Irrigation modernization in Chile: Analysis of the on-farm adoption and of the national incentive programme

Resumen

By introducing technologies and institutional reforms, irrigation modernization has been at the centerof many agricultural-hydraulic policies worldwide, especially in regions where water is scarce or proneto water shortages. While water-supply policies, aiming to increase water availability, werepredominant during the last century, the high cost and feasibility of continuing the search foraugmentation opportunities produced a shift in the agricultural water management paradigm, movingtowards water efficiency (savings) policies.In particular, at the on-farm level, the adoption of improved irrigation technologies has been pointedout as a strategic instrument to enhance the sustainability of irrigation and water resources. Despitethe diversity of claimed benefits, e.g., rising yields and income, improved resource use efficiency,improved water quality, the adoption rates have remained low. To stimulate adoption and overcomethe high implementation costs, various subsidy schemes for the modernization of irrigation systemshave been introduced worldwide.The adoption of irrigation technologies has thoroughly been investigated in the literature, deliveringsignificant insights. However, the need for better management, the dynamics of the adoption process,the interactions between farm and basin level, the impact of subsidy schemes, and the new challengesposed by climate change faced by irrigated agriculture make modernization processes still of interestfor both researchers and make them a key pillar of agricultural policy.In this context, and like many other countries with a Mediterranean climate, Chile embraced in 1985 amodernization process supporting the technological upgrading of its agricultural systems throughsubsidies. Despite this long period of supporting the modernization of irrigated agriculture, itsparticular water policy framework, and the extensive international scientific evidence, the country hasdeveloped little knowledge, where several aspects regarding this process remain unknown.This thesis aims to advance knowledge and understanding regarding the modernization process ofChilean irrigated agriculture both from a farmer and a policy perspective. For this purpose, it uses botha case study and a regional-national scale analysis. The first two research chapters focus on theAchibueno and Ancoa watersheds belonging to the Maule River Basin, Central Chile., with a relativelyabundant water supply characterizing this basin. The research begins by centering on understandingthe main drivers and the extent and patterns of adoption of irrigation technologies among farmers.Accordingly, a low and non-diversified level of adoption is identified, where water availability factorsand socioeconomic characteristics (land size, access to credits) tend to hinder the adoption of on-farmtechnologies.Then the thesis complements by investigating the impact of irrigation technologies on socioeconomicand land-use outcomes. Here, the results show that technologies cause a positive impact on incomeand land use but warn that such efficiency improvements (and benefits) at the individual level couldbe detrimental at the basin level, affecting the long-term sustainability of water resources.Furthermore, the thesis analyses the modernization process from a policy perspective by reviewingthe central irrigation modernization policy, Law 18.450. Namely, the analysis focuses on programmedesign and functioning of the on-farm component, aiming to understand the triggers-obstacles foradopting technologies. In terms of access, and despite the flexibility in targeting, the findings show anuneven allocation with serious entry barriers for smallholders. Besides, the study identifies the inabilityto recognize farmers' needs, market concentration, and a bias towards agricultural expansion. Theselection of projects based on agricultural expansion also threatens the sustainability of agricultureand water resources.Finally, the modernization programme is analyzed in terms of its suitability to deal with droughtperiods, as Chilean authorities and policymakers claim. By matching subsidy allocation and scarcitydeclarations at the municipality level, the last research chapter suggests that the current design is anineffective way for that purpose because the modernization of farming systems is coupled withagricultural expansion, which increases the use of water resources. Moreover, after a decade ofdrought conditions, results can be taken as a disconnection between policies without internalizationof scarcity conditions by the subsidy programme.The dissertation ends by providing a synopsis of the research chapters, showing and connecting themain findings, delivering several policy implications. The chapter also discusses the limitationsregarding the scope of the results, offering a series of future research avenues, complementing andexpanding the knowledge of farming systems modernization in Chile and worldwide.