Asian Development Bank

Poor exempt from water tax

Bangkok Post
May 8, 2000

A long police line seals the entrance to a Chiang Mai hotel as activists protest against the ADB meeting yesterday. Talks to set criteria, but NGOs sceptical.

Poor farmers will be exempted from planned charges on the use of irrigation water, the
Asian Development Bank announced yesterday.

ADB officials will hold talks with farmers, non-governmental organisations, academics
and government officials about setting criteria for the charges, Craig Steffensen, the
bank’s resident adviser in Thailand, said.

Factors to be considered include income and the size and location of the land involved,
he said.

The process would be time consuming.

The tariff on irrigation water would be introduced gradually by targeting water users
who could afford the tax and then volunteers, before expanding the scheme to other

“Poor farmers will not be affected by the water irrigation scheme,” he stressed.

The tax is aimed at encouraging more efficient use of water.

It is a condition of a US$600 million loan the government entered into with the bank
last September for use in reforming the agricultural sector.

It is also compatible with government policy on water use.

The controversial issue tops the agenda of protesters, who want the bank to abolish the
tax or scrap the entire loan, half of which is financed by Japan’s Overseas Economic
Co-operation Fund. It is channelled to the Agriculture and Co-operatives Ministry
through the Finance Ministry.

Finance Minister Tarrin Nimmanahaeminda, who chairs the ADB’s board of governors,
told a seminar on Saturday that the water tax would bring long-term benefits and help
preserve the country’s natural resources, threatened by an alarming rate of forest

Neglecting the problem now could trigger a severe water shortage for users in the
future, he said.

“In 10 years from now, if we don’t do anything, it will come to water rationing,” the
minister said.

Preserving water resources was a top government priority, with a budget already
earmarked for the issue, he said.

The government paid attention to the farming sector, which involved the majority of the

Though agriculture yielded only 10% of gross domestic product, 60% of the population
were involved in it, the minister said.

But NGOs accused the government of trying to deceive the public by saying that water
charges will be collected from large-scale farmers while poor farmers will be exempted.

In reality, the NGOs asserted, it is the poor farmers who will suffer should the water
charge be introduced.

This is because the government would choose to serve those who can pay, they said.

According to Srisuwan Kuankachorn, chairman of the Foundation for Ecological
Recovery, once water was turned into a commodity for fully-commercialised
agriculture, small-scale farmers who do not have the money to pay would have less
access to water resources.

“Especially in the dry season when the water becomes scarce, it is likely that the water
will go to those who have more economic power,” he said.

There was no guarantee poor farmers would be spared, as it was already stated in the
agricultural sector programme loan (ASPL) that a charge would be collected from all

Mr Srisuwan pointed out that “cost recovery” and water charges are the same thing.

They stemmed from the ADB’s basic idea that money should be collected for the use of
water in agriculture.

However, he said any water charges would be unfair to small-scale farmers who had
hardly enjoyed state support when compared to those in the industrial sector, especially
foreigners, who have tax privileges in many forms including import tax exemptions for
machinery and income tax immunities for a certain period of time.

Mr Srisuwan said a study indicated the use of water in the industry gave the highest
economic return, at eight baht for one cubic metre.

“While economic returns for plants like tobacco will be smaller, the second crop of rice
farming gave the lowest return, at 0.40 baht per cubic metre.”

He voiced concern that the study may lead to a state decision that the use of water in
industry was the most cost-efficient and that rice farmers may be forced to leave their
ricefields as a consequence.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s