks of staff, buildings, cars etc. the program budget tries to cost the delivery of a program. The idea is, in principle, a good one as it is hopefully possible to judge the cost of a program against its effectiveness. The difficulty is that the programs were selected at head office and went back to the old concepts of “improvement in wheat production” rather than “a program to improve the profits of farmers in district A.”

Although my reorganisation created a number of important posts as regional directors the career paths for most of the staff still encouraged them to stay with their specialisations.

In retrospect I think that the hard wiring of the bureaucracy will prevail and we need to tackle the problem of inter ministerial cooperation in a different way.

In Egypt you have powerful governors who could perhaps provide a countervailing force within the corridors of government but I am not sure that a state of latent bureaucratic warfare is a

model for effective decentralised government.

Local Irrigation Trusts

The concept of the local Irrigation Trust makes two important changes to the provision of services to farmers. It decentralises the government services and it introduces farmer management.

A trust is a difficult word to define. In the US trusts have a rather sinister meaning and they have various anti-trust laws which are intended to prevent collusion between large corporations in the market place. I do not use trust in that sense but the sense it is used in Britain and Australia. A trust is an organisation established for a charitable purpose. The trust I am proposing is slightly different. It is not a charitable organisation but rather a hybrid between a cooperative and a charitable trust. I have used the word “trust” rather than “association” because I see the trust having a greater executive role. Associations have generally been groups of people with a common interest but little real power. The World Bank (World Bank 2007) has proposed Water Users' Associations as a mechanism for greater accountability by governments to farmers and other water users. They use accountability, participation and transparency frequently in their reports. Of course we are all in favour of these warm words but I am suggesting a real transfer of budgetary power to farmer groups not just consultation. I also have doubts that farmers have the time to fulfil the idealised role given to them by the World Bank. They are busy people with farms to run and cannot devote large amounts of their time to consultation and participation. The elected trust board is more effective model to focus the interaction between the government and farmers.

The irrigation trusts are established by government legislation. They have a board of directors elected by the farmers within the local irrigation area. They are responsible to their farmer members but also to the trust's charter given by the government. This charter protects the assets of the trust, the rights of minorities, and future generations of farmers. Writing the charter will be a difficult task. It must not be too restrictive as that will stifle initiative but neither can it be too vague. Naturally regulations and rules have to be in place to prevent the misuse of power or corruption.

The irrigation trusts in action

In South Australia the reorganisation of the water sector meant that the state government handed over responsibility for local water distribution – that is the pumps, channels, pipes etc. to these farmer-controlled trusts. The board of the trust then employed a manager who was usually, but not exclusively, a former government employee and other staff. The farmers on the board kept the administration lean as they were paying for it. They did not simply take over the existing staff as a block. In some cases the tasks were better carried out on a contract basis either by a ministry or outsourced to a private contractors.

Application of the concept to Egypt

The concept of the irrigation trust could be applied more comprehensively in Egypt.

The first task of the irrigation trust would be to manage the internal distribution of water within a branch canal command area. They would maintain the distribution system and collect the membership fees. This is similar to the South Australian irrigation trust. It would require a small staff with additional specialist areas of expertise being seconded from the existing ministries.

The irrigation trust could be extended further in Egypt than in South Australia into the area of internal water allocation within the branch canal command areas. In Australia water is allocated by tradable water rights. In Egypt the allocation could be managed by the irrigation trusts. A bulk amount of water could be allocated to each trust and they could then organise the allocation among farmers according to their cultivated area. The bulk amount should be delivered in graduated parcels. A certain amount with a high level of reliability – say 95 years out of 100 and then further amounts with lower levels of reliability. While each trust could organise a different allocation system that suited local conditions their freedom would be restricted by the charter. The charter would for example prevent the trust transferring all the water outside the command area even if a majority voted in favour. In fact the trust would draw on the advice of the ministry and other institutions when drawing up its allocation plans. These plans would need to include criteria for equitable allocation.

The irrigation trust could also be a mechanism for sharing the cost of water distribution by users. One of the difficulties at present is that farmers see any charges for water as an additional tax. They cannot see a clear relationship between the costs of the ministry and the charges for water – perhaps there are none. If they are in charge of the distribution system they can make their own cost effective judgements.

The third task the trusts could undertake is advice on the use of water. The trusts should not become mini-ministries of water resources or agriculture but should set priorities for programs of research and extension to provide support and help to improve agriculture in the irrigation trust area. Potentially this is their most important task and must not be given a lower priority in favour of hard edged engineering. The ideal we are aiming at is to reduce water consumption and increase farmers' incomes. These advisory programs may seem difficult to evaluate but they are the future of water efficiency.

The idea of farmer-run improvement groups is not new but I do not know of examples of the improvement group idea being bundled up with the other tasks mentioned before. It is logically sound. If for example farmers decide to use drip irrigation for certain crops this will have an impact on the amount, the pressure and the timing of water deliveries

It is important that the farm improvement aspect of the irrigation trusts has a charter that keeps it separate from the political activities of farmers. The political organisations have a legitimate role in lobbying governments for better services, better prices and cheaper inputs but farm improvement work should be kept quite independent.

The local irrigation trust becomes the mechanism for inter ministrial cooperation not because the ministries initiate the cooperation but because the trusts commission the services from the ministries. Cooperation is demand-driven by the clients rather than being imposed from the top.

Financing the irrigation trusts

As far as the water distribution and allocation roles are concerned it seems inevitable that these will become self-financing through fees. This will be more acceptable to farmers if they are in control of expenditure and can make their own judgements on the costs and improvements.

In addition to the funds the trusts raise from their own farmers and other users they should be provided with subsidies to acquire government services. These are areas where action is needed but the benefits are spread more widely than just the water users in that trust area. The purpose of the subsidy is to give the farmers more muscle in their discussion with the ministry. Rather than just lobbying through delegations to meet the minister or senior officials they can contribute to the cost of the work. The safe disposal of solid and liquid waste would be the type of activity included in the cost sharing schemes.

I would also argue for farm improvement work to be funded by a mixture of farmer payments and subsidy support. Farm improvement is mainly to improve the profitability of farming through increased returns and by cutting costs. This is part of the new slogan I mentioned yesterday of “more income and fewer drops.” An important spin off from cost cutting is reduced chemical use which has important benefits for the wider community. Supporters of the market approach will say that a higher price for water is the only policy decision that is needed for improvements in water efficiency. They claim higher prices will force efficiency on farmers. I am suggesting a more complex approach that includes some cost transfers for water services, some rationing of water by the trusts and encouragement towards greater efficiency through advice and training.

Subsidies provide a means of transferring budgetary power to the trusts without adding to the financial commitments of the government. These subsidies can only be used by the trusts to acquire services from ministries. They can for example acquire farm management advisers or soil scientists or any other specialist service. Giving the trusts cash grants could create problems. The cash might be spent on private contractors and the ministries would still be funded from the government treasury. Subsidies provide a compromise as they can only be spent on a ministry's services but trusts can shop within the various ministries for the most appropriate service.

Of course there will be opposition to the idea of these internal subsidies or transfers. It can be argued that it is an additional cost. The subsidy accounts are issued by the treasury to the trusts on some agreed formula. They are used to commission work from the ministries who then cash them in at the treasury. It is not just a churning of paper but an opportunity for farmers to select the services they want and apply accountability to the quality of the inputs provided from the ministries. The farmers are able to impose cooperation between ministries from the bottom up rather than the top down.

There is a school of thought within the World Bank and other agencies that supporting farmers either through subsidies or cash to improve their management and technology is misguided. The word subsidy in itself is treated with disdain. They argue that farmers are the same as other businesses which have to fend for themselves – more or less. They claim that corporate suppliers of inputs can take over the role of ministries and pay for the advice they provide to farmers from the profits they make on their sales.

Small farmers are quite different from most other business enterprises. Often the farmer is the owner, the manager and the principle worker. They do not have the time to search out new technology or pay for training courses. Farmers need to be provided with this information free or at low cost. If the only source of information is through the suppliers of inputs the whole agricultural economy will be distorted toward a high-input system of farming.

Let me give you an example. In the 1880s in South Australia the government agricultural college found that wheat crops responded well to phosphate fertiliser. The college undertook an extension program but failed to convince the farmers to use phosphate as the farmers said that they could not make a profit. The phosphate was expensive, the application rates high and the risks due to drought very considerable. For a decade the extension program failed to have any impact. Then a farmer discovered that the application of one third of the recommended rate of fertiliser placed near the wheat seed produced the same yield increase. The new recommendation was promoted by farm improvement groups and the ministry of agriculture. The effect was dramatic. Within another decade more than 80% of cereal farmers were using phosphate fertiliser. The price of phosphate was reduced because of the increased sales. Yields increased by about 50% and South Australia gained additional wheat exports.

I cannot see a corporate dominated farm advisory service telling farmers that they should use only one third of the amount of fertiliser.

Another example closer to home comes from our work in North Africa and West Asia, We have been advocating legume pastures as a cheap alternative to purchased nitrogen fertilisers. The legumes are naturally regenerating and there is no corporate money to promote them. Nitrogen fertilisers are big business and have big advertising budgets to expand sales.

Disadvantage of the trusts

Will trusts take bold decisions? They are accountable to their farmer members and may not be prepared to take decisions on new technology because of the opposition of their farmer members. I can illustrate this with an example from South Australia. In the 1980s before the establishment of the farmer-managed trusts the government decided to replace the old open channels in some irrigation areas with pressurised pipe systems. We did this because we wanted the farmers to replace their furrow irrigation with under-tree sprinklers or drippers. A pressurised supply allowed the farmers to connect directly without the need for their own pump. Only a minority of farmers were using improved irrigation techniques at the time and many complained that they would pay extra for the delivery of pressurised water which they fed into their furrows once the pressure had been reduced. Over time almost all the farmers converted to improve irrigation techniques and the cost of pressurising the supply at the central pump station was less than each farmer individually installing a separate pressure pump.

I do not think that this is a significant disadvantage. Farmers are not as conservative as they are portrayed and are well aware of the advantages of technological change. In the example I have quoted we were concerned about water efficiency but we also realised that better application methods would reduce saline drainage which was costly to dispose of. If farmers manage their own trusts they will bring these calculations into their decision making too.

Governments are free to make bold decisions and some are good ones but many are not. Local trust may be more conservative but overall their success rate may be similar.

Association of trusts

Irrigation trusts provide a good model for local management and cooperation between various branches of government. There is a danger that too much local control will lead to the endless re-invention of the wheel. A trust that decides to upgrade its water distribution system does not need to commission studies that have already been done for other trusts that have similar problems. Of course the ministries should be able to provide them with these studies but much of the information is generated from the trusts themselves and is not known to the ministries. I am referring to actual field experience. For example a certain type of filter may be cheaper to install but more costly to clean and maintain. This information is generated in the field and needs to be exchanged between trusts so they can make more informed decisions.

An association of trusts could provide a clearing house for studies, field reports and other practical information for the local trusts.

An association of trusts can also fill some of the gaps in the services provided by the ministries. For example ministries of agriculture around the world have two major divisions – plants and animals but in modern farming they should add mechanisation. Failures in mechanisation can be a significant factor in lower yields. For example the cereal harvesting machinery used in the West Asian and North African region is designed for the high yield damp crops grown in Europe and North America. It does not perform well in low yielding dry crops but the ministries' lack of expertise in mechanisation means that they put the blame on the operators for failing to make the correct adjustments. This is the story coming from the manufacturers but in Australia where conditions are similar to North Africa the major farmer association has conducted its own research and demonstrated that the machinery needs to be modified not adjusted.

Can farmers handle these responsibilities?

Generally and over time the farmers will be able to handle these growing responsibilities. Like any decentralised management there will be variations. Some trusts will be more successful than others.

Farmers will take time to mature in their new role. They will not be on their own. The trusts will take over much of the existing staff of the ministries. They will obtain support and advice from the ministries.

The trusts will be audited independently and there must be mechanisms to dismiss the board if there are irregularities.

Conclusions

Ministries are hard wired to a centralised system of decision making. Delegating more power to regional (governorate) and districts levels will in theory provide an opportunity for inter ministrial cooperation but the experience in Australia is that it is hard to maintain this decentralised structure. The natural tendency is towards central control and once the political pressure is reduced the bureaucracy reverts to its hard wiring. The powers of the trusts are protected by their charters and cannot be eroded away by stealth.

If many of the powers and activities of the ministries are delegated to local trusts owned and managed by farmers they will foster cooperation and coordination in the various branches of the government. We need to remind ourselves that inter ministrial cooperation is not an end in itself but a mechanism to bring engineering, agronomy, management and marketing together with the aim of improving farmers' income during an era of reduced water use.

References

World Bank 2007 Making the Most of Scarcity. Accountability for Better Water Management Results in the Middle East and North Africa. World Bank 2007

Questions for discussion:

Are local irrigation trust a feasible idea for Egypt? Should they be organised around engineering features or communities? Or both? Can trusts allocate water? How much of the budget should be allocated to the trusts in the form of vouchers?